Writ of Mandamus | State Must Release Admitted Dues for Executed Works : Andhra Pradesh High Court

The Andhra Pradesh High Court has reaffirmed that the state cannot withhold admitted payments for executed works without valid justification, holding such delays violate constitutional rights under Articles 14 and 21. This judgment strengthens the remedy of writ of mandamus for contractors facing arbitrary non-payment by government departments, while clarifying that admitted dues must be released even without formal dispute resolution mechanisms.

Background & Facts

The Dispute

The petitioner, M/s. Chandravardhan Engineering Constructions, executed road construction work for the Andhra Pradesh Roads and Buildings Department under two separate grants: Chief Minister Development Fund (CMDF) and District Mineral Foundation (DMF). The total admitted dues amounted to Rs. 46,04,097, comprising Rs. 24,03,654 under CMDF and Rs. 22,00,443 under DMF. Despite completing the work under Agreement C.R. No. 15/2023-24 dated 31-07-2023, the respondents failed to release the payments, citing budget constraints and treasury technicalities.

Procedural History

• 2023: Work executed under the agreement
• 2024-2025: Payments withheld despite admitted liability
• 2025: Writ petition filed under Article 226 seeking writ of mandamus for release of dues
• 2026: Respondents filed counter affidavit admitting liability but citing procedural delays

Relief Sought

The petitioner sought:

• A writ of mandamus directing the respondents to release the admitted dues
• Declaration that the respondents' inaction was illegal, arbitrary, and violative of Articles 14, 21, 19(1)(g), and 300-A
• Interest at 18% per annum for delayed payment

The Legal Issue

The central question was whether the High Court could issue a writ of mandamus to compel the state to release admitted payments for executed works when:

1. The liability was undisputed
2. The delay was attributed to procedural or budgetary constraints
3. The petitioner's constitutional rights were allegedly violated by the non-payment

Arguments Presented

For the Petitioner

The petitioner contended that:

• The respondents had admitted the liability in their counter affidavit
• Delay in payment violated Article 21 (right to livelihood) and Article 14 (equality before law)
• The state's reliance on budget constraints was arbitrary and mala fide
• The petitioner was entitled to interest for delayed payment under Article 300-A (right to property)

For the Respondents

The respondents argued that:

• Payment delays were due to treasury technicalities and budget constraints, which were beyond their control
• They had manifested intent to release payments upon fund clearance
• The petitioner could seek interest through appropriate forums, not under Article 226

The Court's Analysis

The Court examined the scope of writ of mandamus in cases of admitted government dues, relying on the Supreme Court's decision in D.F.O., South Kheri v. Ram Sanehi Singh. The key observations were:

1. Admitted Liability Cannot Be Withheld Arbitrarily:

   "Once the work executed by the petitioner to the respondents is admitted and the payment due to the petitioner is not disputed by the respondents, there was hardly any need for this Court to refer the matter to any forum or for arbitration."

   The Court held that admitted dues must be released without requiring the petitioner to undergo arbitration or dispute resolution, as the liability was not contested.

2. Constitutional Violations by Delay: The Court reiterated that arbitrary non-payment by the state violates Articles 14 and 21, citing D.F.O., South Kheri:

   "When a State decides not to pay the dues with mala fide, with ulterior motives or arbitrarily... such a decision of the State cannot be said to be wholly beyond the reach of Article 226 of the Constitution of India."

   The judgment emphasized that budget constraints or treasury technicalities cannot justify indefinite delays, as they amount to arbitrary state action.

3. Limits of Writ Jurisdiction for Interest Claims: The Court clarified that while writ of mandamus could direct payment of principal dues, interest claims must be pursued through appropriate forums, as Article 226 is not the proper remedy for monetary compensation.

The Verdict

The Court disposed of the writ petition with the following directions:

1. The respondents were directed to release the admitted dues of Rs. 46,04,097 within six weeks from the date of the order
2. The amount was subject to statutory deductions, with liberty to the petitioner to raise disputes regarding recoveries
3. The petitioner was left free to claim interest through appropriate legal forums

What This Means For Similar Cases

Mandamus Lies for Admitted Dues

The judgment reinforces that writ of mandamus is an effective remedy for contractors when:

• The government admits liability for executed works
• Payment delays are arbitrary or procedurally unjustified
• The state invokes budget constraints or treasury issues as excuses

Practitioners should argue that admitted dues must be released without requiring arbitration, as the liability is not disputed.

Constitutional Rights Trump Procedural Delays

• Article 14 is violated when the state discriminates in payments or delays them arbitrarily
• Article 21 (right to livelihood) is infringed when contractors face financial hardship due to non-payment
• Article 300-A (right to property) is breached when admitted dues are withheld without legal justification

Interest Claims Require Separate Proceedings

• Writ jurisdiction under Article 226 is not the proper forum for claiming interest
• Contractors must pursue interest claims through civil courts, arbitration, or specialized tribunals
• The judgment does not preclude interest claims but limits the scope of writ relief to principal dues

Actionable Takeaways for Practitioners

• For Contractors:

  • File writ petitions when payments are admitted but withheld without valid reasons
  • Argue constitutional violations under Articles 14, 21, and 300-A to strengthen the case
  • Seek separate proceedings for interest claims if required

• For Government Departments:

  • Avoid citing budget constraints as a blanket excuse for non-payment
  • Ensure timely release of admitted dues to prevent writ petitions
  • Document justifications for delays to defend against arbitrariness claims