Chevella Vijayalaxmi vs The State Of Telangana & Ors.

"...to issue writ order or direction especially one in the Nature of Writ of Mandamus declaring the action of the respondents in not releasing the admitted due amount of Rs. 3,69,000/ for the work completed by the petitioner i.e., Reconstruction of Sri Hanuman and Sri Lakshmi Temple at Moratga Village, Raikode Mandal, Sangareddy District, erstwhile Medak District, in pursuance of Tender ID-69222 IFB Notice No.EE/40/2018, dt 09.082.018 is illegal arbitrary and violative of Article 19 (1)(g) of the Constitution of India and consequently direct the respondents to release the entire admitted due amounts in respect of the work executed by the petitioner i.e., Reconstruction of Sri Hanuman and Sri Lakshmi Temple at Moratga Village, Raikode Mandal, Sangareddy District erstwhile Medak District by considering the representation of the petitioner dt 14.05.2025 and pass..."

"...It is clear, therefore, from the aforesaid order dated 22.03.2014 that there is no dispute as to the amount that has to be paid to the appellant. Despite this, when the appellant knocked at the doors of the High Court in a writ petition being Writ Civil No.25126 of 2014, the impugned judgment dated 02.05.2014 dismissed the writ petition stating that disputed questions of fact arise and that the amount due arises out of contract. We are afraid the High Court was wholly incorrect inasmuch as there was no disputed question of fact. On the contrary, the amount payable to the appellant is wholly undisputed. Equally, it is well settled that where the State behaves arbitrarily, even in the realm of contract, the High Court could interfere under Article 226 of the Constitution of India [ `ABL International Ltd. and Another v. Export Credit Guarantee Corporation of India Ltd. and Others' (2004 (3) SCC 553)]. This being the case and the work having been completed long back in 2009, we direct the Uttar Pradesh Jal Nigam to make the necessary payment within a period of four weeks from today. Given the long period of delay, interest at the rate of 6 per cent per annum may also be awarded.

The appeal stands disposed of accordingly."

'39. A Bench of two learned Judges of this Court in Shrilekha Vidyarthi (Kumari) v. State of U.P.⁴ observed that there exists "an obvious difference" between contracts concerning private parties to those which have State as a party. The primary difference being that the State while exercising its powers and discharging its functions "acts indubitably, as is expected of it, for public good and in public interest". The said factor singularly is sufficient to bring into any transaction the minimal requirements of public law, to which the State is a party. The fact that a dispute falls into the contractual realm does not relieve the State of its obligation to comply with the requirements of Article 14.

40.

Further the Court in Shrilekha Vidyarthi case⁴ had observed that: (SCC p.237, para 24)

'24. The State cannot be attributed the split personality of Dr.Jekyll and Mr. Hyde in the contractual field so as to impress on it all the characteristics of the State at the threshold while making a contract requiring it to fulfil the obligation of Article 14 of the Constitution and thereafter permitting it to cast off its garb of State to adorn the new robe of a private body during the subsistence of the contract enabling it to act arbitrarily subject only to the contractual obligations and remedies flowing from it. It is really the nature of its personality as State which is significant and must characterize all its actions, in whatever field, and not the nature of function, contractual or otherwise, which is decisive of the nature of scrutiny permitted for examining the validity of its act. The requirement of Article 14 being the duty to act fairly, justly and reasonably, there is nothing which militates against the concept of requiring the State always to so act, even in contractual matters. There is a basic difference between the acts of the State which must invariably be in public interest and those of a private individual, engaged in similar activities, being primarily for personal gain, which may or may not promote public interest. Viewed in this matter, in which we find no conceptual difficulty or anachronism, we find no reason why the requirement of Article 14 should not extend even in the sphere of contractual matters for regulating the conduct of the State activity."

"The Apex Court and this Court in catena of decisions held that when there is non- payment of the undisputed bills, the same is violative of Articles 14 and 16 of the Constitution of India. The counsel for the petitioner rightly placed reliance on the decision of the Apex Court in Surya Constructions Vs. State of Utter Pradesh and others, following the judgment in ABL International Ltd. Vs. Export Credit Guarantee Corporation of India Ltd. Cited supra. In view of the Apex Court judgment, the contention of the learned Government Pleader that the writ petition is not maintainable before this Court could not be countenanced. The bills of the petitioner dated 13.3.2019 are admitted by the respondents and forwarded for payment after due measurements and obtaining quality control and the Vigilance report. Hence, the authorities are estopped from stating that the bills are submitted without executing the works. On the mere ground of pendency of Vigilance report, payment cannot be stopped. Accordingly, there shall be a direction to the respondents to pay the bill amount of Rs.8,08,828/- to the petitioner within a period of six weeks from the date of receipt of copy of this order.

"8.

