Andhra Pradesh High Court - Amravati
Rayapureddy Srinivasa Rao vs The Government Of Andra Pradesh on 5 October, 2021
1
THE HONOURABLE SRI JUSTICE BATTU DEVANAND
Writ Petition Nos: 10038/2021, 4167/2021,
4427/2021, 6899/2021, 11511/2021, 11972/2021,
12126/2021, 12413/2021, 12831/2021, 12917/2021,
12946/2021, 13328/2021, 13381/2021, 13519/2021,
13593/2021, 13644/2021, 13742/2021, 13954/2021,
14085/2021, 14139/2021, 14228/2021, 14253/2021,
14335/2021, 14350/2021, 14352/2021, 14371/2021,
14391/2021, 14513/2021, 14520/2021, 14523/2021,
14528/2021, 14533/2021, 14534/2021, 14540/2021,
14544/2021, 14558/2021, 14565/2021, 14604/2021,
14637/2021, 14652/2021, 14686/2021, 14696/2021,
14698/2021, 14701/2021, 14702/2021, 14703/2021,
14704/2021, 14709/2021, 14710/2021, 14727/2021,
14733/2021, 14757/2021, 14760/2021, 14770/2021,
14798/2021, 14800/2021, 14805/2021, 14806/2021,
14815/2021, 14827/2021, 14829/2021, 14835/2021,
14846/2021, 14849/2021, 14850/2021, 14856/2021,
14858/2021, 14876/2021, 14916/2021, 14920/2021,
14933/2021, 14942/2021, 14961/2021, 14969/2021,
14978/2021, 14987/2021, 15003/2021, 15007/2021,
15023/2021, 15031/2021, 15058/2021, 15070/2021,
15089/2021, 15093/2021, 15099/2021, 15107/2021,
15110/2021, 15124/2021, 15125/2021, 15141/2021,
15146/2021, 15168/2021, 15182/2021, 15198/2021,
15202/2021, 15204/2021, 15208/2021, 15209/2021,
15214/2021, 15216/2021, 15235/2021, 15255/2021,
15260/2021, 15266/2021, 15274/2021, 15290/2021,
15294/2021, 15296/2021, 15299/2021, 15317/2021,
15350/2021, 15374/2021, 15388/2021, 15453/2021,
15470/2021, 15478/2021, 15489/2021, 15504/2021,
15552/2021, 15565/2021, 15567/2021, 15570/2021,
2
15574/2021, 15605/2021, 15613/2021, 15623/2021,
15639/2021, 15641/2021, 15648/2021, 15670/2021,
15675/2021, 15676/2021, 15704/2021, 15716/2021,
15737/2021, 15758/2021, 15763/2021, 15772/2021,
15777/2021, 15781/2021, 15805/2021, 15811/2021,
15815/2021, 15817/2021, 15829/2021, 15876/2021,
15902/2021, 15904/2021, 15905/2021, 15907/2021,
15911/2021, 15915/2021, 15921/2021, 15926/2021,
15927/2021, 15934/2021, 15936/2021, 15946/2021,
15949/2021, 15965/2021, 15974/2021, 15975/2021,
15978/2021, 15994/2021, 16009/2021, 16039/2021,
16042/2021, 16044/2021, 16046/2021, 16058/2021,
16064/2021, 16067/2021, 16069/2021, 16070/2021,
16072/2021, 16080/2021, 16081/2021, 16082/2021,
16086/2021, 16087/2021, 16097/2021, 16099/2021,
16102/2021, 16104/2021, 16106/2021, 16110/2021,
16115/2021, 16117/2021, 16118/2021, 16119/2021,
16126/2021, 16131/2021, 16135/2021, 16137/2021,
16139/2021, 16143/2021, 16144/2021, 16145/2021,
16153/2021, 16159/2021, 16166/2021, 16167/2021,
16170/2021, 16191/2021, 16212/2021, 16227/2021,
16244/2021, 16257/2021, 16275/2021, 16302/2021,
16306/2021, 16309/2021, 16321/2021, 16323/2021,
16338/2021, 16349/2021, 16352/2021, 16355/2021,
16367/2021, 16382/2021, 16392/2021, 16400/2021,
16406/2021, 16407/2021, 16416/2021, 16439/2021,
16447/2021, 16453/2021, 16460/2021, 16470/2021,
16475/2021, 16478/2021, 16504/2021, 16519/2021,
16550/2021, 16571/2021, 16587/2021, 16589/2021,
16645/2021, 16650/2021, 16676/2021, 16678/2021,
16683/2021, 16686/2021, 16694/2021, 16697/2021,
16707/2021, 16713/2021, 16715/2021, 16722/2021,
3
16728/2021, 16732/2021, 16734/2021, 16737/2021,
16742/2021, 16745/2021, 16749/2021, 16758/2021,
16762/2021, 16766/2021, 16768/2021, 16769/2021,
16776/2021, 16783/2021, 16784/2021, 16791/2021,
16805/2021, 16807/2021, 16808/2021, 16814/2021,
16838/2021, 16842/2021, 16888/2021, 16904/2021,
16908/2021, 16919/2021, 16928/2021, 16941/2021,
16949/2021, 16951/2021, 16955/2021, 16991/2021,
17004/2021, 17007/2021, 17013/2021, 17019/2021,
17021/2021, 17032/2021, 17037/2021, 17041/2021,
17042/2021, 17044/2021, 17047/2021, 17048/2021,
17052/2021, 17055/2021, 17063/2021, 17073/2021,
17082/2021, 17099/2021, 17115/2021, 17120/2021,
17127/2021, 17145/2021, 17153/2021, 17158/2021,
17159/2021, 17174/2021, 17176/2021, 17180/2021,
17185/2021, 17193/2021, 17212/2021, 17215/2021,
17217/2021, 17219/2021, 17269/2021, 17293/2021,
17301/2021, 17313/2021, 17329/2021, 17335/2021,
17372/2021, 17388/2021, 17389/2021, 17407/2021,
17410/2021, 17411/2021, 17423/2021, 17432/2021,
17434/2021, 17443/2021, 17454/2021, 17471/2021,
17479/2021, 17484/2021, 17486/2021, 17488/2021,
17490/2021, 17495/2021, 17496/2021, 17509/2021,
17515/2021, 17519/2021, 17520/2021, 17529/2021,
17548/2021, 17558/2021, 17572/2021, 17581/2021,
17583/2021, 17587/2021, 17597/2021, 17602/2021,
17606/2021, 17615/2021, 17631/2021, 17640/2021,
17643/2021, 17656/2021, 17666/2021, 17668/2021,
17687/2021, 17709/2021, 17780/2021, 17786/2021,
17793/2021, 17794/2021, 17797/2021, 17808/2021,
17812/2021, 17815/2021, 17827/2021, 17834/2021,
17835/2021, 17840/2021, 17845/2021, 17852/2021,
4
17855/2021, 17858/2021, 17870/2021, 17891/2021,
17892/2021, 17895/2021, 17896/2021, 17897/2021,
17901/2021, 17921/2021, 17932/2021, 17937/2021,
17944/2021, 17952/2021, 17958/2021, 17966/2021,
17967/2021, 17976/2021, 17980/2021, 17985/2021,
18007/2021, 18009/2021, 18010/2021, 18019/2021,
18022/2021, 18025/2021, 18028/2021, 18029/2021,
18044/2021, 18046/2021, 18048/2021, 18049/2021,
18072/2021, 18074/2021, 18075/2021, 18076/2021,
18077/2021, 18083/2021, 18088/2021, 18090/2021,
18101/2021, 18109/2021, 18111/2021, 18130/2021,
18138/2021, 18158/2021, 18170/2021, 18173/2021,
18174/2021, 18175/2021, 18177/2021, 18185/2021,
18191/2021, 18205/2021, 18214/2021, 18219/2021,
18249/2021, 18254/2021, 18264/2021, 18265/2021,
18266/2021, 18269/2021, 18270/2021, 18313/2021,
18317/2021, 18318/2021, 18319/2021, 18333/2021,
18334/2021, 18353/2021, 18359/2021, 18381/2021,
18392/2021, 18394/2021, 18395/2021, 18396/2021,
18400/2021, 18425/2021, 18441/2021, 18450/2021,
18469/2021, 18487/2021, 18494/2021, 18521/2021,
18526/2021, 18527/2021, 18537/2021, 18544/2021,
18550/2021, 18557/2021, 18571/2021, 18581/2021,
18594/2021, 18597/2021, 18602/2021, 18607/2021,
18612/2021, 18615/2021, 18617/2021, 18621/2021,
18627/2021, 18641/2021, 18645/2021, 18654/2021,
18660/2021, 18668/2021, 18675/2021, 18681/2021,
18685/2021, 18690/2021, 18694/2021, 18705/2021,
18706/2021, 18707/2021, 18708/2021, 18709/2021,
18713/2021, 18715/2021, 18724/2021, 18730/2021,
