M/S.Sp Pharma Lines vs. The State Of Andhra Pradesh

Held

The Court allowed the writ petition in part. It set aside the impugned Memo R.C.No.1580031/CPS/2021, dated 04.12.2021, issued by Respondent No.2. The Court directed Respondent No.2 to release the payment in respect of the Rate Contract Purchase orders within a period of three weeks from the date of receipt of a copy of the order. The Court reasoned that the matter was covered by a previous judgment of the High Court in W.P.No.39324 of 2022. The Court did not explicitly address the impugned memo dated 24.02.2020, but by setting aside the subsequent memo and directing payment, it implicitly found the grounds for withholding payment to be invalid. The ratio decidendi is that if a matter is covered by a previous High Court judgment, similar relief should be granted, and payments due under Rate Contracts should be released promptly, adhering to the terms of the agreement and prior judicial pronouncements.

Facts

The petitioner, M/s. SP Pharma Lines, filed a writ petition seeking to declare two impugned memos dated 24.02.2020 and 04.12.2021, issued by Respondent No. 2, as illegal and unconstitutional. The petitioner also sought a direction to release payment of Rs. 1,01,42,446/- along with 24% interest for pending invoices. The petitioner argued that the issues were covered by a previous High Court judgment in W.P.No.39324 of 2022. The respondents, through the learned Government Pleader for Labour, submitted written instructions stating that payments were being made to authorized distributors instead of the Rate Contract (RC) firms, contrary to the agreement. This was due to scrutiny of payments for drug procurement, and the petitioner was directed to submit invoices of main RC firms for payment processing as per ESIC RC manual rule No. 20 and Audit Object.

Key Issues

1. Whether the impugned memo dated 24.02.2020 issued by Respondent No.2 is illegal, arbitrary, unconstitutional, and contrary to the judgment dated 18.07.2023 passed by this High Court in W.P.No.39324 of 2022? 2. Whether the impugned proceedings Rc.No.1580031/CPS/2021, dated 04.12.2021 issued by Respondent No.2 is illegal, arbitrary, unconstitutional, and contrary to the judgment dated 18.07.2023 passed by this High Court in W.P.39324 of 2022? Petitioner's Contention: The issues involved in the writ petition are squarely covered by the order dated 18.07.2023 passed by this Court in Writ Petition No.39324 of 2022, and a similar order should be passed. Respondent's Contention: Payments were being made to authorized distributors instead of the Rate Contract (RC) firms, contrary to the agreement. Payments to the petitioner were stopped in view of ESIC RC manual rule No.20 and Audit Object, and the petitioner was directed to submit invoices of main RC firms for processing payments.