Facts of the Case

The petitioner, Marysadan Projects Pvt. Ltd., executed road construction works for the Public Works Department (PWD), Kerala, including the Chalakudy–Vellikulangara Road and flood rectification works on the Kulluthi–Kalavarakadavu Road. After completing the work, the petitioner submitted part bills during July and August 2022.

Although the work measurements had been recorded and the bills were prepared, the authorities failed to upload the bills through the Price Software, allegedly because the software had become non-functional while being updated following the revision in GST rates.

The petitioner contended that the delay in uploading the bills would adversely affect its right to timely payment and could also result in loss of seniority in the queue for bill clearance. Consequently, the petitioner approached the Kerala High Court seeking appropriate directions.

Issues Involved

  1. Whether the authorities could delay uploading the contractor's bills due to malfunction or updating of the Price Software.
  2. Whether such administrative delay could adversely affect the contractor's seniority in the processing and clearance of bills.
  3. Whether the Court should issue directions to protect the contractor's entitlement pending restoration of the software.

Petitioner’s Arguments

  • The petitioner had successfully completed the contractual work and submitted the part bills within time.
  • The measurements had already been taken and the bills had been prepared by the departmental authorities.
  • The only reason for non-uploading of the bills was the malfunction of the Price Software.
  • The delay was entirely attributable to the Government's internal software issues and not to any fault of the petitioner.
  • Continued delay would cause financial hardship and could deprive the petitioner of seniority in the processing of bills, thereby affecting timely payment.

Respondent’s Arguments

  • The State submitted that the Price Software was undergoing updation due to revision in GST and would become functional shortly.
  • It was argued that since the work had already been measured and the bills prepared, the petitioner would not lose seniority merely because uploading had been delayed.
  • The Government assured the Court that the software issue was temporary and would be resolved without unnecessary delay.

Court Order / Findings

The Kerala High Court accepted the Government's submission regarding the temporary software issue but recognised that the petitioner should not suffer due to administrative or technical delays.

The Court disposed of the writ petition with directions that:

  • The competent authority shall upload the petitioner's part bills immediately after the Price Software becomes functional.
  • The delay in uploading shall not result in the petitioner losing seniority in the matter of bill clearance.
  • Payment shall be processed subject to the petitioner being otherwise eligible to receive the amounts claimed under the bills.

The Court thereby ensured that contractors are not prejudiced by delays arising from Government software or administrative issues.

Important Clarification

  • Government contractors cannot be penalised for delays caused solely by malfunctioning or updating of Government software.
  • Administrative or technical issues within Government departments cannot deprive contractors of their rightful position in the bill processing queue.
  • Once work measurements have been recorded and bills prepared, subsequent software-related delays should not adversely affect the contractor's entitlement.
  • The Court protected both the petitioner's seniority and eligibility for payment while recognising the temporary nature of the software issue.

Sections / Legal Provisions Involved

  • Article 226 of the Constitution of India
  • Administrative Law Principles relating to Fairness and Non-Arbitrariness
  • Public Works Department (PWD) Payment Procedures
  • Government Contract Administration
  • GST Revision affecting Government Billing Software

Sections Involved:

  • Public Works Department (PWD) Contract Payments
  • Upload of Running/Part Bills through Price Software
  • GST Revision Impact on Government Payment Software
  • Administrative Delay in Processing Bills
  • Principles of Fair Administrative Action under Article 226 of the Constitution of India

Link to download the order - https://www.mytaxexpert.co.in/uploads/1783923957_2125compressed.pdf

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