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

Held

The Court held that the Respondents' action in withholding payment was causing undue delay, considering the work was executed in 2021 and more than four years had elapsed. The Court directed the constituted Expert Committee to examine the work bills submitted by the Petitioner and submit a report to the concerned authorities within a period of four months from the date of the order. If the work bills are found to be genuine, the Respondents are directed to disburse the amount to the Petitioner within a period of six weeks thereafter. The Court disposed of the writ petition with these directions, noting that no order as to costs was made.

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 the repair of 05 push carts. The contract amount was Rs. 92,819/-. The Petitioner claims to have completed the work and submitted a bill for the gross amount. This bill was passed for a net amount of Rs. 89,783/- after adding 18% GST. However, the Petitioner has not received any payment. The delay in payment is attributed to adverse newspaper clippings published in January 2023, which prompted an inquiry into the genuineness of work bills submitted by various contractors, including the Petitioner. An expert committee was constituted on December 13, 2024, to verify these bills, but no timeline was provided for its report.

Key Issues

1. Whether the Respondents' action in withholding the payment of Rs. 89,783/- to the Petitioner, despite the Petitioner claiming to have completed the assigned works, is illegal and arbitrary, thereby violating the Petitioner's right to receive payment for services rendered under the contract? Petitioner's Contention: The Petitioner argues that the delay in payment is illegal and arbitrary, as they have completed the contracted work. They contend that the Respondents are not justified in withholding the payment for an indefinite period, especially since the work was completed in 2021. Respondents' Contention: The Respondents, through signed instructions from the Commissioner, Gudivada Municipality, stated that adverse newspaper clippings necessitated an inquiry into the genuineness of work bills. An expert committee was constituted to examine these bills, and further action regarding payment would be taken only after receiving the committee's report. The Respondents did not explicitly argue against the Petitioner's claim of work completion but highlighted the ongoing verification process.