Disposed¶33

Subhash Chand v. State of Haryana and Ors.

Punjab & Haryana HC11 Nov 2025CWP/1897/2022

Case brief

AI extract

What is this about?

CWP-1897-2022 (O&M); Subhash Chand v. State of Haryana; Punjab and Haryana High Court at Chandigarh; decision dated 11.11.2025; recovery of Rs.8,30,700/- after expiry of defect liability period; vigilance inquiry; Clause 23 Disputes Redressal System; Contract Agreement dated 05.10.2016; no arbitration clause; limitation protection up to 31.12.2025; recovery kept in abeyance; writ petition disposed of.

What did the court decide?

Writ petition disposed of with directions: petitioner may approach the competent authority under Clause 23 of the conditions of contract on or before 31.12.2025 without his claim being rejected on limitation grounds; recovery of Rs.8,30,700/- remains stayed until conclusion of proceedings before the competent or appellate authority; failing timely filing, respondents free to proceed in accordance with law.

Subhash Chand Vs State of Haryana and Ors. — Punjab & Haryana HC (2025) — LawSathi Research

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the Department could impose recovery of Rs.8,30,700/- particularly beyond the period of limitation of three years, after expiry of the defect liability period and despite the Department's own sample tests showing conformity with its parameters. +1 more

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Court's answer

If the petitioner approaches the competent authority on or before 31.12.2025, his claim shall not be rejected on the ground of limitation.

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Ratio / Principle

Finding force in the petitioner's submission, the Court directed the petitioner to the contractual remedy: he may approach the competent authority provided under Clause 23 of the conditions of contract.

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Key takeaways

Recovery of the amount under the impugned order, already kept in abeyance by order dated 25.03.2022, shall not be effected from the petitioner till conclusion of proceedings before the competent authority or appellate authority under Clause 23.ratio¶32
If the petitioner does not file a claim petition on or before 31.12.2025, the respondents shall be at liberty to proceed in accordance with law.ratio¶32

Detailed headnote1 paragraphs

Punjab and Haryana High Court (SUVIR SEHGAL, J.) disposed of a writ petition concerning recovery of Rs.8,30,700/- initiated by the Department more than three years after expiry of the one-year defect liability period for rehabilitation work on the Sarsaud distry (RD 26494 to RD 59500 tail), for which final payment of Rs.2,76,00,000/- had been released on 08.05.2018. Confronted with the existence of a Dispute Redressal System under Clause 23 of the Contract Agreement dated 05.10.2016 (which contained no arbitration provision) and the Department's refusal to consent to arbitration, the Court directed the petitioner to approach the competent authority under Clause 23 on or before 31.12.2025, protected his claim from rejection on the ground of limitation, and continued the interim stay (order dated 25.03.2022) on recovery until conclusion of proceedings before the competent or appellate authority; if no claim petition was filed by 31.12.2025, the respondents were left free to proceed in accordance with law.

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CWP-1897-2022 (O&M) -1-

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IN THE HIGH COURT OF PUNJAB AND HARYANA AT

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CHANDIGARH

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(101)

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CWP-1897-2022 (O&M)

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Date of decision:- 11.11.2025

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Subhash Chand ...Petitioner

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Versus

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State of Haryana and others ...Respondents

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CORAM: HON'BLE MR. JUSTICE SUVIR SEHGAL

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Present:- Mr. Ivneet Singh Pabla, Advocate, for the petitioner.

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Mr. Ravish Kaushik, Additional Advocate General, Haryana.

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SUVIR SEHGAL, J. (Oral)

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CM-4303-CWP-2022

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For the reasons given in the application, it is allowed.

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Documents, Annexures P-7 to P-11, are taken on record.

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CWP-1897-2022

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On 25.03.2022, this Court passed the following order:-

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“ Learned counsel for the petitioner contends that petitioner has successfully completed the work of rehabilitation of Sarsaud distry from RD No.26494 to RD 59500 tail. On 04.10.2017, the completion of work was within the stipulated period. The respondentdepartment on successful completion of work assigned released the final payment of Rs.2,76,00,000/- to the petitioner vide voucher No.17 dated 08.05.2018. The defect liability period for the work done by the petitioner was for one year from the date of completion of work. The defect liability period also expired on 04.10.2018. During the currency of defect liability period, the work done by the petitioner

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PARDEEP NAUTIYAL 2025.11.15 15:02 I attest to the accuracy and authenticity of this order/judgment

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CWP-1897-2022 (O&M) -2-

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was tested by way of taking numerous samples. Test reports of all the samples came to be as per parameters set down by the Department. After more than three years of expiry of defect liability period, the Department has initiated recovery proceedings in respect of Rs.8,30,700/- on the basis of some vigilance inquiry and test report.

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Learned counsel for the petitioner submits that once the Department had itself conducted numerous tests in respect of the quality of material used in the construction work and no incriminating test report could be found, the recovery in pursuance of raid conducted by the vigilance cannot be imposed particularly beyond the period of limitation of three years.

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Notice of motion was issued on 03.02.2022 and notice regarding stay was also issued.

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For further consideration, adjourned to 05.08.2022.

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In the meanwhile, recovery proceedings against the petitioner shall be kept in abeyance. ”

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During the pendency of the petition, on a direction was passed by this Court, State has placed on record a copy of Contract Agreement dated 05.10.2016, Annexure R-1. A perusal of the contract agreement shows that Clause 23 of conditions of contract provides for a Disputes Redressal System and there is no provision for appointment of an arbitrator to resolve the dispute between the parties. On the previous date, State counsel was asked to get instructions. Upon instructions from Mr. Ajay Sihag, S.D.O., he submits that the Department is not agreeable to reference of dispute to an arbitrator.

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As the amount is being disputed by the respondents, counsel for the petitioner has been confronted with maintainability of writ petition. Counsel states that a Dispute Redressal System has been laid down in the Contract Agreement, Annexure R-1, and petitioner may be referred to the authorities specified thereunder. He has expressed an apprehension that in case petitioner approaches the authorities specified therein, his claim is likely to be rejected on

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PARDEEP NAUTIYAL 2025.11.15 15:02the ground of limitation. I attest to the accuracy and authenticity of this order/judgment

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CWP-1897-2022 (O&M) -3-

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This Court finds force in the submission made by the petitioner and intends to pass appropriate orders.

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As there is a specific provision in the Contract Agreement relating to Dispute Redressal System, petitioner may approach the competent authority as provided in Clause 23, ibid . In case, petitioner approaches the competent authority on or before 31.12.2025, claim raised by him shall not be rejected on the ground of limitation. It is further clarified that recovery of the amount under the impugned order, which has been ordered to be kept in abeyance by this Court vide order dated 25.03.2022, shall not be effected from the petitioner till the conclusion of proceedings before the competent authority or appellate authority, as provided under Clause 23 of the conditions of contract. In case, petitioner does not file a claim petition on or before 31.12.2025, respondents shall be at liberty to proceed in accordance with law.

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With the above observation, writ petition is disposed of.

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(SUVIR SEHGAL) JUDGE

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11.11.2025 Pardeep

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Whether Speaking/Reasoned	Yes
Whether Reportable	Yes/No

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PARDEEP NAUTIYAL 2025.11.15 15:02 I attest to the accuracy and authenticity of this order/judgment

Subhash Chand v. State of Haryana and Ors.

Case brief

What is this about?

What did the court decide?

Subhash Chand v. State of Haryana and Ors.

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

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