The Andhra Pradesh High Court on Thursday held that a writ petition in contractual matter is maintainable if the work payment is arbitrarily withheld by the State or any instrumentality of state which is legitimately payable by them.

Fact of the case:

The petitioner had participated in a tender floated by the government of Andhra Pradesh and they became the successful bidder. The petitioner was given the work order which they completed. Afterwards a bill was prepared which was approved by the Respondent but even after long time the bill amount was not released rather the respondent were dragging the issue. So the petitioner filed a writ petitioner in the HC to declare the act of not releasing the bill amount by respondent State as illegal, in violation of natural justice principle & arbitrary.

The counsel for respondent said to the court that the bill was not released yet because of the non availability of funds. He also contended that the A.P. Education and Welfare Infrastructure Development Corporation which floated the tender was merely an executing agency whose work is to only look after the civil construction of the work and to monitor its quality. Furthermore respondent argued that there was a condition in the agreement between petitioner and respondent that all the subject issue should be raised before an Arbitrator or before a civil court having jurisdiction as an alternative mode for settlement of disputes.

Court held:

The HC did not accept the argument of the respondent that the petitioner should have opted for the alternate mode of dispute settlement as per the agreement. The court observed that if a state or the instrumentality of the state fails to make payment which they are legally bound within a reasonable time period for the work done by the petitioner then this violates the fundamental right of the petitioner and so the HC have writ jurisdiction to entertain the case filed by the petitioner.

The court observed that the act of not releasing of the amount which petitioner was legally entitled to is a violation of right of the petitioner because of which petitioner could not make payments to her vendors & employees which resulted in decline of respect and dignity of her. So this is a clear violation of Right to Life under Article 21 of the Indian Constitution.

The Court ordered to respondent to clear the bill and to give 12% per annum interest from the date of submission of bill for the loss caused due to illegal deprivation of right.