P S N Reddy Constructions vs. The State Of Andhra Pradesh

Held

The Court held that the non-payment of admitted dues was arbitrary and required intervention. Citing previous judgments of the High Court, including a learned Single Judge's order dated 05.10.2021 and a Division Bench judgment in Writ Appeal No.724 of 2021 and batch dated 12.10.2023, the Court directed the respondents to release the admitted amount of Rs. 9,73,160/- to the petitioner. Additionally, the Court ordered the payment of interest at the rate of 6% per annum. This payment is subject to the condition that the petitioner furnishes the necessary GST particulars to the respondents. The Court also clarified that it would be open for the petitioner to pursue a claim for a higher rate of interest, if applicable, in an appropriate forum. The Court made no order as to costs. The writ petition was disposed of with these directions.

Facts

The petitioner, P S N Reddy Constructions, was awarded a contract under a scheme in East Godavari District. After completing the work, a final bill of Rs. 9,73,160/- was prepared. The petitioner approached the High Court via a writ petition as the respondents had not made the payment despite admitting the petitioner's entitlement. The petitioner argued that the non-payment was arbitrary and high-handed. The respondents, through the learned Government Pleader for Irrigation, admitted the claim but stated that payment was pending due to a pending Letter of Credit (LOC). They assured that payment would be made upon release of the LOC.

Key Issues

1. Whether the non-payment of the admitted contractual dues of Rs. 9,73,160/- to the petitioner by the respondents is arbitrary and warrants interference by this Court under Article 226 of the Constitution of India? Petitioner's Contentions: The petitioner argued that the respondents admitted the entitlement to the payment of Rs. 9,73,160/- but failed to make the payment, which was arbitrary and high-handed. They relied on previous orders of the Court, including a learned Single Judge's judgment dated 05.10.2021 in W.P.No.10038 of 2021 and batch, which held such non-payment as arbitrary and requiring prompt clearance. Respondents' Contentions: The learned Government Pleader for Irrigation admitted the petitioner's claim and placed on record instructions from the Executive Engineer, Ramachandrapuram, dated 16.04.2024. The reason provided for non-payment was a pending LOC, with an assurance that payment would be made soon after its release.