S V V Rambabu vs. The State Of Andhra Pradesh

Held

The Court held that the action of the respondents in withholding the bill amount of Rs.40,57,966/- after the successful completion of works, without any justification, is illegal and arbitrary. The Court noted that the petitioner's case was "pitiable" and that public authorities have a responsibility to fulfill contractual obligations promptly. The Court directed the respondent authorities to pay the bill amount of Rs.40,57,966/- to the petitioner along with interest at the rate of 6% per annum. This direction was based on the judgment of the Division Bench of the High Court in Writ Appeal No.724 of 2021 and batch dated 12.10.2023. The payment was to be made within six weeks from the date of receipt of a copy of the order. The Court also clarified that it would be open for the petitioner to agitate their claim for any differential amount or higher rate of interest in an appropriate forum.

Facts

The petitioner, a contractor, undertook repair works in West Godavari District. The net payable amount for the completed works was determined to be Rs.40,57,966/-. Despite the completion of works and the expiry of the default liability period, the respondent authorities have not released the payment. The petitioner filed a writ petition seeking a mandamus to declare the withholding of the amount as illegal and arbitrary, and for consequential directions to pay the amount with interest. An interim order dated 25.03.2022 directing payment within six weeks was not complied with.

Key Issues

1. Whether the action of the respondents in withholding the bill amount of Rs.40,57,966/- after the successful completion of works is illegal, arbitrary, and violative of the principles of natural justice, as contended by the petitioner? 2. Whether the petitioner is entitled to payment of the withheld bill amount along with interest, as sought in the writ petition? Petitioner's Contentions: The petitioner argued that the works were successfully completed to the satisfaction of the authorities, and the bill amount of Rs.40,57,966/- was finalized. They contended that withholding this amount without any reason is illegal, arbitrary, and violates principles of natural justice. The petitioner also relied on the interim order of the Court dated 25.03.2022, which was not complied with, and sought payment with interest. Respondents' Contentions: No counter was filed by the respondents, and therefore, no arguments were recorded on their behalf.