18736/2021, 18737/2021, 18738/2021, 18748/2021,
18764/2021, 18766/2021, 18770/2021, 18783/2021,
5
18785/2021, 18786/2021, 18788/2021, 18812/2021,
18813/2021, 18815/2021, 18827/2021, 18833/2021,
18835/2021, 18839/2021, 18844/2021, 18849/2021,
18853/2021, 18858/2021, 18860/2021, 18867/2021,
18879/2021, 18889/2021, 18894/2021, 18895/2021,
18897/2021, 18904/2021, 18906/2021, 18907/2021,
18915/2021, 18921/2021, 18928/2021, 18930/2021,
18931/2021, 18935/2021, 18937/2021, 18938/2021,
18946/2021, 18950/2021, 18968/2021, 18975/2021,
18986/2021, 18988/2021, 19003/2021, 19005/2021,
19007/2021, 19008/2021, 19014/2021, 19015/2021,
19019/2021, 19026/2021, 19030/2021, 19046/2021,
19047/2021, 19059/2021, 19061/2021, 19062/2021,
19064/2021, 19068/2021, 19071/2021, 19073/2021,
19074/2021, 19075/2021, 19078/2021, 19081/2021,
19084/2021, 19087/2021, 19088/2021, 19092/2021,
19093/2021, 19097/2021, 19099/2021, 19101/2021,
19103/2021, 19106/2021, 19135/2021, 19142/2021,
19147/2021, 19148/2021, 19149/2021, 19150/2021,
19172/2021, 19188/2021, 19270/2021, 19327/2021,
19360/2021, 19364/2021, 19366/2021, 19374/2021,
19378/2021, 19413/2021, 19429/2021, 19438/2021,
19442/2021, 19456/2021, 19482/2021, 19490/2021,
19499/2021, 19501/2021, 19504/2021, 19508/2021,
19524/2021, 19525/2021, 19535/2021, 19552/2021,
19569/2021, 19573/2021, 19586/2021, 19601/2021,
19602/2021, 19610/2021, 19617/2021, 19618/2021,
19682/2021, 19685/2021, 19686/2021, 19689/2021,
19696/2021, 19712/2021, 19715/2021, 19718/2021,
19719/2021, 19732/2021, 19737/2021, 19739/2021,
19757/2021, 19790/2021, 19818/2021, 19821/2021,
19826/2021, 19827/2021, 19828/2021, 19829/2021,
6
19831/2021, 19834/2021, 19835/2021, 19845/2021,
19865/2021, 19878/2021, 19890/2021, 19912/2021,
19913/2021, 19922/2021, 19940/2021, 19950/2021,
19956/2021, 19978/2021, 19985/2021, 19991/2021,
19996/2021, 19999/2021, 20054/2021, 20068/2021,
20075/2021, 20083/2021, 20093/2021, 20094/2021,
20096/2021, 20098/2021, 20100/2021, 20125/2021,
20136/2021, 20164/2021, 20175/2021, 20202/2021,
20207/2021, 20210/2021, 20226/2021, 20235/2021,
20239/2021, 20240/2021, 20241/2021, 20287/2021,
20297/2021, 20301/2021, 20310/2021, 20319/2021,
20324/2021, 20325/2021, 20327/2021, 20342/2021,
20345/2021, 20352/2021, 20354/2021, 20356/2021,
20357/2021, 20362/2021, 20364/2021, 20365/2021,
20367/2021, 20369/2021, 20371/2021, 20375/2021,
20380/2021, 20381/2021, 20389/2021, 20391/2021,
20402/2021, 20405/2021, 20413/2021, 20426/2021,
20435/2021, 20451/2021, 20465/2021, 20472/2021,
20487/2021, 20494/2021, 20504/2021, 20509/2021,
20510/2021, 20512/2021, 20515/2021, 20516/2021,
20524/2021, 20526/2021, 20528/2021, 20530/2021,
20533/2021, 20536/2021, 20544/2021, 20546/2021,
20562/2021, 20563/2021, 20568/2021, 20579/2021,
20581/2021, 20589/2021, 20599/2021, 20607/2021,
20610/2021, 20617/2021, 20625/2021, 20627/2021,
20631/2021, 20636/2021, 20640/2021, 20652/2021,
20654/2021, 20667/2021, 20674/2021, 20682/2021,
20688/2021, 20689/2021, 20696/2021, 20705/2021,
20707/2021, 20717/2021, 20723/2021, 20726/2021,
20727/2021, 20729/2021, 20731/2021, 20736/2021,
20751/2021, 20772/2021, 20773/2021, 20784/2021,
20788/2021, 20798/2021, 20806/2021, 20808/2021,
7
20814/2021, 20820/2021, 20822/2021, 20828/2021,
20834/2021, 20840/2021, 20841/2021, 20855/2021,
20863/2021, 20875/2021, 20876/2021, 20877/2021,
20885/2021, 20893/2021, 20904/2021, 20921/2021,
20927/2021, 20961/2021, 21228/2021, 21236/2021,
21243/2021, 21247/2021, 21260/2021, 21272/2021,
21274/2021, 21282/2021, 21286/2021, 21288/2021,
21293/2021, 21295/2021, 21304/2021, 21310/2021,
21315/2021, 21320/2021, 21333/2021, 21337/2021,
21341/2021, 21343/2021, 21348/2021, 21355/2021,
21356/2021, 21357/2021, 21361/2021, 21364/2021,
21370/2021, 21372/2021, 21375/2021, 21376/2021,
21377/2021, 21381/2021, 21384/2021, 21390/2021,
21391/2021, 21394/2021, 21403/2021, 21405/2021,
21407/2021, 21409/2021, 21413/2021, 21414/2021,
21421/2021, 21422/2021, 21423/2021, 21426/2021,
21427/2021, 21432/2021, 21436/2021, 21442/2021,
21448/2021, 21465/2021, 21467/2021, 21468/2021,
21483/2021, 21490/2021, 21495/2021, 21504/2021,
21506/2021, 21526/2021, 21528/2021, 21530/2021,
21533/2021, 21550/2021, 21562/2021, 21563/2021,
21568/2021, 21579/2021, 21583/2021, 21584/2021,
21586/2021, 21590/2021, 21597/2021, 21606/2021,
21609/2021, 21613/2021, 21616/2021, 21622/2021,
21625/2021, 21628/2021, 21635/2021, 21637/2021,
21657/2021, 21659/2021, 21660/2021, 21680/2021,
21681/2021, 21697/2021, 21703/2021, 21707/2021,
21711/2021, 21715/2021, 21717/2021, 21727/2021,
21728/2021, 21732/2021, 21733/2021, 21747/2021,
21749/2021, 21752/2021, 21755/2021, 21767/2021,
21770/2021, 21773/2021, 21777/2021, 21781/2021,
21785/2021, 21788/2021, 21804/2021, 21808/2021,
8
21811/2021, 21815/2021, 21823/2021, 21825/2021,
21826/2021, 21832/2021, 21835/2021, 21838/2021,
21847/2021, 21859/2021, 21898/2021, 21900/2021,
21906/2021, 21911/2021, 21912/2021, 21916/2021,
21922/2021, 21935/2021, 21936/2021, 21941/2021,
21946/2021, 21961/2021, 21963/2021, 21966/2021,
21969/2021, 21975/2021, 21986/2021, 21989/2021,
21992/2021, 21995/2021, 22000/2021, 22014/2021,
22023/2021, 22049/2021, 22057/2021, 22067/2021,
22071/2021, 22076/2021, 22078/2021, 22086/2021,
22089/2021, 22091/2021, 22095/2021, 22107/2021,
22110/2021, 22113/2021, 22135/2021, 22138/2021,
22139/2021, 22147/2021, 22149/2021, 22158/2021,
22167/2021, 22173/2021, 22176/2021, 22181/2021,
22182/2021, 22186/2021, 22188/2021, 22194/2021,
22201/2021, 22203/2021, 22207/2021, 22208/2021,
22211/2021, 22217/2021, 22222/2021, 22223/2021,
22228/2021, 22236/2021, 22247/2021, 22248/2021,
22255/2021, 22265/2021, 22274/2021, 22275/2021,
22279/2021, 22294/2021, 22295/2021, 22305/2021,
22306/2021, 22310/2021, 22314/2021, 22321/2021,
22325/2021, 22326/2021, 22331/2021, 22337/2021,
22347/2021, 22352/2021, 22361/2021, 22368/2021,
22379/2021, 22413/2021, 22419/2021, 22420/2021,
22430/2021, 22431/2021, 22435/2021, 22440/2021,
22441/2021, 22463/2021, 22318/2021, 22385/2021,
22396/2021, 22444,2021, 22445/2021, 22446/2021,
22451/2021, 22455/2021, 22458/2021, 22470/2021,
22471/2021, 22480/2021, 22501/2021, 22509/2021,
22511/2021, 22518/2021, 22528/2021, 22545/2021,
22548/201, and 22550/2021.
