Allowed

M/s Cherom Trading Company v. The State of Ap and 3 Ors.

Gauhati HC2 Apr 2025WP(C)/52/2024

Case brief

AI extract

What is this about?

In this writ petition under Article 226, the petitioner sought recovery of unpaid contractual dues of Rs. 6.42 crore. The High Court, finding no evidence of material dispute regarding work completion, directed the State respondents to pay the balance amount within three months along with interest at 7% p.a. in case of default.

What did the court decide?

The State respondents directed to release the outstanding payment of Rs. 6.42 crore within 3 calendar months (by 31.07.2025).

M/s Cherom Trading Company Vs The State of… — Contract and Commercial Disputes | Gauhati HC (2025)

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GAHC040001292024

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THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) (ITANAGAR BENCH)

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Case No. : WP(C)/52/2024

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M/s Cherom Trading Company

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having its registered offie at Gandhi Market Area, Daporijo, PO Daporijo, Upper Subansiri District, AP represented by its proprietor Shri Taisen Malling Cherom, S/o Late Tachik Malling Roomching, permanent resident of Pillung Malling Village, PO Taliha, Upper Subansiri District, Arunachal Pradesh

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VERSUS

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The State of AP and 3 ors represented by the Commissioner (Power) cum Chief Executive Officer(CEO) Arunachal Pradesh Power Development Agency, Govt of AP, Itanagar 2:The Executive Director Age: 0 Occupation : Power Finance Corporation (PFC) Limited Noida New Delhi 3:The Chief Engineer (P) Age: 0 Occupation : Western Electrical Zone-cum- State Nodal Officer IPDS Department of Power Vidyut Bhawan Itanagar 4:The Superintending Engineer (E) Age: 0 Occupation : APEC-I Naharlagun Department of Power

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Page No.# 2/5

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Govt of Arunachal Prades

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Advocate for the Petitioner : Marto Kato, M Tanga,Nyali Sora

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Advocate for the Respondent : Lissing Perme, S Saha Roy,SC(Power)

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BEFORE

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HONOURABLE MR. JUSTICE KALYAN RAI SURANA

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ORDER

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Date : 03.04.2025

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Heard Mr. M. Kato, learned counsel for the petitioner. Also heard Mr. L. Perme, learned standing counsel for the Power Department, respondent nos.1, 3 and 4; and Mr. S.S. Roy, learned counsel for the respondent no.2, who has appeared through video conferencing.

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It is not disputed by the respondents that the petitioner was awarded with the work of Supply & Installation of Computer & Accessories, Networking Equipment, Meters & GPS Based Survey under IPDS Phase-II, IT Enablement on all 16 Towns (Urban) of IPDS at an estimated cost of Rs.838.00 lakh, for which contract agreement dated 09.03.2020 was entered between the petitioner and the Superintending Engineer (Electrical), Arunachal Pradesh Electrical Circle-I, Department of Power. It is also not in dispute that the Superintending Engineer (Electrical), Arunachal Pradesh Electrical Circle-I (respondent no.4) had issued a work completion certificate dated 07.03.2022 in favour of the petitioner, wherein it was mentioned that the petitioner has successfully and satisfactorily completed the whole work. The case of the petitioner is that out of the total project cost/contract cost, the petitioner has been paid only 20% payment amounting to Rs.1.96 crore, out of which the State share was Rs.1.25 crore; PMA charges was Rs.45.00 lakh; and amount against IPDS Phase-II Project was

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Rs.26.00 lakh, aggregating amount of Rs.1.96 crore and accordingly, the petitioner claims that the balance amount of Rs.6.42 crore has remained unpaid despite issuance of letter of request; advocate’s notice dated 07.02.2023; and representation dated 30.05.2023 and accordingly, this writ petition has been filed under Article 226 of the Constitution of India seeking payment of the unpaid balance contractual bill of Rs.6,42,00,000/- (Rupees six crore forty two lakh only).

