PSK Engineering Construction And Co Vs National Projects Construction Corporation Limited & Anr. (Delhi High Court)
Delhi High Court has dismissed a writ petition filed by PSK Engineering Construction and Co. (the “Petitioner”) against the National Projects Construction Corporation Limited (NPCC) and another entity. The petition sought a court order to compel the NPCC to pay outstanding dues of over Rs. 4.16 crore, including final bill payments, a refund of a security deposit, and the return of a performance guarantee. The petitioner also asked the court to strike down Clause 37 of the contract, which it claimed was unconscionable and violated Article 14 of the Constitution of India due to unequal bargaining power.
The petitioner argued that it had successfully completed the construction work and had even received a satisfactory quality report from IIT Madras. The firm contended that the NPCC’s refusal to release the payments was arbitrary and unjust, and that a writ petition was a valid mechanism to challenge such high-handed actions by a state-owned enterprise. The petitioner cited precedents where courts had entertained contractual disputes when the state’s actions were arbitrary.
In its defense, the NPCC argued that the dispute was purely commercial and that the petitioner had willingly entered into the contract with full awareness of its terms. It stated that payment to the petitioner was contingent on the NPCC receiving payment from its client, as stipulated in Clause 37. The NPCC also pointed to existing communications showing that there were still unrectified defects in the construction work, indicating that the matter involved disputed questions of fact that a writ court could not resolve.
