M/S Laxminath Infrastructure Private … vs The State Of Rajasthan on 13 July, 2026

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    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

    SPONSORED

    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
    No.28/2003 relating to the work order dated 3-5-

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    1985, the respondent has stated that final bill was
    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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