Rajasthan High Court – Jodhpur
M/S Laxminath Infrastructure Private … vs The State Of Rajasthan on 13 July, 2026
Bench: Pushpendra Singh Bhati, Praveer Bhatnagar
[2026:RJ-JP:31004-DB]
HIGH COURT OF JUDICATURE FOR RAJASTHAN
AT JODHPUR
D.B. Civil Miscellaneous Appeal No. 752/2025
CNR: RJHC010188752025
URN: CMA / 1846U / 2025
M/s Laxminath Infrastructure Private Limited, Churu Through
Director Mahendra Kumar Sharma S/o Bhagwanaram, Aged
About 65, R/o C-91, Bhagwan Vatika, Agresen Nagar, Churu
----Appellant
Versus
1. The State Of Rajasthan, Through Pricipal Secretary,
Public Works Department Secretariat Jaipur
2. District Collector, Churu Rajasthan
3. The Chief Engineer, Pradhamantri Gram Sedak Yojna,
Public Works Deparment, Add. 06, Nirman Bhawan
Second Floor Block -A In Front Of Jaipur Club, Jaccob
Road, Post Jaipur
4. The Additional Chief Engineer, Gram Sedak Yojana,
Public Works Department, Add. -06 Near Museum
Chohraha Bikaner
5. The Superintending Engineer, Public Works Department
Division Churu Post Churu
6. The Executive Engineer, Public Works Department,
Division Ratangarh District Churu
7. Assistant Engineer, Public Works Department Post
Bidasar District Churu
----Respondents
For Appellant(s) : Mr. Nitin Trivedi
For Respondent(s) : Mr. Ayush Ghelot for Mr. Rajesh
Panwar, AAG
HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI
HON’BLE MR. JUSTICE PRAVEER BHATNAGAR
Order
Reportable
13/07/2026
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1. The present Civil Miscellaneous Appeal has been preferred by
the appellant-plaintiff claiming the following relief :-
“That the present civil misc. appeal may kindly be allowed and
the judgment and decree dated 04.12.2024 passed by learned
Commercial Court, Bikaner in Civil Original no.36/2023, (M/s.
Laxminath Infrastructure Private Limited, Churu Vs. State of
Rajasthan & Ors.) whereby the recovery suit filed by the
plaintiff has been dismissed, may kindly be quashed and set
aside and accordingly, the relief claimed by the plaintiff in the
relief clause of the plaint may kindly be granted in his favour
by way of passing decree for amount of Rs.8,46,938/- along
with interest @ 12% per annum from the date of filing of suit
i.e. 02.07.2022 to the date of realization of the aforesaid
amount. The respondents department may kindly be directed
to make the aforesaid payment to the plaintiff.”
2. The appellant-plaintiff instituted a suit for recovery of
Rs.8,46,938/- before the learned Commercial Court No.1, Jodhpur
(hereinafter referred to as the ‘learned Commercial Court,
Jodhpur’) on 02.07.2022. During the pendency of the suit, the
Commercial Court at Bikaner came to be established and the
subject dispute fell within its territorial jurisdiction. Consequently,
vide order dated 15.09.2022, the learned Commercial Court,
Jodhpur returned the plaint for presentation before the Court of
competent territorial jurisdiction. The plaint was thereafter
presented before the learned Commercial Court, Bikaner and
registered as Civil Original No.36/2023.
2.1. The dispute arises out of a works contract awarded by the
respondent-department in favour of the appellant-plaintiff for
upgradation of the road from Village Jili to Sadu Choti, Tehsil
Ratangarh, District Churu, under the Pradhan Mantri Gram Sadak
Yojana. Pursuant thereto, Work Order No.508-17 dated
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07.05.2010 was issued in favour of the appellant-plaintiff, and the
contractual work was stipulated to be completed by 15.03.2011.
The contract further contemplated a defect liability period of five
years, which expired on 14.03.2016. Thereafter, the respondent-
department issued the work completion certificate on 01.06.2016.
