1 CGHC010279622024 2026:CGHC:37079-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 4173 of 2024 1 - Prabhat Kumar Ranjan S/o Shri Girijanandan Sinha, Aged About 56 Years R/o Sanjay Nagar, Baikunthpur, District- Korea ( C.G.). ... Petitioner(s) versus 1 - State Of Chhattisgarh Through- Secretary, Public Works Department, Mantralaya, Mahanadi Bhawan, Nava Raipur, Raipur (C.G.). 2 - The Chief Engineer Public Works Department, Sarguja Division, Ambikapur (C.G.). 3 - The Surperintendant Engineer Public Works Department, Ambikapur Division, Ambikapur (C.G.). 4 - The Executive Engineer, Public Works Department, Korea Division, Manendragarh ( C.G.). ... Respondent(s) (cause title taken from CIS) For Petitioner(s) : Mr. Shishir Dixit, Advocate For Respondent(s) : Mr. Sangharsh Pandey, Govt. Advocate Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble Shri R avindra Kumar Agrawal , Judge Order on Board Per Ramesh Sinha, Chief Justice 19/08/2026 1. Heard Mr. Shishir Dixit, learned counsel for the petitioner as well as Mr. Sangharsh Pandey, Govt. Advocate for the Respondent/ State. SAGRIKA AGRAWAL Digitally signed by SAGRIKA AGRAWAL Date: 2026.08.20 10:46:17 +0530 2 2. The present petition has been filed by the petitioner seeking the following reliefs:- “(i) That, this Hon'ble Court may kindly be pleased to set aside the order dated 15.2.2024 passed by the Respondent No. 3 and order dated 26.4.2024 passed by Respondent No. 2, in the interest of justice. (ii) direct the That, this Hon'ble court be pleased to Respondents to release the amount of Rs. 8,90,887/- which has been deducted in pursuance of clause 2 of the condition of contract, in the interest of justice. (iii) That, this Hon'ble Court be pleased to direct the Respondents to release the amount of escalation of Rs. 9,28,696/ withheld in pursuance of clause 2 of the conditions of contract, in the interest of justice. (iv) Any other relief which this Hon'ble Court may deem fit be granted.” 3. The brief facts of the case are that the petitioner, a B-Class contractor, was awarded a work order dated 10.06.2020 for construction of residential quarters for judicial officers and staff at Baikunthpur, District Korea, for a contract value of Rs.153.23 lakhs, with the stipulated period of completion being eight months. The petitioner was initially granted two extensions under Clause 5 of the Conditions of Contract, without penalty, as the delay was attributable to the respondent department due to reasons such as non- provision of layout, non-availability of sand, Covid-19 lockdown and non-release of funds. Thereafter, the petitioner sought a third extension from 30.03.2022 to 30.03.2023, specifically pointing out that payments 3 for the work already executed had not been released due to paucity of funds. The concerned authority also recommended the extension and subsequently permitted completion of the work. The work was completed and a completion certificate was issued. However, despite the department itself having acknowledged that the delay was caused due to non-availability of funds, Respondent No.3, by order dated 15.02.2024, granted the third extension under Clause 2 and imposed a penalty of 6% on the petitioner. Consequently, an amount of Rs.8,90,887/- was deducted towards penalty and escalation amount of Rs.9,28,696/- was also withheld. The petitioner challenged the action before Respondent No.2, but his representation was rejected vide order dated 26.04.2024. Aggrieved by the imposition of penalty and withholding of the aforesaid amounts, the petitioner has preferred the present petition. 4. Learned counsel for the petitioner would submit that the delay in completion of the work was not attributable to the petitioner, but was occasioned solely due to lack of funds and delay in release of payment by the respondent department. It is submitted that the said fact was specifically recorded and recommended by Respondent No.4, which was not properly considered by Respondent Nos.2 and 3 while imposing penalty under Clause 2 of the Conditions of Contract. Learned counsel further submits that the petitioner cannot be penalized for a default which was not committed by him and for circumstances beyond his control. The impugned order imposing penalty of 6% is, therefore, arbitrary, unjust and contrary to the material available on record, particularly the recommendation of Respondent No.4, and consequently, the deduction of Rs.8,90,887/- towards penalty and 4 withholding of the escalation amount of Rs.9,28,696/- are also unsustainable in law. It is accordingly prayed that the impugned order and consequential deductions/withholding may kindly be set aside and the petitioner be granted consequential relief. 