P Lakshmi Narayana vs. The State Of Andhra Pradesh

Held

The High Court allowed the writ petition. The Court directed the respondents to return the EMD and FSD with GST to the petitioner. Additionally, the Court ordered the respondents to pay interest on the amount payable for work done, as per the entitlement established by the judgment of the Division Bench in Writ Appeal No.724 of 2021 and batch of cases dated 12.10.2023. This payment was to be made within two months from the receipt of the order. The Court also clarified that it was open for the petitioner to agitate the claim for a higher rate of interest, if any, before an appropriate forum. No order as to costs was made. The ratio decidendi is that statutory deposits like EMD and FSD, along with applicable taxes and interest, must be returned promptly to contractors upon completion of work, and any delay warrants judicial intervention to ensure compliance with contractual and legal obligations, including constitutional rights.

Facts

The petitioner, P. Lakshmi Narayana, filed a writ petition seeking a direction to the respondents (State of Andhra Pradesh and others) to return the Earnest Money Deposit (EMD) and Full Security Deposit (FSD) along with Goods and Services Tax (GST) and interest. The petitioner had executed works under the "Neeru Chettu" scheme, vide Agreement No.108/SEA/2018-19, dated 20-07-2018. The petitioner contended that despite admission of entitlement to the amount, no payment was made, which was arbitrary. The respondents, through the learned Government Pleader, admitted the petitioner's claim regarding EMD and FSD, noting that the bill amount of Rs.13,93,000/- was paid on 12.10.2022, but EMD and FSD were yet to be returned.

Key Issues

1. Whether the respondents' action in not returning the EMD and FSD along with GST and interest, despite admitting the petitioner's entitlement, is illegal, arbitrary, and violative of constitutional rights and government orders? 2. Whether the petitioner is entitled to interest on the amount payable for work done, as per the judgment in Writ Appeal No.724 of 2021? Petitioner's arguments: The petitioner argued that the non-payment of EMD and FSD, along with GST and interest, was arbitrary and high-handed, violating Articles 14, 19(1)(g), and 21 of the Constitution of India, G.O.RT No.266 dated 15-02-2021, Memo No.1279341/FMU-WR.I/2020 dated 18-02-2021, and the principles of natural justice, as well as the order in W.A No.724 of 2021. Respondents' arguments: The learned Government Pleader for Irrigation admitted the claim regarding EMD and FSD and placed on record written instructions confirming that the bill amount was paid, but EMD and FSD were yet to be paid. The respondents prayed for appropriate orders.