The High Court · 2025

Judgment

2. J.

4. 5. 6. 7. 6_ 9. 10. State of Telangana, Represented by Special Chief Secretary to Government, Finance Department, Secretariat Building, Hyderabad State-of Telangana, Represented by SpecialChief Secretary to Government, I and CAD Department, Secretariat Building, Hyderabad Engineer-in-Chief (General), lrrigation and' CAD Department, Secretariat Buildings, Hyderabad. Engineer-in-Chief(lrrigation), Ramagundam Chief Engineer (lrrigation). Dharoor Camp, Jagtial, Jagtial. Superintending Engineer, Irrigation Circle, KLIS LMD eolony, Karimnagar. Superintending Engineer, lrrigation Circle, Dharoor Camp, J-agitial. Executive Engineer, I and CADD., irrigation Division N0,6, Vemulawada. Executive Engineer, lrrigation Division No.7, Ramagundam. Assistant Pay and Accounts Officer (W and P), Rajanna Sircilla. ...RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ, order or direction more particularly one in the nature of writ of mandamus or any other Writ declaring the action of the Respondents in failing to release the admitted amounts due to the Petitioner JV for price adjustment towards Labour and Other Materials under the Stage-ll, Phase-l of the Sripada Sagar Project (for period December 2005 to December 2O2O) as illegal, arbitrary and unco nstitutio nal and consequently direct the Respondents to release the admitted and approved amount ot 8O,26,24,011 / (Rupees Eighty Crores Twenty Six Lakhs Twenty Four Thousand and Eleven only) along with I interest at the rate of I percent per annum from the due dates of the respective RA bills till the date of release of payments lA NO: 1 OF 2023 Petition under Section '151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to direct the Respondents to forthwith release the principal amount of Rs. 80,26,24,O111- (Rupees Eighty Crores Twenty Six Lakhs Twenty Four Thousand and Eleven only) being'the admitted and approved payable due to the petitioner JV for price adjustment towards Labour and Other Materials for the relevant period, pending disposal of the above writ petition lA NO: 2 OF 2024 Between: Buildings, Hyderabad. Finance Department, Secretariat Building, Hyderabad and CAD Department, Secretariat Building, Hyderabad -

1. State of Telangana, Represented by Special Chief Secretary to G6vemment, 2. State_of Telangana, Represented by Special Chief Secretary to Govemment, I 3. The Engineer-in-Chief (General), lrrigation and CAD Department, Secretariat 4. The Engineer-in-Chief(lrrigation), Ramagundam 5. The Chief Engineer (lrrigation), Dharoor Camp, Jagtial, Jagtial. 6 Inq Superintending Engineer, lrrigation Cirale, KalS LMD Colony, 7. The Superintending Engineer, lrrigation Circle, Dharoor Camp, Jagitial. 8. The Executive Engineer, I and CADD., irrigation Division N0,6, Veirulawada. 9. The Executive Engineer, lrrigation Division No.Z, Ramagund-am. 10.The Assistant Pay and Accounts Officer (W and P), Rajanna Sircilla. Karimnagar. AND ...PETiTIONERS/RESPONDENTS IVRCL- Navayuga-SEW (JV), Having its office at, M-22 / 3 RT, Viiavanaoar 9pl.ont, Hyderabad - 5_00 057 Refresented by Authorized Sign'atbry ilir. Maheshwar Vedantam, S/o. Sri Krishna Murthy. a-ged about 51 yeirs. ..,RESPONDENT/PETITIONER Petition under section 151 cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to vacate the interim order in lA.No.l of 2023 in WP.No.34492 of 2O23 dated 22.12.2023,and dismiss the Writ Petition Counsel for the Petitioner: SRl. TPS HARSHA Counsel forthe Respondent No.1: GP FOR FINANCE PLANNING Counsel for the Respondent Nos. 2to10: GP FOR IRRIGATION The Court made the following: ORDER l I