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Although voluminous affidavit-in-opposition has been filed, by the State respondent nos.1, 3 and 4; and separately by the respondent no.2, a further affidavit by the respondent nos.1, 3 and 4 against the affidavit-inopposition filed by respondent no.2; and affidavit filed by respondent no.2 against the affidavit filed by the respondent nos.1, 3 and 4, however, upon perusal of the same, the Court does not find any reason to burden this order with the stand taken in those affidavits because of the fact that voluminous communication between the State respondents and the respondent no.2 revolves around the nature of disbursements made by the Power Finance Corporation Limited (respondent no.2) and allegations and counter-allegations relating to requests by the respondent no.2 for utilisation certificates. According to the learned standing counsel for the Power Department, the respondent no.2 is also claiming utilisation certificate for amount recovered by them on account of interest. It may be mentioned that in the said four affidavits, it is not the stand of any of the respondents that the petitioner had not completed the work and is falsely claiming payments. Therefore, any inter-party communication between the Power Department of the State and the Power Finance Corporation Limited (respondent no.2) is something which the said respondents would have to settle between themselves.

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The basic issue raised in this writ petition is that although the petitioner was issued with a work completion certificate by the respondent no.4 on 07.03.2022, balance amount as claimed by this writ petition was not paid to the petitioner. Although an effort was made by the Court to examine the contents of the documents appended to those affidavits, but none of the documents lead to a conclusion that there is any inter-se dispute between the respondent nos.1, 3 and 4 and the respondent no.2 with regard to the completion of work by the petitioner. The various amounts referred to in various documents do not add to Rs.838.00 lakh, which is the contract amount or to Rs.6,42,00,000/- which is claimed to be due and payable to the petitioner. Accordingly, it is reiterated that if there is any dispute between the State respondents in the Power Department of the State of Arunachal Pradesh (respondent nos.1, 3 and 4) on one part and the Power Finance Corporation Limited (respondent no.2) on the other part, it is for these two authorities to settle their inter-se dispute in a manner as they may be so advised. In none of the affidavits, it is the stand that any correspondence from the petitioner was lacking, which prevented the State Power Department to issue a utilization certificate or that any deficiencies on part of the Petitioner prevented the respondent no.2 from accepting those utilization certificates. Therefore, the Court does not find that the petitioner is at fault, for which payment to the petitioner has been delayed. Resultantly, the extent of work completed and the extent of payment due to the petitioner not being matter in dispute, the inter-se dispute between the Power Department of the State (Respondent nos.1, 3 and 4) and the Power Finance Corporation Limited (Respondent no.2) regarding documentation and providing of utilization certificates to the respondent no.2 would not come in the way of the Court to direct the respondent nos.1, 3 and 4,

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i.e. the State of Arunachal Pradesh, represented by the Commissioner (Power) -cum- Chief Executive Officer, Arunachal Pradesh Power Development Agency (respondent no.1); the Chief Engineer (Power), Western Electrical Zone -cumState Model Officer, IPDS, Department of Power (respondent no.3); and the Superintendent Engineer (Electrical), APEC-I (respondent no.4) to release the outstanding payment of the petitioner within an outer period of 3 (three) calendar months i.e. 31.07.2025 from the date when the certified copy of this order is served on the respondent no.4 i.e. the Superintendent Engineer (Electrical), APEC-I, who is the contracting authority of the petitioner.

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It would be the responsibility of the respondent no.4 to communicate copies of the certified copy of the order to any other authority including respondent nos.1 and 2.

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In the event the outstanding dues of the petitioner is not cleared within 31.07.2025, the dues of the petitioner shall carry interest @7% p.a., which will be disbursed by the State with liberty to recover the amount from the officers, who are found guilty of delaying the release of the amount due to the petitioner, if so advised, after following all the requisite formalities and procedures.

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The writ petition stands allowed.

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There shall be no order as to cost.

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JUDGE

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Comparing Assistant

M/s Cherom Trading Company v. The State of Ap and 3 Ors.

Case brief

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M/s Cherom Trading Company v. The State of Ap and 3 Ors.

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