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

Held

The Court acknowledged the Petitioner's claim that the works were executed in 2021 and that over four years had elapsed. The Court disposed of the writ petition with specific directions. Firstly, it directed the Expert Committee to examine the work bills and submit a report to the concerned authorities within a period of four months. Secondly, if the work bills submitted by the Petitioner 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 authorities must act expeditiously in disbursing payments for completed works and cannot indefinitely delay such payments based on inquiries without a defined timeline, especially when significant time has passed since the work was executed. The Court's intervention was based on the principle of ensuring timely payment for services rendered and preventing undue hardship due to administrative delays.

Facts

The Petitioner, Sri Ratan Job Works And Material Suppliers, is a civil contractor who was awarded a contract by Respondent No.3, Gudivada Municipality, for repairing dumper bins. The agreement was executed on February 5, 2021, for an amount of Rs. 95,969/-. The Petitioner claims to have completed the work and submitted a bill for Rs. 95,969/-, which was passed at a net amount of Rs. 92,714/- after adding 18% GST. Despite the bill being passed, no payment was disbursed. The Petitioner filed a writ petition challenging the inaction of the Respondents. The Respondents stated that an inquiry was initiated based on adverse newspaper clippings, leading to the formation of an expert committee to verify the genuineness of work bills submitted by the Petitioner and others. The committee's report was pending, and no timeline was provided for its submission.

Key Issues

1. Whether the Respondents' action in withholding payment of Rs. 92,714/- to the Petitioner, despite the work being completed 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' initiation of an inquiry based on newspaper clippings and the subsequent constitution of an expert committee to verify work bills, without a specified timeline, constitutes an unreasonable delay and amounts to an arbitrary action, causing prejudice to the Petitioner? Petitioner's Contention: The Petitioner argued that they had completed the assigned works and submitted the bill, which was processed and passed, yet payment was withheld without justification. They contended that the delay in payment, especially given that the work was completed in 2021, was illegal and arbitrary. Respondents' Contention: The Respondents submitted that an inquiry was initiated based on adverse newspaper clippings, and an expert committee was constituted to verify the genuineness of work bills. They stated that further action would be taken after receiving the committee's report, but did not provide a specific timeline for the inquiry or report submission.