Andhra Pradesh High Court - Amravati
Aadhaar Enabled Biometric ... vs University And Another2 on 21 July, 2022
HONOURABLE SRI JUSTICE M. GANGA RAO
Writ Petition No.25939 of 2021
ORDER:
Brief facts of the case are that APTS-HWP1 Division called for
tenders for procurement of 25000 Notebooks, Tablets, Tablets based
Aadhaar Enabled Biometric Attendance Systems (AEBAS) for various
departments of Government of Andhra Pradesh. The petitioner along
with others participated in the Pre-Bid conference held on
08.07.2016. The petitioner company along with others i.e., M/s.
Analogics Tech India Limited stood as a successful bidder and the
petitioner was selected and a Letter of Intent dated 27.10.2016 was
issued by the 4th respondent for procurement of 67000 devices. The
petitioner company was informed to handover sample devices for
testing the compatibility and quality of devices to meet the technical
requirements set out and developed by the Centre for Good
Governance (CGG) and AP Online. The petitioner supplied the
samples devices for conducting tests. Accordingly, an agreement
dated 18.11.2016 was entered into between the petitioner and the 4th
respondent for supply of devices in two phases; in Phase-1, 15,000
devices to be supplied by 31.12.2016 and in Phase-2, 30,000 devices
to be supplied by 31.01.2017. As per the agreement term, payment
was to be released on annuity model basis i.e., equal quarterly
installment per unit and amount was released accordingly. The
Government released an amount of Rs.35,77,70,000/- vide
G.O.Rt.No.1681 dated 24.08.2018. Biometric Attendance System was
introduced on annuity model in schools during 2017-18 aiming at
online monitoring of attendance of students and teachers under
Government/local body management in the State. The Government
has provided the budget for the financial year 2017-18, 2018-19 and
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W.P.No.25939 of 2021
2019-20. The Government issued G.O.Rt.No.104 dated 22.5.2020
and sanctioned an amount of Rs.14.85 crores towards payment of
pending bills for the financial year 2020-21, but not allocated the
required amount as proposed towards implementation of the project
in annuity model. The Government has sanctioned
Rs.47,12,00,000/- towards meeting the expenditure incurred in
supply of IRIS devices and Fingerprint devices. But at the time of
submission of bills, though financial approval has been accorded,
bills were not cleared in Comprehensive Financial Management
System (CFMS). The Commissioner of School Education, Government
of Andhra Pradesh constituted a Division Level Committee to submit a
detailed report on 04.04.2022 and based on the report submitted on
23.05.2022, a request was made to the Government to release an
amount of Rs.20,06,34,533/-. The Government of Andhra Pradesh
vide G.O.Rt.No.327 dated 11.06.2022 issued Budget Release Order for
an amount of Rs.20,21,53,000/-.
2. The petitioner, as per the agreement entered towards
deployment of Fingerprint devices under the annuity model in
November, 2016 and an amount of Rs.29.94 crores was paid and as
no budget was allocated for payment of remaining balance, no
payment was done to the petitioner. The Government issued
G.O.Ms.No.52 dated 04.03.2021 sanctioning an amount of
Rs.47,12,00,000/- as additional funds to pay the expenditure
incurred for supply of IRIS devices and Fingerprint devices. The
entire material on record and contractual terms have been examined
and verified wherein it is found that the petitioner has supplied 1000
IRIS devices during the transition period of 20,000 dysfunctional
Fingerprint devices for which invoice was raised for an amount of
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W.P.No.25939 of 2021
Rs.1,76,14,800/- out of which an amount of Rs.44,03,700/- was paid
in three quarters. As these devices were supplied as replacement for
the dysfunctional devices, due to system up-gradation, the payment
made to the extent of three quarters has been deducted from the total
bill. The petitioner raised the invoices towards supply of IRIS devices
during the transition of supply of dysfunctional devices together to a
tune of Rs.1,76,14,800/- which need to be deducted from the balance
amount. As per the agreed terms of MoU, towards security deposit it
is mandatory to withheld 5% of total cost of 20,000 devices i.e.,
Rs.1,00,72,178/- for making functional due to lack of maintenance.
The respondents after assessment of performance imposed a penalty
of Rs.1,42,72,178/- towards 20,000 dysfunctional devices due to
updating of RD Services during 2018. Further, an amount of
Rs.2,95,25,294/- was incurred towards data charges for the sims
installed in the biometric and IRIS devices for the last one year.
