M/S. Uni Ads LTD. vs. The State Of Andhra Pradesh

Held

The Court held that the material fact that the work was entrusted to the petitioner and executed by them from March 1, 2019, to March 8, 2019, is not in dispute, as admitted by Respondent No. 2. It was also not disputed that a sum of Rs. 80,28,720/- is due to the petitioner for this work. The sole reason for non-payment, as stated by Respondent No. 2, was the lack of sanctioned budget, with a prior request for budget sanction having been rejected. The Court found no justification for the concerned Department's failure to sanction the budget for payment. Since the respondents availed the petitioner's services, they are bound by law to pay the due amount. The petitioner is entitled to recover the sum of Rs. 80,28,720/-. The Court directed Respondent No. 2 to immediately send a proposal for budget sanction to the Minority Welfare Department and Respondent No. 1 within two weeks. Upon receipt, the concerned departments and Respondent No. 1 were directed to sanction the necessary budget and pay the petitioner within six weeks from the proposal's receipt.

Facts

The petitioner, a company engaged in advertising, was awarded a work order by Respondent No. 2 on March 1, 2019, to telecast advertisements for the Government of Andhra Pradesh's Minority Welfare Schemes through LED digital screens from March 1, 2019, to March 8, 2019. The petitioner executed this work and claims an outstanding payment of Rs. 80,28,720/-, which includes GST. The petitioner filed a writ petition seeking a mandamus to direct Respondents 1 to 3 to pay this amount, alleging illegal and arbitrary inaction. Respondent No. 1 (Finance and Planning) stated it had no direct involvement with the agreement or work execution and had not received any budget sanction proposals. Respondent No. 2 (the issuing authority) confirmed the work was awarded and executed, and the amount is due, but explained that budget sanction for the expenditure was rejected by the Government on June 24, 2020, preventing payment.

Key Issues

1. Whether the inaction of the respondents in paying the sum of Rs. 80,28,720/- to the petitioner for telecasting advertisement of Minority Welfare Schemes is illegal and arbitrary, and consequently, whether the petitioner is entitled to a direction for payment of the said amount, including GST, under the relevant provisions of law governing contractual obligations and public finance? Petitioner's contention: The petitioner argued that having executed the work as per the work order, the respondents are legally bound to pay the agreed amount, including GST. The inaction and delay in payment, despite the admitted execution of work and the amount due, are illegal and arbitrary. Respondents' contention: Respondent No. 1 claimed no direct role. Respondent No. 2 admitted the work and the amount due but stated payment could not be made due to the rejection of budget sanction by the Government. They contended that payment would be made once the budget is released.