Court orders payment without deduction, deems withholding unjust. Coercive measures post-NCLT approval not allowed.

The court ruled in favor of the petitioner, directing the respondents to clear pending bills for the completed work without deducting the vigilance claim. The court found the withholding of payments and issuance of a fresh tender during an ongoing contract to be unjust. It emphasized that post-approval of the resolution plan by the NCLT, coercive measures against the petitioner were not permissible. The writ petition was disposed of without costs, and pending applications were closed.

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Issues Involved:
1. Withholding of payments related to executed works.
2. Issuance of fresh tender despite ongoing contract.
3. Claims of substandard work and liquidated damages.
4. Applicability of the Insolvency and Bankruptcy Code (IBC) on pending claims.

Summary:

1. Withholding of Payments Related to Executed Works:
The petitioner sought a Writ of Mandamus to declare the respondents' action of withholding payments for works executed under agreement No. 17/2017-18 as illegal and arbitrary. The petitioner completed 85% of the work but faced delays due to external factors like the Seemandhra Strike and Phailin Cyclone. Despite these challenges, the respondents withheld payments citing a Vigilance Report that recommended recovering Rs. 1,93,87,048/- for substandard work and liquidated damages.

2. Issuance of Fresh Tender Despite Ongoing Contract:
The petitioner argued that the respondents issued a fresh tender notification for the same work without terminating the existing contract. This was done even though the petitioner had completed a significant portion of the work. The court found that the respondents' intention seemed to be to award the work to third parties, which was evident from their actions of issuing show-cause notices and withholding payments.

3. Claims of Substandard Work and Liquidated Damages:
The respondents justified withholding payments based on a Vigilance Report that cited substandard work and delays. They calculated liquidated damages as per Clause 48.20 of the agreement. However, the petitioner contended that the Vigilance Report was not communicated to them, and no opportunity was given to refute the claims. The court noted that the financial creditors of the petitioner had approached the NCLT, and the respondents did not file any claims before the NCLT, which approved the resolution plan.

4. Applicability of the Insolvency and Bankruptcy Code (IBC) on Pending Claims:
The court referred to Section 15, 13, 24, and 31 of the IBC Act, 2016, and cited a Supreme Court judgment which held that once a resolution plan is approved by the Adjudicating Authority, all claims not part of the resolution plan are extinguished. The court held that the respondents could not initiate any coercive measures against the petitioner post-approval of the resolution plan.

Conclusion:
The court directed the respondents to clear the pending bills for the 85% work completed by the petitioner without deducting the vigilance claim. The writ petition was disposed of with no order as to costs, and any pending miscellaneous applications were also closed.

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