Judgment Navaniti Prasad Singh, J. 1. The State has filed counter affidavits and rejoinders have been filed thereto by the petitioner. The case was heard on several dates and as would, be noticed adjourned for documents to be furnished by the State. In view of the stand taken by the State today, this writ petition is now being disposed of with the consent of parties as in my view no material issue is left to be decided. 2. This writ petition was filed on 24.03.2004 by the petitioner-Company for issuance of an appropriate direction to the respondent-State to make adequate fund allocation for payment of its long outstanding dues which was admitted by the authorities but could not be paid because of non-availability of fund. The matter was adjourned for several days alongwith other similar matters of the same petitioner. Ultimately, a counter affidavit was filed by the State stating that while the matter was pending before this Court, the matter was referred to a Liability Committee constituted by the State Government to ascertain the claims. The Liability Committee made enquires and came to a finding that the petitioner had delayed in executing the contract and as a consequence whereof, decided to impose liquidated damages to the extent of 10% of the contract value. The Liability Committee did not dispute the liability to pay the amount as claimed but held that in view of the penalty imposed which was substantially more than the amount due, nothing was payable to the petitioner rather money was recoverable from the petitioner. This finding of the Liability Committee was strenuously challenged by the petitioner. This Court required the documents which formed the basis of the decision of the Liability Committee to be produced. Petitioner asserted that it supplied the black pipes in time. The State took a stand that the supplies were delayed. Petitioner stated that an extension was granted which was being suppressed by the State. Petitioner produced letter of extension. State did not then dispute but sill maintained that the supplies were made even, beyond this date. This was again disputed by the petitioner on the ground that the Collector who was the authority to assess the claim and order for its payment had nowhere disputed the deliveries as being late. Petitioner produced letter of extension. State did not then dispute but sill maintained that the supplies were made even, beyond this date. This was again disputed by the petitioner on the ground that the Collector who was the authority to assess the claim and order for its payment had nowhere disputed the deliveries as being late. The Collector who was the authority under the agreement accepted the claim of the petitioner in full and that too immediately after supplies were made which is of the year 1997. If there was a delay, the Collector would not have accepted the tills nor forwarded them for payment nor sent reminder for allocation of funds to make the payment. In view of the aforesaid facts, in order to satisfy that there was in fact delay in supply as held by the Liability Committee constituted almost a decade after supplies were made, this Court adjourned the matter time and again giving opportunity to the State to produce documents to show that the supplies were delayed. One such document was mentioned in the order of the Liability Committee being a communication received from the District Magistrate long after the filing of the writ application. State was then directed to produce the said letter alongwith supporting documents to show that supplies were actually delayed as the petitioner all along maintained that there was no delay in supply. 3. Petitioner also challenged the right of the Liability Committee to impose penalty for delayed delivery on the ground that under the agreement, it was the Collector who was the competent authority to decide and settle matters with regard to payment or otherwise under the contract. The Collector not having invoked the penalty clause rather on the contrary assessed the amount and directed for its payment, it was not open to the Liability Committee and that too after almost a decade to raise this issue and impose a penalty and that too on a nonest ground. The petitioner strenuously submitted that all this was a pretence of a defence being set up by the State to deny legitimate payments and escape its liabilities. 4. This Court insisted that documents which formed the basis of the report sent by the Collector should be furnished to the Court. The case was adjourned at least half a dozen times but no document in support thereof was furnished. 4. This Court insisted that documents which formed the basis of the report sent by the Collector should be furnished to the Court. The case was adjourned at least half a dozen times but no document in support thereof was furnished. Yesterday when the case was taken up, I disclosed that if documents are not submitted then the Court would proceed on the basis of pleadings on record and draw an adverse inference against the State. Today when the case was taken up, the learned State Counsel, on instructions, made a statement that he had received a communication from the Department with the copy of the letter of the Collector which admitted the mistake on their part. The letter of the Department and the Collector produced for my perusal clearly stated that the dates of delivery as shown in the report filed earlier were in fact the date of letters by which delivery records were transmitted to the district headquarters and not the date of delivery. This clearly vindicated, the stand of the petitioner who maintained that delivery was within time though the authorities may have sent their reports later on. This also shows a very serious fact which I cannot brush aside easily. This clearly establishes that someone somewhere in the State had deliberately planned its communication in such a manner as to deliberately mislead not only the Liability Committee but also this Court. The information furnished at both levels were wrong to the knowledge of the person sending those informations. The purpose was singular to deny legitimate payments to the petitioner or at least create a pretence of dispute so that the payments may linger. 5. In view of the stand now taken, I need not go into the other questions about legality and propriety of imposition of penalty for delayed delivery because it is now established that there was no delay in delivery. If there was no delay in delivery, the entire finding of the Liability Committee which was headed by responsible officers like the Chief Engineer falls flat to the ground. It is left with no legs to stand. If that be so then it remains undisputed that the petitioner was liable to be paid Rs 16,67,717.22 P. as was the finding and recommendation of the Collector by his letter dated 12.06.1999 to the Secretary, Department of Irrigation (Minor Irrigation), Government of Bihar, Patna (Annexure-2/1). It is left with no legs to stand. If that be so then it remains undisputed that the petitioner was liable to be paid Rs 16,67,717.22 P. as was the finding and recommendation of the Collector by his letter dated 12.06.1999 to the Secretary, Department of Irrigation (Minor Irrigation), Government of Bihar, Patna (Annexure-2/1). It is also evident that the Collector had earlier also been writing to the authorities with regard to this. In that view of the matter, the dues being admitted and payable since 1997, the petitioner is liable to be compensated with interest as well as there was no sufficient cause for delay in payment. As I have already noted above, first the delay was because of insufficiency of funds and then by a false pretence of an excuse set up by the State. Because of both reasons, I find it a fit case to award interest at the rate of 12% per annum from the date when payment was due which would be from April, 1997 as the contract had to be completed by March, 1997. It is further directed that the entire amount that is the principal amount due alongwith interest should be paid to the petitioner-Company within a period of one month from production of a copy of this order. 6. So far as the second writ application is concerned, here again, the State has not disputed its liability to pay a sum of Rs. 1,41,836.56 P. Its stand is that as in the earlier case, a penalty of over Rs. 20.54 lacs was imposed as against, a liability of only Rs. 16.67 lacs there being a balance recoverable of over Rs. 3.5 lacs from the petitioner. The liability to pay the aforesaid amount of Rs. 1.141 lacs stood adjusted and, therefore, not payable by the State. For the reasons given above, the penalty as imposed has been found to be totally unsustainable. Consequently, it was held that the amount is payable. It follows that if no penalty was imposable, no adjustment or set off could be claimed and, as such, amount of Rs. 1,41,836.56 P. is payable alongwith interest as mentioned above and within the time stipulated above. 7. Accordingly, the two writ applications are allowed.