The Andhra Pradesh High Court has affirmed that the state cannot withhold undisputed payments due to private contractors under public works agreements, even in the absence of formal adjudication. This ruling reinforces the constitutional obligation of the state to act fairly and non-arbitrarily in fiscal dealings with citizens, and clarifies the scope of writ jurisdiction in monetary claims against public authorities.
Background & Facts
The Dispute
The petitioner, PLR Projects Private Limited, executed 73 road works across five mandals in Chittoor District under Agreement No. 2023-24 dated 27.07.2023, as part of the Andhra Pradesh Rural Road Project. Upon completion, the petitioner submitted bills for payment totaling Rs. 79,62,837/-, with a net payable amount of Rs. 67,53,945/- after statutory deductions. Despite the bills being finalized and uploaded to the CFMS Portal, the respondents delayed release of funds without any stated legal or factual justification.
Procedural History
- The petitioner filed Writ Petition No. 31861/2025 under Article 226 of the Constitution, challenging the non-payment as arbitrary and violative of Articles 14, 19 and 300A.
- An interim application under Section 151 CPC sought urgent payment pending disposal.
- The respondents did not dispute the execution of work or the quantum of dues.
- The 6th respondent submitted written instructions confirming the net liability and that the amount was awaiting fund clearance.
Relief Sought
The petitioner sought a writ of mandamus directing immediate payment of Rs. 67,53,945/- with interest at 24% per annum, and declaration that the withholding of payment was illegal and unconstitutional.
The Legal Issue
The central question was whether writ jurisdiction under Article 226 can be invoked to enforce payment of admitted and undisputed dues under a public contract, even when an alternative remedy exists under contract or procurement rules.
Arguments Presented
For the Petitioner
The petitioner relied on M/s Utkal Highways Engineers and Contractors v. Chief General Manager & Ors (2025 SCC Online SC 1400) to argue that non-payment of admitted dues constitutes arbitrary state action under Article 14 and violates the right to property under Article 300A. It was contended that the availability of an alternative remedy does not bar writ jurisdiction when the claim is clear, undisputed, and involves constitutional rights. The delay, extending beyond reasonable time, amounted to a breach of the state’s duty to act fairly.
For the Respondent
The respondents did not contest the factual basis of the claim. The Assistant Government Pleader acknowledged the liability and confirmed that the bill had been uploaded to CFMS and was pending fund clearance. No legal objection was raised to the maintainability of the writ petition, effectively conceding the petitioner’s entitlement.
The Court's Analysis
The Court examined the nature of the state’s obligation under public contracts and the limits of writ jurisdiction in monetary disputes. It emphasized that while writ courts generally avoid adjudicating pure contractual claims, exceptions exist where the state’s action is arbitrary or violates constitutional rights.
"Be that as it may, the High court has not dealt with the merits of the writ petition. Moreover, it is not an inviolable rule that no money claim can be adjudicated upon in exercise of writ jurisdiction. Non-payment of admitted dues, inter alia, may be considered an arbitrary action on the part of respondents and for claiming the same, a writ petition may lie."
The Court held that the respondents’ conduct - admitting liability yet delaying payment without cause - constituted a clear violation of Article 14 and Article 300A. The absence of any dispute over the quantum of work performed or the calculation of dues rendered the matter suitable for adjudication under Article 226. The Court rejected the notion that procedural delays or fund clearance timelines could justify indefinite withholding of constitutionally protected property rights.
The Court further noted that the petitioner had waited beyond a reasonable time, and the state’s failure to act could not be shielded by invoking administrative processes.
The Verdict
The petitioner succeeded. The Court held that withholding admitted dues under public contracts violates Articles 14 and 300A, and writ jurisdiction is maintainable to enforce such payments. The respondents were directed to release Rs. 67,53,945/- within five months of receipt of the order. No interest was awarded, and costs were declined.
What This Means For Similar Cases
Admitted Dues Are Non-Negotiable
- Practitioners may now file writ petitions under Article 226 to enforce payment of admitted contractual dues from state agencies without waiting for lengthy administrative appeals.
- The burden shifts to the state to justify delay - mere administrative backlog is not a valid defense.
- Any delay beyond a reasonable period (even if funds are pending) may attract constitutional scrutiny.
Writ Jurisdiction Is Not Barred by Alternative Remedies
- The existence of a contract-based remedy or procurement grievance mechanism does not oust writ jurisdiction when constitutional rights are infringed.
- Courts will look at the substance: if the claim is undisputed and the state’s inaction is arbitrary, writ relief is available.
- This principle applies equally to contractors under NHAI, PWD, RERA, and rural development schemes.
Constitutional Right to Property Applies to Contractual Payments
- Article 300A protects not just land or physical assets, but also legally enforceable monetary claims arising from state contracts.
- Delayed payment of dues is now recognized as a deprivation of property without legal authority.
- Practitioners should cite this judgment when challenging delayed payments in infrastructure, rural development, and public works contracts.