HONOURABI,E SRI JUSTICE B' VIJAYSEN RBDDY WRIT PETITION No.344920F 2023 ORDER: (ORAL) This writ petition is filed aggrieved by the action of the respondents in not releasing the admitted and approved amount of Rs.80,26,24,011/- (Rupees eighty crores twenty six lakhs twenty four thousand and eleven only) to the petitioner (Joint Venture) for price adjustment towards labour and other materials as per the conditions of the Agreement No.LS 112005'2XX6dated 03'04'2005 and orders of this Court in W.P. No'4000 0 of 2012 dated 23 '03 '2022 as illegal' arbitrary' unconstitutional and for a consequential direction to the respondents to release the amount along with interest'

2.1. In the tender process floated by the respondents for execution of Stage II, Phase I of Sripada Sagar Project - Investigation' soil exploration. Design, Supply' Installation' Testing and Commissioning of Pumping Machinery' Transformers' Substations' fusing Mains, including construction of Pump Houses' alt Civil Structures, CM & CD works, Delivery Cistems etc'' to develop about 2.00 lakh acres of ayacul under Sripada Sagar Project near Yellampalli Village, Ramagundam Mandal in the up-land area of erstwhile 2 Karimnagar District (Sripada Sagar Project), the petitioner was declared as successful bidder.

2.2. Project Agreement No.LS l/2005-2006 dated 03.04.2005 was entered into between the petitioner and respondents. General Conditions of Contract (GCC) were incorporated into the Agreement between the petitioner and the respondents.

2.3. It is the case of the petitioner thal as per Clause 13.8 of the GCC, the petitioner is entitled to price adjustment from the respondents in the event of increase in rates and prices of labour, cement, steel, fuel, lubricants and other materials. Accordingly, the petitioner, right fiom October 2005, was submitting running account bills with price adjustment lor the aloresaid items in terms of GCC and agreement conditions. There was exchange of correspondence between the petitioner and the respondents regarding price adjustment. As there was dispute regarding price adjustment, the petitioner filed W.P. No.40000 of 2012 befbre this Court against the respondents to declare the letter dated 03.02.2012 and the internal proceedings dated

16.11.2009 whereby the petitioner's price adjustment claim was rejected as illegal, arbitrary and unconstitutional. W.P. No.40000 of / 3 ', 2012 was allowed by this Court by the order dated 23.03.2022 directing the respondents to verifu the claim of the petitioner for price adjustment towards labour and other materials and pay the amount as expeditiously as possible preferably within a period of eight (8) weeks from the date ofreceipt ofa copy ofthat order.

2.4. Thereafter, the petitioner made several representations for payment of price adjustment towards labour and other materials as directed by this Court in W.P. No.40000 of 2012. Upon receipt of the petitioner's request vide letter dated 15.10.2022, the Govemment vide Memo dated 27.10.2022 requested respondent No.3 - Engineer-in- Chief (General), Irrigation and CAD Department, Secretariat Buildings, Hyderabad, to take necessary action for release of pending payment of price adjustment towards labour and other materials. Respondent No.7 - Superintending Engineer, Irrigation Circle, Dharoor Camp' Jagitial, vide Letter No.SE/ICIJGL/DSE/ DEE- t/AEE-2/338/H dated I9.06.2023 to respondent No.5 - the Chief Engineer, I&CADD, Dharoor Camp, Jagitial, informed that the verified amount of Rs.80.26 crores (Rs.80,26,24,01I /-) is the amount towards price adjustment payable to the petitioner and requested for taking further necessary action. In tum, respondent No.5 vide Letter No.CE(lrrigation)lTS/T2l \ .l SYP Price escalationl2023l621 dated 28.06.2023 verified and requested respondent No.3 to address the Govemment for taking further necessary action.

2.5. It is submitted that subsequently respondent No.3 vide Letter No.ENC(GySE(P&MyDCE(GB)DEE3/AEE7lSYP 12023 dated

28.07 .2023 informed respondent No.2 - the Special Chief Secretary to the Govemment, Irrigation & CAD Department, Hyderabad, to accord approval for payment of price adjustment towards labour and other materials to the petitioner as per the agreernent conditions and the order of this Court in W.P. No.40000 of 20 I 2 for Rs.80,26,2 4,Ol I l-.

