High Court's Jurisdiction Under Article 226 Of Constitution Much Beyond Confines Of Mere Administrative & Executive Review: J&K High Court

In allowing a plea of a contractor seeking the release of an admitted liability on the part of the administration Justice Wasim Sadiq Nargal observed,

“Law does not put any bar or any fetters on the High Court in respect of exercising its writ jurisdiction in contractual matters…there has been paradigm shift in the approach of the Courts in exercise of its Writ Jurisdiction in the matters of contractual disputes with State and its authorities”.

Background:

The case in question involved petitioner Rehmatullah Naik, a contractor seeking the release of outstanding payments amounting to Rs. 20.74 lakhs from the Government of Jammu and Kashmir. Naik had undertaken a road upgradation project as per a supplementary agreement that increased the contract cost. Despite completing the work satisfactorily, the petitioner faced delays in receiving the agreed payment.

Contentions between the petitioner and respondents, represented by Mr. Irfan Khan and Mr. Ravinder Gupta respectively, centred on whether the petitioner's claim was time-barred and whether the supplementary agreement was valid. While the respondents cited alleged violations of General Financial Rules, the petitioner argued that the agreement was legally binding, and the delay in payment was unjustifiable.

Court Observations:

Delving into key legal principles applicable to the case at hand Justice Nargal cited Tapri Oil Industries v. State of Maharashtra and others 1984 and emphasised that High Courts, under Article 226, have the authority to go beyond simply reviewing administrative actions and executive decisions of the state. This expanded power includes enforcing the "doctrine of promissory estoppel," which ensures the government keeps its promises, it underscored.

Fortifying the said position could also be found worthwhile to record the observations of the Apex Court in Bhoruka Power Corporation Ltd. V. State of Haryana and ors ,AIR 2000 wherein it was observed,

“It is a settled proposition of the law that after having laid down the standard for the judging its conduct, a public authority cannot deviate from the said standards”.

Drawing upon the doctrine of promissory estoppel, Justice Nargal reiterated the court's role in ensuring governmental accountability and preventing unjust enrichment at the expense of contractors and emphasised that once a promise is made and relied upon, the government must honor its commitment, and failure to do so can lead to legal repercussions.

The bench pointed,

“Since, there were a series of communications between the parties, which have not been denied by the respondents and, accordingly, it can safely be concluded that there was a binding contract between the parties and the respondents cannot escape from their liability of making the payment to the petitioner arising out of the said binding contract”.

In concluding the verdict, the court directed the respondents to release the outstanding payment to the petitioner within a stipulated timeframe. Additionally, it mandated the payment of interest in case of further delays, holding the responsible officer accountable for any such lapse.

Case Title: Rehmatullah Naik Vs UT Of J&K

Citation: 2024 LiveLaw (JKL) 113

Mr. Irfan Khan, Advocate represented the petitioners, Mr. Ravinder Gupta, AAG withMs. Pallvi Sharma, Advocate appeared for respondents

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