Facts of the Case

M/S Arrow Constructions Limited challenged the termination of its works contract for providing infrastructure works (internal roads, water supply lines, drainage lines) in Srinilaya Township, Rajampet, under an agreement with the A.P. Rajiv Swagruha Corporation Limited. The termination was affected via a notice dated 26.12.2022, and the petitioner also sought release of billed amounts totalling Rs. 43,49,223, comprising Rs. 14,93,930 for work done (including GST) plus EMD, security deposit and other retained amounts (aggregating the balance), contending the termination and consequent non-payment were illegal and arbitrary.

Issues Involved

  1. Whether the termination of the petitioner's works contract, and the consequent withholding of billed amounts (including GST) and deposits, was illegal and arbitrary.
  2. Whether the petitioner was entitled to release of the withheld bill amounts and deposits, and/or to complete the balance work.

Petitioner's Arguments

  • Contended that the termination of the contract under Clause 60(a) of the tender conditions, and the consequent non-release of billed amounts (Rs. 14,93,930 including GST) and deposits (aggregating Rs. 43,49,223), was illegal and arbitrary, without assigning proper reasons.

Respondent's Arguments

  • The Government Pleaders for the departments involved appeared for the respondents; specific counter-contentions are not detailed at length in the available portion of the order.

Court Order / Findings

  • Disposed of the writ petition with a direction relating to release of amounts due to the petitioner and permitting completion of the balance work (the precise terms of the direction are only partially legible in the available scanned order).
  • No costs were awarded; pending miscellaneous applications, if any, were closed.

Important Clarification

This is a government works-contract termination dispute; GST features only as a component of the amount billed for work already executed, not as a subject of legal analysis. The available scan of the order is degraded in its concluding portion, so the precise terms of relief could not be fully reconstructed — this summary reports only what is clearly legible (disposal permitting completion of balance work and considering release of dues) without inventing additional detail.

Sections Involved

  • Article 226, Constitution of India — writ jurisdiction for challenging contract termination
  • Central Goods and Services Tax Act, 2017 — referenced only as a component of the billed contract amount

Decision – In Favour of

The petitioner (Arrow Constructions Limited) — writ petition disposed of, with the order indicating some relief regarding release of dues and completion of balance work; this is a contract-law outcome, not a GST-law ruling.

Case Details

High Court of Andhra Pradesh at Amaravati; Writ Petition No. 11562 of 2023; Coram: Hon'ble Sri Justice Ravi Cheemalapati; Date of Order: 11.09.2023.

Link to Download the Order

Click here to view/download the full order

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