2.6. Thus,, it is the case of the petitioner that there is no dispute whatsoever regarding payment of Rs.80,26,2 4,01| l- towards price adjustment. Despite the same, the respondents are not releasing the amount

3. Respondent No.l - the State of Telangana, represented by the Special Chief Secretary to Govemment, Finance Department, Secretariat Building, Hyderabad, filed counter affidavit contending that pursuant to the orders of this Court in W.P. No.40000 of 2012, no file is received in the Finance Department from the concemed I / 5 Administrative Department. As and when the file is received from respondent No.2, the same will be processed by the Finance Department in accordance with the Rules in vogue and as per the orders of this Court in W.P. No.40000 of 2012.

4.1. Respondent Nos.2 to 9 filed separate counter affidavit and subsequently fi led additional counter affidavit.

4.2. lt is stated in the counter affidavit that the contract price shall be adjustcd for increase or decrease in the rates and prices lor labour, cernent. steel, fuel, lubricants and other materials (Electro Mechanical works) in accordance with the principles mentioned under Clause l3.tt.l(i) to 13.8.1(iii) and procedures as defined in Clause 20.9 of the conditions of the contract. The formulae for calculation of price adjustment on labour, cernent etc., are stipulated under Clause 13.8.2 of Volume II, Part A GCC of the agreement. Further, Corrigendum - I to Tender Notice No: 'e' Procurement No.4/2004-05, dated 19.01.2005 at Item - 5 i.e., under Clause 13.8.3 Components with percentage (Vol-ll Part A), it is stipulated that "Price Variation fbr Electro-Mechanical Cornponent is acceptable as per IPMA & IEEMA recommendations only." 6 BITJ

4.3. In accordance with the above conditions of the agreement, the price escalation is being allowed on steel, cement and fuel as per the formulae mentioned in Clause 13.8.2 of Volume - II Part - A of GCC and price escalation is being allowed on electro mechanical works as per IPMA and IEEMA recommendations as mentioned in Corrigendum-2

4.4. The bilt raised by the petitioner for price adjustment on labour and other items was not accepted by the respondents on the ground that it is in deviation of the Government (I&CADD) Memo No.5217lReforms/06 dated 23.02.2006 stating that price adjustment can be allowed only on cement, steel and fuels. The Government vide Memo No.30250/ Maj.lrr.llllA2/2007-6 dated 16. 11.2009 rejected the proposal of price variation on labour and other materials. Aggrieved by the same, W.P. No.40000 of 2012 was filed by the petitioner and the same was allowed by the order dated23.03.2022.

4.5. It is stated that: "a) The Engineer-in-Chief (General), I&CADD, Hl derabad has requested the Chief Engineer (Irrigation). Jagtial to lurnish the Cost particulars of Price Adjustrnent on Labour and Other Materials (Other than electro nrechanical rvorks) tbr taking turther necessary action vide Lr.No.ENC(C)/SI j 7 (P&M)iDCrE((;B)/DEE3 / AEET /SYP /2022, dti- 16-12-2022 said lettcr was received in this Olfice through proper b) -Ihe channel on 07-01-2023 and immediately after receipt of the sarne this olfice has started to work out the cost particulars of price adjustment of labor and other materials from 2004 to 2020 i.e pertaining to a period of 16 years (up to RA l39th and Part bill). c) Meanrvhile. the petitioner has subrnitted a representation datcd: 29 - 12-2022 and rcquested to deduct YAT @ 2.8o/o only instead ol' 4Vo l5o/o from the value of work done and to revise thc "R" value accordingly while calculating the price adjustmcnt...... d) Aflcr procuring tlre relevant indices, linking factors, and analyzing thc representation ol the agency for revision ol "R" r'alue rvith reference to lhe previous objections raised by the audit dcpartment regarding the calculation ol price adjustment and existing Government orders, this oflice has rvorked out the cost particulars of price adjustment in the various scenarios and submitted a detailed report to the Superintcnding Engineer. Irrigation Circle, Jagtial vide this officc [..etter No. EEi lrrigation Div.6lYlvlD/Al153/H, dated-20-02-2023 ... ... e) After carelul examination of the report and vetting the calculations. the Supcrintending Engineer. Irrigation Circlc. Jagtial has suggested certain corrections and orally directed 8 to resubmit the calculations. Accordingly, this olfice has worked out the final cost particulars on price adjustment on Iabour and other materials which is arrived at Rs 80.26 Crores and submitted the detailed report and calculations to the Superintending Engineer. Irrigation Circle, Jagtial vidc this otfice Lr.No. EEllrrigation Division No.6/VMD/A l/ i35/H. dated:- 14-06-2023 ... ..;'

