High Court · 2025

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 Writ, Order, direction more particularly one in the nature of Writ of Mandamus declaring the action of the respondents in purporting to recover the amount of Rs.21,28,511/- representing the differential amount beyond 8% interest on mobilization advance as per the Agreement No F/EPCiNKLIS/2004- 05 dated 20 3.2005 and floating government notified interest as illegal, arbitrary and u ncon stitutional and set aside the said proceedingsiletters vide Lr No.EEllr/GKLIP/Dv2tDBtD2t74 dated 29.6.2012, trlemo No.SE/MGJLtp/DEE- 1tT3l62ls dated 24 4.2012 and Lr No PAO/MBNR/Sn t/LtFT il/2012-13t29 dated t

16.6.2012 and consequenfly direct the Respondents not to recover the amount of Rs.21,28,51 1l- frcm the petitioners towards differential amount interest amount on mobilization advance that is already paid. LA. NO: 1OF 2O12 WPMP. NO: 306 39 0F 2012 Petrtion under section i 5 i cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be preased to issue interim directions directing the respondents not to reco'er the amount ot Rs 21 ,28'511l- representing the differentiar amount of interest peyond 8% on mobilization advance aS under Agreement No . F/EpC/NhlLIS/2004_05 dated 20 3 2005 and government notified froating rate, pending the disposar of the writ petition Counsel for the petitioners: SRI TpS HARSHA Counsel for the Respo4dent Nos.1, 3 and 4: MS. SWATHI, AGP FOR IRRIGATION & COMM AREA DEV counsel for the Respondent Nos.? and 5: sRl RAM SHANKER SHARMA, AGP FOR FINANCE & PLANNING The Court made the following: ORDER f THE HON'BLE SRI JUSTICE E.V. VENUGOPAL IIrRIT PETITION No.23969 OF 2O1 2 ORDER: This Writ Petition is hled under Article 226 of Constitution of India seeking the following relief/s:- "... to issue aIry appropriate writ, order or direction more particularly one in the nature of 'Writ of Mandamus" declaring the action of the respondents in purporting to recover the arnount of Rs.21,28,511/ representing the differentiat amount beyond 89/o interest on mobilization advance as per the Agreement No. F/ EPC/ NKLIS/ 200a 05 dated 20.3.2005 and floating government notified interest as illegal, arbitrary and unconstitutional and set aside the sa.id proceedings/letters vide Lr No.EEIMGKLIP / Dv2 I DB / D2 I 7 4 dated 29.06.2012, Memo No.SE/MGJLlp/DEE- r /T3 162 /S dated 24.4.2012 and Lr No.PAO/MBNR/ Sn.1/ LlF-t. I2or2-t3I29 dated 16.6.2Ot2 and consequentty direct the Respondents not to recover the amount of Rs.21,28,511/- from the petltioners towards differential arnount interest amount on mobilization advalce that is already paid and pass such other order or orders ..."

2. Heard MT.TPS Harsha, learned counsel for the petitioner, Ms.Swathi, learned Assistant Government Pleader for Irrigation and Command Area Development appearing for respondent Nos.1, 3 and 4 and Mr.Ram Shanker Sharma, learned Assistant Government Pleader for Finance & Planning appearing for respondent Nos.2 and 5.

3. The brief facts of the case are that petitioner No.2 is the authorized signatory of petitioner No.1 which is a joint venture participated, selected and awarded the work of "Investigation Design Estimation and Construction of Earth work Excavation 2 Forming Embankment and Construction of CM & CD works and Regulators of Kalwakurthi Lift Irrigation Scheme with respect to i) Achampet Branch Canal from Gudipalli gattr_r Balancing Reservoir ii) Distributory Network along with field Channels for irrigating an Ayacut of 9O,OO0 Acres" package No.3O under Agreement No.F/EPC/NKLLSl2OO4-O5 dated 20.i:i.2OOS. It is stated that petitioner No.l through its GpA holder has been executing the said works as per the Agreement mentioned above. Under the said agreement petitioner No.l is required to make a deposit of mobilization advance in installments. The rate of interest applicable for installments of mobilization advance was fixed under the Agreement @ 8% per annum under clause 49.4. Pursuant to the said clause, the petitioner paid the mobilization advance as per the schedule in the years 2OO5 and 2O06; that the entire mobilization advalce was paid by the lretirioner by October, 2OO6 and the petitioners have been executing the said works and submitting R.A. Bills to the respondents, particularly respondent No.5. Whileso, respondent No.4 issued a letter dated

