Allahabad High Court Orders Verification of State's NIL Contractor-Dues Claim

Conflicting State figures about unpaid food-supply bills owed to five family-run firms

The firms supplied food packets for training programmes through the Government e-Marketplace. Payment-system failures caused funds to lapse. A 2025 departmental order admitted lower sums than claimed; later verification asserted NIL liability.

Issue and applicable law

The central question was conflicting State figures about unpaid food-supply bills owed to five family-run firms.

The Court distinguished enforceable admitted dues from genuinely disputed contractual quantum. It permitted civil proceedings with Section 14 Limitation Act protection and left recovery or set-off of excess payments open.

Court's reasoning

The Court held that a writ court may enforce the department's own admitted figure but contested excess claims requiring evidence belong in a civil suit. Its principal reason was that the later NIL assertion could not override earlier departmental admissions without comparing amounts actually released.

Decision and practical effect

Shortfalls in two petitions were ordered paid within two months with nine per cent interest from 15 January 2025; higher disputed claims were rejected with liberty to sue.

The ruling is significant because it clarifies how the stated legal standard should be applied to comparable disputes without extending the decision beyond the facts reported by the source.

Case details

• Case: M/s Jaiswal Foods through Proprietor Sudheer Jaiswal v. State of U.P. and others
• Court: Allahabad High Court
• Case number or citation: 2026 LiveLaw (AB) 654
• Judges: Justice Shekhar B. Saraf and Justice Abdhesh Kumar Chaudhary
• Source: https://www.livelaw.in/high-court/allahabad-high-court/allahabad-high-court-writ-court-test-state-claim-nil-outstanding-dues-department-earlier-admission-548677