We Are Aspiring To Be Third Largest Economy, But Don't Have Funds To Pay Dues To A Contractor: J&K&L HC Slaps ₹9L Penalty For Delayed Contractor Payments

The dispute originated when the Jammu and Kashmir government failed to pay a contractor for civil works completed in 2015. Initially, the contractor was owed approximately ₹29 lakhs, which the High Court's single judge ordered to be paid along with 6% annual interest. When the government did not comply, the contractor filed a contempt petition.

The government's attempt to challenge the single-judge order with a revision petition was dismissed as "frivolous" and seen as an attempt to undermine the contractor's rights. An appeal against the order was also rejected, with the government’s arguments about unauthorized additional work being dismissed as a tactic to reduce liability.

A Division Bench of Justice Atul Sreedharan and Justice Mohd Yousuf Wani criticized the administration for evading compliance with earlier court directives. The Court said, “Despite this Court having passed several decisive orders in the past in contempt petitions, the Union Territory continues to play hide and seek with the orders of this Court.”

Deputy Advocate General Mubeen Wani appeared for the Appellants and Advocate Lone Altaf appeared for the Respondent.

The contractor, who had claimed a total of ₹20.97 lakhs was still unpaid, passed away in July while the appeal was pending. The Division Bench expressed profound concern over the government's behavior, describing the appeal as malicious and intended to harass the contractor.

The Court condemned the administration's actions, and noted, “It shocks the conscience that we tout ourselves as fifth largest economy in the world, aspiring to be the third largest soon, but do not have funds to pay the legitimate dues of the respondent (contractor) amount to Rs 20.97 lacs, which denigrates and puts to doubt the lofty claims of the economic prowess of the country.”

The Court added, "The Court deprecates the conduct of the Union Territory in filing the present appeal, the only motive being to harass the respondent for which certain precipitate orders are required to be passed so that the Union Territory in all future cases shall appreciate that there are severe consequences to be suffered for misuse of the judicial process.”

In light of these events, the Court ordered a penalty of ₹1 lakh per year of delay, totaling ₹9 lakhs, reflecting the nine-year delay in payments. The costs are to be recovered from the salary of the official responsible for initiating the appeal. Additionally, the Union Territory was directed to pay the remaining dues of ₹20.97 lakhs, with interest, to the contractor's legal heirs.

Cause Title: Union Territory of JK & Ors. v. Mohammad Afzal Reshi

Appearance:

Respondents: Advocates Lone Altaf, Irfan Andleeb, and Shafqat Nazir