(Per Hon’ble Sri Justice V.V.S.Rao)

1. The appellant in both the appeals is a company specialized in facilitation/execution of EPC contracts in the areas of power and infrastructure. The Andhra Pradesh State Electricity Board (APSEB) invited tenders from contractors for installation, commissioning and maintenance of 11 KV 2 MVAR Capacitor Bank System Units (CBSU) at various substations in Andhra Pradesh. The appellant was successful, and therefore, APSEB entered into lease contract agreement with the appellant for certain number of CBSUs. After the implementation of electricity reforms, Eastern Power Distribution Company Limited (EPDCL) – respondent in W.A.No.1152 of 2008, and the Northern Power Distribution Company Limited (NPDCL) – respondent in W.A.No.1187 of 2008, stepped into the shoes of APSEB and succeeded to the rights, duties and obligations under the contracts. To reduce the long story into a short one, the appellant’s bills for monthly operation lease rentals were paid up to August 2005. From September 2005 to September 2006 the lease rental bills were not paid. There was correspondence between the appellant and the concerned Superintendent Engineer (SE) on one hand and between the latter and the Chief General Manager (CGM) (Expenditure) on the other. Though initially the SE conducted scrutiny of the appellant’s bills and sent the same to CGM for necessary action, about four months thereafter the same SE informed the appellant that the lease rental bills of the appellant are returned by the corporate Office, Visakhapatnam, stating that, “payment cannot be made as the lessor has neither maintained the capacitor banks nor has attended for rectification of defective capacitor banks during the period from 09/2005 to 10/2006 as per the report of the Divisional Engineer, dated 10.11.2006”. Though not specifically informed by written communication, the NPDCL also did not release the lease rental bills.

2. Being aggrieved by the denial of payment of lease rental bills, the appellant filed W.P.No.6771 of 2007 against EPDCL and W.P.No.12436 of 2008 against NPDCL. In both of them, the appellant prayed for a writ of mandamus declaring the denial of the payment as illegal and arbitrary and for a consequential direction to the respondents to release the operational lease rental payments to the appellant in the bills processed by the SE.

3. Learned single Judge dismissed the writ petitions by a common order observing that there is dispute between the parties as to performance under the contract; the contract is not covered by statutory terms; the post-threshold dispute is contractual in nature, and therefore, the appropriate remedy for the appellant is to approach the civil Court.

4. In these appeals the Counsel for the appellant submits that after receiving the lease rental bills for the period from September 2005 to September 2006, the SE processed and after finding the claim to be correct forwarded the same to the CGM (Expenditure). But, the Corporate Office prevailed over the SE and made him to issue the letter raising all untenable objections. He would urge that during the period, no complaint was made against the maintenance/rectification work carried out by the appellant, and therefore, the turnaround is unjustified and arbitrary.

5. The contract for commissioning and maintenance of CBSUs with APSEB, and later with EPDCL and NPDCL is non-statutory contract. As found by the learned single Judge the contract between the parties does not provide for any payment schedules separately for installation, commissioning and maintenance. Subject to the term of contract, for the breach of any terms by one party, the other party to the contract may withhold the payments. When the respondents denied the payments for the period from September 2005 to September 2006 on the ground that the appellant did not maintain the CBSUs nor attended to rectification of defective Capacitor Banks, there is certainly a dispute regarding