Milestone Constructions vs The State Of Andhra Pradesh & Ors.

Present intra-Court appeal is preferred assailing the order, dated 16.06.2026, in W.P.No.15022 of 2026, passed by the learned Single Judge, whereby writ petition preferred by appellant came to be disposed.

Appellant/writ petitioner preferred the writ petition questioning the action of respondents 2 to 4 in processing and proposing to release payments under contract, dated 01.02.2024, entered into between 2^nd respondent APIIC and Joint Venture Milestone-Garrison into account opened with 6^th respondent Bank, without proper authorisation of the said Joint Venture members, and despite complaint, dated 18.05.2026, as illegal, arbitrary, and unconstitutional.

(a) The case of appellant was that the appellant and 5^th respondent entered into a joint venture agreement under the name and style "Milestone-Garrison (JV)" vide agreement, dated 05.01.2024, for the purpose of executing specific project, namely, forming and laying of BT roads, construction of culverts, and storm water drains at IP-5, Venkatapuram Village, Chittoor District.

5^th respondent filed counter-affidavit stating that though the contract was executed and was supposed to be completed within a period of 9 months, the same could not be completed within time due to non-infusion of funds by appellant, in those circumstances, after negotiations amongst the JV partners, on the understanding that 5^th respondent would pump in the required money, accordingly, it was decided to bestow banking authority in favour of 5^th respondent to ensure smooth and efficient operations. Thus, banking authority agreement, dated 19.05.2025, was executed, and all the partners of both JV partners signed the same, including the managing partner of appellant. Basing on the said authorization, G. Hemanth Reddy, managing partner of 5^th respondent, opened bank account with 6^th respondent. Upon completion of execution of work, bills were submitted to the tune of ₹2,77,69,533/-, and request was made to process the same in favour of JV to be settled into aforesaid account, (which of course was denied and disputed by the managing partner of appellant), therefore, pleaded for dismissal of the writ petition.

The learned Single Judge, having considered the aforesaid stands, in view of serious disputes amongst JV partners, and in particular the genuineness or otherwise of banking authority agreement issued in favour of G. Hemanth Reddy, managing partner of 5^th respondent, refused to exercise extraordinary jurisdiction, as the same would have to be resolved through the mechanism agreed under the JV contract, but not by invoking writ jurisdiction. Learned Single Judge also opined that respondents 2 to 4 are merely required to proceed in accordance with the terms of JV agreement and the work contract for processing the payments, and in case there is any disagreement amongst the members of JV, they should be relegated to resolve the disputes as envisaged under the JV agreement, and accordingly, disposed the writ petition.

Heard Mr.Soora Venkata Sainath, learned counsel for appellant; learned Government Pleader for Industries and Commerce, for 1^st respondent; Ms.Santhi Chandra, learned Standing Counsel for APIIC; Mr.V.R. Reddy Kovvuri, learned counsel for 5^th respondent; and Mr.M.Vipin Viswas, learned counsel, for Mr.Kunuku Raja Sekhar, learned counsel for 6^th respondent.

Learned counsel for appellant contended that as prayer in the writ petition merely assailed the action of respondents 2 to 4 in taking steps for release of payments in favour of JV into disputed bank account without verification of the authorization, the learned Single Judge was not right in relegating the appellant to work out remedies under the JV agreement. It is further contended that as the initial bank guarantee, as well as overdraft, were availed from Union Bank of India for the purpose of execution of subject works, for all purposes, it is impliedly understood that the partners of JV have nominated aforesaid bank for crediting of the processed bills, however, strangely, 5^th respondent, without any resolution of JV, unilaterally opened new account with 6^th respondent, thus, respondents 2 to 4, without verifying whether change of new account was with the consent of the members of JV, could not have taken steps for initiating processing of bills and crediting into the new account. The said action is clearly arbitrary and illegal, therefore, learned Single Judge ought to have examined the issue in the said perspective, rather than holding that there are serious disputes amongst the members of JV partners, which require to be settled within the framework of the said agreement. Even if it is assumed that there are certain disputed questions of fact involved, still the same would not act as a bar for writ Court to exercise its jurisdiction and entertain the writ petition. In support thereof, learned counsel for appellant places reliance on judgment of Hon’ble Apex Court in ABL International Ltd. v. Export Credit Guarantee Corporation of India^{11.(2005) 3 SCC 553}.