9
COMMON ORDER:
Heard respective counsel appearing for the petitioners
and the respondents in all writ petitions. Perused the
material available on record.
2) As the issue involved in all these writ petitions is
one and the same, all these writ petitions are disposed of by
a common order.
3) All these writ petitions have been filed seeking
writ of Mandamus to declare the action of the respondents in
not clearing the bills submitted by the petitioners for the
works executed prior to 2019 under Mahatma Gandhi
National Rural Employment Guarantee Scheme (in short
"MGNREGS"), the works executed under Special
Development Fund (SDF), Rural Development Fund (RDF),
C.M. Tipping Fund and other works executed and for non-
payment of the amounts, for which they are legitimately
entitled as illegal, arbitrary, unjust, against to principles of
natural justice and violative of Article 14 and 21 of the
Constitution of India.
4) The respondent Nos.1 and 2 filed their counter-
affidavits in W.P.No.11511 of 2021 and 16806 of 2021. A
memo has been filed on behalf of the respondent Nos.1 and
2 adopting the counter-affidavit filed in W.P.No.16806 of
2021 in all writ petitions. The contents made in counter-
affidavit filed in W.P.No.11511 of 2021 are reiterated in the
counter-affidavit in W.P.No.16806 of 2021.
5) Before proceeding into these cases, we consider it
appropriate to look into the preamble of Mahatma Gandhi
National Rural Employment Guarantee Act. The Mahatma
Gandhi National Rural Employment Guarantee Act, 2005 was
enacted by the Parliament with the preamble as extracted
hereunder:
"An Act to provide for the enhancement of livelihood
security of the households in rural areas of the
Country by providing at least 100 days of guaranteed
wage employment in every financial year to every
household whose adult members volunteer to do
unskilled manual work and for matters connected
with or incidental thereto".
6) For the effective implementation of the Act,
"Mahatma Gandhi National Rural Employment Guarantee
Scheme" has been announced and is implemented through
the Country.
7) Section 22 of the Act provides 'Funding Pattern'
as extracted hereunder:
"FUNDING PATTERN:
(1) Subject to the rules as may be made by the Central
Government in this behalf, the Central Government shall
meet the cost of the following, namely:--
(a) the amount required for payment of wages for unskilled
manual work under the Scheme;
(b) up to three-fourths of the material cost of the Scheme
including payment of wages to skilled and semi-skilled
workers subject to the provisions of Schedule II;
(c) such percentage of the total cost of the Scheme as may
be determined by the Central Government towards the
administrative expenses, which may include the salary and
allowances of the Programme Officers and his supporting
staff, the administrative expenses of the Central Council,
facilities to be provided under Schedule II and such other
item as may be decided by the Central Government.
(2) The State Government shall meet the cost of the
following, namely:--
(a) the cost of unemployment allowance payable under the
Scheme;
(b) one-fourth of the material cost of the Scheme including
payment of wages to skilled and semi-skilled workers
subject to the provisions of Schedule II;
(c) the administrative expenses of the State Council.
8) On careful perusal of the "funding pattern"
provided under Section 22 of the Act, the Central
Government shall meet the cost of the amount required for
payment of the wages for unskilled manual work under the
Scheme and up to 3/4 (75%) of the material cost of the
Scheme including payment of wages to skilled and semi-
skilled workers subject to the provisions of Schedule II. The
State Government shall meet the cost of unemployment
allowance payable under the scheme and 1/4 (25%) of the
material cost of the Scheme including payment of wages to
skilled and semi-skilled workers subject to the provisions of
Schedule II along with administrative expenses of the State
Council.
9) In clear words, it can be understood that the
amount required for payment of wages for unskilled manual
work and 3/4 of the material cost of the Scheme would be
borne by the Central Government and 1/4 of the same
material cost payment of wages to skilled and semi-skilled
workers would be borne by the State Government. The
payment of wages to unskilled workers will be paid by the
Central Government directly to them. With regard to
material cost of the Scheme, the Central Government bears
3/4 (75%) and releases the funds to the State Government
and the State Government by adding its 1/4 (25%) share,
has to make payment towards material suppliers and makes
payment of wages to skilled and semi-skilled workers
through the Gram Panchayats.
10) As per the Scheme, once the project to be taken
up under the scheme as per the recommendations of the
Grama Sabha and Ward Sabha, the Gram Panchayat takes
up the projects within the area of the said Gram Panchayat
as sanctioned by the Programme Officer. For executing any
project under the Scheme, the Gram Panchayat has to
procure the materials and skilled and semi-skilled workers to
execute the project. After receiving funds from the State
Government, it is the responsibility of the Gram Panchayat
to make payment for the material and to pay wages to the
skilled and semi-skilled workers. During the process of
execution of the projects/works to be taken up by the Gram
Panchayats, the persons like the petitioners in these writ
petitions will be engaged by the Gram Panchayat for supply
of materials and skilled and semi-skilled workers.
11) The learned Government Pleader for Panchayat
Raj contended that the Writ Petitions cannot be entertained
in contractual matters. He further contends that the amount
claimed is not admitted and in the absence of privity of
contract the petitioners cannot claim a direction as prayed
for. He also submitted that public law remedy cannot be
entertained to the petitioners, who worked for the Gram
Panchayats and as such, writ is not the proper remedy.
12) On the other hand, the learned counsel for the
petitioners contended that the writ petitions are
maintainable on the issue of privity of contract. Learned
counsel would submit that once fund transfer order is issued
after verifying the measurement books, which clearly
indicates that work has been executed and that the material
has been supplied. They contended that once respondents
in failing to pay the amount is clear, this Court can entertain
the writ and direct the respondents to make payments.
13) The Hon'ble Apex Court in ABL International
Limited v. Export Credit Guarantee Corpn. of India Ltd 1
has observed thus:
"19. Therefore, it is clear from the above
enunciation of law that merely because one of the
parties to the litigation raises a dispute in regard to
the facts of the case, the court entertaining such
petition under Article 226 of the Constitution is not
always bound to relegate the parties to a suit. In
the above case of Gunwant Kaur [(1969) 3 SCC
769], this Court even went to the extent of holding
that in a writ petition, if the facts require, even oral
evidence can be taken. This clearly shows that in an
appropriate case, the writ court has the jurisdiction
to entertain a writ petition involving disputed
questions of fact and there is no absolute bar for
entertaining a writ petition even if the same arises
out of a contractual obligation and/or involves some
disputed questions of fact".
While summing up the conclusions in the aforesaid
case, the Apex Court concluded thus:
(2004)3 SCC 553
"27. From the above discussion of ours, the
following legal principles emerge as to the
maintainability of a writ petition:
(a) In an appropriate case, a writ petition as
against a State or an instrumentality of a State
arising out of a contractual obligation is
maintainable.
(b) Merely because some disputed questions
of fact arise for consideration, same cannot be a
ground to refuse to entertain a writ petition in all
cases as a matter of rule.
(c) A writ petition involving a consequential
relief of monetary claim is also maintainable.
14) A Division Bench of the High Court of Telangana
at Hyderabad, by following the law declared by the Apex
Court in ABL International Limited and Popatrao
Vyankatrao Patil2, rejected the contention of the
respondents that the Writ Petition was not maintainable in
contractual matters.
15) The High Court of Andhra Pradesh in Mutyala
Veera Venkata Satyanarayana vs. State of Andhra
Pradesh3 at Amaravati while dealing with the batch of writ
petitions filed for claiming payments for supplying materials
to the Panchayat under the Mahatma Gandhi National Rural
Employment Guarantee Act, 2005, this Court held as under:
2020 SCC Online SC 291
2021 SCC OnLine AP 1410
"Therefore, in view of the settled law and keeping in
mind the purpose for which the legislation is enacted,
this Court has to hold that there is a public element
involved in this and that it is not a pure case of the
State entering into a commercial contract.
