Lok Sai Advertising vs. The State Of Andhra Pradesh

Held

The Court held that the respondents' action in not paying the bill amount due to the petitioner for the work executed was illegal, as evidenced by the unequivocal admission of the learned Government Pleader for Tourism. The Court found that the respondents had admitted the entrustment of the work, its completion by the petitioner, and the outstanding amount of Rs. 8,85,000/-. The ratio decidendi is that a government authority cannot arbitrarily withhold payment for work duly executed and admitted as due. The Court directed respondents 1 and 2 to pay the sum of Rs. 8,85,000/- to the petitioner within four weeks from the date of the order. Failing payment within this period, the respondents were made liable to pay interest at 12% per annum on the due amount until its realization by the petitioner. No issue was expressly left undecided.

Facts

The petitioner-firm was awarded a work order on January 23, 2020, by the Chief Executive Officer of the A.P. Tourism Authority for designing, fabrication, and display of a Tableau for the Republic Day Celebrations on January 26, 2020. The petitioner completed the work and submitted a bill for Rs. 8,85,000/-, inclusive of GST. Despite repeated demands, the respondents failed to pay the due amount. The petitioner filed a writ petition seeking a mandamus to declare the respondents' inaction illegal and to direct payment of the outstanding sum. The Government Pleader for Tourism, representing the respondents, conceded that the work was entrusted, completed, and the amount of Rs. 8,85,000/- was due. The Government Pleader requested four weeks' time for payment.

Key Issues

1. Whether the action of the respondents in not paying the bill amount due to the petitioner for the work executed is illegal? (Question of law) Petitioner's contention: The petitioner argued that the respondents' failure to pay the undisputed amount for completed work is illegal and warrants judicial intervention. The petitioner sought a direction for payment of Rs. 8,85,000/-, including GST. Respondents' contention: The learned Government Pleader for Tourism, on instructions, conceded that the work was entrusted to the petitioner, completed by them, and that a sum of Rs. 8,85,000/- is due. The respondents requested four weeks' time to make the payment. No specific legal arguments were presented by the respondents against the petitioner's claim, other than seeking time for payment.