4.6. It is further stated in the counter affidavit that after detailed verification and checks, the Superintending Engineer, Irrigation Circle, Jagitial has submitted report to the Chief Engineer (Irrigation), 'Jagitiat vide LT.No.SEIICIJGLIDSEIDEE-1/AEE-2I338/H dated 19.06.2023 and later the same was submitted to the Engineer-in-chief (Generat), l&CADD, Hyderabad vide Chief Engineer (Irrigation), Jagitial CE(I/TS/T2/SYP Price escalation/2l23 I 621 dated 28.06.2023 which finally submitted to the Government vide Lr.No.ENC(G)/ SE(P&M/DCE(GB)/DEE3/AEE7lSYPl2023 dated 28.07.2023. Immediately after receipt of approval from the Covemment lor payment of price adjustment on labour and other materials, proposals tbr Revised Estimate II would be submitted and Revised Administrative Approval will be obtained and payment witl be tnade to the agency as per the orders of this Court I

4.7. A fiesh Revised Estimate - tI has to be prepared duly incorporating the provision for Price Adjustment on Labour and other materials along with other items viz., VAT Reimbursement, GST Reimbursenlent, amount for additional pipe line work etc., claimed by the agency fiom time to time. The Revised Estimate - II has to be prepared by respondent No.8 - the Executive Engineer, I & CADD, Irrigation Division - VI, Vemulawada, and to be submitted to respbndent Nos.7, 5 and 3 through proper channel for their scrutiny and onward submission. The Govemment vide G.O. No.5, I&CADD (Reforms) Department, dated 15.07.2024,has constituted a State Level Standing Comrnittee (SI-SC) to carry out certain functions in respect of the project works under EPC system taken up under Jalayagnam with the following composition: i) ENC (General), I&CADD, Hyderabad : Chairman, ii) ENC (Admin), I&CADD, Hyderabad : Co-Chairman, iii) CE, Central Designs Organization : Member iv) Director of Works Accounts : Member, v) ENC/CE of the concerned project : Member-Convener. l0

4.8. Subsequently, the Govemment vide Memo No.3769l Reforms/2019 dated 08.08.2019 issued certain instructions for processing the Revised Estimates and issues relating to the Major, Medium and Minor lrrigation Projects by the SLSC.

4.9. [t is stated that after verification of the bill and after apptying all necessary checks, respondent No.8 has to pass the bill and present the same to respondent No.l0 - the Assistant Pay and Accounts Officer (W&P), Rajanna Sircilla District, for arranging payment. It is stated that presently the matter is in early stages awaiting approval from the Govemment and there is lot of procedure to be followed before reaching the final stage of payment.

4.10. It is submitted that: as per Preliminary Specification: 69 (a) of thc Andhra Pradesh Detailed Standard Specifications states that "No omission by the Executive Engineer or the Sub Divisional Olfice to pay the amount due upon certificatcs shall vitiate or make void the Contract. nor shall the contractor be entitled to interest upon any guarantee lund or payments in arrears. nor upon any balance tvhich rnay, on the final settlement of his accounts, be found to be due to hirn"......... '/ As per Para I of Articles of, Contract of Agreement. ... ... ... the Contractor has also signed the copy of the Andhra Pradesh Standard Specification and addenda volume there to be maintained in the office of the Superintending Engineer. SripadaSagar Project Circle, Mancherial, Adilabad District in token of acknowledgement of being bound b1 all the conditions ol the clauses of Standard Specifications lor items of work as described by the standard specification nurnber in schedule. Ilencc. thc petitioner does not entitle for payment of any interesl as he is bound by the Prelirninary Specification: 69 (a) of the Andhra Pradesh Detailed Standard Specifications which restricts thc petitioner lrom claiming any such interest." It is thus contencled that the petitioner is not entitled for payment of interest as per PS 69(a) of the APDSS.

