B Kesava Reddy vs. The State Of Andhra Pradesh

Held

The Court held that the non-payment of the admitted contractual dues was arbitrary and required the respondents to release the payment. The Court directed the respondents to release the amount of Rs. 10,76,364/- to the petitioners. Furthermore, the Court held that the petitioners were entitled to interest on this amount at the rate of 6% per annum, in line with the judgment of the Division Bench of the Court in Writ Appeal No.724 of 2021 and batch dated 12.10.2023. This payment was made subject to the condition that the petitioners produce the GST to the concerned executive engineer within six weeks of receiving the order. The Court also clarified that it would be open for the petitioners to pursue their claim for a higher rate of interest, if any, in an appropriate forum. The Court noted that the respondents had forfeited their right to file a counter affidavit due to their failure to provide instructions.

Facts

The petitioners, who were awarded a contract for work under a scheme in Ananthapur District, approached the High Court by way of a writ petition. They sought payment of a final bill amounting to Rs. 10,76,364/-, which had been prepared after the execution of the contract. The petitioners contended that despite the respondents admitting their entitlement to the payment, no payment was being made, which they considered arbitrary and high-handed. The respondents, through the learned Government Pleader for Irrigation, sought time to obtain instructions and file a counter affidavit, but failed to do so. The Court noted that the respondents had previously sought time and had not furnished any instructions or information, leading to the forfeiture of their right to file a counter.

Key Issues

1. Whether the non-payment of the admitted contractual dues of Rs. 10,76,364/- to the petitioners is arbitrary and warrants interference by this Court under Article 226 of the Constitution of India? 2. Whether the petitioners are entitled to interest on the delayed payment of the contractual dues? Petitioner's Arguments: The petitioners argued that the non-payment of the admitted sum of Rs. 10,76,364/- was arbitrary and high-handed, necessitating judicial intervention. They relied on previous orders of the Court, including a learned Single Judge's judgment dated 05.10.2021 in W.P.No.10038 of 2021 and batch, which held that such non-payment is arbitrary and dues need to be cleared promptly. They also sought interest on the delayed payment, referencing a Division Bench judgment in Writ Appeal No.724 of 2021 and batch dated 12.10.2023. Respondents' Arguments: The learned Government Pleader for Irrigation submitted that the concerned authority was not cooperating, preventing the factual aspect of payment from being clarified. Consequently, neither instructions could be obtained nor a counter affidavit filed.