SC stays attachment proceedings against Rajasthan govt in contractor refund case

New Delhi: The Supreme Court Monday stayed recovery and attachment proceedings against the Rajasthan govt after it was told that "movable property, including furniture and vehicles," had already been seized for non-payment in a contractor dispute.A bench of Justices M M Sundresh and N Kotiswar Singh agreed to hear the state's plea and issued notice to the contractor, seeking his response. Advocate Kartikeya Asthana told the court the Rajasthan high court had wrongly refused to entertain the govt's appeal on the ground of delay, despite a "satisfactory justification for the 259-day delay" being placed on record.
The dispute involves a Kota-based contractor. In Sept 2023, a trial court held that the state had breached a road construction contract and directed it to refund Rs 6.35 lakh to the company with 6% annual interest. The state filed its appeal in the Rajasthan high court in July 2024, after the limitation period had expired in Nov 2023.In August 2024, the high court refused to condone the delay and dismissed the appeal without examining the merits. Challenging that order, Asthana said the high court had wrongly dismissed the state's "well-reasoned condonation of delay application," which cited "unforeseen reasons, including a change in the state govt and the delayed process of appointing lawyers.""The high court failed to appreciate that there were three main reasons cited for the delay in the condonation application: (1) change in lawyers following the change in state govt, (2) concerned officials being deputed due to the state assembly elections and subsequently the 2024 parliamentary elections, and (3) the enforcement of the model code of conduct during the election period," the state said in its plea.After being informed that attachment warrants had been issued by the executing court and that govt movables had already been seized and attached, the Supreme Court passed an interim order staying the attachment proceedings."The high court erroneously dismissed the condonation of delay application and, consequently, the petitioners' appeal itself through a wholly arbitrary, unreasonable, and erroneous final order. It gravely erred in observing that there was falsity in either the condonation of delay application or the additional affidavit. The high court order suffers from arbitrariness and non-application of mind and ought to be set aside," the petition stated.