M/S. Udayam Constructions vs. The State Of Andhra Pradesh

Held

The Court held that the non-payment of admitted dues by the respondents was arbitrary, aligning with previous judicial pronouncements. The Court directed the respondents to release the admitted amount of Rs. 26,01,470/- to the petitioner. Furthermore, the Court directed the respondents to pay interest on this amount at the rate of 6% per annum, referencing a judgment of the Division Bench of the High Court in Writ Appeal No.724 of 2021 and batch dated 12.10.2023. The payment, including interest, was ordered to be made within three months from the date of receipt of the order. The petitioner was also granted liberty to pursue their claim for a higher rate of interest or any other due amounts in an appropriate forum. The Court did not expressly leave any issue undecided, as all contentions were addressed by the final directions.

Facts

M/s. Udayam Constructions (the petitioner) was awarded a contract for works in Krishna District, for which final bills were prepared amounting to Rs. 32,34,247/-. The respondents failed to make the payment, prompting the petitioner to file a writ petition. The petitioner contended that the respondents admitted an amount of Rs. 26,01,470/- was payable but no payment was being made, which was considered arbitrary. The respondents, through the Executive Engineer, Bhimavaram, admitted the payable amount of Rs. 26,01,470/- and stated that payments would be cleared soon after the release of the Letter of Credit (LOC).

Key Issues

1. Whether the non-payment of admitted dues by the respondents to the petitioner is arbitrary and warrants interference by this Court, as per the principles laid down in previous judgments of this Court? 2. Whether the petitioner is entitled to interest on the delayed payment of admitted dues, and if so, at what rate? Petitioner's Contentions: The petitioner argued that the non-payment of the admitted amount of Rs. 26,01,470/- was arbitrary and high-handed. They relied on previous orders of the Court, including a Single Judge's order 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 placed on record written instructions admitting the payable amount of Rs. 26,01,470/- and submitted that payments would be cleared upon release of the LOC. The respondents also implicitly acknowledged the entitlement to interest based on the Division Bench judgment cited by the Court.