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 2022 and that more than three years had elapsed since then. Considering the delay, the writ petition was disposed of with specific directions. The Court directed the constituted Expert Committee to examine the work bills and submit a report to the concerned authorities within four months. 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 six weeks thereafter. The Court made no order as to costs. The ratio decidendi is that prolonged and unexplained delays in disbursing payments for completed works, even in the face of ongoing inquiries, are not permissible, and a time-bound resolution is necessary. The Court did not decide on the genuineness of the bills, leaving that to the expert committee.

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.95,640/- for completed works. The Petitioner was awarded a contract by Respondent No.3, Gudivada Municipality, for repairing pushcarts, with an agreement executed on 15.11.2022 for Rs.83,895/-. The Petitioner submitted a bill for Rs.83,895/-, which was subsequently passed at Rs.95,640/- after adding 18% GST. Despite the bill being passed, no payment was disbursed. The Respondents' counsel submitted instructions indicating that adverse newspaper clippings led to an inquiry into the genuineness of work bills, and an expert committee was constituted on 13.12.2024 to verify these bills. The Respondents stated that further action would be taken after receiving the committee's report, but no time limit was specified.

Key Issues

1. Whether the Respondents' action in withholding payment of Rs.95,640/- to the Petitioner for completed works is illegal and arbitrary, in violation of the agreement and principles of natural justice, particularly concerning the delay in payment and the process of verification of work bills? (Mixed question of law and fact, concerning contract law and administrative action). Contentions: Petitioner: Argued that the Respondents' inaction in releasing the payment is illegal and arbitrary, despite the completion of assigned works and the passing of the bill. The Petitioner implicitly relies on the contractual obligation for payment upon completion of work. Respondents: Submitted that adverse newspaper clippings necessitated an inquiry into the genuineness of work bills. An expert committee was constituted to verify the bills, and further action would be taken based on its report. The Respondents did not explicitly argue against the Petitioner's claim on merits but highlighted the ongoing verification process.