M/S.Sri Satya Sai Constructions vs. The State Of Andhra Pradesh

Held

The Court held that there was no dispute regarding the entrustment and execution of work by the petitioner. The central dispute concerned the petitioner's claim for payment for two coats of ceiling plastering, given that the M-books, which recorded the work executed, had been altered from two coats to a single coat. The Court found that these interpolations in the M-book were not countersigned by the parties to the agreement and therefore had to be disregarded as not binding on the petitioner. Referring to CPWD specifications (13.4.6), which state a minimum average thickness of 6 mm and a minimum of 5 mm, the Court noted that the plastering thickness was found to be 12 mm, supporting the petitioner's claim of applying two coats. The Court reasoned that under the peculiar circumstances, where M-books were altered without the petitioner's counter-signature, such interpolations must be ignored. The department was directed to take appropriate action against those responsible for interpolating the M-books. The Court allowed the writ petition, directing the respondent authorities to rectify the alterations made without the petitioner's concurrence in the M-Books and to process the petitioner's final bills based on the recordings prior to the alteration, clearing the bills expeditiously, preferably within six weeks.

Facts

The petitioner, M/s. Sri Satya Sai Constructions, a contractor, was awarded construction work for seven Ekalavya Model Residential Schools in 2017. The petitioner claims to have incurred additional costs beyond the initial estimates, including for escalations, GST, and deviations, which were allegedly recommended and approved by the respondent authorities. The petitioner submitted final bills in 2023 and alleged that the then Chief Engineer demanded illegal gratification for clearing these bills. Subsequently, the Chief Engineer was arrested by the Anti-Corruption Bureau on August 7, 2025, for accepting a bribe. After the arrest, the petitioner discovered that the final working estimates and M-books had been unilaterally altered, changing the ceiling plastering from two coats to a single coat, without the petitioner's knowledge or consent. The petitioner quantifies a loss of ₹47,00,000 due to this alteration.

Key Issues

1. Whether the unilateral alteration of M-books regarding ceiling plastering from two coats to a single coat, without the petitioner's concurrence, is arbitrary, illegal, and violative of the petitioner's fundamental rights under Articles 14, 19, and 21 of the Constitution of India? (Question of law and fact, concerning contractual obligations and administrative actions). 2. Whether the petitioner is entitled to payment for two coats of ceiling plastering despite the altered M-books? (Question of law and fact, concerning contractual performance and payment entitlement). Petitioner's arguments: The petitioner contended that the M-books were altered unilaterally after the arrest of the then Chief Engineer, who had allegedly made illegal demands. The petitioner argued that clause 41 of the agreement mandates that any alteration to M-books must be countersigned by the petitioner or their authorized representative. The petitioner highlighted that respondents 6 to 8, in their letters dated October 21, 2025, and October 27, 2025, admitted that corrections were made to the M-books on July 8, 2025, on instructions from the then Chief Engineer, and confirmed that the petitioner used FE-500 Grade steel and executed two coats of ceiling plastering. The 12 mm thickness of the plastering also indicated two coats. Respondents' arguments: The respondents argued that the agreement stipulated single-coat plastering for the ceiling and that no supplementary agreement was entered into for two coats. They also submitted that the petitioner did not submit any representation seeking alteration of contract specifications. While the quality control team found 12 mm thickness, they could not differentiate if it comprised two separate coats on-site.