Article 226 Writ Jurisdiction | Admitted Contractual Dues Must Be Paid Even If Alternative Remedies Exist : AP HC

The Andhra Pradesh High Court has reaffirmed that writ jurisdiction under Article 226 can be invoked for recovery of admitted contractual dues, even when alternative remedies exist. The judgment underscores that arbitrary withholding of payments by state authorities violates constitutional guarantees, providing relief to contractors facing bureaucratic delays.

Background & Facts

The Dispute

The petitioner, M/s N.V.G Constructions, executed road construction work for the Panchayat Raj Department under Agreement No.453/2023-24 dated 29.11.2023. After completing the work, the respondents withheld payment of Rs.16,06,192 (net amount) under CFMS No.2024-173578, despite finalizing the bills. The petitioner alleged arbitrary and illegal withholding of dues, violating Articles 14, 16, 19, and 300-A of the Constitution.

Procedural History

• 2023: Agreement executed for CC road construction
• 2024: Work completed; bills finalized but payment withheld
• 2025: Writ Petition No.2768/2025 filed under Article 226
• IA No.1 of 2025: Interim relief sought for payment with 24% interest

Relief Sought

The petitioner sought:

• A writ of mandamus directing payment of Rs.16,06,192
• Interest at 24% for delayed payment
• Declaration of respondents' action as arbitrary and unconstitutional

The Legal Issue

The central question was whether Article 226 can be invoked to recover admitted contractual dues when:

1. The state admits liability but withholds payment arbitrarily
2. Alternative remedies (e.g., civil suits) exist but are time-consuming

Arguments Presented

For the Petitioner

• Relied on M/s Utkal Highways Engineers and Contractors v. Chief General Manager & Ors (2025 SCC OnLine SC 1400) to argue that writ jurisdiction lies for admitted dues
• Contended that delayed payment violates Article 300-A (right to property)
• Argued that alternative remedies are not absolute bars to writ petitions

For the Respondents

• Raised preliminary objection on maintainability, citing availability of alternative remedies
• Did not dispute the execution of work or quantum of dues in written instructions

The Court's Analysis

The Court examined the scope of writ jurisdiction under Article 226, emphasizing:

"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. Further, throwing a writ petition on ground of availability of alternative remedy after 10 years, particularly, when parties have exchanged their affidavits, is not the correct course unless there are disputed questions of fact which by their very nature cannot be adjudicated upon without recording formal evidence."

Key principles established:

1. Admitted Dues: When liability is undisputed, writ jurisdiction can be invoked
2. Arbitrary Action: Withholding payment without justification violates Articles 14 and 300-A
3. Alternative Remedy: Not an absolute bar if the state's action is arbitrary

The Court distinguished cases involving disputed facts, where civil suits may be appropriate. Here, since the respondents admitted the dues, the writ petition was maintainable.

The Verdict

The Court allowed the writ petition, directing the respondents to release Rs.16,06,192 within three months. No costs were awarded.

What This Means For Similar Cases

Writ Petitions Lie for Admitted Dues

• Contractors and suppliers can now approach High Courts under Article 226 for undisputed payments
• Government departments cannot withhold payments arbitrarily, even if alternative remedies exist
• Practitioners should argue:
  • The admission of liability in written communications
  • Delay in payment as arbitrary action
  • Constitutional violations (Articles 14, 16, 19, 300-A)

Alternative Remedy Is Not Absolute

• Courts may override alternative remedies if:
  • The state's action is arbitrary
  • Affidavits have been exchanged (reducing factual disputes)
  • Delay in civil suits would cause irreparable harm
• Practitioners must highlight:
  • Undisputed quantum of dues
  • Unjustified delays by authorities

Interest for Delayed Payments

• While the Court did not award 24% interest as sought, it implicitly recognized the right to compensation for delays
• Contractors should:
  • Include interest claims in writ petitions
  • Cite this judgment to argue for higher interest in similar cases
  • Negotiate settlements with authorities citing this precedent