Jharkhand HC Directs JUIDCO to Release Harmu River Project Dues Within 60 Days, With 10% Interest

Jharkhand High Court held JUIDCO's mid-litigation release of the Bank Guarantee an admission by conduct that M/s Eagle Infra India Limited had completed all contractual obligations satisfactorily, leaving no room to withhold admitted dues.

The High Court of Jharkhand at Ranchi has directed the Jharkhand Urban Infrastructure Development Company Limited (JUIDCO) to release all admitted contractual dues owed to M/s Eagle Infra India Limited within sixty days, along with delayed payment interest at 10% per annum from the date each amount fell due until actual payment. Justice Ananda Sen, sitting singly, allowed the writ petition filed under Article 226 of the Constitution of India, holding that the respondents had failed to raise any genuine dispute justifying withholding of money, and that JUIDCO's own decision to release the contractor's Bank Guarantee during the pendency of the petition amounted to an unambiguous admission by conduct that all contractual obligations had been fulfilled to its full satisfaction. The judgment was pronounced on 15 July 2026, having been reserved on 9 July 2026.

The Contract, the Project, and the Withheld Payments

M/s Eagle Infra India Limited, a company incorporated under the Companies Act, 2013 and registered at Ulhasnagar, Maharashtra, was awarded a contract by JUIDCO in 2015 pursuant to a valid tender. The contract covered detailed survey, investigations, designing, river training, sewerage system, sewerage treatment plants, storm water drainage, landscaping, associated electrical works, and five years of Operation & Maintenance (O&M) for the Rejuvenation and Conservation of Harmu River Project, under Agreement No. 6 dated 24 February 2015.

The petitioner completed the main project on 31 October 2018 and the stipulated five-year O&M period on 31 October 2023. JUIDCO issued a Completion Certificate and, crucially, issued a communication dated 29 January 2024 — signed by the General Manager (WSS) — certifying that the agency had “completed the stipulated five (05) years of Operation & Maintenance i.e. from 01.11.2018 to 31.10.2023.” The same letter recorded that the final bill was under scrutiny and the project had not been handed over.

Despite this certification, JUIDCO did not release Running Bill No. R.A. 29, O&M dues, electricity bills, or any payment for the period after 31 October 2023 during which the petitioner continued maintaining the site because the respondents had not taken over possession. The Bank Guarantee furnished by the petitioner to secure contractual performance also remained encashed against the petitioner. The petitioner filed W.P.(C) No.1563 of 2025 on 7 March 2025 seeking directions for release of all dues, payment for the extra period of site maintenance, and release of the Bank Guarantee.

The Legal Questions: Money Claims in Writ Jurisdiction and Disputed Facts

JUIDCO's counsel raised two preliminary objections. First, that a money claim arising from a commercial contract cannot ordinarily be entertained under Article 226 and the petitioner should be relegated to civil proceedings or arbitration under the contract's dispute resolution clause. Second, that disputed questions of fact — particularly the technical assessment of work quality by the Project Director (Technical) and the need for environmental impact evaluation by the National Environmental Engineering Research Institute (NEERI) — required formal evidence and could not be resolved in writ jurisdiction.

Justice Sen examined the law on both points in detail. On the first, he relied on the Supreme Court's judgment in ABL International Ltd. & Anr. v. Export Credit Guarantee Corporation of India Ltd. & Ors., (2004) 3 SCC 553, which held that a writ petition against a State or an instrumentality of a State arising out of contractual obligation is maintainable in appropriate cases, and that a writ petition involving a consequential relief of monetary claim is also maintainable. He also drew on the Supreme Court's more recent order in M/s Utkal Highways Engineers and Contractors v. Chief General Manager & Ors., 2025 SCC OnLine SC 1400, which held that non-payment of admitted dues may be considered an arbitrary action and that throwing a writ petition out on the ground of an alternative remedy after ten years, when parties have exchanged affidavits, is not the correct course absent disputed questions of fact requiring formal evidence.

On the second question, Justice Sen relied on ABL International Ltd. and the Supreme Court's order in M/s Jalakash v. State of Uttar Pradesh & Ors., Special Leave Petition (Civil) No.6036 of 2020, decided on 25 January 2024, for the proposition that even in writ petitions involving disputed questions of fact, the High Court can entertain the petition if the dispute does not require elaborate recording of evidence. Non-exercise of jurisdiction under Article 226 on the ground of an alternative remedy is not a hard and fast rule but a rule of self-restraint.

How the Court Dismantled Each of JUIDCO's Objections

Having settled the legal framework, Justice Sen turned to the actual factual matrix. He found that the completion of the work was not genuinely disputed. JUIDCO's own counter affidavit at paragraph 8 categorically stated that after completion of work, the matter was under consideration for payment. That concession, combined with the January 2024 certification letter, left no real controversy about whether the work had been done.