This Court further held that apart from this when
State or State instrumentalities act in an arbitrary
manner or failed to act within time the Writ Court
does have jurisdiction to entertain the matter."
16) In view of the facts and circumstances of the case
and there is a public law element involved in these matters,
this Court is unable to accept the contention of the learned
Government Pleader on the ground of maintainability of
these writ petitions and accordingly, we are rejecting the
same, in the light of the law declared by the Hon'ble Apex
Court and others Courts extracted as herein above.
17) In the counter-affidavit in W.P.No.11511 of 2021
filed by the 1st respondent on 07.07.2021, it is submitted
that the Gram Panchayats will identify the works to be done
under MGNREGS and inform the same to the Mandal or
District authorities by passing resolutions and based on said
resolutions, the Collector/District Program Coordinator would
sanction the said works to be undertaken. Further, matching
component of work (from concerned department or State
Convergence Fund) will be executed by the Agency
nominated by the Gram Panchayat based on the resolution.
After sanction, the MGNREGS portion works will be executed
by the Gram Panchayat duly identifying material suppliers.
Works that require un-skilled labour, will be executed by the
wage seekers registered under MGNREGS and the unskilled
labour wage amount will be paid directly from Government of
India, to their individual accounts through Electronic Fund
Management. There is no interference of the State
Government in the disbursement of fund in so far as amount
payable to the registered job seekers under the scheme.
18) It is further submitted that the material
component involved in execution will be paid to the Gram
Panchayat and then to material suppliers through Gram
Panchayat.
19) It is submitted that with regard to making
payments for the works under MGNREGS, before making
payment, necessary steps shall be taken for proper
execution of MGNREGS works and in the case of any enquiry
against any alleged irregularities is going on, action like
withholding of payments, etc., will be contemplated.
20) It is further submitted that MGNREGS payments
will be made only after execution of work and for the
amount authorized by the Gram Panchayat through Fund
Transfer Order. All money transactions under MGNREGS are
done through NeFMS (National Electronic Fund Management
System) wherein each State Government has to open one
account for wages and one account for Materials &
Administrative payments. The funds released by
Government of India are deposited in these accounts and the
amount for which FTO raised by various implementing
agencies, will be debited from the state account and credited
to Gram Panchayat account directly as approved by State
Finance Department.
21) It is submitted that the ratio of material
component and labour component in MGNREGS is 40:60 and
on an average the material entitlement is to a tune of
Rs.3,000 - 3,800/- Crores per year. Administrative
sanctions usually will be taken 2 to 3 times on availability of
funds keeping in view of the nature of works, pace of
execution of works and the objective to utilize material
entitlement fully. It is further submitted that the State
Convergence Fund and the State Development Fund, G.P.
General Fund/14th Finance Commission funds are to be paid
by the State Government as per releases from the Finance
Department.
22) It is submitted that the grants released by
Government of India and expenditure incurred towards
wages and material for the financial years 2017-18, 2018-
19, 2019-20 and 2020-21 are as stated below:
Year Releases Expenditure Carry
(Material & forwarded
Admin) payments
2017-2018 2752.94 3524.00 2085.18*
2018-2019 2854.93 3598.69 1746.80
2019-2020 3425.47 2964.03 3905.62
2020-2021 3399.53 5119.92 4124.94
* Including previous year liabilities
23) It is submitted that in a particular financial year,
when expenditure is more than the releases from
Government of India, certain payments are carried forward
to the subsequent year. It is further submitted that
Government of India generally releases in two Tranches i.e.,
first one in the April (1st month of Financial Year) and the
second Tranche in March (last month of a Financial Year),
due to which also part of payments of a particular year take
place in the subsequent Financial Year.
24) It is submitted that the State Government has
ordered vigilance enquiry on the works taken up under
MGNREGS based on several complaints received and enquiry
reports were received on 16.10.2020. The Government,
while considering the findings of the Vigilance Report, have
initially permitted the Commissioner, PR & RD to pay the
amounts in respect of the works of below Rs.5.00 lakhs on
05.11.2020. Later, the Government has also permitted the
Commissioner, PR & RD to make payments in respect of the
works above Rs.5.00 lakhs on 12.05.2021.
25) With regard to the funds position of MGNREGS, it
is submitted that the proposal for release of 1st Tranche of
Central Assistance along with UC's for the financial year
2021-22 were submitted to the Government of India on
01.04.2021, 15.04.2021 and 15.06.2021 to a tune of
Rs.4652.70 Crores which includes an amount of Rs.3158
Crores of committed liabilities of previous years. The said
amount is yet to be released. Therefore, for the works under
Vigilance Enquiry, the MGNREGS amount of Rs.1281.10
Crores with respect to the works of the above Rs.5.00 lakhs
payments and Rs.382.10 Crores with regard to the works of
below Rs.5.00 lakhs will be paid after receipt of funds from
Government of India. The amounts due from State
Convergence Fund and Special Development Fund will be
paid as per the releases from State Finance Department.
26) It is submitted that due to pending vigilance
enquiry and subsequent non-receipt of MGNREGS funds
which are due from the Government of India and the State
Government could not be paid to the petitioners.
27) On 09.07.2021, after noticing the averments
stated in the counter-affidavit of the 1st respondent as
extracted above, this Court intended to seek information
from the Union of India, Ministry of Rural Development,
Department of Panchayat Raj and Rural Development with
regard to the funds released under the MGNREGS for the
State of Andhra Pradesh from the year 2014 onwards. For
this purpose, the Court felt it is necessary to implead the
Union of India as one of the respondents in these writ
petitions to ascertain the said information and accordingly,
suo motu, the Court impleaded the Union of India, Ministry
of Rural Development, Department of Panchayat Raj and
Rural Development as 10th respondent in W.P.No.12524 of
2021 and directed Sri N. Harinath, learned Assistant Solicitor
General to get comprehensive information from the Union of
India with regard to the funds released to the works
executed in the State of Andhra Pradesh under Union of
India, Ministry of Rural Development, Department of
Panchayat Raj and Rural Development from the year, 2014
onwards, on or before the next date of hearing and place the
same before the Court.
28) In compliance of the above said direction, on
17.08.2021, the 10th respondent filed affidavit in
W.P.No.12524 of 2021. The averments made in the
counter-affidavit filed by the 10th respondent are extracted
hereunder:
3. It is humbly submitted that under Mahatma Gandhi
National Rural Employment Guarantee Act (Mahatma
Gandhi NREGA), the fund release to the State is a
continuous process and Central Government is committed
to making funds available to States for the implementation
of the Scheme. Funds are released to the State/ UT
periodically in two tranches with each tranche consisting of
one or more installments, keeping in view the "agreed to"
Labour Budget, demand for works, opening balance, pace
of utilization of funds, pending liabilities, overall
performance and subject to submission of relevant
documents. It is also pertinent to mention here that a
robust online MIS "NREGASoft" is in place, to which the
updation of information at each level is done by the
concerned State/ UT and on the basis of the information of
NREGASoft, the funds are released. As per the provision of
the Act, Govt. of India releases 100% of the wage payment
directly to the Bank/Post Office accounts of beneficiaries
through NeFMS. For all works taken up under the scheme,
the cost of material component including the wages of the
skilled and semi skilled workers shall not exceed 40% at
the district level. Central Govt. releases 75% of material
cost to the State Govts. and 25% of the material cost is
borne by the concerned State Govt. This is applicable to the
state of Andhra Pradesh also.
A. Fund release to the state of Andhra Pradesh:
1. Towards wage component: The payments of wage of
unskilled workers are released on regular basis through
PFMS platform under NeFMS. Wage payment liability of
previous financial year, if any, is liquidated in the initial
month of the current financial year. Accordingly all such
wage liability of previous year has been liquidated.
During the current year so far fund to the tune of Rs.
4333.85 Crore has been released to the State of Andhra
Pradesh for unskilled wage. Further release of funds is
subject to availability of relevant documents from the
state.
2. Fund towards Material (payments for semi-
skilled, skilled workers and material payment):
As per the existing provision under the Act, Central Govt.
releases funds every financial year including the liability
of previous financial year, if any, for all States including
Andhra Pradesh. As there is not any specific fund is
allotted to any State for a financial year, the expected
fund may be calculated on the basis of Persondays (PDs)
generated according to agreed to Labour Budget for the
Financial Year. In the FY 2014-15, a consolidated fund to
the tune of Rs. 4599.74 Crore was released to the
erstwhile State of Andhra Pradesh which was bifurcated
into two states namely Andhra Pradesh and Telangana
later. The details of funds to be released (calculated as
per the PDs generated) and actually released towards
material component since 2015 to the State of Andhra
Pradesh are as under:
Financial Persondays Average Expected Central Actual
year expected as Wage Material Share to be Central
'agreed to' rate per component released Release
labour budget/ day per (75% of towards
actually person material material
Generated component) component
(No.in Lakh)
2015-16 1954.46/ Rs.3073.80
1992.10 The fund for wage and material was crore
released together.
