Facts of the Case

The petitioner was awarded a contract for execution of work under the “Neeru-Chettu” Programme for removal of weed growth in the Amalapuram Main Canal from Nadipudi Lock to Chintalapudi Lock in D.C., Amalapuram, East Godavari District, under Agreement No. 93/2018-19 dated 26.07.2018.

After completion of the work, a final bill amounting to Rs. 1,87,276/- plus 9% GST was prepared and submitted to the concerned authorities for payment. However, the respondents did not release the payment. Consequently, the petitioner approached the High Court by filing the writ petition seeking judicial intervention against the continued non-payment of the contractual dues.

Issues Involved

The principal issues arising for consideration were:

  1. Whether the continued non-payment of contractual dues, despite the petitioner’s asserted entitlement to payment, was arbitrary and warranted interference by the High Court.
  2. Whether the respondents could indefinitely defer payment on the ground that verification of the petitioner’s claim was still in progress.
  3. What time-bound directions should be issued for completion of verification and payment of the amount found due.
  4. Whether the petitioner could separately pursue a claim for interest on delayed payment before an appropriate forum.

Petitioner’s Arguments

The petitioner contended that the respondents had admitted the petitioner’s entitlement to the amounts in question, yet payment was not being made.

It was argued that such withholding and non-payment of money was arbitrary and high-handed, thereby requiring interference by the High Court. The petitioner’s grievance was founded on the fact that the contracted work had already been executed and the final bill had been prepared and submitted, but the payment remained outstanding.

Respondents’ Arguments

The learned Government Pleader submitted that the respondent authorities were in the process of verifying the petitioner’s claims.

According to the respondents, payment could be made only after completion of such verification. Thus, the respondents sought to justify the delay on the ground that the verification process had not yet concluded.

Court Order / Findings

The High Court referred to its earlier orders, including the judgment of a learned Single Judge dated 05.10.2021 in W.P. No. 10038 of 2021 and batch, wherein the Court had taken the view that such non-payment of dues was arbitrary and that the dues were required to be cleared by the respondents at the earliest.

After considering the submissions of the petitioner’s counsel and the learned Government Pleader for Irrigation, the Court disposed of the writ petition with the following directions:

  1. The respondents were directed to complete the verification process within three weeks from the date of receipt of a copy of the order.
  2. Thereafter, the respondents were directed to pay the amount due to the petitioner, depending upon the outcome of verification, within six weeks.
  3. If the verification process was not completed within the stipulated three-week period, the respondents were required to pay the amount due to the petitioner without insisting upon any further time for verification.
  4. The petitioner was granted liberty to agitate the claim for interest, if any payable by the respondents, before an appropriate forum.
  5. There was no order as to costs.
  6. Pending miscellaneous petitions, if any, were ordered to stand closed.

Important Clarification

The most significant clarification issued by the Court was that the respondents could not use an incomplete verification process as a basis for indefinite delay. If verification was not completed within the prescribed period of three weeks, the respondents were directed to pay the amount due without insisting upon any further time for verification.

The Court further clarified that the order did not finally determine any claim for interest. The petitioner remained free to pursue such a claim, if otherwise payable, before an appropriate forum.

Legal Principle Emerging from the Case

The order reinforces the principle that State authorities should not indefinitely withhold legitimate contractual dues after execution of work merely by keeping the verification process pending. Where claims require verification, such verification must be completed within a reasonable and judicially fixed timeframe. Failure to complete verification within that period cannot become a continuing justification for withholding payment.

The Court’s reliance on the judgment dated 05.10.2021 in W.P. No. 10038 of 2021 and batch further supports the proposition that arbitrary non-payment of dues by public authorities warrants judicial intervention and that outstanding dues should be cleared at the earliest.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1783318651_1252compressed.pdf

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