S V V Rambabu vs. The State Of Ap

Held

The Court held that the non-payment of the admitted contractual dues was arbitrary, aligning with its previous pronouncements. The Court directed the respondents to release the principal amount of Rs.41,10,520/- to the petitioner. Furthermore, in line with the judgment of the Division Bench of the High Court 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. This payment was to be made within six weeks from the receipt of the order. The Court also noted that it was open for the petitioner to pursue their claim for a higher rate of interest, if applicable, in an appropriate forum. No costs were awarded. The issue of a higher rate of interest was expressly left open for the petitioner to agitate elsewhere.

Facts

The petitioner was awarded a contract for a work under a Scheme in West Godavari District. Upon completion, a final bill of Rs.41,10,520/- was prepared. The petitioner approached the High Court via a writ petition as the respondents had not made the payment. The petitioner contended that despite the respondents admitting the entitlement to the sum, payment was withheld arbitrarily. The respondents, through the learned Government Pleader, admitted the claim and stated that the bills were not uploaded in CFMS due to a lack of LOC (Letter of Credit), and processing would occur upon its release. The tax period is not specified.

Key Issues

1. Whether the non-payment of the admitted contractual dues of Rs.41,10,520/- by the respondents to the petitioner is arbitrary and requires the High Court's interference under its writ jurisdiction? (Mixed question of law and fact, concerning principles of administrative law and contractual obligations). Petitioner's arguments: The petitioner argued that the non-payment of admitted dues was arbitrary and high-handed, necessitating judicial intervention. They relied on previous orders of the High Court, including a judgment dated 05.10.2021 in W.P.No.10038 of 2021 and batch, which held such non-payment as arbitrary and requiring prompt clearance. Respondents' arguments: The respondents, while admitting the claim, submitted that the delay was due to procedural reasons, specifically the non-upload of bills in CFMS owing to a lack of LOC. They assured that payment would be processed once the LOC was released. They did not explicitly argue against the petitioner's claim of arbitrariness but provided a reason for the delay.