5.1. Additional counter affidavit has been filed by respondent Nos.2 to 9 stating that as per the directions issued by this Court in C.C. No.2757 of 2023, claim of the petitioner for price adjustment on labour and other materials was examined. Respondent No.S has presented the claim of price adjustrnent on labour and other materials for Rs.67.64 crores to the Assistant Pay and Accounts Officer, Raj anna Sircilla and following amounts have \gen paid: I l2 BVRJ S L\O I 2 l RA Bill Number RA 1451h & Part bill [al+o-Epu.t uitt RA 147'h & Parr bitl 'l otal I Gross amount of the bill r0.00.00.000.00 25,00,00,000.00 19.11,29,813.00 5{,11,29,813.00 Cheque Number 2s12429224 2s14401589 2512429224 Vr No I 2 I Date t3-06-2024 24-06-2024 26-06-2024

5.2. It is stated that instead of Rs.80.26 crores, the bills of the petitioner were restricted to Rs.67.64 crores and payment was made for Rs.54. I I crores by the Assistant Pay and Accounts Officer, Raj anna Siricilla District. It is stated that Rs.13.53 crores is to be released after receipt of approval for Variation Estimate-Il from the Govemment.

5.3. It is submitted that as per the guidelines for calculation of price adjustment vide G.O. Ms. No.35, Transport, roads & Buildings (R.I) Department, dated 28.02.2006, the formula of Price adjustment, R, the value of work shall exclude the Seigniorage Charges, VAT and all other Over Head Charges. The 'R' value adopted for calculation of price adjustment in most of the bills of the subject work is not in accordance with the above principle of excluding VAT, seigniorage charges or overhead charges. This resulted in payment of price adjustment not only on the value of work done but also price adjustment is paid on VAT, seigniorage charges and other overhead l3 charges which is contrary to the agreement conditions, the Government Orders and the basic concept and spirit of price adjustment itselfl

5.4. It is also stated that: "L Moreover. an amount of Rs 24.36 Crores has been already paid to the Petitioner's JV in RA l40th and Part Bill towards reimbursement of difference between 4o/o/5o/o YAT recovered fronr running accounl bills and 2.8%o TOT loaded in the estimate. Hence, there is no separate need fbr price adjustment on VAT, as the difference rvas already reimbursed. As such, the inclusion ol VAT in "R" Value leads to undue benefit and double paynrent t<r the agency. g. The Accountant (leneral (A&E). Hyderabad has observed the above deviations in calculation of price adjustment and raised audit paras in the lnspection Reports of 2009-10 and 2016-17 regarding excess payments made to the agency due to non- deduction of VAT. Seigniorage charges. or overhead charges from the "R" Value in calculation olprice adjustn.rent... ... ... h. Further. after receipt of Honorable High Court orders in WP No. 40000 of 2012" the Engineer-in-Chief (Ceneral), I&CADD, Hyderabad has requested to fumish the cost particulars ol price adjustmcnt on labor and other materials vide Lr.No.ENC (G)/SB (P&M)/DCE(Gll)/DEti3iAEETlSYP/2022. dt:- l6-12-2022. While preparation olcost particulars. the agency was involved at eveq' stage along with departmental stafI. as the contract was under EPC mode. I hc Petitioner's JV was then very much satisfied r.rith the calculations of price Adjustment on labor and other materials worked oul by the department for Rs 80.26 l.l Crores. 'fhe "R" value taken by the depanment in said calculations excludes ttre VAT, Seniorage and other overhead charges. The agency has also submitted the Variation Estimate-Il duly making provision lbr same amount i.e Rs 80.26 Crores towards price adiustment on labour and other materials. The agency has even liled thc WP No. 34492 of 2023 and CC No.2757 of 2023 & 120 ol 2024 in the l{onorable High court praying for payment of same Rs 80.26 crores touards price Adjustment on labor and other materials but never challenged the procedure adopted for calculation. i. It is surprising that. the petitioner's JV is now finding faults and challenging the action ol the department, when similar. procedures is adopted to regularize the irregular payments oi price adjustment on cement. steel, fuel and electromechanical items which werc made earlier without deducting VAT, Seigniorage and other overhead charges from "R" value. This exposes the dual standards taken by the petitioner in their attempt to get undue benefil. j. It is true that. the Honorablc l{igh Court in WP No.28183 of 2010 regatding deduction of VA'l' lrom "R'value has dirccted the respondents that "such deductions may not be allowed before the Dispute Adjudication Board takes a decision. Both the parties shall take recourse to approaching thc Dispute Adjudication Board prescribed by clause 20.2 of the general conditions of contract and the tir(her conditions that lbllowed in the agreement. Pcnding ad-iudication of the question by the Dispute Adjudication Board. thc respondents shall not interfere with the process of pricc adjustment in making payments with reference to seign iorage and VAI t5 k. llut, when the AG has raised Audit Para in Inspection Repo( 2016-17 regarding non deduction of VAT from "R" Value, the Petitioner's JV itself started submitting the RA bills duly calculating the price adjustment by deducting V AT @ 5%. Seigniorage and additionally Income Toi @ 2o/o also liom "R" Value. This ascertains that the agency has agreed with the observations of the Audit and submitted the subsequent bills accordingly. l. Moreover, the Petitioner's JV itself has requested this office to deduct VA'I' @2.8"/o from "R" value and revise the price adjustment vide their letter dated:29- 12-2022. Now, the department has considered their request and regularized the price adjustment in RA l45th and Parr Bill. As such, the avemlent of the Petitioner's JV that the departrnent has made unilateral deductions does not stand. m. Hence. lhe action taken by the department in regularizing the excess payment by recovering an amount of Rs 10.15 crores towards excess payment of price adjustment made due to non- deduction of VAT, Seigniorage and Olher Overhead Charges tionr "R" value is strictly in accordance with the agreement conditions and Govemment orders.