The dispute between the parties pertains to the appellant-
plaintiff’s claim for payment of the outstanding amount under the
said contract, which, according to the appellant-plaintiff, remained
unpaid.
2.2. As the claim remained unresolved, the appellant-plaintiff
sought recourse to the dispute resolution mechanism
contemplated under Clause 24 of the Standard Bidding Document
forming part of the contract. The appellant-plaintiff submitted its
claim before the Standing Empowered Committee on 07.11.2017
and deposited the prescribed fee of Rs.15,400/-. According to the
appellant-plaintiff, the Committee did not take any decision on the
claim. The appellant-plaintiff thereafter caused a legal notice
dated 14.08.2018 to be sent to the respondents through
registered post, asserting its claim for the outstanding contractual
dues. According to the appellant-plaintiff, the said notice was duly
served upon the respondents; however, the dispute remained
unresolved.
2.3. The dispute thereafter travelled to arbitration. The learned
Arbitrator, vide order dated 24.07.2019, recorded that no
amicable settlement could be arrived at between the parties and
disposed of the proceedings. The appellant-plaintiff thereafter
continued to pursue its claim for recovery of the outstanding
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contractual amount and, prior to institution of the commercial suit,
underwent the process of pre-institution mediation contemplated
under Section 12A of the Commercial Courts Act, 2015
(hereinafter referred to as the ‘Act of 2015’). Upon the mediation
proceedings not resulting in a settlement, the appellant-plaintiff
instituted the aforesaid recovery suit before the learned
Commercial Court, Jodhpur on 02.07.2022.
2.4. The learned Commercial Court, Bikaner, vide judgment and
decree dated 04.12.2024, dismissed the suit. The dismissal
principally rests upon three findings, namely:
(i) The pre-institution mediation undertaken prior to institution
of the suit before the learned Commercial Court, Jodhpur did not
satisfy the mandate of Section 12A of the Act of 2015 upon
presentation of the returned plaint before the learned Commercial
Court, Bikaner;
(ii) The suit was barred by limitation, the expiry of the defect
liability period on 14.03.2016 having been treated as the starting
point for computation thereof; and
(iii) The appellant-plaintiff had not validly availed the contractual
remedy contemplated under Clause 24 of the Standard Bidding
Document.
3. Learned counsel appearing for the appellant-plaintiff submits
that the object underlying Section 12A of the Commercial Courts
Act, 2015 is to afford the parties an opportunity to explore an
amicable settlement before institution of commercial proceedings
and thereby facilitate early resolution of commercial disputes. It is
submitted that the statutory requirement is mandatory; however,
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once the process contemplated thereunder has admittedly been
undertaken in respect of the same commercial dispute, the
provision does not contemplate repetition of the identical exercise
merely on account of return of the plaint for presentation before
the Court having competent territorial jurisdiction.
3.1. Learned counsel further submits that the appellant-plaintiff
had admittedly undergone the process of pre-institution mediation
prior to institution of the suit before the learned Commercial
Court, Jodhpur and, therefore, the requirement under Section 12A
of the Act of 2015 stood duly complied with. According to learned
counsel, the subsequent return of the plaint and its presentation
before the learned Commercial Court, Bikaner did not alter the
parties, the underlying commercial dispute or the relief claimed.
Thus, mere change of the Court before which the plaint came to
be presented could not render the pre-institution mediation
already undertaken ineffective or necessitate a fresh process
under Section 12A of the Act of 2015.
3.2. Assailing the finding on limitation, learned counsel for the
appellant-plaintiff submits that the learned Commercial Court
proceeded from the expiry of the defect liability period on
14.03.2016 directly to the date of institution of the suit, without
determining the point at which the amount claimed became due
and the right to sue for its recovery accrued under the contractual
framework. It is further submitted that the appellant-plaintiff had
invoked the dispute resolution mechanism contemplated under
Clause 24 of the Standard Bidding Document by approaching the
Standard Empowered Committee and depositing the prescribed
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fee of Rs.15,400/-. The claim, however, was not decided by the
Committee and the appellant-plaintiff thereafter issued the legal
notice dated 14.08.2018 and pursued the dispute further.