2016-17 1653.24/ Rs.3940.21
crore
2060.90
After that the fund was released component wise as the unskilled wage has
been transferred directly to the beneficiaries' Bank/PO accounts through
NeFMS
2017- 2000.00/ Rs.152.49 Rs.2155.44 Rs.1616.58 Rs.1873.25
18 2120.24 Crore Crore Crore
2018- 2470.48/ Rs.198.83 Rs.3268.29 Rs.2451.22 Rs.2141.20
19 2465.64 Crore Crore
2019- 2025.00/ Rs.203.15 Rs.2711.71 Rs.2033.79 Rs.2694.10
20 2002.25 Crore Crore Crore
2020- 2592.93/ Rs.228.74 Rs.3954.21 Rs.2965.67 Rs.4090.71
21 2593.04 Crore Crore Crore
2021- 2000.00/ Rs.221.21 Rs.3015.50 Rs.2261.62 Rs.571.80
22 2044.77 Crore Crore Crore
Total: Rs.11328.86 Rs.11371.06
Crores crores
As obvious from the above table, the Central Govt. is
releasing funds regularly to the state and after
adding/releasing the due State share (25%), the State
implementing agency is expected to clear the liability of
previous years as well as current year.
3. Release of funds towards material component
during the current financial year 2021-22: As per the
Utilization Certificate provided by the State as on 01.04.2021,
the state was having surplus funds (unspent fund) under
material component to the tune of Rs. 1991.07 Crore (which
includes central release of Rs. 1482 Crore and due state share
Rs. 494 Crore approx.). Each time when the funds are
released, the state has been directed to clear the previous
liabilities, from this fund and the state must liquidate the
previous financial year's liability first.
Further as per the Utilization Certificate dated 27.05.2021, the
State has informed that it has unspent balance of a tune of
about Rs. 41 Crore. It reflects that the state has cleared some
liability from the available fund of Rs. 1991.07 Crore.
Currently as per the Utilization Certificate dated 04.08.2021,
the state still has unspent balance of Rs. 15.34 Crore. Besides
this, Central Govt. has also released Rs. 571.80 Crore to the
State of Andhra Pradesh recently.
As per the conditions of sanction order of material
funds from Govt. of India, State is to clear the
previous year's pending liability on priority.
B. An issue of non-payment of material liability of
Financial Year 2018-19 has been brought into the notice
of Govt. of India during Labour Budget Revision meeting for
the State of Andhra Pradesh for FY 2020-21, held on
31.08.2020. During the meeting it s observed "State has been
requested to clear the material pending liability of previous
financial year. The State has informed that several teams
have been constituted to inspect the completed works and
payment will be released after receipt of final enquiry report.
The state is advised to expedite the inspection work and
intimate the date of completion of all inspection work and
liquidation of genuine pending liabilities. The State agreed,
however, it stated that it would not be in position to complete
the enquiries and decide upon the pending material payment
for about next six months. Accordingly the state was
requested to return the funds under material component to
the ministry which they are unable to liquidate now due to
aforesaid reasons. The State informed that the issue of
returning of the unused money will be discussed with the
State Finance Division and the outcome will be intimated to
the Ministry."
Now as shared by the state, the inquiry got over in the
month of October, 2020 (16.10.2020) and the state Govt.
has accepted the final report and took a decision on
05.11.2020 to make the payment. As per the UC of
01.04.2021, State was having an unspent balance of Rs.
1991.07 Crore.
29) The 1st respondent filed reply affidavit to the
affidavit filed on behalf of the 10th respondent in
W.P.No.12524 of 2021, which are extracted as hereunder:
"I respectfully submit that as stated in the Last para of the
affidavit of respondent No.10, it is true that this respondent
submitted the said UC on 1.04.2021 and as per the said
Utilization Certificate, the State of Andhra Pradesh, was
having an unspent balance of Rs.1991.06. However the
Central in its affidavit has mentioned at Para 3 that the
unspent amount as on 27-05 2021 is only Rs. 41 Crores. It
may be stated here that the amounts received by the State
Government and the manner in which it has been spent are
explained herein below.
3. It is submitted that every year the Central Government
releases funds towards material component payments in
two tranches in a financial year from April to March. During
the financial year 2020-21, the Central Government
released 1" tranche amount in 6 instalments as mentioned
below table:
Sl. Date Central State Govt. Total
Govt. share share in Cr.
No.
in Cr.
1. 19.05.2020 1900.00 633.33 2533.33
2. 11.12.2020 63.22 21.07 84.29
3. 02.02.2021 199.00 66.33 265.33
4. 04.02.2021 94.21 31.40 125.61
5. 04.03.2021 190.00 63.33 253.33
6. 22.03.2021 103.21 34.40 137.61
Total 2549.64 849.86 3399.50
The said amount of Rs. 3399.50 crores was released
towards the pending Fund Transfer Orders for the years
2018-19 to 2020-2021 which includes FTOS pertaining to all
works below Rs.5 lakhs that were under enquiry for which
permission for payment has been given by the government.
Further the Central Government released an amount of Rs.
1482.31 towards II tranche amount for the financial year
2020-21 on 31.03.2021 and the same was credited to
Commissioner Rural Development account on 29.04.2021
along with State's Contribution of Rs. 494.11 Cr totalling to
Rs. 1976.42 Cr. It may be stated here that the Government
of Andhra Pradesh, Finance (FMU, PR & RD Department vide
U.O.Note.No.FMUOMISC/564/FMU.PR&RD,RWS/2020, dated
3.05.20201 had directed the Commissioner Rural
Development to repay loan amount of Rs. 700 Cr back to
State Government from the amounts received from the
Centre. This loan of Rs. 700 Crores was issued Finance
Department vide G.O.Rt.No.2981, Finance (FMU, PR&RD)
dept, dated 16.12.2020. Hence after deduction of the loan
amount of Rs. 700 Crores, the balance amount available for
payment was Rs. 1276.42Crs. Out of the said amount
available an amount of Rs. 1217 Crores was released for
payments for works during the years 2018-2021. As such,
there was a balance of Rs.59.15 Cr kept towards salaries of
MGNREGS staff and admin component. As of 21-08-2021
the State has no balance from the above amount".
30) In the counter-affidavit filed by the 2nd
respondent on 15.09.2021, it is submitted that pursuant to
the assurance (No.32) given in the legislative assembly
pertaining to Question No.230(15) dated 25.07.2019 by the
Hon'ble Minister for Panchayat Raj and Rural Development
for conduct of a discreet enquiry by the Vigilance &
Enforcement Department on the subject of "misappropriation
of funds in Neeru-Chettu Programme", respondent No.1
requested the Director General of Vigilance and Enforcement
Department, Vijayawada, vide Letter dated 01.08.2019 to
conduct discreet enquiry on all the works carried under the
"Neeru-Chettu Programme" and as the Vigilance &
Enforcement Department stated that they have received
complaints on implementation of MGNREGS and have stared
enquiring into the specific cases, the Government has
stopped payment for certain works till the enquiry report is
received.
31) It is further submitted that total 7,94,022
(Mandal Computer Centre-6,65,441 and District Computer
Centre-1,28,581) works are identified/executed in the period
from 01.10.2018 to 31.05.2019 and an amount of
Rs.179410.12 lakhs is the estimated cost of the said works.
In the said works, 727305 number of works are below
Rs.5.00 lakhs estimated costs and 62717 number of works
are above Rs.5.00 lakhs estimated cost.
32) It is submitted that pursuant to the receipt of the
Vigilance and Enforcement Department's Report dated
06.02.2020, the Government has issued instructions to
verify all the material component works taken up during the
period 01.10.2018 to 31.05.2019 vide Memo
No.1202/Vig.I/2020-4, dated 05.05.2020. The Vigilance
Department has submitted another report No.03-
1/V&E/Engg/MGNREGS/2020, dt. 15.06.2020 to the State
Government. Considering the gravity of irregularities and
the huge amounts of public money being misappropriated
and in accordance with letter No. PRR05-17022/1/2019-EGS
WORKS SEC-CORD(987840), dated 13.05.2020 addressed
by the Government, PR & RD to the Collector of all the
Districts, 107 teams were constituted by the District
Collectors with quality control engineers of Panchayat Raj,
Rural Water Supply, Roads & Buildings and Water Resources
to conduct an internal investigation into the quality of the
works executed during the period 01.10.2018 and
31.05.2019. Investigations/inquiries conducted on various
works executed by the Vigilance and Enforcement teams are
668 works and by the teams constituted by the District
Collectors are 11,918 works.
