Sri Ratan Job Works And Material Suppliers vs. The State Of Andhra Pradersh

Held

The Court acknowledged the Petitioner's claim that the works were executed in 2021 and that more than four years had elapsed without payment. The Court found that the Respondents had constituted an expert committee to examine the genuineness of the work bills, but no time limit was provided for the committee to submit its report. Considering the significant delay, the Court disposed of the writ petition with specific directions. Firstly, the Expert Committee was directed to examine the work bills and submit its report to the concerned authority within a period of four months from the date of the order. Secondly, if the work bills were found to be genuine, the Respondents were directed to disburse the amount to the Petitioner within a period of six weeks thereafter. The Court made no order as to costs. The ratio decidendi is that while inquiries are permissible, they must be conducted within a reasonable timeframe, and prolonged delays in disbursing legitimate payments are not permissible.

Facts

The Petitioner, Sri Ratan Job Works And Material Suppliers, a civil contractor, filed a writ petition challenging the inaction of the Respondents in releasing Rs.95,302/- despite completing assigned works. The Petitioner was awarded a contract by Respondent No.3, Gudivada Municipality, for repair of a tractor trailer for Rs.83,598/-, with an agreement executed on February 6, 2021. The Petitioner submitted a bill for Rs.83,598/-, which was subsequently passed at Rs.95,302/- after adding 18% GST. However, no payment was disbursed. The Respondents stated that adverse newspaper clippings led to an inquiry by the Commissioner and Director of Municipal Administration, who instructed an expert committee to examine the genuineness of work bills submitted by the Petitioner and others. The committee was constituted on December 13, 2024, and further action on payment was contingent on its report, with no specified timeline.

Key Issues

1. Whether the Respondents' action in withholding payment of Rs.95,302/- to the Petitioner, despite the Petitioner claiming completion of assigned works and the bill being passed, is illegal and arbitrary, thereby violating the Petitioner's right to receive payment for services rendered under the contract? 2. Whether the Respondents have acted within their authority and followed due process by initiating an inquiry based on newspaper clippings and constituting an expert committee to verify work bills, without providing a specific timeline for the inquiry and subsequent payment, thereby causing undue delay and prejudice to the Petitioner? Petitioner's Contentions: The Petitioner argued that the Respondents' inaction in releasing the payment, even after the bill was passed, is illegal and arbitrary. They contended that the works were completed in 2021, and over four years have elapsed without payment. Respondents' Contentions: The Respondents, through signed instructions from the Commissioner, Gudivada Municipality, stated that an inquiry was initiated based on adverse newspaper clippings. An expert committee was constituted to examine the genuineness of work bills, and further action regarding payment would be taken after receiving the committee's report. The Respondents did not provide any specific legal provisions or precedents in their submissions.