Tejha Power Controls PVT LTD vs. The State Of Andhra Pradesh

Held

The Court held that the non-payment of the pending bills to the petitioner is not justifiable, given the undisputed position regarding the petitioner's entitlement to the bills for the completed works. The Court found the respondents' reasons for withholding payment insufficient. The Court directed the respondents to arrange for the payment of Rs. 2,51,20,957/-, after effecting statutory deductions if any, as expeditiously as possible, preferably within four months from the date of receiving the order. The Court also noted that the petitioner is at liberty to pursue a claim for interest before the appropriate forum if they are so advised. The issue of interest was expressly left undecided by the High Court in this writ petition.

Facts

M/s Tejha Power Controls Pvt Ltd. (Petitioner) filed a writ petition challenging the inaction of the State of Andhra Pradesh and its authorities in releasing pending bills totaling Rs. 2,51,20,957/- with interest. The petitioner had supplied Transformer Sets to various Government Hospitals in Chittoor, Kadapa, Ananthapur, and Kurnool districts under an agreement dated 05.10.2021. Despite completing the works and submitting bills, including LS-II, LS-III, LS-IV, LW-V, and Final Bills, payment was not made. The petitioner contended that as per Clauses 68 and 69 of the A.P. Standard Specifications, payment should be made within six months of work completion, causing hardship and irreparable loss. The respondents, in their counter-affidavit, admitted that the petitioner completed the works, an amount of Rs. 8,61,54,924/- had been released, and the final bill of Rs. 2,51,20,957/- was pending clearance in CFMS since 2022.

Key Issues

1. Whether the respondents' action in withholding payment of the pending bills amounting to Rs. 2,51,20,957/- to the petitioner, despite completion of the works and submission of bills, is illegal and arbitrary, violating the terms of the agreement and relevant specifications? (Question of law and fact, turning on the interpretation of the agreement and Clauses 68 & 69 of A.P. Standard Specifications). Petitioner's arguments: The petitioner argued that the respondents have failed to release the pending bills within the stipulated period as per Clauses 68 and 69 of the A.P. Standard Specifications, causing them significant hardship and financial loss. They contended that the delay in payment is unjustifiable. Respondents' arguments: The respondents, through their counter-affidavit, stated that while the petitioner completed the works, there were certain defects pointed out by field officers which the petitioner delayed in rectifying. They also clarified that the APMSIDC is an executing agency and funds are released by various Heads of Departments, implying no willful delay on their part in submitting bills to CFMS. However, they did not dispute the amount pending or the petitioner's entitlement to it.