Amsavalli. M vs. The Commissioner
Held
The Court found the respondent Municipality's contention regarding the delay in convening a Council meeting unacceptable as a reason for non-payment. The Court noted that the tender process was initiated based on a Council resolution, and the petitioners had fulfilled their contractual obligations satisfactorily. The Court acknowledged the petitioners' difficulties, including facing GST penalties and incurring interest on loans due to the delayed payment. Consequently, the Court allowed the writ petitions, directing the respondent Municipality to settle the amounts due to the petitioners for the executed contract works. The Court also ordered the payment of interest at the rate of 6% per annum on these amounts. The settlement was to be completed within 12 weeks from the date of receiving the Court's order. No issue was expressly left undecided.
Facts
The petitioners, including M. Amsavalli and M/s. SS and Company, filed writ petitions before the Madurai Bench of the Madras High Court. They sought a mandamus directing the Commissioner, Sivagangai Municipal Corporation, to disburse amounts owed for executed contract works. The petitioners claimed they had participated in tenders issued by the Corporation, executed the works to satisfaction, but the Municipality had failed to disburse payments even after two years. This delay, they argued, led to penalties from the GST Authority and incurred significant interest on loans taken for project execution. The respondent Municipality's counsel stated that payments would be disbursed after a Council meeting decision.
Key Issues
1. Whether the respondent Municipality is obligated to disburse amounts due to the petitioners for completed contract works, despite the delay in convening a Council meeting, considering the petitioners have executed the work to the satisfaction of the Municipality and are facing financial hardship and GST penalties due to non-payment? (Question of law and fact, concerning contractual obligations and principles of natural justice). Petitioner's Argument: The petitioners contended that the Municipality, having issued tender notifications, awarded contracts, and accepted the completed works, had a contractual duty to settle the amounts promptly. They highlighted the financial strain caused by borrowing at high interest and the imposition of GST penalties due to the Municipality's delay. They sought immediate release of arrears and interest. Respondent's Argument: The respondent Municipality, through its Standing Counsel, submitted that the disbursement of amounts would be prioritized after a decision was taken in a Council meeting.
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BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED:09.11.2023 CORAM: THE HONOURABLE MR.JUSTICE B.PUGALENDHI W.P(MD).Nos.23993, 26178, 26217, 26224 and 26228 of 2023 and W.M.P(MD).No.20148 of 2023 M.Amsavalli ... Petitioner in W.P(MD).No.23993 of 2023 M/s.SS and Company Rep.by its Managing Partner, Subramanian ...Petitioner in W.P(MD).Nos.26178 of 2023 and W.P(MD).No.26224 of 2023 Subramanian ...Petitioner in W.P(MD).No.26217 of 2023 M/s.KOP & Company Rep.by its Managing Partner, K.O.Periya Karuppan ...Petitioner in W.P(MD).No.26228 of 2023 Vs. 1.The Commissioner, Sivagangai Municipal Corporation, Sivagangai. ...1st respondent in W.P(MD).No.23993 of 2023 and respondent in W.P(MD).Nos. 26178, 26217, 26224 and 26228 of 2023 2.The Commissioner of GST and General Excise, Lat Bahadur Shastri Road, Bibikulam, Madurai-625 002. ..2nd respondent in W.P(MD).No.23993 of 2023 1/7 https://www.mhc.tn.gov.in/judis PRAYER in W.P(MD).No.23993 of 2023: Writ Petition is filed under Article 226
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