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Union of India v. M/s Puna Hinda

Civil Appeal · 2021 INSC 448Decided 6 Sept 2021
Civil Appeal No. 4981 of 2021
Justice Hemant Gupta · Justice A.S. Bopanna

Background

A contractor was hired by the Border Roads Organisation to build a stretch of road in Arunachal Pradesh. After completing the formation work, a dispute arose over how much additional money the contractor was owed, based on a "Joint Survey Report" that significantly inflated the measured quantities of work compared to what had been recorded during actual execution. The department rejected this report as flawed and possibly the product of collusion between the contractor and some of its own officers. The contractor went to the Gauhati High Court, which ordered the government to pay based on the Joint Survey figures since re-measuring the work years later was no longer practical.

Decision Breakdown

The Supreme Court held that this was fundamentally a contractual, factual dispute, about how much work was actually done and how much money was owed, and such disputes involving seriously contested facts are not well-suited to be decided in writ proceedings under Article 226, especially when the contract itself provided for arbitration. The Court found the Joint Survey Report deeply suspect, noting it inflated figures far beyond what was recorded in the contemporaneous measurement books, and that the claimed amount kept swelling over time without proper basis. The Court concluded that even though exact remeasurement was no longer feasible after the passage of time, the existing measurement books could still serve as a reasonable basis for determining dues, but that this assessment should happen through arbitration, the forum the parties had agreed to, not through a writ petition. The appeal was allowed and the writ petition before the High Court was dismissed.

Lesson Learnt

Disputes over how much is owed under a government works contract, especially where the facts are hotly contested, generally belong in arbitration or civil court, not in a writ petition, even when one party is the government and the other claims unfair treatment.

Official source (sci.gov.in)View Judgment (PDF)

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