29.06.2012 to petitioner No. I proposing to deduct :r.n amount of Rs.21,28,51 1/- towards the difference of interest anrount beyond the rate of 8o/o per annum that was recovered pursuart to the agreement between the petitioners and respondents, on a floating 3 rate basis pursuant to certain G.O.s and internal Memos issued by the Government and the superior officers. Petitioner No.l addressed a letter dated 7.7.2012 stating that the mobilization advances were already paid along with agreed rate of interest @ 8o/o per annum and that entire payment was completed by the year 2006 itself and levying higher interest rate retrospectively and recovering them from the future bills of the petitioner after a lapse of six years, that too unilaterally is arbitrary and illegal and without considering the reply of the petitioner, respondent No.S released the amounts towards RA No.75 of July, 2Ol2 by holding the differentia-l interest amount of Rs.21,28,5111-. It is stated that the respondents are threatening to recover the said withheld amount of Rs.21,28 ,5lll- from the bills payable by the petitioners. Aggrieved by the same, the petitioners preferred the present Writ Petition.

4. Learned counsel for the petitioners submits that the action of respondents in purporting to deduct the amounts towards difference of interest beyond 8% per annum contrary to the agreement dated 20.03.2005 entered into between the petitioner and the respondents in a unilateral manner is illegal and unconstitutional. Therefore, relying on the decisions passed by i 4 the Honble Supreme Court in ABL International Ltd. and another Vs. Export Credit Guarantee Corporation of India Ltd. And Othersl and Durga Enterprises (p) Ltd. and another Vs. Principal Secretary, Government of U.p. O,n.r"z, he "nU seeks to pass appropriate ord.ers.

5. Respondent No.3, by filing the counter affidavit, contended that as per Clause 49.1 of general conditions of ttre agreement, an amount equivalent to lOo/o of contract value of Rs.10,07,00.00 was paid on 24.03.2005 to the petitioners cornl)any towards mobilization advance to facilitate the petitioner to procure men, machinery for executing the works and the advance bears an interest at 87o per annum as per Clause 49.4. The zrdvance along with interest is recoverable at the rate of 2Oyo on the running bill amount as per Clause 49.6.1. The principal amount of advance and the interest amounting to Rs.1O,92,14,O43/- was completely recovered upto LS XI & part bill paid in the month of October,

2006. He further stated that the Government vide rf.O.Ms.No.94 I&CAD Department, dated 1.2.2003 issued guidelines on various issues, wherein, it had clearly mentioned at Item 11, of Annexure I appended to above G.O. about the payment ol mobilization ' 1200+1 I Supreme Coun ( ases 551 '(2004) l3 Supreme Coun Cases 665 I I I I t I I I I ! I I i i I I 5 advance and levying of interest, at Government borrowing rate on it and that it was a policy decision taken by Government much earlier to the date of concluding the above agreement' Item 17 of Annexure I is extracted as hereunder:- 1L7 OBILISA TION ADVANCE: The contractor shall have the facility of obtaining mobilzation J..r.. upto 10% of contract value on works costing more than Rs.1 crore against Bank Guarantee which will attract suitable rate of interest The advance and interest shall be recovered from the contractor's bitls in approPriate insta-llments' Therefore, he states that the interest payable on mobilization advance was kept at 8o/o erroneously under Claus e 49 '4 of contract agreement instead of keeping at Government borrowing rate. Upon noting the same, the Government vide G'O'Ms'No'273 and 3O3 Fin (W & M) Department, dated 20'09'2006 and l9.tO.2OO6 notified the Government borrowing rate at lOVo for the years 2005-06 and' 2006-07 respectively and at 1O'50% for the year 2OO7-O8 as per G.O'Ms'No'292, dated 28'\l'2OO7 for Irrigation Projects. l,earned counsel for respondent No'3 further contends that 6. respondent No.3 had issued instructions vide Memo dated 24.04.2012 to respondent No'4 seeking to regulate the rate of interest at the above Government rates with retrospective effect' Respondent No.4 has worked out the difference in between the 6 Government borrowing rates and 80% as mentioned in the agreement and arrived to Rs.21,28,511/-. Respon<tent No.4 vide letter dated 29.06.2O12 has intimated to the petitioner that the difference of interest on mobilization advance will be recovered in future bills and that the act of respondent No.4 is neither illegal nor unconstitutional. Therefore, he seeks to disrniss this Writ Petition.