33) It is further submitted that out of Total 7,94,022
works executed under the MGNREGS, a sample of 11,918
works have been investigated into. Out of the works verified
by the teams, in 62.51% works either rejection or recovery
was advised by the teams. In monetary terms, the average
of rejection and recovery comes to 21.02% in Department
Computer Centre Works and 6.33% in Mandal Computer
Centre Works. Basing on this, the Principal Secretary to
Government, Panchayat Raj and Rural Development has
issued a Memo No.1286733/RD.II/A1/2020, dt. 05.11.2020
permitting the Commissioner, PR & RD to release an amount
of Rs.409.69 crores for the total 7,27,205 number of works
that are having estimated cost up to Rs.5.00 lakhs with the
deduction of 21.02% for Department Computer Centre and
6.33% for Mandal Computer Centre Works. The amount
towards the works below Rs.5.00 lakhs estimated costs were
paid as per the said memo.
34) It is the contention of the State Government for
not clearing the bills submitted by the petitioners that:
(1) Non-receipt of MGNREGS funds which are due
from the Government of India.
(2) Due to pending vigilance enquiry against the
petitioners.
35) But, contra, the Central Government in its
affidavit clarified as under:
(1) The Central Government is releasing funds
regularly to the State and after adding/releasing due to
the State share (25%), the State Implementing Agency
is expected to clear the liability of previous years as
well as current year and as per the conditions of
sanction order of material funds from the Government
of India, State has to clear the previous year pending
liability on priority.
(2) As shared by the State, the enquiry got over in the
month of October, 2020 (16.10.2020) and the State
Government has accepted the final report and took a
decision on 05.11.2020 to make the payments. As per
UC on 01.04.2021, State was having an unspent
balance of Rs.1991.07 Crores.
36) Sri N. Harinath, learned Assistant Solicitor
General, appearing for the Central Government, submitted
that the Central Government is releasing funds as per their
share regularly to the State Government and the State
Government has to make payments to the works executed
by the petitioners by adding 25% of State Government
share.
37) The learned counsel for the petitioners and the
learned Government Pleader for Panchayat Raj and Rural
Development, submitted that after filing of writ petitions
before the Court, in some cases the petitioners received total
payments for the bills submitted by them. In some cases
only 79% of the amount is paid after deducting 21% of the
amount. It is an admitted fact that the works executed by
the petitioners prior to 2019 and immediately after
execution, they have submitted bills as per the procedure to
the concerned authorities and after approval by the
competent authorities, the said bills are kept pending for all
these days.
38) Learned Government Pleader for Panchayat Raj
and Rural Development, Government of Andhra Pradesh,
submitted that in cases where vigilance reports are there,
the respondents are not making payments to them for
taking further action as per the vigilance reports. Learned
Government Pleader further submits that in the cases where
enquiries are pending, 21% of the amounts are withholding
and making payments of 79% in terms of Government
Orders vide Memo No.1263069/RD.II/A1/2020, dated
05.11.2020 and the Memo No.1388361/RD.II/A1/2020,
dated 12.05.2021 issued by the Government of Andhra
Pradesh, Panchayat Raj and Rural Development (RD-II)
Department (which are filed along with the counter-affidavit
filed by the 2nd respondent, on 14.09.2021).
39) On careful examination of the said Memos, it
appears that vide Memo, dated 05.05.2020, the State
Government decided that all the material component works
taken up under MGNREGS in Panchayat Raj and Rural
Development Department during the period from 01.01.2018
to 31.05.2019 shall be verified by the Vigilance and Quality
Control Wings of Panchayat Raj Engineering Department,
Rural Water Supply and Sanitation Engineering Department,
Technical persons in SSAAT and Quality Control wing of
Commissioner, Rural Development by forming teams. The
verification of the works shall be started immediately and
should be completed in a time bound manner not later than
a period of six months.
40) On perusal of the Memo, dated 05.11.2020, it
appears that basing on the report, dated 03.11.2020 of the
Commissioner of Panchayat Raj and Rural Development, in
which it is reported that out of total 7,95,494 number of
works executed under MGNREGS, a sample consisting of
11,918 works have been verified by the Special Vigilance
Teams constituted by drawing vigilance engineers from PR,
RWS, R&B and Irrigation Departments. The sample taken is
1.5% of total works. Out of the works verified by vigilance
teams, in 62.51% works, either rejection or recovery was
noticed by Vigilance teams. Similarly, in monetary terms
both recovery and rejection out together it comes to 21.02%
in DCC works and 6.33% in MCC works. Considering the
proposal of the Commissioner, Panchayat Raj and Rural
Development, accorded approval permitting to release an
amount of Rs.409.69 Crores for total 7,27,205 number of
works that are having estimated cost up to Rs.5.00 lakhs
with the deduction of 21.02% for DCC works and 6.33% for
MCC works.
41) Similarly, vide Memo, dated 12.05.2021, the
Government of Andhra Pradesh approved the proposal of
Commissioner of Panchayat Raj and Rural Development,
accorded permission to release pending payment of works
above Rs.5.00 lakhs which were taken up under MGNREGS
between period from 01.10.2018 to 31.05.2019 applying the
abstract of findings on recovery for the works verified that is
applying recovery of 21.02% for DCC works and 6.33% for
MCC works duly following all the guidelines prescribed by the
Government of India, Ministry of Rural Development and the
State Government from time to time in release of payments.
42) After considering the submissions of Sri
N. Harinath, learned Assistant Solicitor General that the
Central Government is releasing funds regularly to the State
Government as per their share and considering the
submissions of the learned counsel for the petitioners that
there is no enquiry pending against the petitioners, the
Court passed an interim order on 23.08.2021 directing the
respondents to clear the bills submitted by the petitioners
for the works executed by them under MGNREGS/contract
works and make payments to the petitioners within a period
of two weeks and directed to post these writ petitions after
two weeks.
43) On careful examination of the said Memos, dated
05.11.2020 and 12.05.2021, the reason mentioned to
deduct such amounts out of the payment to be made to the
petitioners is unreasonable. As and when the Government
took decision vide Memo, dated 05.05.2020 to conduct
enquiry against all the material component works taken up
under MGNREGS in Panchayat Raj and Rural Development
Department during the period from 01.10.2018 to
31.05.2019 by constituting Special Teams and a stipulated
time to complete the enquiry within six months, the stand of
the Panchayat Raj and Rural Development Department is
that they have verified a sample consisting of only 11,918
number of works out of total 7,95,494 number of works
executed during that period. Basing on that verification,
they submitted a report and made a proposal to deduct
21.02% for DCC works and 6.33% for MCC works. Without
conducting proper enquiries against the works executed by
the petitioners, taking decision to deduct 21.02% and 6.33%
from the amounts payable to the petitioners is irrational and
unjustifiable.
44) This Court noticed on perusal of the entire
material available on record that no notice was issued to the
petitioners with regard to the alleged enquiry and with
respect to taking decision to deduct the amounts mentioned
in the Memos dated 05.11.2020 and 12.05.2021 out of the
total amounts to be paid to the persons, who executed the
works under MGNREGS. Without giving/putting up a notice
to the persons, who would be aggrieved by the decision of
deduction taken by the State Government is nothing but
violation of principles of natural justice.
45) As such, in our opinion, the Government Memo
No.1263069/RD.II/A1/2020, dated 05.11.2020 and Memo
No.1388361/RD.II/A1/ 2020, dated 12.05.2021 issued by
the Government of Andhra Pradesh, Panchayat Raj and Rural
Development (RD-II) Department are liable to be set aside
to the extent of deduction part, as the said Memos are
illegal, arbitrary, unjust and irrational and against the
principles of natural justice.
46) With regard to the pendency of the alleged
enquiry, after noticing the contents of affidavit filed by the
Central Government, this Court came to prima facie
conclusion that the respondent Nos.1 and 2 are not placing
correct information before this Court. Accordingly, directed
the Chief Secretary of the State Government to appear
before the Court on 24.09.2021 and to submit the status of
the enquiry.
47) This Court also directed the 10th respondent to file
an additional affidavit stating the facts along with the
information shared by it from the State Government about
the completion of the enquiry.