5.5. The reasons for withholding GST reimbursement of Electro Mechanical Items are stated as under: a. The (iovemmcnt has issucd certain guidelines vide G.O.Ms.No.67 I&CAD (Reforms) Dept. dated: 04-07-2018 for 1 t6 implementation of Coods and Service Ta.r (GST) which was came into eflect w'.e.f lst.luty 2017. ln respect of ongoing works for which estimates prepared with SOR prior to 20 t 7- 18 (in which embedded taxes are included). it is stipulated that. the estimates are to be split into two le value olwork done and paid in VAT regime aLnd balance value o{'work to be done liom 0l- 07 -2017 for which GST applicable. Iror this purpose the taxes embedded in the estintates are to be quantilied and deducted while allowing reimbursement of GSI'. b. The Engineer-in-Chief (Cencral). I&CADD, Hyderabad vide letter No.ENC (GySE (P&M)iEE/DEE2/ AEES/ CST /2021, dt- 04-03-2021 (Copy submitted) has issued certain guidelines for finalization of CST rates rvithout embedded taxes, as per which,' the embedded ta\ rates ior work items from the year 2004-05 to 2008-09 (05) years is to be arrived from SSR-2009-10 and a committee will be formed rvith respect to Eleclro Mechanical and Hydro-Mechanical items to the ongoing lift inigation schemes to finalize the issue. c. Accordingly, the cmbedded tax on work items of above work (estimate prepared with 2004-05 SOR) has been quantified and GST reimbursement was allowcd in RA l40th and Part Billduly. d. Later, the State Levcl Standing Commiftee has convened a meeting on 23-04-2024 tbr approval of Vzriation Estimate-ll and in the minutes ol thc said meeting (Copy submitted), it was specifically mentioncd that. the provision towards the reimbursement of GS.t rvithout embedded tax rates on Electromechanical and Hydromechanical itern has to be considered subject to fi nalization of guidelines/methodology. e. Hence, the GST reimbursenrent made on Electromechanical t7 and Hydromechanical items for Rs 3.75 Crores in RA l40th and Part Bill was disallowed in RA 145th and part bitt. The samc r.r,ill be again released to the agency after linalization of embedded tax component by the committee."

6. I-leard Mr. Avinash Desai, leamed senior counsel, appearing for Mr. T.P.S. Harsha, learned counsel for the petitioner, and Mr. S. Rahut Reddy, leamed Special Govemment Pleader' appearing lor the respondents, and perused the material on record.

