M/S Shalini Construction Company vs. The State Of Madhya Pradesh

Held

The Court disposed of the petition by directing Respondent No.2, the Chief Engineer, Public Works Department, Rewa Zone, Rewa (M.P.), to consider the representation submitted by the petitioner (Annexure P/34). This consideration must take into account the documents relied upon by the petitioner, specifically Annexures P/22, P/24, and P/30. A self-contained speaking order is to be passed within 90 days from the receipt of the certified copy of the order. If the petitioner is found entitled to the payment, the same shall be disbursed along with interest at the rate of 6% per annum, as per the Supreme Court's decision in Union of India vs Willowood Chemicals (P) Ltd., from the date of entitlement until actual payment. The Court explicitly stated that it had not expressed any opinion on the merits of the case. No order as to costs was made.

Facts

The petitioner, M/s Shalini Construction Company, executed contractual works for the operation and maintenance of CCTV, Fire-Hydrant, and Fire Alarm systems at Government Medical College & Hospital, Shahdol, for the PWD Department. The petitioner raised monthly invoices, which were verified and processed. Deductions were made towards EPF/ESIC at 18.11%, which the petitioner contended were illegal as they were statutorily exempt. An adjudicatory order dated 19.10.2023 favored the petitioner. The petitioner also sought revision of GST rates from 12% to 18% as per GST Notification No.11/2017 and PWD order dated 31.10.2022, as payments were delayed. Internal communications acknowledged the petitioner's entitlement to these revisions and refunds. Despite budgetary allotment being sanctioned, the respondents failed to release the admitted dues, leading to the present petition.

Key Issues

1. Whether the petitioner is entitled to the release of outstanding admitted contractual dues amounting to Rs. 6,79,674/- along with interest, considering the contractual work was executed to the petitioner's satisfaction and invoices were raised month-wise. 2. Whether the deductions made from the petitioner's bills towards alleged EPF/ESIC contributions at the rate of 18.11% were illegal and should be refunded with interest, in light of the adjudicatory order dated 19.10.2023. 3. Whether the petitioner's pending bills should be revised and processed by applying GST at the rate of 18%, in accordance with GST Notification No.11/2017 dated 13.07.2022 and the Public Works Department order dated 31.10.2022, and payment released accordingly. Petitioner's Arguments: The petitioner argued that the EPF/ESIC deductions were illegal as the contract employed fewer than 20 workers, exempting them from mandatory registration under the EPF Act, 1952, as per Annexure P/22. They also contended that the GST rate should be revised to 18% as per the relevant notification and departmental order, given the delay in payment, as acknowledged in internal communications (Annexures P/30 & P/31). The petitioner highlighted that budgetary allotment for payment was sanctioned (Annexure P/24) but dues remained unpaid. Respondents' Arguments: The counsel for the respondents/State had no objection to the limited prayer made by the petitioner's counsel.