Psr Constructions vs. The State Of Andhra Pradesh

Held

The Court held that the non-payment of admitted dues is arbitrary and requires the respondents to release the payment. The Court directed the respondents to release the amount of Rs. 35,50,000/- to the petitioner. Additionally, the Court directed the payment of interest at the rate of 6% per annum on this amount, citing the judgment of the Division Bench of the High Court in Writ Appeal No.724 of 2021 and batch dated 12.10.2023. The Court specified that this payment, along with interest, must be made within six weeks from the date of receipt of a copy of the order. The petitioner was also granted liberty to agitate their claim for a higher rate of interest, if any payable, in an appropriate forum. The Court did not expressly leave any issue undecided, as the primary claim for payment and interest was addressed.

Facts

The petitioner was awarded a contract for works in Kadapa District and completed the work, preparing a final bill for Rs. 35,50,000/-. The respondents have not made the payment. The petitioner approached the High Court by way of a writ petition, contending that the non-payment is arbitrary despite the respondents admitting the entitlement to the sum. The respondents, through the learned Government Pleader, admitted the claim but stated that payment is contingent upon the release of Letter of Credit (LOC) for the works. The petitioner sought intervention from the Court due to the delay in payment.

Key Issues

1. Whether the non-payment of the admitted contractual dues of Rs. 35,50,000/- by the respondents to the petitioner is arbitrary and warrants interference by this Court under Article 226 of the Constitution of India? Petitioner's arguments: The petitioner argued that the respondents admitted the entitlement to the payment of Rs. 35,50,000/-. The continued non-payment, despite this admission, is arbitrary and high-handed, necessitating judicial intervention. The petitioner relied on previous orders of the Court, including a learned Single Judge's order dated 05.10.2021 in W.P.No.10038 of 2021 and batch, which held that non-payment of dues is arbitrary and requires prompt clearance. Revenue/State's arguments: The learned Government Pleader for Irrigation admitted the petitioner's claim. However, he submitted that the LOC for the said works has not yet been allotted. He stated that once the LOC is released, the bills will be submitted for payment. No specific statutory provisions or precedents were cited by the revenue.