Among the above, since the devices were dysfunctional, an amount of
Rs.1,47,72,647/- (50% bills share of pending date sims recurring
charges) towards the expenditure for the sim cards utilized in the
devices, amount of 50% to each vendor has been deducted from the
petitioner to the extent of the devices supplied as penalty as per Point
15.3 of the agreement. A proposal was sent to the Government on
10.06.2022 for release of an amount of Rs.17,88,19,733/- (including
withheld amount of Rs.1,00,72,178/-) plus Rs.2,33,32,652/-
(difference tax to be paid from 1st July, 2017), totaling
Rs.20,21,52,385/- towards the devices produced on the annuity
model and the details of the pending quarter bills were submitted to
the Government. Accepting the proposal, the Government issued
G.O.Rt.No.93 dated 12.06.2022 as per the Budget Release Order
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W.P.No.25939 of 2021
dated 12.06.2022 issued by the Finance Department. The petitioner's
pending bills from 2019 amounting to Rs.20,21,52,385/- were verified
by the Commissioner of School Education, Andhra Pradesh and found
that the petitioner is eligible for payment of Rs.17,73,07,560/- only
against the performance conditions of the devices. An amount of
Rs.2,48,44,825/- was deducted under various heads and payment of
remaining amounts are disputed due to non maintenance and
dysfunction of devices. For non-payment of the balance amount, the
petitioner filed the present Writ Petition.
3. Sri Ambati Sudhakar Rao, learned counsel appearing for the
petitioner states that after entering into agreement, at the instance of
the 4th respondent, the execution of devices was reduced to 37,000
from 67,000 with a promise that the balance requirement would be
procured in the second lot. Even though the petitioner is a successful
bidder and selected to supply the whole lot of 67,000 devices, due to
new regulations issued by UIDAI Department, the petitioner was
informed to upgrade their application which was being used on the
devices to cater to the requirements and guidelines for registered
devices. The devices were upgraded and ensured that there are no
issues while upgrading the application at the field level. Even the
application of devices and up-gradation of the devices was the
responsibility of another stakeholder M/s.Akshara, who had
performed their obligations as per their contract only and all the
devices were functioning without any hitch. The petitioner raised
invoices for an amount aggregating to Rs.47,62,01,669/-, out of
which, the petitioner received an amount aggregating to
Rs.25,39,46.720/-, while still an amount of Rs.21,19,54,283/- is
outstanding and payable by the Government. Learned counsel
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submits that the petitioner paid Goods and Service Tax aggregating to
Rs.4,28,20,815/- on the invoice amount to the authorities deducting
the amounts from the pending bills is illegal and arbitrary. Clause 12
of the agreement reads as under:
"Upon successful installation of Tablet based Aadhaar
Enabled Biometric Attendance System Quarterly Payment
shall be made based on the deferred payment model for 3
years.
Purchaser to complete the requisite documentation &
certifications, performance reports required for payment
processing before 10th of every month.
Payment will be released by department within 14 days of
submission of Quarterly Invoices subject to satisfactory
performance.
Learned counsel further states that the Government has to pay the
outstanding approved invoices within 15 days from the date of receipt
of the invoices. Seven invoices were raised from 05.03.2019 onwards
and the latest invoice was raised on 05.03.2021 and the Government
has to make payments on each invoice within 14 days from the date
of invoice. Non-payment of amounts as per the agreement, deferred
in payment of loan installments to the banks obtained for execution of
the agreement works. The petitioner could not able to pay the
installments and wages to the employees and other statutory
payments, which is illegal. He placed reliance on the judgments of
the Apex Court as well as this Court. In Urban Improvement Trust,
Bikaner Vs. Mohan Law1, J. Devender Reddy Vs. Kakatiya
University and another2, S.Srinivas Vs. State of Andhra Pradesh
and others3, wherein it is held that the petitioner is entitled for the
interest @ 12% per annum from the date of expiry of one month from
the date of submission of bill to till the date of payment and states
that having approved the bills by the respondents under CFMS portal
(2010) 1 SCC 512
2015 (3) ALD 97
(2021) 5 ALT 267
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W.P.No.25939 of 2021
and thereafter, CFMS portal is closed due to year end activity and no
renewing the petitioner's bills in CFMS portal is illegal and arbitrary.
4. Per contra, learned Government Pleader for School Education
while reiterating the averments of the counter affidavit filed by the
Respondents 2 and 4 in I.A.No.2 of 2022 in this Writ Petition, would
contend that the agreement dated 18.11.2016 was entered between
the petitioner and the Commissioner of School Education to supply
67,000 Tablets based Aadhaar Enabled Biometric Attendance
(AEBAS) with STQC certified Fingerprint Scanner and supply of
devices was scheduled in two phases, Phase-1, 15,000 devices to be
supplied by 31,12,2016 and whereas in Phase-2, 30,000 devices to be
supplied by 31.1.2017. The petitioner submitted Invoice for an
amount of Rs.47,62,01,669/- and after verifying, an amount of
Rs.29.94 crores was already paid. The following amounts were
deducted from the bills payable to the petitioner:
Sl.No. Description Amount in ]
Rs.
1. Pending Bills from 2019 onwards for finger 20,06,34,533/-
print devices
2 Penalty imposed for non-supplying of -42,00,000/-
dysfunctional devices
3 Amount to deduct for the invoices raised -1,76,14,800/-
without purchase order towards supply of
IRIS devices during the transition of
supplying of dysfunctional devices.
4 Amount to be withheld 5% of total cost on -1,00,72,178/-
20,000 devices as security deposit for
making functional due to lack to
maintenance
5 Deduction of Recurring expenses (Data -1,47,72,647/-
Charges for last one year) due to non-
functioning of devices for network
connectivity to the extent of 35,708 devices.
