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2025 Supreme(AP) 557
IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
K.SREENIVASA REDDY, J.
Ch Panduranga Raju, S/O Ramaraju - Appellant
Versus
The State Of Ap, Rep By Its Principal Secretary To Government, Higher Education Development, Secretariat Building, Velagapudi, Amaravathi, Guntur District. – Respondent
Writ Petition No : 15546 of 2025
Decided On : 11-08-2025
Advocate Appeared:
For the Appellant : DEVASRI ROSHAN KANCHARLA
For the Respondent: N.B. CHANDRA SEKHAR
Withholding of payments by government entities to contractors constitutes illegal and unconstitutional action, warranting judicial intervention for the release of dues.
Headnote:(A) Andhra Pradesh Financial Code - Articles 39 and 50 - Withholding of payments - The petitioner, a Civil Contractor, executed work to satisfaction but was denied payments amounting to Rs.1,17,56,087/- for over four years - The respondents failed to release payment despite recognizing the completed work. (Paras 1-7)
(B) Writ Jurisdiction - The court ordered the release of the pending payment within six weeks, failing which interest at 6% per annum would be applicable until realization - The delay was deemed illegal and unconstitutional. (Paras 10, 11)
Facts of the case:
The petitioner was awarded a contract to construct a Central Library and completed the work satisfactorily, but payments were withheld by the respondents despite finalization of bills. The petitioner faced financial hardship due to the delayed payments.
Findings of Court:
The court found that the respondents had recognized the completed work and had not justified the delay in payments. Orders were given for immediate resolution of pending amounts.
Issues: The primary issue was whether the withholding of payments by the respondents was lawful.
Ratio Decidendi: The court concluded that the withholding of payments was arbitrary and unconstitutional, emphasizing the obligation of the government to honor contractual agreements.
Result: Writ Petition disposed of; amount ordered to be released within six weeks.
| Table of Content |
|---|
| 1. challenge to withholding of payments (Para 1 , 2) |
| 2. counterarguments regarding budget and payment delays (Para 3 , 4 , 5) |
| 3. petitioner's entitlement to payment recognized (Para 6 , 7) |
| 4. government's administrative sanction for payment (Para 8 , 9) |
| 5. order for payment and interest provision (Para 10 , 11) |
ORDER :
This Writ Petition is filed challenging the action of respondents in withholding the payments of pending amount of Rs.1,17,56,087/- even after finalizing the bill payable to the petitioner in relation to the work i.e. Construction of Central Library (G+1 Floors with a plinth area of 1600 square meters) at COH, Venkataramanagudem, West Godavari District, Agreement No.196/2018-19, dated 15.12.2018).
2. The contents of the affidavit filed in support of the Writ Petition, in brief, are that, the petitioner is a Civil Contractor, used to execute works pertaining to laying of roads and sewage works etc., of R&B Department, Panchayat Raj Department and other Government Departments; that the respondent No.2 issued Tender Notification on nomination basis in the year 2018 and the petitioner, being the lowest bidder, was allotted the work on 15.12.2018 for an estimated amount of Rs.397.00 lakhs. The petitioner entered into an Agreement No.196/2018-19 with respondents and subsequently, completed the work within the stipulated period of contract i.e. within 17 months.
(b) After completion of work, as per the terms of the Agreement, the respondent officials recorded the same in M-Book on 22.09.2023 and after finalizing the formalities viz. QC, Vigilance, the bills were forwarded to the Finance Department, the final bills were sent to respondent No.5 for grant of amount to the petitioner, but the respondents have not chosen to pay the amount for the work done by the petitioner, for four years.
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(c) The petitioner approached the respondents for payment of amounts on several occasions, but no action was taken; that the petitioner invested amounts by borrowing from various sources, on interest and executed entire works to the satisfaction of the respondents and the respondents, having been satisfied with the execution of work, prepared bills, but had not released the amounts till date. The interest on the amounts, that were borrowed, was piling up day-by-day and if, the amounts are not paid at the earliest, the petitioner would be put to irreparable loss and hardship. The action of respondents in withholding the amounts payable to the petitioner, even after completion of works, is nothing but illegal, arbitrary and unconstitutional. Hence, the Writ Petition.
3. Respondent No.2/Dr. Y.S.R. Horticulture University filed counter-affidavit, contending that the bills, pertaining to Construction work of Central Library (G+1 Floors with a plinth area of 1600 sqm) at College of Horticulture, Venkataramannagudem, West Godavari District, were uploaded in CFMS Portal in the month of September, 2023 during the Financial Year 2023-24, but no payment was made for the above bills and they were returned to DDO as per Articles 39 and 50 of the Andhra Pradesh Financial Code in the month of April, 2024; that for re-uploading the bills in CFMS portal, during the Financial Year 2024-25, it was shown as insufficient budget for given DDO Head of Account combination; that the bills would be re-uploaded only when the Budget Release Order (BRO) and Administrative Sanction (AS) is released from the Government, but no Budget Release Order (BRO) was released for the Financial Year 2024-25.
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(b) The budget estimates for the Financial Year 2025-26 were released on 15.07.2025 and administrative sanction was issued on 22.07.2025, in which total amount of Rs.173.87 lakhs was provided under NABARD RIDF Head of Account. The bills would be re-uploaded in the CFMS Portal as and when the said amount is received to the Executive Engineer Account, Dr.Y.S.R.Horticulture University. Therefore, it is prayed to dismiss the Writ Petition.
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4. Heard the learned counsel for