According to learned counsel, the aforesaid chronology and the
legal effect, if any, of the proceedings undertaken under the
contractual mechanism were required to be examined before
returning a finding that the suit was barred by limitation.
3.3. Learned counsel for the appellant-plaintiff further submits
that the learned Commercial Court erred in concluding that the
contractual dispute resolution mechanism under Clause 24 had not
been validly invoked merely on account of the alleged deviation
from the procedure prescribed thereunder. It is contended that the
appellant-plaintiff had approached the Standard Empowered
Committee and deposited the requisite fee; therefore, the steps
actually undertaken by the appellant-plaintiff, the nature of the
procedural requirement alleged to have been breached and the
legal consequence of such breach were required to be examined
with reference to Clause 24 itself. According to learned counsel,
the issue could not have been concluded solely by recording
procedural non-compliance without determining its effect under
the contractual framework.
4. Per contra, learned counsel appearing for the respondents
submits that upon return of the plaint by the learned Commercial
Court, Jodhpur and its subsequent presentation before the learned
Commercial Court, Bikaner, the proceedings before the latter
Court constituted a fresh institution of the suit in the eye of law. It
is, therefore, contended that the appellant-plaintiff was required
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to satisfy the mandatory statutory requirements applicable on the
date of such institution, including compliance with Section 12A of
the Commercial Courts Act, 2015. According to learned counsel,
the pre-institution mediation undertaken prior to institution of the
suit before the learned Commercial Court, Jodhpur could not
dispense with the requirement of compliance upon fresh
presentation of the plaint before the Court of competent territorial
jurisdiction.
4.1. Learned counsel further supports the finding recorded by the
learned Commercial Court on the issue of limitation. Placing
reliance upon the judgment of the Hon’ble Supreme Court in Geo
Miller and Company Private Limited Vs. Chairman,
Rajasthan Vidyut Utpadan Nigam Limited, (2020) 14 SCC
643, particular emphasis has been laid upon paragraph 21
thereof, which reads as follows:-
“Applying the aforementioned principles to the present
case, we find ourselves in agreement with the finding
of the High Court that the appellant’s cause of action
in respect of Arbitration Applications Nos.25/2003 and
27/2003, relating to the work orders dated 7-10-1979
and 4-4-1980 arose on 8-2-1983, which is when the
final bill handed over to the respondent became due.
Mere correspondence of the appellant or by way of
writing letters/reminders to the respondent
subsequent to this date would not extend the time of
limitation. Hence the maximum period during which
this Court could have allowed the appellant’s
application for appointment of an arbitrator is 3 years
from the date on which cause of action arose i.e. 8-2-
1986. Similarly, with respect to Arbitration Application
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handed over and became due on 10-8-1989. this has
not been disputed by the appellant. Hence the
limitation period ended on 10-81992. Since the
appellant served notice for appointment of arbitrator in
2002, and requested the appointment of an arbitrator
before a court only by the end of 2003, his claim is
clearly barred by limitation.”
4.2. On the strength of the aforesaid judgment, learned counsel
submits that limitation commences when the cause of action first
accrues and cannot be extended or revived merely by subsequent
correspondence, representations, reminders or issuance of a legal
notice. It is contended that continued pursuit of a claim does not
constitute a continuing cause of action and, therefore, the steps
subsequently taken by the appellant-plaintiff could not, by
themselves, save an otherwise time-barred claim. According to
learned counsel, the learned Commercial Court has rightly held
the suit to be barred by limitation.
4.3. Learned counsel further submits that the appellant-plaintiff,
having sought to invoke the dispute resolution mechanism
contemplated under Clause 24 of the Standard Bidding Document,
was bound to adhere to the procedure prescribed thereunder. It is
contended that mere submission of a claim before the Standard
Empowered Committee or deposit of the prescribed fee would not
constitute a valid invocation of the contractual mechanism if the
procedure stipulated under Clause 24 was not duly followed.
