JUDGMENT Ramesh Kumar Merathia, J. Mr. P.K. Sinha, learned senior counsel appearing for the petitioner submitted that the action of the respondents in not paying the promised amount is arbitrary, unreasonable and illegal and, therefore, they should be directed to pay the promised amount with interest and costs. He relied on a decision of the Supreme Court in ABL International Limited and Anr. v. Export Credit Guarantee Corporation of India Limited and Ors. . 2. Mr. Gulam Mustafa, learned Counsel appearing for the respondents submitted that the writ Court should not interfere in this contractual matter involving disputed facts, especially when there was an arbitration clause. Moreover, the claim is barred by limitation. 3. The dispute lies in a narrow compass. According to the petitioner, the respondents directed the petitioner to transport coal between 13.10.1993 to 31.1.1994 for a distance longer than what was stipulated in the earlier contract with a clear stipulation that new rate will be paid for such transportation, whereas, according to the respondents, as the total quantity of coal to be transported under the earlier contract (ended on 12.10.1993) could not be transported, the contract was extended on the existing rate/old rate. 4. The contention of the respondents is absolutely wrong and contrary to their own documents. A contract was awarded to the petitioner for the period 12.10.1992 to 12.10.1993 for transporting coal from stock of Urimari to Central Saunda Railway Siding. The quantity mentioned was nine lacks metric tones. The distance mentioned was 5.4 km. and the rate was 18.15 per M.T. (Annexure 1). 5. From the correspondences made between the petitioner and the respondents (Annexures 2 to 6), it appears that the. respondents insisted for transporting the balance quantity of coal on the old rate, whereas the petitioner insisted for payment of new rate on the ground that the distance was longer than the old contract. Ultimately by letter dated 4.11.1993, the respondents agreed for payment of new rate. The said letter reads as follow: Sub: Transportation of coal from Urimari stock to C. Saunda Rly. Siding beyond 12.101993 against agreement No. Dev/Tra-Urimari/C. Saunda/92-93/2905 dt. 28.4.1993. Extension of time granted from 13.10.1993 to 12.1.1994 vide this office letter No. 10408 dated 20.10.1993. Dear Sir, You are requested to continue the above work beyond 12.10.1993 and for the quantity transported with effect from 13.10.1993, provisional payment will be made at the existing rate Le. Rs. Siding beyond 12.101993 against agreement No. Dev/Tra-Urimari/C. Saunda/92-93/2905 dt. 28.4.1993. Extension of time granted from 13.10.1993 to 12.1.1994 vide this office letter No. 10408 dated 20.10.1993. Dear Sir, You are requested to continue the above work beyond 12.10.1993 and for the quantity transported with effect from 13.10.1993, provisional payment will be made at the existing rate Le. Rs. 18.15/-MT subject to adjustment to the new final tendered rates. If the new rate is below the existing rate, recovery will be made from the bills/dues and if the new rate is higher, excess payment will be made for the quantity transported from 13.10.1993 for the extension granted upto 12.1.1994. This has got the approval of competent authority with the concurrence of finance vide Cone. No. AFM (S)/cone/ 112/ Uri/CT/Adj in rate/Rev/93-94 dt. 28.10.1993. Again letter dated 13.12.1993 (Annexure 7/1) was issued to the petitioner in similar terms, relevant portion of which reads as follow: You are directed to continue the transportation from Potanga to C/Saunda Rly. Siding at the existing terms and conditions of the agreement for transportation of coal from Urimari to C/Saunda siding vide award No. Dev/TransUri/C.BND/92/2176R dated 16.3.1993 on the new tender rate to be finalised. Payment for this job shall be made provisionally as per existing rate le. Rs. 18.15 per M.T. subject to adjustment with the new tender rate till finalisation of the tender. 6. Under the letter dated 20th December, 1995 (Annexure 10) issued by the respondents, the petitioner was awarded contract for the subsequent period i.e. from 1.2.1994 to 31.3.1995 inter alia for transportation of coal from Potanga Depot situated at a longer distance of 5.7 k.m. at the new rates. The petitioner claimed difference between the old rates and the new rates for transportation/work done as per the aforesaid direction and promise of the respondent. 7. In paragraph 29 of the writ petition, Annexure 14 was reproduced to show that the petitioners claim was found correct by the Project Officer and the amount payable to the petitioner was quantified as Rs. 11.61.572.04P. In paragraph 34 of the counter affidavit, the respondents have not denied the said calculation, but said that the same was not approved for the reason that the subsequent transportation was covered by the old contract. 8. Such stand is wholly against the aforesaid documents of the respondents. 11.61.572.04P. In paragraph 34 of the counter affidavit, the respondents have not denied the said calculation, but said that the same was not approved for the reason that the subsequent transportation was covered by the old contract. 8. Such stand is wholly against the aforesaid documents of the respondents. Thus in spite the aforesaid promises and the report of the Project Officer, the respondents did not pay difference of the old rate and the new rate to the petitioner and ultimately refused to pay the said amount by issuing a cryptic letter dated 12.5.1997 (Annexure 12) which reads as follow: Sub.: Transportation of coal from Urimari Potanga stock to Central Saunda Rly. Siding-13.10.1993 to 31.1.1994. Ref.: Your representation vide No. ATC/ Coal/Uri. C. SND/94 dated 1.2.1996. This is in reference to your -representation vide letter No. ATC/Coal/Uri C SND/94 dt. 1.2.1996 with a copy to CMD, CCL, Ranchi, D(T)(O), CCL and D(F) for release of payment for the subject work at approved new tendered rates for the period w.e.f. 1.2.1994. The matter has been examined at various levels at Area and Hqr. and it is observed that there is no justification for reopening the issue beyond approval already communicated and implemented. This is for your information. The petitioner made further representations protesting to the said action and asserting his claim but as nothing was done, this writ petition was filed on 28.1.1999 against the said letter dated 12.5.1997. From the facts and circumstances noticed above, it is clear that the claim was not time barred. 