Kolkata, March 26 -- Observing that it amounts to absolute breach of trust if a state authority withholds payment of a contractor who performed the work satisfactorily, the Calcutta High Court directed the Public Works Department (PWD) to pay the dues of a contractor with interest for relaying a synthetic athletic track at Sports Authority of India (SAI), Kolkata.
The bench of Justice Amrita Sinha was moved by the contractor praying for release of admitted dues along with interest, besides releasing the earnest money deposit and the security deposit.
The work was executed within time. The contractor was hired by the PWD.
The petitioner company contended it was not paid because the SAI is not releasing payment to PWD on the ground that Customs Duty exemption was not obtained by PWD.
The court observed there is no privity of contract between SAI and the petitioner who was selected by PWD for the work allotted through tender.
It is the primary responsibility of the tender issuing authority to arrange for payment and disburse the same to the contractor.
"In the case at hand, Customs authority specifically refused to exempt duty, hence SAI will be liable to release payment in favour of PWD for onward transmission to the contractor. SAI can thereafter get the customs duty reimbursed from the authority in accordance with law," court observed.
Published by HT Digital Content Services with permission from Millennium Post.