Savara Malathi vs. The State Of Andhra Pradesh

Held

The Court noted the respondents' submission that payments would be made after the allotment of budget. Consequently, the writ petition was disposed of with a direction to the respondent authorities to pay the amounts to the petitioner at the earliest, and at any rate, within a period of three months from the date of receipt of the order. The Court also clarified that it would be open to the petitioner to agitate their claim for interest, if any payable, in an appropriate forum. The Court made no order as to costs. The issue of interest was expressly left to be pursued in another forum.

Facts

The petitioner, a contractor, filed a writ petition seeking release of payments totaling Rs. 29,00,000 (Rs. 9.60 lakhs, Rs. 9.50 lakhs, and Rs. 9.80 lakhs) for completed works on tribal welfare educational institutions in Srikakulam District. The works were executed under agreements dated 18.05.2018 and 02.11.2018. The petitioner contended that the works were completed satisfactorily, inspected, and bills finalized, yet payments were withheld arbitrarily. The respondents, represented by the Government Pleader, stated in their counter-affidavit that one bill was processed but returned due to budget and activity issues. The other two bills could not be processed due to non-allotment of budget under the maintenance grant. They assured that all bills would be processed immediately after budget allotment and funds clearance, and payments would be based on measurements and approved rates after statutory deductions.

Key Issues

1. Whether the action of the respondents in withholding payments for completed works, despite the petitioner fulfilling contractual obligations, is illegal, arbitrary, and violative of Articles 14 and 21 of the Constitution of India? Petitioner's arguments: The petitioner argued that the non-release of payments for completed works, after inspection and finalization of bills, was arbitrary and high-handed, necessitating judicial intervention. They sought immediate release of the amounts with interest. Respondents' arguments: The respondents contended that the delay in payment was due to non-allotment of budget under the maintenance grant and procedural issues with one bill. They asserted that there was no willful negligence and that payments would be processed once the budget was allocated and funds were cleared. They also clarified that payments would be based on measurements and approved rates, subject to statutory deductions, including GST.