Namburi Gopala Krishna vs. The State Of Andhra Pradesh

Held

The Court held that the non-payment of the admitted dues was arbitrary, aligning with its previous judgments. The respondents' explanation for the delay, citing a lack of LOC, was noted. Consequently, the Court directed the respondents to release the principal amount of Rs. 7,22,271/- to the petitioner. Furthermore, in line with a Division Bench judgment in Writ Appeal No.724 of 2021 and batch dated 12.10.2023, the Court also directed the payment of interest at the rate of 6% per annum on the principal amount. The payment was to be made within six weeks from the date of receipt of the order. The petitioner was also granted liberty to pursue a claim for a higher rate of interest in an appropriate forum. The Court expressly left undecided the petitioner's claim for a higher rate of interest, allowing them to agitate it separately.

Facts

The petitioner, Namburi Gopala Krishna, was awarded a contract for works under a scheme in West Godavari District. Upon execution, a final bill of Rs. 7,22,271/- was prepared. The petitioner approached the High Court as the respondents had not made the payment. The petitioner contended that despite admission of entitlement, payment was being withheld arbitrarily. The respondents, through the Government Pleader, admitted the claim but stated that payment was delayed due to a lack of Letter of Credit (LOC). They assured payment upon release of the LOC. The Court considered previous judgments on arbitrary non-payment and the respondents' submissions.

Key Issues

1. Whether the non-payment of the final bill amount of Rs. 7,22,271/- to the petitioner by the respondents is arbitrary and requires the intervention of this Court, as contemplated under Article 226 of the Constitution of India? Petitioner's contention: The petitioner argued that the respondents admitted the entitlement to the payment, yet no payment was being made, which was arbitrary and high-handed. They relied on previous judgments of the High Court, including a learned Single Judge's order in W.P.No.10038 of 2021 and batch, which held such non-payment as arbitrary and requiring prompt clearance. Respondents' contention: The respondents, while admitting the claim, submitted through the Government Pleader that the delay in payment was due to a lack of Letter of Credit (LOC). They assured that the bill amount would be paid soon after the release of the LOC. They did not rely on any specific statutory provisions, circulars, or precedents in their argument regarding the delay.