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IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
NYAPATHY VIJAY
Dattasai Constructions, Rep By Its Managing Partner, B.B. Appa Rao, S/o. Pardesi Naidu – Appellant
Versus
State Of Andhra Pradesh, Rep. By Its Principal Secretary – Respondent
| Table of Content |
|---|
| 1. right to interest on delayed payments. (Para 1 , 2 , 3) |
| 2. argument for interest payment based on losses due to delays. (Para 4) |
| 3. court analysis of previous judgment on delayed payments. (Para 5 , 6) |
| 4. court's directive for granting interest based on prior judgments. (Para 7) |
| 5. closure of pending applications. (Para 8) |
ORDER :
NYAPATHY VIJAY, J.
1. The present Writ Petition is filed questioning the action of Respondents in not paying the interest on the delayed payments of contract bills @ 6% per annum for the amount of Rs.1,92,86,097/- from 01.11.2020 to 21.11.2023 by the Respondents, as illegal and arbitrary.
2. The Petitioner herein is a Contractor and has been awarded tender for providing infrastructure and drinking water and Sanitation to Tribal Welfare Ashram School (Boys) at Neelakantapuram Village in Kurupal Mandal of Vizianagaram District and the estimated value of the work is Rs.394.70 Lakhs vide Agreement No.182/2018-19, dated 01.11.2018. Though the Petitioner had completed the work in terms of the Agreement, the balance amount of Rs.1,92,86,097/- was due to the Petitioner. Hence, the Petitioner filed W.P.No.9704 of 2023 before this Court and the same was
The contractor is entitled to 6% interest on delayed payments as per previous court judgments regarding contractor compensation.
(1) Interest payment is essentially compensatory in nature.(2) Rate of Interest should not be excessive.
The court held that arbitrary withholding of payments, even in the absence of a provision for interest in the scheme, justifies the payment of interest for economic losses incurred.
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