N.Venkata Raju vs. The State Of Andhra Pradesh

Held

The Court found that the petitioners had undisputed proof of executing the works and that the payment was withheld without a valid reason. The Court considered the respondents' explanation regarding the pending LOC but deemed the continued non-payment unjust and untenable. However, the Court was inclined to grant time to the respondents to make the payment. The Court directed the respondents to make the payment of the amounts due and payable to the petitioners, after effecting statutory deductions, as expeditiously as possible, within a period of eight weeks from the date of receipt of the order. Regarding the claim for interest, the Court noted that the petitioner could raise this claim before the appropriate forum if they were so advised, implying that the writ court was not the appropriate forum for adjudicating interest claims in this instance.

Facts

The petitioners, N. Venkata Raju and two others, filed a writ petition challenging the inaction of the respondents (State of Andhra Pradesh and its departments) in not paying bills for works executed by them under various agreements. The total amount due was Rs. 49,22,445/-, including 12% GST. The petitioners had completed the works, and inspections and quality checks were conducted. Despite repeated requests, payment was not made, causing financial hardship. The respondents' counsel submitted written instructions stating that the bills were pending due to the non-release of a Letter of Credit (LOC) from higher authorities. The petitioners sought payment of the due amounts with interest.

Key Issues

1. Whether the respondents' action in withholding payment for the completed works, despite the petitioners fulfilling their contractual obligations, is illegal and arbitrary, thereby warranting intervention by this Court under Article 226 of the Constitution of India? 2. Whether the petitioners are entitled to claim interest on the delayed payment of bills, and if so, before which forum? Petitioner's Arguments: The petitioners argued that they had completed the works as per the agreements, and the concerned officers had verified the quality. The delay in payment by the respondents was causing them severe financial distress. They sought a direction for the payment of the principal amount along with GST and interest. Respondents' Arguments: The respondents, through written instructions, submitted that the delay in payment was solely due to the non-release of the Letter of Credit (LOC) by higher authorities. They stated that requisitions were being made for the release of LOC and that payment would be processed soon after its release.