7. It is submitted that atleging non-compliance of the interim order dated 22.12.2023 in the present writ petition (W.P. No.34492 of 2023), C.C. No.l20 of 2024 was filed by the petitioner. During pendency of the contempt case, on 18-07.2024, it was reported by the counsel appearing for the parties that an amount of Rs.54,l1,29,8131- (rupees fifty four crores eleven lakhs twenty nine thousand eight hundred and thirteen only) has been paid as part-payment to the petitioner out of Rs.80.26 crores; and on 27.08.2024, it was reported that an amount of Rs.13,67,89,4931- (Rupees thirteen crores sixty seven lakhs eighty nine thousand and four hundred and ninety three only) which is the balance undisputed amount was paid to the petitioner; and the same were recorded by this Court.

8. The learned senior counsel appearing for the petitioner f submitted that pursuant to the interim order passed by this Court in this writ petition on 22.12.2023 and time granted vide interim orders in C.C. tto.tZO of 2024, in total an amount of Rs.67,79,19,306/- (rupees slxty seven crores seventy nine lakhs nineteen thousand three hundred and six only) has been paid to the petitioner out of Rs.80.26 crores, and without prejudice to the rights of the petitioner to claim the balance amount, the petitioner received the said amount. However, the petitioner is entitled to interest on the admitted amount which was delayed. It is submitted that the petitioner cannot be relegated to Civil Court in view of the decisions in M. Gangareddy v. State of A.P.I, J. Deventfer Ready v. Kakatiya Universify2 and also unreported decisions of this Court in W.P. Nos. 12677 of 2023 and, 12825 of2023 dated 03.10.2023.

9. The leamed Special Govemment Pleader submitted that the bills of the petitioner have been admitted only after 2020. Lot of procedure is involved for processing and finalising the bills payable to the petitioner. After the order in W.P. No.40000 of 2012, process was ' 1996(3) ALD 434 - MANU/Ap/0658/ 1996 'zot51l; elo eo - MANU /Api2434l2014 l9 initiated and in view of the reasons explained in the counter affidavit and additional counter affidavit, time was consumed for processing the payment. Assuming that there was delay, it was not intentional and price adjustment could not have been made within few days or months as it required , several procedures like Govemment Orders, Administrative and Executive instructions to be followed. There was no delay as such on the part of the respondents. Thus, the petitioner is not entitled to any interest. The leamed Special Govemment Pleader further submitted that the writ petition is barred by constructive res judicata in as much as the petitioner did not seek interest in W.P. No.40000 of 2012 and relied on the decisions of the Hon'ble Supreme Court in Small Industries Development Bank of India v. SIBCO Investment Private Limitedr and Commissioner of Income Tax, Bombay v. T.P. Kumarana on the principle of constructive res judicata. DISC'T]SSION :

10. Grant ol penal interest is discretion of the Court. No doubt, as held in the decisions referred in paragraph No.8, this Court in exercisc of jurisdiction under Article 226 of the Constitution '1:oz:1 ; scc :o ' ( r996) lo s('c 561 20 of India has power to award interest. However, in every case of delay ( in payment of bills, interest cannot be awarded as a matter of routine. It depends on facts and circumstances of each case. The claim of the petitioner for price adjustment was initially rejected. Thereafter, W.P No.40000 of 2012 was filed by the petitioner and the same was allowed. The petitioner did not specifically seek for award of interest in W.P. No.40000 of 2012. The present writ petition is filed for releasing payment of admitted bilts quantified in compliance of the order in W.P. No.40000 of 2012. Subsequently, the present writ petition was filed. The quantification of penal interest is to be done by guessing work and depending upon the nature of contract. In the commercial transactions, the loss suffered by the party for delayed payments is usually compensated by award of penal interest. It may be noted that there was initial rejection of claim of the pelitioner, thereafter acceptance of its claim for Rs.80.26 crores, which was again readjusted to Rs.67,79,19,306/- (Rupees sixty seven crores seventy nine lakhs nineteen thousand and three hundred and six only) by excluding VAT and other charges. In the circumstances, it would be difficult to decide what would be starting point fbr awarding penal interest. Further, assuming that there is delay as contended by the 2t petitioner. it requires some detail exercise/adjudication to be done to decide whether delay of payment alter quantification of price adjustment was intcntional or deliberate. Such adudication needs to be done by a Civil Coufi or through in-house mechanism, as the case may be, by giving sufficient opportunity to the respondents to explain ItS Case.