5. Learned State counsel, opposing the petition, submits that the impugned order dated 15.02.2024 granting the final extension under Clause 2 of the Conditions of Contract and imposing compensation at the rate prescribed therein is in accordance with the terms of the contract. It is submitted that the petitioner was required to complete the work by 09.03.2021, whereas the work was actually completed only on 26.03.2023, resulting in a delay of 747 days. Though two extensions were earlier granted under Clause 5 without penalty, the petitioner failed to complete the work within the extended period up to 29.03.2022. Learned State counsel further submits that the allegation that the delay was solely attributable to non-availability of funds is not borne out from the record, as the bills raised by the petitioner were substantially paid within a reasonable period and the delay in payment of the escalation bill was attributable to the process of examination and allotment of funds. It is therefore contended that the respondents were justified in invoking Clause 2 and levying compensation of 6%, amounting to Rs.8,90,886.72/-, in terms of the contractual conditions. It is further submitted that the petitioner has already availed the remedy under Clause 28 by approaching Respondent No.2, who upheld the decision of Respondent No.3, and thereafter the petitioner has an efficacious alternative remedy of approaching the Arbitration Tribunal. Accordingly, learned State counsel submits that no arbitrariness or illegality is made out in the impugned action and the writ petition, being 5 devoid of merit and involving disputed contractual issues, deserves to be dismissed. 6. We have heard learned counsel for the parties and perused the material available on record. 7. Having heard learned counsel for the parties and upon perusal of the pleadings, documents and material placed on record, this Court finds that the dispute in the present case essentially arises out of the contractual relationship between the petitioner and the respondent- Department and pertains to the delay in completion of the work, grant of extension of time and levy of compensation/penalty under Clause 2 of the Conditions of Contract. It is not in dispute that the agreement executed between the parties contains a specific mechanism for resolution of disputes under Clause 28 of the Conditions of Contract. The petitioner, having already availed the remedy of approaching the Chief Engineer under the said clause, and the decision rendered thereon having been upheld, the contract itself provides for further resolution of the dispute through the Arbitration Tribunal. Thus, the grievance raised by the petitioner involves interpretation and enforcement of the contractual terms, particularly with regard to attribution of delay and levy of compensation, which can appropriately be examined by the forum prescribed under the agreement. 8. The agreement executed between the parties admittedly contains a detailed dispute resolution mechanism under Clause 28 of the General Conditions of Contract, which reads as under: “Clause 28- Except as otherwise provided in this contract all question and dispute relating to the whatsoever in any way arising out of or relas and 6 the contract designs, drawings, specification, meaning of the specification, designs, drawings and instruction herein before mentioned as to thing estimate, concerning the works, or the execution of failure to execute the same, whether arising during the progress of the work, or a after the abandonment there of shall be referred to the Superintending Engineer for his decision, within a period of 30 (thirty) days of such an occurrence (s). There upon the Superintending Engineer shall give his written instructions and/or decisions, after hearing the contractor and Executive Engineer within a period of 15 (fifteen) days of such request. This period can be extended by mutual consent of parties. Upon receipt of written instructions or decisions, of Superintending Engineer the parties shall promptly proceed without delay to comply such instructions or decisions. if the Superintending Engineer fails to give his instruction or decisions in writing within a period of 15 (fifteen) days or mutually agreed time after being requested and/or, if the party (es) is/are aggrieved against the decision of the Superintending Engineer, the aggrieved party may within 30 days prefer an appeal to the Chief Engineer, who shall afford an opportunity to the parties of being heard and te offer evidence in support of his appeal. The, Chief Engineer will give his decision within 30 (thirty) days, or such, mutually agreed period. If any party is not satisfied with the decision of the Chief Engineer he can file the petition for resolving the dispute through arbitration in the arbitration tribunal. A reference to Arbitration Tribunal shall be no ground for not continuing the work on the part of the Contractor. Payment as per original terms and condition of the agreement shall be continued by the Executive Engineer in accordance with clause 8 above." 7 9. A bare perusal of Clause 28 of the Conditions of Contract demonstrates that a complete and efficacious mechanism for resolution of disputes has been contractually agreed between the parties, providing for reference of the dispute initially to the Superintending Engineer, followed by an appeal to the Chief Engineer and, thereafter, reference to the Arbitration Tribunal in case either party remains dissatisfied with the decision of the Chief Engineer. The clause further prescribes specific timelines and an opportunity of hearing to the parties at each stage of the adjudicatory process. In the present case, the petitioner has already availed the remedy before the Chief Engineer, who has upheld the decision of the Superintending Engineer, and the petitioner has thereafter approached this Court without availing the further remedy of arbitration specifically provided under the contract. In such circumstances, particularly when the dispute involves attribution of delay, interpretation of contractual conditions and entitlement to compensation, which raise disputed questions of fact and contractual obligations, this Court is of the considered view that exercise of writ jurisdiction under Article 226 of the Constitution of India is not warranted, the petitioner having an efficacious alternative remedy under the agreed contractual mechanism. 