Allahabad HC: Withholding admitted contractual dues is arbitrary, writ lies

The Allahabad High Court has ruled that withholding contractual dues which the state authority itself admits is arbitrary and recoverable through a writ petition under Article 226 of the Constitution, rejecting the rule against deciding money claims in writ jurisdiction where the amount is admitted. A civil contractor had completed construction work for Nagar Panchayat, Chandauli, and claimed Rs 28.43 lakh remained unpaid after partial payments totalling Rs 12.56 lakh. The executive officer of the nagar panchayat admitted that Rs 7,92,580 remained unpaid under the first work order and Rs 6,31,890 under the second, where a bill format issue remained.

Citing the Supreme Court's ruling in M/s Utkal Highways Engineer and Contractors v. Chief General Manager, the bench of Justice J.J. Munir and Justice Indrajeet Shukla held there is no absolute bar on writ jurisdiction for admitted dues withheld without justification. The court directed the petitioner to raise a fresh bill for the second work order within a fortnight of Monday, 19 October 2026, and directed the authorities to pay the entire admitted dues within four weeks with simple interest at 6% per annum from the date each sum fell due. The writ petition was allowed fully.