According to learned counsel, the appellant-plaintiff cannot derive
any legal advantage from steps taken contrary to the agreed
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contractual procedure, nor can such steps have the effect of
extending the period of limitation.
4.4. Learned counsel relied on the following judgments:
(i.) M/S Dhanbad Fuels Private Limited vs Union of India & Anr.
(SLP (C) No. 4980 of 2021, decided on 15.05.2025)
(ii.) Oil and Natural Gas Corporation Limited vs Modern
Construction and Co., (2014) 1 SCC 617;
(iii.) Geo Miller and Company Private Limited vs Chairman,
Rajasthan Vidyut Utpadan Nigam Limited, (2020) 14 SCC 643;
(iv.) Patil Automation Private Limited and Ors. Vs Rakheja
Engineers Private Limited, (2022) 10 SCC 1;
5. Heard learned counsel for the parties and perused the
material available on record as well as perused the judgments
cited at the Bar.
6. Upon consideration of the rival submissions and the
impugned judgment, this Court finds that the dismissal of the suit
essentially rests upon three distinct grounds, namely, (i) non-
compliance with Section 12A of the Act of 2015; (ii) limitation;
and (iii) non-compliance with the procedure contemplated under
Clause 24 of the Standard Bidding Document. The aforesaid issues
are, therefore, required to be examined in the same sequence.
7. At the outset, this Court deems it appropriate to deal with
the objection regarding Section 12A of the Act of 2015. There can
be no dispute that the requirement of pre-institution mediation
under Section 12A is mandatory where the suit does not
contemplate any urgent interim relief. The said position stands
settled by the Hon’ble Supreme Court in Patil Automation
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Private Limited & Ors. Vs. Rakheja Engineers Private
Limited (supra) and has been reiterated in M/s Dhanbad Fuels
Private Limited Vs. Union of India & Anr. (supra).
7.1. The present case, however, does not involve a situation
where the appellant-plaintiff instituted the suit without undergoing
the process of pre-institution mediation. Admittedly, prior to
institution of the suit before the learned Commercial Court,
Jodhpur on 02.07.2022, the appellant-plaintiff had undergone the
process contemplated under Section 12A of the Act of 2015, which
did not result in settlement. Subsequently, upon establishment of
the learned Commercial Court at Bikaner having territorial
jurisdiction over the dispute, the plaint was returned by the
learned Commercial Court, Jodhpur under Order VII Rule 10 CPC
and was thereafter presented before the learned Commercial
Court, Bikaner.
7.2. The respondents have relied upon Oil and Natural Gas
Corporation Limited Vs. Modern Construction and Co.
(supra) to contend that presentation of a returned plaint before
the competent Court amounts to fresh institution of the suit. The
said principle, however, does not answer the issue arising in the
present case. The question before this Court is whether the
process of pre-institution mediation, already undertaken between
the same parties in respect of the same commercial dispute, was
required to be repeated merely because the plaint was returned
and presented before the Court having territorial jurisdiction.
7.3. This Court notes that Section 12A is intended to ensure that,
before a commercial dispute is brought before the Court, the
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parties are afforded an opportunity to explore its resolution
through mediation. In the present case, such an opportunity had
already been afforded to the parties and the process contemplated
under Section 12A had concluded without settlement before the
suit was initially instituted at Jodhpur. The subsequent return and
presentation of the plaint did not bring into existence a new
commercial dispute, nor did it alter the identity of the parties, the
underlying contract or the relief claimed.
7.4. Neither Section 12A nor the judgments cited before this
Court have been shown to require repetition of an already
concluded pre-institution mediation process in such circumstances.
The mandatory character of Section 12A undoubtedly requires
strict compliance with the statutory requirement before institution
of a commercial suit to which the provision applies; however,
where the prescribed process has already been undertaken in
respect of the same dispute between the same parties, such
compliance cannot be rendered ineffective merely because the
plaint is subsequently returned for presentation before the Court
of competent territorial jurisdiction.
7.5 Thus, requiring the appellant-plaintiff to undergo the
identical mediation process once again before presentation of the
returned plaint at Bikaner would amount to repetition of an
exercise already undertaken in respect of the very same
commercial dispute.