7. l,earned counsel for respondent No.5, by frling counter afftdavit, conceded to the submissions of learned counsel for respondent No.3

8. Having regard to the submissions of all the counsel, this Court opines that it is an admitted fact that as per the agreement dated 20.03.2O05 both the parties have explicitely agreed that the rate of interest on the mobilization advance will be @ 8%o per arrnum. Respondent No.3 had issued the procr:edings dated

24.O4.2OL2 to respondent No.4 seeking to adopt and regulate the rate of interests on mobilization advances releasecl so far based on the existing effective borrowing rates in the forthcoming bills. Consequently, the Government of Andhra pradesh in partial modilication of the orders, issued the comprehensive G.O.Ms.No.94 irrigation and CAD (PW-COD) Department dated 7 O1.OT.2O03.Thatbeingthecase,therespondentauthorities holding the money of the petitioners enhancing the rate of interest vide proceedings in Memo No'SE/MGJLIP/DEE- llT3l62 lS dated 24.4.2012 by giving retrospective effect to the reguiated rate of interest is illegal and' arbitrary and hence' the proceedings/letters vide Lt No'EE/MGKLIP/Dv2/DBlD2l74 d.ated. 29 .06.20 12, Memo No. SE/ MGJLIP/ DEE- I / T3 I 62 I S dated

24.4.2Or2 and Lr No.PAO/MBNR/Sn'1/LIFT'lIl20r2-t3129 dated 16.6.2012 are hereby set aside' Resultantly' the respondents are directed to clear the admitted Bill amounts due to the petitioners, within a period of eight (8) weeks from today' g.Withtheabovedirection,thisWritPetitionisdisposedof. No costs. Miscellaneous Petitions, pending if any, shall stand closed' //TRUE COPY'/ SD/- K. BHAVANI SWAMY ISTAN T REGISTRAR SECTION OFFICER ent, Secretariat Building' To, of And hra Pradesh, Finance and The Government ects) DeP ineer, MGJ LIP Circle, Mahabubnagar MGKLIS Division-2 Nagarkurnool, M ahabubnagar artment, Hyderabad

1. The PrinciPal Secretary, lrrigation and CAD DePa The Govern ment of And hra Pradesh, HYd erabad ry, ProJ

2. The PrinciPa Planning (Wo The SuPerinte The Executive District I Secreta rks and nding Eng Engineer, J 4 s Tn" piv & Accounts Officer, Mahabubna-ggr -. 6 o"i,'ct to Sa lFs Harsha, Advocale [oPUc] ^ -. 7 rwo cc to The ce tol. rr?is?tio'i;ft.i;'ltsiiArea Development High ; ?fl :t8a [" 5'pkiltu rei il Ix8:'!i8f, t8,?Jt r, he Sta te or " fl,ringinr, at HYderabad [oUT] 9. Two CD Copies w TJ SS f i B F l: F t. t-: i HIGH COURT DATED:21 10312025 ORDER WP.No.23969 of 2012 g SIAI6 1$ rl2 JljN 2T25 ( q o () I DEsPA'rc , t DISPOSING OF THE WRIT PETTTION WITHOUT COSTS \a d?,L fu*