11. I'he leamed Special Govemment Pleader stated during the course of hearing that Clause 20.2 of the GCC provides for resoJution of disputes relating to payment of bills by the Disputes Adjudication Board (Dz\t)) and Clause 20. 1 of GCC provides for arbitration. The petitioner is always at liberty to approach the DAB. The leamed senior counsel appearing fbr the petitioner submitted that the DAB has not been constituted despite request of the petitioner. According to the leamed Spccial Govemment Pleader, DAB will be constituted for each contract and in accordance with the consent ofboth parties.

12. In the circumstances, the petitioner is given liberty to make a request to the respondents to constitute DAB for quantification of interest for the delayed payment. On such request of the petitioner, the DAB shall be consrituted and enquiry shall be conducted in accordance )) with the procedure provided under GCC within a period of six weeks ( thereafter

13. This Court by the order dated, 22.12.2023 directed the respondents to release the admitted principal amount of Rs.80,26,24,211/- (Rupees eighty crores rwenty six lakhs twenty four thousand and two hundred and eleven only) within fifteen (15) days fiom the date of receipt of the copy of the order. However, as stated in the preceding paragraphs No.5.l. and 7, an amouq! of Rs. 54, I 1,29,813 I - and Rs. I 3,67,8 9,493 l -, toralling to Rs.67,7 9,19,3061 - (Rupees crores seventy nine lakhs nineteen thousand and three hundred and six only) was paid on different dates (between June and August 2024) after lapse of the time granted by this Court. As the total admitted principal amount was not paid within the time fixed by this Court by the order dated 22.12.2023, the respondenrs are liable ro pay interest to the petitioner for such delayed period, and therefore, the respondents are directed to pay interest to the petitioner at the rate of 6%o per annum for the admitted principal amount from 06.01.2024 (the date of expiry of the rime granted by this Court) till rhe date of payment to the petitioner. 23

14. With the above directions, the writ petition is allowed in paft. No order as to costs. As a sequel thereto, miscellaneous applications, if any, pending in the writ petition stand closed. //TRUE COPY// 1 SD/-T. TIRUMALA DEV| \ASSISTANT REGISTRAR i / q/ SECTION OFFICER The Special Chief Secretary to.Government, Finance Department, Secretariat Building, Hyderabad I he Special Chief Secietary.to Government, I and CAD Departmert, Secretariat Building, Hyderabad rne Engineer-in-chief (Generar), Inigation and cAD Department, secretariat Buildings, Hyderabad. The Enginqer-in-Chief(lrrigation), Ramaqundam +ffi 3,[?,.i"?3,i??,1H,{3il3l)i,?i31,""",'3iliu,lf ,'J,i,,i,#g,lll"r, The Sup6rintendino Enoineer,. llrlgglon Circle, Dharoor Camp, Jagitial. The Executive Enq'ineei l ano cn"oo, irri;;[dr-tiidi". N0,6, vemurawada The Executive Enoineer trriggtion oivisiorirrio.T,laiilgunoam. 'nuiJnn'" Assistant Pay and-Accounts"Officei(W a-na'pj, Sir"if fr. pne QC to SRr rpS HARSHA. ntJoi,rt"lo6rlii-"'" I wo CCs to Gp FOR FTNANCJ pLANNtNb Telan_gana at Hyderabad tourl - " rr,rr vvv ,H-igi court for the state of Two CCs to Gp FOR |RRiGATiON, High Court for the State of Telangana, at Hyderabad [OUTI Two CD Copies

7. 8. 9. 10. 11. 12.

14. I \ To,

3. 4 5 6 @frv I t / CC TODAY HIGH COURT DATED:2910112025 ORDER WP.No.34492 of 2023 1 HE ST4 .{: 'z o 1 B FEB 2025 6) .L \. ,/} -,:r" ALLOWING THE WRIT PETITION WITHOUT COSTS \