8. This brings the Court to the second issue, namely, limitation.
The learned Commercial Court has treated 14.03.2016, being the
date of expiry of the defect liability period, as the starting point of
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limitation and, proceeding on that basis, held the suit instituted on
02.07.2022 to be barred by limitation.
8.1. In Geo Miller (supra), the Hon’ble Supreme Court has held
that mere correspondence, letters or reminders issued after
accrual of the cause of action do not extend the period of
limitation. Therefore, the legal notice dated 14.08.2018 or the
continued pursuit of the claim by the appellant-plaintiff could not,
by themselves, extend or revive the period of limitation once the
right to sue had accrued.
8.2. The principle laid down in Geo Miller (supra), however,
necessarily requires the Court to first identify the point of time at
which the cause of action or the right to sue actually accrued. In
Geo Miller (supra), the date on which the final bill became due
was identified as the relevant date for such purpose. In the
present case, however, the learned Commercial Court has
proceeded on the premise that limitation commenced upon expiry
of the defect liability period on 14.03.2016.
8.3. The defect liability period under the contract related to the
obligation of the contractor to carry out repair and maintenance
for the stipulated period. The impugned judgment, however, does
not record as to how the expiry of the said period, by itself,
rendered the maintenance bills or the amount claimed by the
appellant-plaintiff due and payable. The date of expiry of the
defect liability period and the date on which the right to recover
the claimed amount accrued could not have been treated as
necessarily identical without examining the relevant contractual
terms and the nature of the claim raised by the appellant-plaintiff.
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8.4. The appellant-plaintiff has specifically pleaded that after
expiry of the defect liability period, it approached the
departmental mechanism contemplated under Clause 24 on
07.11.2017 and deposited the prescribed fee of Rs.15,400/-. It
thereafter issued the legal notice dated 14.08.2018 and pursued
arbitral proceedings, which came to be closed on 24.07.2019
without adjudication of the claim on merits. The suit was
thereafter instituted on 02.07.2022.
8.5. At this stage, it is necessary to clarify that this Court is not
recording any finding that the aforesaid correspondence or
proceedings, by themselves, extended the period of limitation or
generated a fresh cause of action. Equally, the closure of the
arbitral proceedings on 24.07.2019 cannot, merely on that
account, be treated as the starting point of limitation. The legal
effect, if any, of the proceedings undertaken by the appellant-
plaintiff has to be independently examined with reference to the
terms of the contract and the applicable law.
8.6. The primary question requiring determination was, therefore,
the point of time at which the amount claimed by the appellant-
plaintiff became due and payable and, consequently, when the
right to sue for recovery thereof first accrued. It is only upon
determination of the said date that the subsequent events and
their legal effect, if any, could be examined for the purpose of
determining whether the suit was within limitation.
8.7. The learned Commercial Court, however, proceeded directly
from the expiry of the defect liability period on 14.03.2016 to the
date of institution of the suit, without undertaking the aforesaid
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exercise. Therefore, while the principle laid down in Geo Miller
(supra) remains fully applicable, the finding on limitation, in the
manner recorded in the impugned judgment, cannot be sustained
without a proper determination of the date on which the right to
sue first accrued. The issue of limitation, therefore, requires fresh
consideration by the learned Commercial Court.
9. The third issue concerns compliance with Clause 24 of the
Standard Bidding Document. The learned Commercial Court has
held that the appellant-plaintiff did not follow the procedure
prescribed under the said Clause and, therefore, had not validly
invoked the contractual dispute resolution mechanism.
9.1. As noticed in the impugned judgment, Clause 24
contemplated a sequence for resolution of disputes. The dispute
was first required to be placed before the authority specified under
the contractual mechanism and, upon the dispute remaining
unresolved, the contractor could approach the Standing
Empowered Committee in the prescribed manner. The learned
Commercial Court found that the appellant-plaintiff approached
the Standing Empowered Committee without first following the
earlier stage contemplated under Clause 24.