10. The Hon’ble Supreme Court in Kerala State Electricity Board v. Kurien E. Kalathil, (2000) 6 SCC 293 has categorically held: “10. We find that there is a merit in the first contention of Mr. Raval. Learned Counsel has rightly questioned the maintainability of the writ petition. The interpretation and implementation of a clause in a contract cannot be the subject matter of a writ petition. Whether the contract 8 envisages actual payment or not is a question of construction of contract. If a term of a contract is violated, ordinarily the remedy is not the writ petition under Article 226. We are also unable to agree with the observations of the High Court that the contractor was seeking enforcement of a statutory contract. A contract would not become statutory simply because it is for construction of a public utility and it has been awarded by a statutory body. We are also unable to agree with the observation of the High Court that since the obligations imposed by the contract on the contracting parties come within the purview of the Contract Act, that would not make the contract statutory. Clearly, the High Court fell into an error in coming to the conclusion that the contract in question was statutory in nature. 11. A statute may expressly or impliedly confer power on a statutory body to enter into contracts in order to enable it to discharge its functions. Dispute arising out of the terms of such contracts or alleged breaches have to be settled by the ordinary principles of law of contract. The fact that one of the parties to the agreement is a statutory or public body will not of itself affect the principles to be applied. The disputes about the meaning of a covenant in a contract or its enforceability have to be determined according to the usual principles of the Contract Act. Every act of a statutory body need not necessarily involve an exercise of statutory power. Statutory bodies, like private parties, have power to contract or deal with property. Such activities may not raise any issue of public law. In the present case, it has not been shown how the contract is statutory. The contract between the parties is in the realm of private law. It is not a statutory contract. The disputes relating to interpretation of the terms and conditions of such a contract could not have been agitated in a petition under Article 226 of the Constitution of India. That is a matter for adjudication by a civil court or in arbitration if provided for in the contract. Whether any amount is due and if so, how much and refusal of the appellant to pay it is justified or not, are not the 9 matters which could have been agitated and decided in a writ petition. The contractor should have been relegated to other remedies.” 11. In the present case, the issues raised by the petitioner, including attribution of delay in completion of the work, alleged non-availability of funds, effect of the recommendations made by Respondent No.4, applicability of Clause 2 for levy of compensation, and entitlement to the withheld escalation amount, are all matters arising out of the contractual obligations of the parties and require detailed examination of the relevant documents, payment records, correspondence and other evidence, as well as interpretation of the terms and conditions of the contract. Such disputed questions of fact and contractual interpretation cannot appropriately be adjudicated in summary proceedings under Article 226 of the Constitution of India, particularly when the parties have agreed upon a specific dispute resolution mechanism culminating in reference to the Arbitration Tribunal. 12. In view of the aforesaid legal position and considering that (i) the dispute is purely contractual in nature and relates to delay in completion of the work and levy of compensation under Clause 2 of the Conditions of Contract, (ii) the determination of attribution of delay, effect of non-availability of funds, payment of bills and entitlement to escalation involves disputed questions of fact requiring examination of evidence and contractual terms, and (iii) an efficacious and comprehensive alternative remedy of dispute resolution culminating in arbitration is specifically available under Clause 28 of the Conditions of Contract, this Court is not inclined to entertain the present writ petition. The petitioner has already availed the remedy before the Chief 10 Engineer and, being aggrieved by the decision rendered thereon, may pursue the further remedy of reference to the Arbitration Tribunal as contemplated under Clause 28. The law is well settled that writ jurisdiction under Article 226 of the Constitution of India is not intended to supplant an agreed contractual remedy, particularly where the contract itself provides an efficacious mechanism for adjudication of disputes. 13. Accordingly, the writ petition being devoid of merits is hereby dismissed. No order as to costs. Sd/- Sd/- (Ravindra Kumar Agrawal) (Ramesh Sinha) Judge Chief Justice sagrika