JUIDCO sought to create a dispute by referring, in a single line in paragraph 8 of its counter affidavit, to a contrary opinion recorded by the Project Director (Technical) regarding quality of work. The Court found this assertion to be vague, unsupported by any documents, and nothing more than an attempt to manufacture a dispute. It further noted that even after this supposed technical objection, paragraph 9 of the same counter affidavit admitted that the petitioner's claim was again processed for finalisation before the Payment Committee. The Project Director (Technical) then opined that despite the rejuvenation work, there had been no significant tangible improvement in the condition of the river — a criticism the Court squarely rejected as a ground to deny payment. Once the work entrusted to the contractor under the work order has been completed, the responsibility for whether the broader environmental objective has been achieved cannot be placed on the contractor. Questions of project viability cannot be raised after the contract has been awarded and executed.

The plea of limitation was equally dispatched. JUIDCO had argued in paragraph 17 of its counter affidavit that the statutory limitation of three years had run from the date of the job completion certificate issued in 2019. However, the Court noted that JUIDCO itself, in paragraph 15 of the same counter affidavit, had asserted that the project remained ongoing and active under the existing contractual agreement and had not reached its final conclusion — a statement directly contradicting the limitation plea. In any event, the petitioner's five-year O&M obligation ran until 31 October 2023 per JUIDCO's own 29 January 2024 letter, and the writ petition was filed on 7 March 2025, well within three years of that date.

On the arbitration plea, Justice Sen held that arbitration is a dispute resolution mechanism — and there was simply no genuine dispute to refer. The respondents had tried to raise a dispute without factual backing or supporting documents. That attempt collapsed against JUIDCO's own pleadings and conduct.

The Bank Guarantee: An Admission by Conduct

The most consequential development in the proceedings was JUIDCO's unilateral release of the Bank Guarantee during the pendency of the petition. At the hearing, JUIDCO's counsel, Mr. Krishna Murari, appearing through video conferencing, informed the Court that the Bank Guarantee furnished by the petitioner had been released in its entirety two to three days earlier. This was confirmed by the petitioner's counsel after taking immediate instructions.

The Court read this admission against JUIDCO's own counter affidavit paragraph 16, which had asserted that the Performance Bank Guarantee “must be retained and kept valid until the project reaches its full and satisfactory conclusion and fulfillment of all post-execution obligations.” Having taken that position in writing, JUIDCO had then, without any court direction, released the guarantee during the very proceedings in which it was contesting that the work was unsatisfactory. Justice Sen held that this voluntary release led to only one inevitable conclusion: the project had reached its conclusion, the completed work was to the full satisfaction of the respondents, and the petitioner had fulfilled all post-execution obligations. JUIDCO could no longer advance any contrary plea about the quality of work or the petitioner's contractual performance. The release of the Bank Guarantee operated as an admission by conduct of unblemished completion.

Payment for Sixteen Months Beyond the O&M Period

A separate head of claim concerned the period after 31 October 2023. The petitioner's five-year O&M obligation expired on that date, but JUIDCO did not take over the project site despite repeated requests. The petitioner was compelled to continue maintaining the site without any extension of the work order or agreement. The petitioner specifically asserted this in paragraph 20 of the writ petition. JUIDCO's counter affidavit did not deny this assertion. Instead, paragraph 15 of the counter affidavit admitted that the project remained ongoing and active under the existing contractual agreement and had not reached its final conclusion.

The Court held that this admission by the respondents themselves demonstrated that the petitioner was entitled to monetary compensation for the sixteen months of O&M work performed beyond the contracted period — that is, from 1 November 2023 until the date of filing of the writ petition on 7 March 2025. The quantification of the total amounts due, set out by the petitioner at Annexure-11 of the petition and referenced at paragraph 11 of the writ petition, was not denied by the respondents.

The Court also recorded JUIDCO's candid admission in paragraph 12 of the counter affidavit that funds had not been made available by the Parent Department against R.A. Bill No.29, O&M dues, and electricity bills — and that JUIDCO is merely an executing agency. The funding constraint, the Court's reasoning made plain, is not a lawful basis to deny an admitted contractual entitlement.

Order

Justice Ananda Sen allowed W.P.(C) No.1563 of 2025 in its entirety. The following directions were issued:

• JUIDCO is directed to immediately release Running Bill No. R.A. 29 in favour of M/s Eagle Infra India Limited.
• JUIDCO is directed to disburse the entire dues of the petitioner with regard to O&M work.
• JUIDCO is held liable to make payment for O&M work for sixteen months from 1 November 2023 till the date of filing of the writ petition.
• All amounts payable will carry delayed payment interest at 10% per annum from the date each amount fell due until actual payment.
• The entire amount must be disbursed within sixty days from the date of receipt of a copy of the order.

The prayer relating to release of the Bank Guarantee was treated as having become infructuous given JUIDCO's own release of the guarantee during the pendency of the petition. Any pending interlocutory applications were disposed of.