The Andhra Pradesh High Court upheld the order passed by the trial court which directed the respondents to pay the petitioners only in regard to units supplied before the order of stop supply order was issued and held that where an amount which is payable to the applicant is undisputed, the Writ Courts can exercise powers under Article 226 of the Constitution of India in a case where the action of the State is arbitrary even when the same is in the realm of a contract

Brief Facts:

The petitioner filed an appeal against the order passed by the trial court which directed the respondents to pay the petitioners only in regard to 779 units of Advanced Digital Class Rooms at the contractual rate and not with regard to the entire 2,000 units which had been allegedly supplied by the Appellants after a dispute arose between them regarding the period of supply and delivery.

Contentions of the Applicant:

The petitioners contended that the appellants’ right to receive payments ought not to have been restricted to 779 ADCRs but ought to have been extended to pending payments for the entire 2,000 units of ADCRs which were delivered and installed at various locations.

Contentions of the Respondent:

The respondents argued on the maintainability of the writ petition and contended that the petitioners had an equally efficacious remedy by way of arbitration in terms of the arbitration clause contained in the agreement executed between the parties. It was further argued that any supply after the stop supply order was issued would not be considered and only 779 ADCRs supplied before the order would be considered.

Observations of the Court:

The court stated that the appellants had restricted the claim only to the supplies made and admitted to having been received by the respondents before the order directing the stopping of supplies was given and there was a dispute regarding the actual date of receipt of supplies and number of units supplied. The court observed that in the light of the disputed figures, it would not have been necessary for the Writ Court to embark upon finding the exact number of units supplied and the appellants had claimed payment only in regard to the admitted figure of 779 ADCR’s and beyond that there is clearly a dispute with regard to the number of units that had been received by the respondents at various locations within the prescribed time limit.

The court further referred to the judgments in Surya Constructions Vs. State of Uttar Pradesh and Others and ABL International Limited Vs. Export Credit Guarantee Corporation of India Limited to state that where an amount which is payable to the applicant is undisputed, the Writ Courts can exercise powers under Article 226 of the Constitution of India in a case where the action of the State is arbitrary even when the same is in the realm of a contract and the present case, the Writ Court did not fall into any error in directing payments only to the extent of the admitted number of units which stood supplied to the respondents before the issuance of the stop supply order.

The decision of the Court:

The court dismissed the appeal and upheld the impugned order.

Case Title: Celkon Impex Private Limited vs. State of Andhra Pradesh

Coram: Hon’ble Mr. Chief Justice Dhiraj Singh Thakur and Hon’ble Mr. Justice A.V Sesha Sai

Case No.: WRIT APPEAL No.919 of 2022

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Kritika