9.2. The appellant-plaintiff, however, contends that it had
approached the departmental authorities and thereafter submitted
its claim before the Standing Empowered Committee along with
the prescribed fee of Rs.15,400/-. Its specific case is that the
objection raised by the respondents related to the authority
approached at the earlier stage, namely, that the appellant-
plaintiff approached the Chief Engineer instead of the Additional
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Chief Engineer. According to the appellant-plaintiff, such deviation
was merely procedural and could not, by itself, result in rejection
of the recovery claim.
9.3. In the considered opinion of this Court, determination of the
aforesaid issue required a closer examination of the terms of
Clause 24 itself. The learned Commercial Court was required to
examine the sequence prescribed under the said Clause, the
authorities required to be approached at each stage, and the steps
actually undertaken by the appellant-plaintiff. Upon such
examination, it was further required to determine the legal
consequence, if any, flowing from the appellant-plaintiff having
approached an authority other than the one specified under the
contractual mechanism.
9.4. Undoubtedly, the mere fact that the appellant-plaintiff
deposited the prescribed fee and approached the Standing
Empowered Committee would not, by itself, establish due
compliance with the procedure contemplated under Clause 24. At
the same time, before rejecting the appellant-plaintiff’s case on
the ground of non-compliance, the learned Commercial Court was
required to determine the precise nature of the procedural
deviation and the legal consequence attached thereto under the
contractual framework.
9.5. The aforesaid aspects have not been examined in the
impugned judgment in the manner required for a conclusive
determination of the issue. This Court, therefore, refrains from
recording any final finding regarding compliance or non-
compliance with Clause 24. The issue requires fresh consideration
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by the learned Commercial Court with reference to the contractual
terms, the authorities designated thereunder, the steps actually
undertaken by the appellant-plaintiff and the material available on
record.
10. The discussion aforesaid leads this Court to conclude that the
finding of the learned Commercial Court regarding non-compliance
with Section 12A of the Act of 2015 cannot be sustained and
hence is set-aside, since the appellant-plaintiff had already
undergone the process of pre-institution mediation in respect of
the same commercial dispute before the initial institution of the
suit. As regards limitation, the learned Commercial Court was
required to first determine when the amount claimed became due
and payable and when the right to sue first accrued, rather than
treating the expiry of the defect liability period, without further
examination, as the starting point of limitation. Similarly, the issue
regarding compliance with Clause 24 required examination of the
contractual procedure, the steps actually undertaken by the
appellant-plaintiff and the legal consequence of the alleged
deviation therefrom.
10.1. Since the findings on limitation and compliance with Clause
24 require fresh consideration on the basis of the contractual
stipulations, pleadings and material available on record, this Court
considers it appropriate not to express any opinion on the merits
of those issues. The appellant-plaintiff’s substantive claim for
recovery is, consequently, also required to be adjudicated afresh
in accordance with law.
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11. Accordingly, the present appeal is allowed. The judgment
and decree dated 04.12.2024 passed by the learned Commercial
Court, Bikaner in Civil Original No.36/2023 are hereby quashed
and set aside.
12. The matter is remanded to the learned Commercial Court,
Bikaner for fresh adjudication in accordance with law. The finding
recorded by this Court regarding compliance with Section 12A of
the Act of 2015 shall bind the learned Commercial Court. The
issues pertaining to limitation, compliance with Clause 24 of the
Standard Bidding Document, and the merits of the appellant-
plaintiff’s claim shall remain open for independent consideration.
13. The parties shall be at liberty to raise all factual and legal
submissions available to them. The learned Commercial Court
shall decide the matter on the basis of the pleadings, contractual
stipulations and evidence available on record, uninfluenced by the
findings recorded in the impugned judgment on the issues left
open by this Court. The proceedings shall continue from the stage
of final hearing.
14. The parties are directed to appear before the learned
Commercial Court, Bikaner on 10.08.2026.
15. All pending application(s) stand disposed of.
(PRAVEER BHATNAGAR),J (PUSHPENDRA SINGH BHATI),J
11/Raksha Rakhecha/632
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