M/S. Vasista Engineerings vs. The State Of Andhra Pradesh

Held

The Court held that the respondents' action in not releasing the final bill amount to the petitioner was unjust and untenable, given the undisputed position regarding the execution of the work. The Court acknowledged the petitioner's claim and the respondents' admission of the work's completion. While the respondents cited the absence of an LOC and budget as reasons for non-payment, the Court found these reasons insufficient to justify the delay in releasing the due and payable amount. The Court directed the respondents to arrange for the payment of the amount due to the petitioner, after effecting statutory deductions, as expeditiously as possible, and at any rate, within a period of six weeks from the date of receipt of the order. The Court explicitly noted that the issue of GST reimbursement was mentioned in the counter-affidavit but did not form the primary basis for the Court's direction on the payment of the principal amount.

Facts

The petitioner, M/s. Vasista Engineerings, filed a writ petition seeking a direction to the respondents to release a final bill amount of Rs.17,03,753/- for irrigation works executed under two agreements. The petitioner stated that the works were completed, inspected, quality checked, and the final bill was approved. However, payment was not made despite repeated requests, causing financial hardship. The respondents, through a counter-affidavit filed by the 5th respondent, did not dispute the work executed. They indicated that payment was delayed due to the absence of a Letter of Credit (LOC) and sufficient budget. The counter-affidavit mentioned that GST amounts would be reimbursed to the agency in the final bills after the release of the LOC.

Key Issues

1. Whether the respondents' action in withholding the payment of the final bill amount of Rs.17,03,753/- for the irrigation works executed by the petitioner is unjust and untenable, considering the undisputed completion of the work. Petitioner's Argument: The petitioner argued that they had completed the irrigation works as per the agreements, and the final bills were approved. Despite repeated requests, the respondents failed to release the payment, causing severe financial distress. They sought a direction for the release of the undisputed amount. Respondents' Argument: The respondents, in their counter-affidavit, did not dispute the execution of the work. However, they stated that payment was not made due to the lack of a Letter of Credit (LOC) and sufficient budget. They also mentioned that the GST amount would be reimbursed after the release of the LOC.