M/S. 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 was not justifiable, considering the averments made in the counter affidavit and the undisputed position regarding the petitioner's entitlement to the bills for the completed works. The Court found that the respondents had not provided a sufficient justification for the delay in payment. The Court directed the respondents to arrange for the payment of the amount of Rs. 1,25,47,583/-, after effecting statutory deductions if any, as expeditiously as possible, preferably within four months from the date of receipt of the order. The Court also noted that the petitioner was at liberty to raise a claim for interest before the appropriate forum if so advised. The issue of interest was expressly left undecided by the High Court, with the petitioner relegated to an alternative remedy for that specific claim.

Facts

M/s Tejha Power Controls Pvt Ltd. (Petitioner) filed a writ petition against the State of Andhra Pradesh and others (Respondents) seeking release of pending bills totaling Rs. 1,25,47,583/- along with interest. The petitioner had supplied Transformer Sets to various Government Hospitals in Andhra Pradesh under Agreement No. 06/APMSIDC/2021-22, dated 05.10.2021. The petitioner contended that despite completing the works and submitting bills, payment was not released, causing hardship. The agreement was for Rs. 12,38,23,464/- (including GST @ 18%). An amount of Rs. 8,61,54,924/- had already been released, leaving the final bill of Rs. 1,25,47,583/- pending. The respondents, in their counter affidavit, acknowledged the pending final bill and stated it was pending CFMS since 2022. They also mentioned certain defects pointed out by field officers which the petitioner allegedly delayed rectifying, and that the APMSIDC is an executing agency for various Heads of Departments.

Key Issues

1. Whether the action of the respondents in not releasing the pending bills worth Rs. 1,25,47,583/- to the petitioner, despite completion of works under Agreement No. 06/APMSIDC/2021-22, is illegal, arbitrary, and violative of Clauses 68 and 69 of the A.P. Standard Specifications, which mandate payment within six months of work completion? (Question of law and fact, turning on the interpretation and application of contractual clauses and principles of administrative law). Petitioner's Contention: The petitioner argued that the respondents' failure to release the pending bills, despite the petitioner fulfilling its contractual obligations and the stipulated payment period under the A.P. Standard Specifications having elapsed, constitutes illegal and arbitrary action, causing financial hardship. They relied on Clauses 68 and 69 of the A.P. Standard Specifications. Respondents' Contention: The respondents, through their counter affidavit, submitted that while the work was completed and an amount released, the final bill was pending CFMS. They attributed potential delays to defects pointed out by field officers that the petitioner allegedly delayed rectifying. They also stated that APMSIDC is an executing agency and funds are released by various Heads of Departments, implying no willful delay on their part.