Madhya Pradesh High Court
M/S Orion Contractors Pvt Ltd. Through ... vs Madhya Pradesh Rural Road Development ... on 13 October, 2025
Author: Vivek Rusia
Bench: Vivek Rusia
NEUTRAL CITATION NO. 2025:MPHC-IND:30097
1 WP-220-2025
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE VIVEK RUSIA
&
HON'BLE SHRI JUSTICE BINOD KUMAR DWIVEDI
ON THE 13th OF OCTOBER, 2025
WRIT PETITION No. 220 of 2025
M/S ORION CONTRACTORS PVT LTD. THROUGH DIRECTOR AND
AUTHORIZED SIGNATORY SHRI DEEPAK SONI KRISHNA T
Versus
MADHYA PRADESH RURAL ROAD DEVELOPMENT AUTHORITY
THROUGH THE CHIEF EXECUTIVE OFFICER BLOC TH FLOOR PA
AND OTHERS
Appearance:
Shri Aniket Naik - Advocate for the petitioner.
Shri Sanjay Kumar Karanjawala - Advocate for the respondents .
ORDER
Per: Justice Vivek Rusia
Petitioner has filed the present petition under Article 226 of the
Constitution of India seeking quashment of order dated 04.10.2024
(Annexure P/12), whereby the respondents have declined to release the
security deposit of package No.MP10506.
Facts of the case, in short, are as under:
02. The petitioner is a private limited company incorporated under the
Companies Act, 1986 (Now 2013). The respondent No.1 is a registered
society entrusted with public / sovereign function of construction and
maintenance of public roads and other infrastructure in the State of Madhya
NEUTRAL CITATION NO. 2025:MPHC-IND:30097
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Pradesh. The respondent No.2 is the General Manager concerning with the
Project Implementation Unit which allotted Package No.MP10506 to the
petitioner.
03. The respondents issued an NIT bearing Package No.MP10506 for
construction, upgradation and maintenance of the road for 5 years under
Pradhan Mantri Gram Sadak Yojana (PMGSY). The petitioner was awarded
the contract vide work order dated 08.06.2015. Indisputably, the petitioner
had successfully carried out the said work and also maintained the road for
the period of 5 years. The respondent issued a completion certificate dated
05.12.2017 to the petitioner (Annexure P/3). The respondents have not issued
any complaint or demand in respect of this work.
04. The petitioner was awarded another works contract vide Package
No.MP10UPG07. Vide notice dated 17.09.2021, the respondents issued a
recovery of Rs.59,80,172/- with interest to the petitioner, which was
challenged by way of Writ Petition No.19220/2023 inter alia on the ground
that the reference is pending before the M.P. Arbitration Tribunal. In the said
writ petition, the respondents filed the reply stating that as per the terms and
conditions and General Condition of Contract, the recovery can be made
from the deposits made for other work / project by the petitioner (Package
No.MP10506). Vide order dated 15.12.2023, the writ petition came to be
allowed by restraining respondents to recover any amount till the
adjudication of reference case by the M.P. Arbitration Tribunal. It has also
been observed that the amount of Rs.59,80,172/- is not liable to be recovered
from any pending other work or by way of RRC from the petitioner and
NEUTRAL CITATION NO. 2025:MPHC-IND:30097
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amount which has already been recovered shall be subject to the outcome of
reference.
05. Thereafter, the petitioner has submitted a representation to the
respondent No.2 for release of the security amount of Package No.MP10506.
Vide letter dated 04.10.2024, the respondent No.3 informed that in view of
the aforesaid order passed by this Court, the remaining amount will be
released after the judgment passed by the M.P. Arbitration Tribunal hence,
this petition before this Court.
06. The respondents have filed the reply raising an issue of
maintainability of the petition and again reiterated that the work awarded
vide Package No.MP10UPG07 dated 16.11.2017 has been cancelled on
16.11.2018 due to non-completion of the work. The respondents have
already recovered the amount under recovery from the security deposit of
Package No.MP10506 before the order dated 15.12.2013 passed by the High
Court and now, the said amount is liable to be returned only after the
reference is decided by the Tribunal. As per Annexure R/2, the respondents
have recovered Rs.23,57,660/- from Package No.MP10506 BW.
07. Learned counsel appearing for the respondents prays from
dismissal of the petition.
We have heard learned counsel for the parties and perused the
record.
08. The issue which requires consideration is whether the action of the
respondent is justified in making recovery of the amount under Package
No.MP10UPG07 from the security deposit of Package No.MP10506.
NEUTRAL CITATION NO. 2025:MPHC-IND:30097
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Admittedly, the petitioner had successfully completed the work of Package
No.MP10506 and there is no recovery against the petitioner. The respondents
have not brought on record any terms and conditions of the contract executed
in Package No.MP10UPG07 which authorizes them to recover any amount
of this contract from the security deposit of the other contract.
09. The Clause 43.4 of standard bidding document for PMGSY of a
contract of Package No.MP10506, only authorises the respondents to
withhold the performance security equal to 5% of a contract price is repaid
to the contractor when the period of 5 years fixed for routine maintenance is
over and due certification by the Engineer. As per Clause 43.2, on
satisfactory completion of the whole of the construction work, half of the
total amount retained as security deposit is liable to be repaid to the
contractor. As per Clause 43.3, the additional performance security for
unbalanced bids as detailed in Clause 46 of the General Condition of
Contract is liable to be repaid to the contractor when the construction work is
complete. Therefore, there is no such provision brought on record by the
respondents which authorizes them to adjust the amount of performance
security in the recovery of any other contract.
10. So far as the order passed by this Court in Writ Petition
No.19220/2023 is concerned, first time the respondent informed in the said
writ petition that the amount of Rs.59,80,172/- recoverable in Package
No.MP10UPG07 has been recovered from the security deposit of Package
No.MP10506. This Court did not justify their action and only restrained to
recover Rs.59,80,172/- till the decision in the pending reference case in view
NEUTRAL CITATION NO. 2025:MPHC-IND:30097
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of the judgment passed by the Hon'ble Apex Court in the cases of Tulsi
Narayan Garg V/s M.P. Road Development Authority reported in 2019 SCC
OnLine SC 1158 and B.B. Verma V/s State of M.P. reported in (2007) 4
MPLJ 610. Now, the petitioner has challenged the said action in this petition,
thus, in absence of any authority or any agreement between the parties, the
respondents have wrongly adjusted the amount of Rs.25,06,620/- (or actual
amount adjusted).
11. In view of the above, the impugned order dated 04.10.2024
(Annexure P/12) is set aside. The withheld / adjusted security amount of
Package No.MP10506 be returned to the petitioner with interest at the rate of
6% per annum from the date of completion of 5 years of maintenance period
till payment.
12. With the aforesaid, this Writ Petition stands allowed and disposed
of.
Certified copy as per rules.
(VIVEK RUSIA) (BINOD KUMAR DWIVEDI)
JUDGE JUDGE
Divyansh