Conversely, learned Standing Counsel appearing for respondents 2 to 4 submitted that the JV agreement does not specifically provide the details of bank to which the payments are to be processed, and it is only based on the banking authorization agreement submitted by JV members, necessary steps were being initiated to process and settle the payments, thus, respondents 2 to 4 cannot be found fault with.

Mr. V.R. Reddy Kovvuri, learned counsel for 5^th respondent, contended that provisions of JV agreement, in particular Clause 8, clearly envisage operation of bank accounts and payments, as per which the bank account will have to be operated by the person nominated by JV partners by executing necessary power of attorney. The members accordingly have executed banking authority agreement, dated 19.05.2025, authorizing G. Hemanth Reddy of 5^th respondent to open and operate bank account, which has also been signed by managing partner of appellant, therefore, the same cannot be disputed in any manner, and rightly, respondents 2 to 4 have been requested to process and release the payments to aforesaid account. Therefore, it is contended that the impugned order passed by learned Single Judge is well-reasoned and does not suffer from any infirmity.

We have given our anxious consideration to the submissions made above and also perused the record available.

The only issue that arises for our consideration is whether 5^th respondent was authorized to open bank account with 6^th respondent on behalf of JV, and that respondents 2 to 4, in turn, are justified in processing the payments executed in pursuance to the contract and crediting the same into the said account.

It is the case of appellant that as per JV agreement, the parties have agreed that all the payments receivable on account of execution of project should be credited to the account maintained with Union Bank of India. The basis for making such submission is that bank guarantee, dated 29.01.2024, for ₹9,55,000/- drawn by JV was from aforesaid bank, further, OD for ₹3.50 Crores was sanctioned by the very same bank for the purpose of executing the contract. However, 5^th respondent denies and disputes the same, and it is the case of 5^th respondent that as per banking authority agreement, dated 19.05.2025, Mr.G. Hemanth Reddy, managing partner of 5^th respondent, was authorized to open and operate bank account on behalf of JV, accordingly, account was opened with 6^th respondent for processing and releasing of payments.

In order to examine said issue, relevant clauses of JV agreement, read as under:

Clause 8, extracted above, merely stipulates that JV partners shall nominate a person by executing necessary power of attorney to open and operate bank accounts. It appears that, after execution of the JV agreement, the contract, dated 01.02.2024, was awarded in its favour. The bank guarantee, dated 29.01.2024, which is referred to in the said contract, no doubt, states that the same was issued by Union Bank of India, but the same leads nowhere. The bank account statement furnished by appellant, along with additional material papers, relating to appellant partnership firm, refers to sanctioning of OD for ₹3.50 Crores. The bank account, therefore, is not in the name of JV, and the OD sanctioned is also not in favour of JV, therefore, it cannot be presumed that the amounts were sanctioned for the purpose of this project.

Be that as it may, there is a reconstitution of the appellant's partnership firm on 15.05.2025, as per which, second partner of the said firm, viz., Mr.C. Vikram Sai, has been recognized as managing partner and authorized to open and operate bank accounts on behalf of said partnership firm. Thereafter, the banking authority agreement was executed on 19.05.2025 by all the three partners of appellant as well as 5^th respondent, including the said C. Vikram Sai, authorizing G.Hemanth Reddy of 5^th respondent to open and operate bank account on behalf of JV. The signature and execution of the said banking authority agreement have been seriously disputed by appellant. Except for the aforesaid authorization, which is in terms of Clause 8 of the JV agreement, no other authorization nor existence of any bank account with Union Bank of India is brought to our notice, nor did learned counsel for appellant point out anything in that regard. Thus, we are of the view that if there is any dispute with regard to the genuineness or otherwise of banking authority agreement, dated 19.05.2025, the same has to be resolved amongst JV partners as contemplated under Clause 13 of the said agreement. The learned Single Judge, therefore, was absolutely justified in relegating the appellant to settle the dispute in terms of JV agreement.

Though learned counsel for appellant sought to rely on the judgment of Hon’ble Apex Court in ABL International Ltd.¹, having regard to the facts and circumstances of the present case, as the execution of document itself is denied and disputed, including the signature over it, such seriously disputed questions of fact can neither be gone into nor decided under writ jurisdiction.

Therefore, the writ appeal lacks merit; accordingly, the same is dismissed. No order as to costs.

As a sequel, miscellaneous petitions pending, if any, shall stand closed.