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,

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,

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,

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,

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,

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,

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,

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.

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 nonpayment 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 counteraffidavits 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 counteraffidavit 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 semiskilled 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 Ltd¹ 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:

¹ (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:

² 2020 SCC Online SC 291

³ 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<br>(Material &<br>Admin)	Carry<br>forwarded<br>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 semiskilled, 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<br>year		Persondays<br>expected<br>'agreed<br>actually<br>Generated<br>(No.in Lakh)	as<br>to'<br>labour budget/		Average<br>Wage<br>rate<br>per<br>day<br>per<br>person		Expected<br>Material<br>component	Central<br>released<br>(75%<br>material	Share to be<br>of<br>component)	Actual<br>Central<br>Release<br>towards<br>material<br>component
2015-16<br>1954.46/						Rs.3073.80
	1992.10		The fund for wage and material was<br>released together.				crore
2016-17<br>1653.24/						Rs.3940.21
		2060.90								crore
After that the fund was released component wise as the unskilled wage has<br>been transferred directly to the beneficiaries' Bank/PO accounts through<br>NeFMS
2017-		2000.00/<br>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.<br>No.	Date	Central<br>Govt.<br>share<br>in Cr.	State<br>Govt.<br>share in Cr.	Total
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

⁴ (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

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 defence 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

⁸ (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.Roy⁹ 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 another¹⁰ 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 others¹¹ . 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.

⁹ AIR 1992 SC 732

¹⁰ 2015 (3) ALD 97

¹¹ (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:

1 (2004)3 SCC 553 ² 2020 SCC Online SC 291 ³ 2021 SCC OnLine AP 1410 4 (2010) 1 SCC 512 5 [(1979) 4 SCC 176] 6 [(1985) 3 SCC 737] 7 [(1974) 3 SCC 554:1974 SCC (L&S) 89] 8 (2016)7 SCC 498 ⁹ AIR 1992 SC 732 ¹⁰ 2015 (3) ALD 97 11 (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

______________________