48) On 24.09.2021 the Chief Secretary, Government
of Andhra Pradesh, appeared before the Court. When the
Court asked him with regard to the enquiry alleged to have
been pending against the petitioners (as stated by the
Officers of Department of Panchayat Raj and Rural
Development in their affidavits) the Chief Secretary,
Government of Andhra Pradesh, submitted that no enquiry is
pending as on date on this issue and his statement is
recorded by the Court.
49) On 29.09.2021, the 10th respondent filed
additional affidavit. At para No.5 of the additional affidavit,
dated 28.09.2021 signed by Under Secretary, Government
of India, Ministry of Rural Development, it is contended as
extracted hereunder:
"It is submitted that upon enquiry from our office, the
Office of the Commissioner, Panchayat Raj and Rural
Development, Andhra Pradesh, through e-mail
([email protected], dated 05.08.2021 informed
the Director/Joint Director, Mahatma Gandhi NREGA
that the Vigilance final report was received on
16.10.2020 and the State has submitted a detailed
information vide Letter No.308/RD/DBT/2014, dated
11.08.2021 for preparing a reply to the Parliament
Question regarding the pending payments under
material component and regarding the submission of
final report by the Vigilance Team on 16.10.2020. The
State has also informed regarding the decision of the
State Government Vide Memo No.1263069/RD.II/A1/
2020, dated 05.11.2020, and Memo No.1388361/
RD.II/A1/2020, dated 12.05.2021 for releasing the
pending payments of the works which were taken up
under Mahatma Gandhi NREGS between the period from
01.10.2018 to 31.05.2019."
50) Having heard the Chief Secretary, Government of
Andhra Pradesh and upon careful perusal of the affidavits
filed by respondent Nos.1, 2 and 10, without any hesitation,
this Court is holding that the contention of the Respondent
Nos.1 and 2 that the payments could not be made to the
petitioners due to pending vigilance enquiry and non-receipt
of MGNREGS funds which are due from the Government of
India are false, and far from truth and the said contentions
are made to mislead the Court and to drag on the payment
to the petitioners for which they are legitimately entitled.
51) In Urban Improvement Trust, Bikaner v
Mohan Law4, the Apex Court has criticized the attitude of
Government officials in deliberately delaying taking crucial
(2010) 1 SCC 512
decisions affecting citizens and then contesting the same on
technical pleas without justification. It declared.
"5. Statutory authorities exist to discharge statutory
functions in public interest. They should be responsible
litigants. They cannot raise frivolous and unjust
objections, nor act in a callous and high-handed
manner. They can not behave like some private litigants
with profiteering motives. Nor can they resort to unjust
enrichment. They are expected to show remorse or
regret when their officers act negligently or in an
overbearing manner. When glaring wrong acts by their
officers are brought to their notice, for which there is no
explanation or excuse, the least that is expected is
restitution/restoration to the extent possible with
appropriate compensation. Their harsh attitude in regard
to genuine grievances of the public and their indulgence
in unwarranted litigation requires to be corrected.
6. This Court has repeatedly expressed the view that
Governments and statutory authorities should be model
or ideal litigants and should not put forth false, frivolous,
vexatious, technical (but unjust) contentions to obstruct
the path of justice.
52) In Madras Port Trust v. Hymanshu
International5, the Apex Court held:
"2. ... It is high time that Governments and
public authorities adopt the practice of not relying
upon technical pleas for the purpose of defeating
legitimate claims of citizens and do what is fair and
just to the citizens. Of course, if a Government or a
[(1979) 4 SCC 176]
public authority takes up a technical plea, the Court
has to decide it and if the plea is well founded, it
has to be upheld by the court, but what we feel is
that such a plea should not ordinarily be taken up
by a Government or a public authority, unless of
course the claim is not well founded and by reason
of delay in filing it, the evidence for the purpose of
resisting such a claim has become unavailable."
53) In a three-Judge Bench judgment of Bhag
Singh v. UT of Chandigarh6, the Apex Court held:
"3. ... The State Government must do what is fair
and just to the citizen and should not, as far as
possible, except in cases where tax or revenue is
received or recovered without protest or where the
State Government would otherwise be irretrievably
be prejudiced, take up a technical plea to defeat the
legitimate and just claim of the citizen."
54) The Apex Court, has time and again held, that the
State should act as a model litigant. In Urban
Improvement Trust's case (cited above), the Apex Court
observed as under:
"6. This Court has repeatedly expressed the view
that Governments and statutory authorities should
be model or ideal litigants and should not put forth
false, frivolous, vexatious, technical (but unjust)
contentions to obstruct the path of justice. We may
refer to some of the decisions in this behalf".
6 [(1985) 3 SCC 737]
55) In Dilbagh Rai Jarry v. Union of India7, the
Apex Court extracted with approval the following statement
[from an earlier decision of the Kerala High Court (P.P.
Abubacker case [Ed.: P.P. Abubacker v. Union of India, AIR
1972 Ker 103 : ILR (1971) 2 Ker 490 : 1971 Ker LJ 723],
AIR pp. 107-08, para 5)]: (SCC p. 562, para 25)
"25. ... '5. ... The State, under our Constitution,
undertakes economic activities in a vast and
widening public sector and inevitably gets involved
in disputes with private individuals. But it must be
remembered that the State is no ordinary party
trying to win a case against one of its own citizens
by hook or by crook; for the State's interest is to
meet honest claims, vindicate a substantial de-
fence and never to score a technical point or
overreach a weaker party to avoid a just liability or
secure an unfair advantage, simply because legal
devices provide such an opportunity. The State is a
virtuous litigant and looks with unconcern on
immoral forensic successes so that if on the merits
the case is weak, Government shows a willingness
to settle the dispute regardless of prestige and
other lesser motivations which move private parties
to fight in court. The layout on litigation costs and
executive time by the State and its agencies is so
staggering these days because of the large amount
of litigation in which it is involved that a positive
and wholesome policy of cutting back on the
volume of law suits by the twin methods of not
being tempted into forensic showdowns where a
reasonable adjustment is feasible and ever offering
7 [(1974) 3 SCC 554 : 1974 SCC (L&S) 89]
to extinguish a pending proceeding on just terms,
giving the legal mentors of Government some
initiative and authority in this behalf. I am not
indulging in any judicial homily but only echoing the
dynamic national policy on State litigation evolved
at a Conference of Law Ministers of India way back
in 1957."
56) As per the contention of the State Government,
payments are not made due to pendency of vigilance enquiry
against the works executed between 01.10.2018 to
31.05.2019. Though the State Government Officers failed to
place correct information for all these days about the status
of the alleged vigilance enquiry, now it is clear by the
affidavit filed by the 10th respondent (Central Government)
and the statement made by the Chief Secretary,
Government of Andhra Pradesh, before the Court that the
said vigilance enquiry is concluded on 26.10.2020. The
State Government at-least after completion of the vigilance
enquiry ought to have made payments to the petitioners by
clearing their bills. But, without making payments, even
after filing of the writ petitions before the Court, the State
Government contended that payments could not be made
due to pendency of the enquiry against the petitioners.
57) On careful examination of the averments made in
the counter-affidavit filed by the Central Government on
17.08.2021, it is clear that the Central Government released
funds to clear the material component liability of financial
year 2018-19. It is also clear that the Central Government
asked the State Government to return the funds which were
not liquidated under material component to the Ministry of
Central Government. The State Government informed the
Central Government that returning of the unused money will
be discussed with the State Finance Department and will be
intimated to the Ministry of Central Government. Later on,
what happened about the returning of unused funds by the
State Government is not placed before the Court, either by
the Central Government or by the State Government. But,
as per the observations recorded in the Labour Budget
Revision meeting held on 31.08.2020, it is proved that the
Central Government released funds under material
component liability to make payments to the petitioners.
But, the said amounts are not released in favour of the
petitioners for which they are entitled.
58) The learned counsel appearing for the petitioners
submitted that in some cases works were executed under
the State Convergence Fund, Special Development Fund,
Rural Development Fund, Gram Panchayat General Fund/14th
Finance Commission Fund and C.M. Tipping Fund. For
execution of these works also the petitioners submitted bills
and the same are not cleared till now and payments are not
made. In the counter-affidavit filed by the respondent Nos.1
and 2, it is stated that for works executed under these
schemes, the payments have to be made by the State
Government as per releases from the Sate Finance
Department.
59) In our considered opinion, the State Government
is responsible for making payments for works undertaken
other than MGNREGS, be it the Finance Department or
Panchayat Raj Department or any other department.
60) The learned counsel for the petitioners brought to
the notice of this Court that in some cases the State
Government released funds to the Gram Panchayats to pay
the same to the petitioners. But, the Gram Panchayats are
not releasing payments to the petitioners who executed the
works. This Court is making it clear that if any such
instances brought to the notice of this Court by filing
appropriate petitions, this Court will take serious note of
against such Gram Panchayats and the persons responsible
for not making payments to the petitioners after releasing
the funds from the State Government.