Balance after deducting the above -15,39,74,908/-
VAT/GST differential charges for the +2,33,32,652/-
devices supplied after July, 2017
GRAND TOTAL 17,73,07,560/-
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W.P.No.25939 of 2021
and the petitioner was paid an amount of Rs.20,21,52,385/-, but due
to dysfunctioning of the devices and non maintenance of the devices,
it is found that the petitioner had supplied 1000 IRIS devices during
the transition period of 20,000 dysfunctional fingerprint devices for
which invoice was raised for an amount of Rs.1,76,14,800/-, however,
out of which an amount of Rs.44,03,700/- was paid in three quarters.
As these devices were supplied as replacement for the dysfunctional
devices due to system up-gradation, the payment made to the extent
of three quarters has been deducted from the total bill. Further, the
petitioner raised invoices towards supply of IRIS devices during the
transition of supply of dysfunctional devices together to a tune of
Rs.1,76,14,800/- which need to be deducted from balance amount.
As per the agreed terms of MOU, towards security deposit, it is
mandatory to withheld 5% of total cost of 20,000 devices i.e.,
1,00,72,178/- for making functional due to lack of maintenance. He
further states that the admitted bill amount was already paid but the
disputed amount could not be paid due to non compliance of the
terms and conditions of the agreement. The disputed bills are
withheld. The Hon'ble Supreme Court and this Court in catena of
decisions held that if any dispute arises for payment of the bills or
non execution of the works as per the tender conditions agreed, the
dispute arises under the realm of contracts and if any dispute arises
under the concluded contracts, non payment of bills, Writ Petition is
not maintainable and the petitioner has to seek remedies in terms of
the concluded agreement before the Arbitrator or Civil Court and the
same is liable to be dismissed.
5. Learned Government Pleader appearing for the Finance states
that the admitted bill amounts were already paid and the balance
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W.P.No.25939 of 2021
amount pertaining to the disputed bills could not be paid by the
Finance Department due non compliance of the terms and conditions
of the agreement and due to supply of dysfunctional devices and for
not upgrading the versions. The petitioner cannot rely on the
sanction of the bills by the earlier authority. The subsequent
authority is under statutory obligation to verify the bills and admit the
bills for payment as the amount that is going to be paid is the public
money. The authorities have to follow the strict financial guidelines in
payment of the amounts. However, in pursuance of the interim order
passed by this Court, the admitted amount was already paid. Hence,
for payment of disputed amounts, the parties have to go before the
Arbitrator as per the terms and conditions of the agreement. The writ
petition is not maintainable.
6. This Court found that the cause of action for this Writ Petition
is non-payment of due amounts arising out of concluded contract.
The respondents already disputed the payment of balance amount of
Rs.21,19,54,283/- along with interest at the rate of 18% per annum
for delay in releasing the amount from 20.3.2019 onwards, by filing
elaborate affidavit by the Respondents 2 and 4 in support of I.A.No.2
of 2022. However, the respondents paid Rs.17,73,07,560/- admitted
amount as per the interim order dated 22.03.2022. The respondents
deducted an amount of Rs.42,00,000/- towards the penalty imposed
for non-supplying of dysfunctional devices, an amount of
Rs.1,76,14,800/- was deducted for the invoices raised without
purchase order towards supply of IRIS devices during the transition of
supplying of dysfunctional devices, an amount of Rs.1,00,72,178/-
was withheld towards 5% of total cost on 20,000 devices as security
deposit for making functional due to lack to maintenance and an
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amount of Rs.1,47,72,647/- was deducted towards recurring
expenses (Data Charges for last one year) due to non-functioning of
devices for network connectivity to the extent of 35,708 devices as per
the terms and conditions of the agreement. The deductions which
cannot be said to be illegal without undertaking enquiry and
interpretation of terms and conditions of the agreement and the same
is not available to the Writ Court. The Apex Court and this Court
held that the Writ Petition is not the remedy when dispute arose for
non-payment of due amounts arising out of concluded contract, the
parties would be relegated to the common law Courts. The Hon'ble
Supreme Court in the case of Union of India and others Vs. Puna
Hinda4, held that dispute could not be raised by way of a Writ
Petition on the disputed question of facts in contractual matters in
the field of private law, having no statutory flavour, are better
adjudicated upon by forum agreed to by parties. In the facts and
circumstances of the present case, as per the terms and conditions of
the agreement, the remedy available to the parties is before the
Arbitrator. Accordingly, the Writ Petition is dismissed. The interim
order granted on 22.03.2022 stands vacated. However, liberty is
given to the petitioner to avail the remedies as per the terms and
conditions of the agreement. There shall be no order as to costs.
As a sequel thereto, miscellaneous petitions, if any, pending
shall stand closed.
_____________________
M. GANGA RAO, J
Date: .07.2022
CSR
(2021) 10 SCC 690
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W.P.No.25939 of 2021
HON'BLE SRI JUSTICE M. GANGA RAO
W.P.No.25939 OF 2021
DT: .07.2022
CSR