The provisions of the Act make it clear that it is a welfare legislation meant to create employment/eradicate unemployment in rural areas and in the process to create durable assets for rural India. Thus, it is clear that a public element is involved in these works with State participation and funding. The "States" presence is therefore all pervasive in this scheme. The law on the interpretation of welfare legislation is also very clear. As held in number of cases including K.H.Nazar v. Mathew K Jacob case by the Supreme Court of India "Judges ought to be concerned with the colour, content and the context of such statutes". Therefore, in view of the settled law and keeping in mind the purpose for which the legislation is enacted, this Court has to hold that there is a public element involved in this and that it is not a pure case of the State entering into a commercial contract."

9.

Apart from this when State or State instrumentalities act in an arbitrary manner or fail to act within time the Writ Court does have jurisdiction to entertain the matter. Even the case law cited by the learned counsel for the petitioner supports this to an extent. Besides this Court notices that there is no method/mode for settlement of disputes provided for. Section 23 of the Act and Rule 14 of Schedule-I for example provide for constant monitoring of the works/books to be maintained etc. Despite this, there is no strict denial of the exact quantum of work executed."

"23)

The High Court of Andhra Pradesh in J. Devendra Reddy v Kakatiya University and another reported in 2015 (3) ALD 97, held that withholding of the amount payable to the petitioner for the contract works, constitutes patent arbitrariness on the part of the respondents and directed the respondents to pay 2015 the amount due to the petitioner along with interest @ 12% per annum.

24)

The High Court of Andhra Pradesh in S. Srinivas vs. State of Andhra Pradesh and others reported in 2021 (5) ALT 267, held that the petitioner is entitled for the interest @ 12% p.a., from the date of expiry of one month from the date of submission of bill to till the date of payment."

"5.

Having regard to the submissions of both the learned counsel, this Court deems it appropriate to dispose of the Writ Petition by directing the respondent authorities to release the admitted bill amount of Rs.1,16,51,734.00/ due to the petitioner, as expeditiously as possible, preferably within a period of six (6) weeks from the date of receipt of a copy of the order. No costs."

"12.

In the light of the pleadings and arguments referred to above, it is clear that there is no dispute with regard to amounts payable under Bill Nos.34, 35 and 36. It has been held by the Hon'ble Supreme Court from time to time that writ jurisdiction per se cannot be denied merely because the dispute arose out of a commercial contract as held in Surya Constructions' case (Supra 1), ABL International Limited's case (Supra 2) and Century Spinning and Manufacturing Company Limited's case (Supra 3). In Surya Constructions' case (Supra 1), the Hon'ble Supreme Court granted relief to the petitioner therein taking note of the fact that bills payable to the petitioner were undisputed. In the instant case, the petitioner stands on a better footing as the bills of the petitioner are not only admitted but also certified. As observed above, in the present case there is no dispute as such between the parties. The only issue is with regard to release of payment under Bill Nos.34, 35 and 36 by the respondents - State. No explanation is forthcoming from the respondents as to why the amounts covered by Bill Nos.34, 35 and 36 cannot be released. According to the respondents, Bill Nos.34, 35 and 36 are pending for want of budgetary clearance. On the face of it, action of the respondents is arbitrary, unreasonable and unjust and the same cannot be countenanced.

13.

The contention of the learned Additional Advocate General that the petitioners have to approach civil Court even for payment of admitted bills runs contrary to the settled legal proposition. This Court would also look into the public interest involved. The project, as informed by the learned counsel on either side, is an ongoing project and the bills worth of hundreds of crores are kept pending for no reason and there is every possibility of non-release of payment impacting the ongoing project and the same would not be in public interest. Even for this reason, this Court holds that the petitioner has made out a case warranting interference in writ jurisdiction. Further, as there is inordinate delay in release of payments covered by the subject bills by the respondents to the petitioner without any justification, in the opinion of this Court, the respondents are liable to pay penal interest. However, as against the claim of 18% per annum sought by the petitioner, this Court holds that the respondents are liable to pay penal interest at 9% per annum."

"4.

In view of the same and particularly since it has been nearly a year since the token has been given to the petitioner, this Court deems it fit and proper to direct the 5th respondent to release the admitted and certified work done payments, i.e., Rs.77,79,224/- in respect of the Token No.2456868964 to the petitioner within a period of ten (10) days from the date of receipt of a copy of this order and if the payment is not made by the said date, the said payment shall carry interest at the rate of 15% per annum from the date of issuance of the Token till the date of payment."

DISCUSSION AND CONCLUSION :-

“100.

The High Courts exercising their jurisdiction under Article 226 of the Constitution of India, not only have the power to issue a writ of mandamus or in the nature of mandamus, but are duty-bound to exercise such power, where the Government or a public authority has failed to exercise or has wrongly exercised discretion conferred upon it by a statute, or a rule, or a policy decision of the Government or has exercised such discretion mala fide, or on irrelevant consideration.

101.

In all such cases, the High Court must issue a writ of mandamus and give directions to compel performance in an appropriate and lawful manner of the discretion conferred upon the Government or a public authority.”