61) In view of the above discussion, it is to be held
that the State Government unlawfully withheld the amounts
payable to the petitioners without any reason and authority.
62) In the considered opinion of this Court, not
releasing the amount for which the petitioners are
legitimately entitled is nothing but depriving the rights of the
petitioners. Due to illegal action of non-payment of the
amounts promptly by clearing the bills submitted by the
petitioners after execution of works, the petitioners could not
feed and look after the welfare of their family properly, they
could not make payments to employees/workers and they
could not make payments to the material procured and they
have to pay interests for the debts incurred by them for
execution of works. Due to this situation, petitioners'
respect and dignity in the society will be deteriorated. As
such, the petitioners' right to life with respect and dignity
will be defeated which is violative of Article 21 of the
Constitution of India.
63) As such, this Court holds that withholding the
amount, for which the petitioners are legally entitled, is
illegal, arbitrary, and unjust and violative of Article 21 of the
Constitution of India.
64) The view of this Court is fortified by the
expression of the Hon'ble Apex court in Swaraj Abhiyan
(III) vs Union of India and others8, while considering the
implementation of MGNREG Scheme with regard to delay in
payment of wages at paragraph No.165 held as under:
"165. It is quite clear, therefore, that when the
rights of tens of thousands of people are affected by
delayed payment of their legitimate dues, there is a
clear constitutional breach committed by the State--
be it the Government of India or a State
Government".
65) The finding of the Hon'ble Apex Court is
squarely applicable to the facts of the present case and the
present situation.
66) The State Government has been unlawfully
enjoying the funds released by the Central Government
without making payments to the petitioners, who are
legitimately entitled for payment, which would amount to
"unjust enrichment", which is against the public interest.
67) The concept of "unjust enrichment" was defined
by the Courts time and again as the unjust retention of a
benefit to the loss of another or the retention of money or
(2016)7 SCC 498
property of another against the fundamental principles of
justice or equity and good conscience.
68) The principle of unjust enrichment states that no
person can be enriched with another's expenses and the
person who enriches or obtains benefit at another's
expenses and causing loss to another, shall be required to
reimburse or restitute a reasonable value of those services
and money which the person received unfairly.
69) Admittedly, the petitioners executed works. They
submitted bills. There are no enquiries pending against
them. There is no fault on the part of the petitioners. The
Central Government had released funds of 75% share. But,
the petitioners did not receive payments. As such, the
respondents are responsible for the said delay in making
payments to the petitioners for which they are legally
entitled. Therefore, in our view, it is appropriate and
reasonable to compensate the petitioners for the loss caused
to them by the State Government.
70) The view of this Court is fortified by the
expression of a larger bench of the Hon'ble Apex Court in
Secretary, Irrigation Department, Government of
Orissa and others v G.C.Roy 9 as extracted hereunder:
"A person deprived of the use of money to which he is
legitimately entitled has right to be compensated for the
deprivation, call it by any name. It may be called
interest, compensation or damages".
71) The High Court of Andhra Pradesh in
J. Devendra Reddy v Kakatiya University and another 10
held that withholding of the amount payable to the petitioner
for the contract works, constitutes patent arbitrariness on
the part of the respondents and directed the respondents to
pay the amount due to the petitioner along with interest @
12% per annum.
72) The High Court of Andhra Pradesh in
S. Srinivas vs. State of Andhra Pradesh and others 11.
held that the petitioner is entitled for the interest @ 12%
p.a., from the date of expiry of one month from the date of
submission of bill to till the date of payment.
73) In view of the above, this Court holds that the
petitioners are entitled for the interest at 12% p.a., from the
date of expiry of one month from the date of submission of
the bill to till the date of payment.
AIR 1992 SC 732
2015 (3) ALD 97
(2021) 5 ALT 267
74) Accordingly, these Writ Petitions are allowed with
the following directions:
i) The Memo No.1263069/RD.II/A1/2020, dated
05.11.2020 and the Memo No.1388361/RD.II/A1/
2020, dated 12.05.2021 issued by the Respondent
No.1 are set aside to the extent of deduction of
21.02% for DCC works and 6.333% for MCC works
while making payments to the petitioners.
ii) The respondents are directed to clear the bills
submitted by the petitioners and to release
payments forthwith, in case no payment is made
till date.
iii) In case, any part payment is made as on date, the
remaining amount shall be paid to the petitioners
forthwith.
iv) The respondents shall pay interest @ 12% per
annum within a period of four (4) weeks from the
date of receipt of a copy of this order.
v) The interest shall be computed from the date of
expiry of one month from the date of submission of
the bill by the petitioners to till the date of final
payment.
75) There shall be no order as to costs.
As a sequel, miscellaneous applications pending, if any
in these Writ Petitions, shall stand closed.
76) Before parting this order, having considered the
grievances being faced by the petitioners in these writ
petitions, in our view, it is appropriate to extract the
observations of the Hon'ble Apex Court in Swaraj
Abhiyan case (8 supra) as here under:
168."We are unable to appreciate the unconscionable
delay on the part of the Government of India in the
release of the funds both under the wage component
as well as under the material component. It is quite
clear, and there is no worthwhile justification
forthcoming from the learned Additional Solicitor
General, that delay in payment of wages acts as a
disincentive to those persons who are intending to
take the benefit of the scheme. We have not been
given any explanation whatsoever whey a person
would want to work without wages or at least work
with an uncertainty in timely receipt of wages. It just
does not stand to reason".
77) It appears that the Parliament while enacting the
Mahatma Gandhi National Rural Employment Guarantee Act,
2005, with its wisdom, in the interest of the wage seekers,
made provision at condition No.29 of Schedule II of Section
5 of the Act as under:
29. (1) In case the payment of wages is not made
within fifteen days from the date of closure of the
muster roll, the wage seekers shall be entitled to
receive payment of compensation for the delay, at
the rate of 0.05% of the unpaid wages per day of
delay beyond the sixteenth day of closure of muster
roll.
78) But, it appears the Parliament did not anticipate
the situation aroused at present, about the delay in
payment, to the material cost of the scheme including
payment of wages to skilled and semi-skilled workers. This
Court hopes that the Central Government may take
appropriate steps to incorporate relevant provision under
the Act, 2005 to grant compensation for the delay in
payment to the material costs of the scheme including
payment of wages to skilled and semi-skilled workers for
better implementation of the scheme in future, in the
interest of the public at large.
______________________
JUSTICE BATTU DEVANAND
Date: 05.10.2021
Note: Issue CC by 08.10.2021 in each case separately.
B/o
PGR/eha
THE HON'BLE SRI JUSTICE BATTU DEVANAND
WRIT PETITION No.10038 OF 2021 & Batch
Date: 05.10.2021
PGR/eha
* THE HONOURABLE SRI JUSTICE BATTU DEVANAND
+ WRIT PETITION No10038 of 2021 & batch
%Dated: -05-10-2021
#Rayapureddy Srinivasa Rao and others --- Petitioners
and
$ The Government of Andhra Pradesh, rep.
by its Principal Secretary to Government,
Department of PR & RD (RD-II) Department,
A.P. Secretariat, Velagapudi,
Guntur District and others. - - - Respondents
! Counsel for the Petitioners : Sri Bokka Satyanarayana &
others.
^ Counsel for Respondents : 1) Government Pleader for
Panchayat Raj & Rural
Development.
: 2) Sri I. Koti Reddy & Sri V.Vinod
K Reddy, Standing Counsel for
Gram Panchayats.
< GIST:
> HEAD NOTE:
? Cases referred:
(2004)3 SCC 553
2020 SCC Online SC 291
2021 SCC OnLine AP 1410
4 (2010) 1 SCC 512
[(1979) 4 SCC 176]
[(1985) 3 SCC 737]
[(1974) 3 SCC 554:1974 SCC (L&S) 89]
(2016)7 SCC 498
AIR 1992 SC 732
2015 (3) ALD 97
(2021) 5 ALT 267
DATE OF ORDER PRONOUNCED: 05.10.2021
THE HON'BLE SRI JUSTICE BATTU DEVANAND
1. Whether Reporters of Local newspapers Yes/No
may be allowed to see the Judgments?
2. Whether the copies of judgment may be Yes/No
Marked to Law Reporters/Journals.
3. Whether Their Ladyship/Lordship wish Yes/No
to see the fair copy of the Judgment?
______________________
JUSTICE BATTU DEVANAND
