The contractor is entitled to 6% interest on delayed payments as per previous court judgments regarding contractor compensation.

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 disposed of on 12.07.2023 with the following directions;

7. Accordingly, the respondents are directed to release the admitted/legally entitled amount to the petitioner at the earliest, and at rate, within a period of six (06) weeks from the date of receipt of a copy of this order. It would be open to the petitioner to agitate its claim for interest, if any, payable by the respondents, if it is so advised, in an appropriate forum. There shall be no order as to costs.”

3. Pursuant to the Order dated 12.07.2023 passed by this Court in W.P.No.9704 of 2023 the Petitioner was paid the amounts due. Presently, the grievance of the Petitioner is that the Petitioner is entitled for the payment of interest at the rate of 6% per annum on the delayed payments as the Petitioner suffered immense loss due to the delay in payment of bills.

4. The learned counsel for the Petitioner would submit that the delay in payment of amounts caused huge loss and the Petitioner is entitled for payment of interest at the rate of 6% per annum on the delayed payment and he relied on the Judgment of the Division Bench of this Court in W.A.No.724 of 2021 and batch, dated 12.10.2023. The learned Assistant Government Pleader submitted that the delay in payment of amounts was on account of procedural certifications and budgetary constraints. It is also contended that there would be delays in Government departments as there is a requirement of completion of work and assessment of quality of work at different levels.

5. Heard the respective counsel.

6. In W.A.No.724 of 201 and batch the Division Bench of this Court had considered the payment of interest for the delayed payments and the Writ Appeals were disposed of with certain directions. The relevant portion of the Judgment reads as under;

“(c) In case the works are as per standards, the petitioners would be paid not only the balance amount but also interest calculated at the rate of 6% per annum on the entire amount with effect from the date when the bills were submitted by the petitioners for payment till the date of final payments;

(b) Such of the petitioners who had executed works much before the period of 01.10.2018 would be paid, if not already paid, the entire amount due and payable to them within a period of one month from today, with interest calculated at the rate of 6% per annum with effect from the date when the bills were submitted by the petitioners for payment till the date of final payments.”

7. In view of the above Judgment, the Writ Petition is disposed of with the following directions;

i) The Respondents are directed to consider grant of interest at the rate of 6% per annum for the balance amount of Rs.1,92,86,097/- in terms of the Division Bench Judgment of this Court in W.A.No.724 of 2021 and batch, dated 12.10.2023 from the