9. It is further clear that a new contract was created on new rate between the parties on the basis of the correspondences exchanged between them for the period 13.10.1993 to 31.1.1994 and, therefore, it cannot be accepted that the petitioner should be driven to take recourse to arbitration clause contained in the old contract. It cannot be disputed that on the direction of the respondents, the petitioner continued to transport coal between 13.10.1993 to 31.1.1994 on the clear assurance that payment will be made as per the new rate. 10. It is true that the dispute arises out of a contract but from the documents of the respondents themselves, it is clear that refusal to pay the promised new rate to the petitioner is wholly arbitrary, unreasonable and illegal. 10. It is true that the dispute arises out of a contract but from the documents of the respondents themselves, it is clear that refusal to pay the promised new rate to the petitioner is wholly arbitrary, unreasonable and illegal. The respondents are "State" within the meaning of Article 12 of the Constitution of India and it is duty bound to act fairly and reasonably. 11. In the case of ABL International Ltd. (supra) one of the questions was whether a writ petition under Article 226 of the Constitution of India is maintainable to enforce a contractual obligation of the State or its instrumentalities by aggrieved party. The following portion of the judgment of Gujarat State Financial Corporation v. Lotus Hotels (P) Ltd. was referred: The instrumentality of the State which would be other authority under Article 12 cannot commit breach of a solemn undertaking to the prejudice of the other party which acted on that undertaking or promise and put itself in a disadvantageous position. The appellant Corporation, created under the State Financial Corporation Act, falls within the expression of other authority in Article 12 and if it backs out from such a promise, it cannot be said that the only remedy for the aggrieved party would be suing for damages for breach and that it could not compel the Corporation for specific performance of the contract under Article 226. Paragraph 19 of ABL International Ltd. (supra) reads as follow: Therefore, it is clear from the above enunciation of law that merely because one of the parties to the litigation raises a dispute in regard to the facts of the case, the Court entertaining such petition under Article 226 of the Constitution is not always bound to relegate the parties to a suit. In the above case of Gunwant Kaur this Court even went to the extent of holding that in a writ petition, if the facts require, even oral evidence can be taken. This clearly shows that in an appropriate case, the writ Court has the jurisdiction to entertain a writ petition involving disputed questions of fact and there is no absolute bar for entertaining a writ petition even if the same arises out of a contractual obligation and/or involves some disputed questions of fact. This clearly shows that in an appropriate case, the writ Court has the jurisdiction to entertain a writ petition involving disputed questions of fact and there is no absolute bar for entertaining a writ petition even if the same arises out of a contractual obligation and/or involves some disputed questions of fact. The following portion of paragraph 23 is also relevant: It is clear from the above observations of this Court, once the State or an instrumentality of the State is a party of the contract, it has an obligation in law to act fairly, justly and reasonably which is the requirement of Article 14 of the Constitution of India.... Ultimately in paragraph 27, it was held as follow: From the above discussion of ours, the following legal principles emerge as to the maintainability of a writ petition- (a) In an appropriate case, a writ petition as against a State or an instrumentality of a State arising out of a contractual obligation is maintainable. (b) Merely because some disputed questions of fact arise for consideration, same cannot be a ground to refuse to entertain a writ petition in all cases as a matter of rule. (c) A writ petition involving a consequential relief of monetary claim is also maintainable. In the said case, it was also observed that as considerable time had elapsed, the interest of justice demands that the proceedings should come to an end as early as possible and the parties should not be driven to file a suit. 12. In the facts and circumstances noticed above, I am satisfied that the petitioner has made out a case on the basis of the admitted documents of the respondents. There is no option but to hold that the impugned action of the respondents is arbitrary, unreasonable and illegal. The amount of Rs. 11,61,572.04 quantified by the respondent No. 5/The Project Officer was withheld without any basis. At this distance time i.e. more than 10 years, it will not be just and proper to remand the matter for reconsideration to the respondents, as submitted by Mr. Mustafa, learned Counsel appearing on behalf of the respondents, 13. The amount of Rs. 11,61,572.04 quantified by the respondent No. 5/The Project Officer was withheld without any basis. At this distance time i.e. more than 10 years, it will not be just and proper to remand the matter for reconsideration to the respondents, as submitted by Mr. Mustafa, learned Counsel appearing on behalf of the respondents, 13. In the result, this writ petition is alowed and the respondents are directed to pay the said amount with simple interest @ 10% per annum from the date of filing of this writ petition i.e. 28.1.1999 within 30 days from the date of receipt/production of a copy of this order. However, no costs.