APHC010013912025 IN THE HIGH COURT OF ANDHRA PRADESH Bench Sr.No:-4 AT AMARAVATI [3483]

WRIT APPEAL NO: 60 of 2025 The Managing Director and others ...Appellants Vs.

Sree Balaji Constructions and others ...Respondents **********

Advocate for Appellants: Mr. Rama Chandra Rao Gurram Advocates for Respondents: GP for Home, Mr. Shaik Afzal Mohammed, Mr. K. C. Venkata Reddy (SC for A.P.S.P.H), GP for Finance Planning CORAM : T HE CHIEF JUSTICE DHIRAJ SINGH THAKUR SRI JUSTICE RAVI CHEEMALAPATI DATE : 11^th February, 2025.

P C :

The present writ appeal under Clause 15 of the Letters Patent has been preferred against the judgment and order dated 04.07.2024, passed in writ petition No.33703 of 2023.

2. Briefly stated the material facts are that the petitioner filed a writ petition before the learned single Judge claiming that even when contracted works had been completed by the petitioner, and a final bill was prepared for a sum of Rs.38,72,715/- as per the sanction orders, payment had not been released. 3. Learned single Judge recorded the admission made by the respondent counsel, in the writ petition, regarding the claim of the petitioner that payment would be released as per bills, as soon as the funds were released by the Government, and the petition came to be disposed of on that basis with a further direction to pay interest @ 6% per annum by placing reliance upon a judgment of this Court rendered in writ appeal No.724 of 2021 and batch, decided on 12.10.2023.

The learned single Judge further gave liberty to respondent No.1 herein/petitioner to agitate its claim for a higher rate of interest, if the same was payable, before an appropriate forum.

4. The present writ appeal has been preferred primarily to the limited extent that the learned single Judge has ordered payment of interest @ 6% per annum claiming firstly that reliance placed by the learned single Judge upon the Division Bench judgment rendered in writ appeal No.724 of 2021 was not apt and consequently, that no interest could be ordered to be paid in view of Clause 38.1 of the Agreement, which specifically provided that the contractor would not be entitled to interest upon any guarantee fund or payments in arrear, or upon any balance which may on the final settlement of his accounts be found to be due and payable to him.

For purposes of reference, Clause 38.1 of the Agreement is reproduced hereinbelow:

“38. Interest on Money due to the Contractor:

38.1 Any omission by the Executive Engineer or the sub- divisional officer to pay the amount due upon certificates shall vitiate or make void the contract, nor shall the contractor be entitled to interest upon any guarantee fund or payments in arrear, nor upon any balance which may, on the final settlement of his accounts, found to be due to him.”

5. Learned counsel for the respondents, however, do not dispute the existence of Clause 38.1 to the extent it does not envisage payment of interest upon any amount which is due and payable.

6. In any case, we find that the learned single Judge had ordered the payment of interest without considering the provisions of Clause 38 of the Agreement entered into between the parties, which may not have been brought to the notice of the Court during the course of the hearing and at the time of disposal of the writ petition.

7. Apart from this, it can be seen that the learned single Judge had ordered payment of interest @ 6% based upon a judgment and order dated 02.12.2022, rendered in writ appeal No.724 of 2021 and batch. However, on a perusal of the said judgment and order, we do not find that there were any agreed terms of the contract which prohibited the contractors from claiming interest as has been brought to our notice in the present proceedings, which is applicable to the case of the contractor/petitioner/respondent No.1 herein.

8. It needs to be pointed out that it is no longer res integra as has been held by a three-Judge Bench of the Apex Court in Union of India vs. Bright Power Projects (India)