M/S. Udayam Constructions vs. The State Of Andhra Pradesh

Held

The Court held that the respondents' inaction in releasing the approved final bill amounts, despite the completion of works, was illegal, arbitrary, and unjust. The Court noted that there was no dispute regarding the execution of works or the bill amounts. Citing the principle of "first done, first paid" and giving priority to those whose works were below Rs. 50.00 lakhs, the Court directed the respondents to clear the bills and release the total amount of Rs. 23,65,685/- to the petitioner within four weeks of receiving the order. Additionally, the Court ordered that interest at 12% per annum be paid on this amount. The interest was to be computed from one month after the submission of the bill until the date of payment. The Court's reasoning was based on the established legal principles that withholding legitimate dues is a violation of constitutional rights and causes undue hardship, as articulated in the cited precedents.

Facts

M/s. Udayam Constructions (Petitioner) filed a writ petition seeking a direction to release final bill amounts totaling Rs. 23,65,685/- (comprising Rs. 20,47,895/- and Rs. 3,17,790/-) along with applicable GST, for works completed under agreements dated 27.10.2022 and 01.07.2022. The Petitioner had participated in a tender process and was the lowest bidder. The works involved removal of weed growth in specific drains. The Petitioner claims to have completed the works, obtained quality control certificates, and had the final bills approved on 17.02.2025. Despite completion and approval, the amounts were not released. The Petitioner argued that this non-payment caused significant financial hardship, including paying interest on borrowed funds. The respondents, the State of Andhra Pradesh and others, failed to file a counter affidavit despite several adjournments.

Key Issues

1. Whether the inaction of the respondents in releasing the final bill amounts, despite completion and approval of works, is illegal, arbitrary, and violative of Articles 14, 16, and 21 of the Constitution of India? 2. Whether the Petitioner is entitled to payment of the approved bill amounts along with interest? Petitioner's Arguments: The Petitioner contended that withholding the legitimately earned amounts is illegal, arbitrary, and unjust, violating Article 21 of the Constitution. They relied on the High Court's decision in S. Srinivas Vs. State of Andhra Pradesh, which held that withholding legitimate amounts amounts to deprivation and is violative of Article 21. The Petitioner also cited the Apex Court's opinion in Secretary, Irrigation Department, Government of Orissa and others V. G.C.Roy, stating that a person deprived of money is entitled to compensation. Furthermore, the Petitioner referred to J.Devendra Reddy V Kakatiya University and another, where withholding payment for contract works was deemed patent arbitrariness. Respondents' Arguments: The judgment records no specific arguments from the respondents, as they failed to file a counter affidavit.