When a state entity admits liability for contractual payments but delays disbursement without legal justification, it crosses the line from administrative delay into constitutional violation. The Andhra Pradesh High Court has now firmly held that such inaction, even if not malicious, violates the state’s duty under Articles 14 and 21 of the Constitution. This judgment reinforces that public bodies cannot treat contractual obligations as optional or subject to bureaucratic inertia.
Background & Facts
The Dispute
The petitioner, Vyshno Constructions, executed road and building works under Agreement No.66/2023-24 dated 30.12.2023 with the State of Andhra Pradesh. The work was completed and certified through official Measurement Books. The first two progress bills were paid in full. The third and final bill, for a net amount of Rs.28,69,870, was generated on the Nidhi portal on 24.07.2025 and approved by the Pay and Accounts Officer on 30.07.2025. Despite this, the amount remained unpaid due to pending fund clearance.
Procedural History
- 30.12.2023: Agreement executed between petitioner and state.
- July 2025: Final bill approved by PAO and transmitted for payment.
- October 2025: Petitioner filed Writ Petition No.31295/2025 under Article 226 seeking payment and interest.
- January 2026: Hearing before Justice Tarlada Rajasekhar Rao.
Relief Sought
The petitioner sought a writ of mandamus directing the respondents to pay the admitted amount of Rs.28,69,870 with 12% interest from the date of bill approval, and declared the delay as arbitrary and violative of Articles 14 and 21.
The Legal Issue
The central question was whether withholding an admitted contractual payment by a state entity, without any legal or factual dispute, constitutes a violation of Articles 14 and 21 of the Constitution, thereby justifying judicial intervention under Article 226.
Arguments Presented
For the Petitioner
Counsel argued that the state had admitted the liability through certified Measurement Books and PAO approval. The continued non-payment, despite no pending audit, dispute, or contractual condition, amounted to arbitrary action. Reliance was placed on D.F.O., South Kheri v. Ram Sanehi Singh to assert that state inaction motivated by administrative apathy or fiscal delay, even if not mala fide, still breaches constitutional obligations.
For the Respondent
The Government Pleader conceded that the amount was due and approved but contended that payment was delayed due to fund allocation processes. They relied on W.A.791/2022 to argue that interest claims must be pursued before a civil forum and that writ jurisdiction should not interfere in routine financial disbursements.
The Court's Analysis
The Court rejected the notion that fiscal constraints or procedural delays justify non-payment of admitted dues. It emphasized that the state, as a contracting party, is bound by the same principles of fairness and non-arbitrariness as any private entity. The fact that the bill was approved and no dispute existed rendered the delay legally indefensible.
"When a State decides not to pay the dues with mala fide, with ulterior motives or arbitrarily... such an act of the State of not paying its dues cannot be said to be wholly beyond the reach of Article 226."
The Court distinguished this case from those involving factual disputes requiring evidence or arbitration. Here, the state had already validated the work and the quantum due. The Court further held that delay in payment of public dues, even without malice, erodes public trust and violates the right to equality and life with dignity under Articles 14 and 21.
The Court declined to entertain the interest claim under writ jurisdiction, noting that interest disputes require factual adjudication best suited for civil courts. However, it underscored that the principal amount, once admitted, must be paid without further delay.
The Verdict
The petitioner succeeded. The Court held that the state’s failure to pay an admitted contractual amount, despite approval and no dispute, violates Articles 14 and 21. The respondents were directed to pay Rs.28,69,870 within six weeks. The interest claim was left open for civil remedy.
What This Means For Similar Cases
Payment of Admitted Dues Is Non-Discretionary
- Practitioners can now invoke Article 226 to compel payment of undisputed government dues, even without alleging mala fide.
- The burden shifts to the state to prove a legitimate, documented reason for delay - not mere administrative backlog.
- Writ petitions are maintainable where the state has already certified work and approved bills.
Interest Claims Must Be Separately Pursued
- While principal amounts are enforceable via writ, interest claims require civil litigation.
- Lawyers should file writ petitions for principal dues and parallel civil suits for interest to avoid jurisdictional pitfalls.
- Courts will not entertain interest claims under Article 226 unless tied to constitutional arbitrariness.
State Entities Cannot Hide Behind Budgetary Constraints
- Fiscal constraints are not a valid defense against constitutional obligations.
- Public departments must prioritize contractual payments to private parties as part of their duty under Rule of Law.
- Delayed payments now carry reputational and legal risk beyond financial liability.
