V3 Enterprises PVT LTD vs. The State Of Ap

Held

The Court held that the supplies made by the petitioner were not in dispute, and work completion certificates had been issued, which ipso facto entitled the petitioner to payment. The Court observed that the counters filed by the respondents indicated financial constraints in clearing the petitioner's bills, but these constraints could not be pitted against the petitioner, rendering them a non-performing asset for their bankers. The Court found that the respondents were passing on the baton of responsibility between departments without valid reason. The Court emphasized that the State must ensure timely clearance of payments to suppliers to maintain seamless supplies and meet its requirements. Therefore, the Court directed the respondent authorities to expedite the processing of bills and release the payments due to the petitioner within 12 weeks from the date of receipt of the order. The Court did not explicitly leave any issue undecided, as the core issue of payment release was addressed.

Facts

V3 Enterprises Pvt Ltd (Petitioner) filed a writ petition before the Andhra Pradesh High Court challenging the inaction of respondent authorities in releasing payments amounting to Rs. 1,56,26,609/- for supplying and assembling furniture for government schools under the 'Manabadi, Naadu-Nedu' program. The petitioner was awarded tenders as the lowest bidder and completed the work to the satisfaction of the respondents, receiving work completion certificates. Despite this, payments were withheld. The petitioner had remitted statutory taxes of Rs. 9 crores towards GST and Income Tax. The respondents, including the State of AP (Finance Department and School Education Department) and Andhra Pradesh Education and Welfare Infrastructure Development Corporation (APEWIDC), provided conflicting information regarding the status of bills and token generation for payments. The Finance Department claimed it had not received all bills, while APEWIDC stated tokens were generated for a significant amount. The Court noted the respondents were passing responsibility between departments.

Key Issues

1. Whether the action of the respondent authorities in withholding payments due to the petitioner, despite the completion of work and issuance of work completion certificates, is illegal, arbitrary, and in violation of Articles 14, 19, and 21 of the Constitution of India? Petitioner's arguments: The petitioner contended that the respondents' failure to release payments was illegal and arbitrary, violating their fundamental rights. They argued that the work was completed satisfactorily, and work completion certificates were issued, entitling them to payment as per Clause 17 of the agreement, which stipulates 90% payment after delivery and retention of 2.5% until the warranty period. The petitioner highlighted that they had already paid substantial statutory taxes (GST and Income Tax) and that the respondents were neither denying the supplies nor disputing their quality but were still withholding payments. Revenue/State's arguments: The respondents, through their counters, presented conflicting information regarding the bills submitted and the tokens generated for payment. The Finance Department claimed it had not received all bills from the Commissioner, School Infrastructure, while APEWIDC indicated that tokens had been generated for a substantial amount. The respondents also appeared to be passing on responsibility between departments.