Unjustified Inter-Departmental Delay Cannot Penalize Contractors for Admitted Dues; Interest Imposed for Continued Non-Payment.

The Petitioner, a proprietorship firm dealing in stationery and sports materials, supplied various goods to the Additional Chief Medical Health Officer (FW), Darrang (Respondent No. 3) during the financial years 2020–2023.

These supplies were made against valid indents and approved quotations.

Despite the delivery of goods and submission of bills totaling ₹9,79,545/-, and subsequent representations to the authorities, the respondent department failed to release the payment.

The respondent department admitted the liability but cited "inter-departmental delays" and pending "financial sanction" formalities as the reasons for non-payment.

1. Whether the Petitioner is entitled to receive the outstanding payment of ₹9,79,545/- for materials supplied to the respondent authorities.

2. Whether the state can indefinitely withhold payment for admitted dues on account of internal administrative or financial sanction delays.

The court applied the principle of administrative fairness and the doctrine of state liability for contractual dues.

When a claim is "duly admitted" by the State, the citizen should not be penalized for inter-departmental delays or internal procedural formalities.

This aligns with the constitutional mandate of Article 14 (prevention of arbitrariness) and the principle that once the State accepts goods/services, it is under a legal obligation to compensate the provider within a reasonable timeframe.

The court observed that the Respondent Health and Family Welfare Department explicitly admitted the debt of ₹9,79,545/-.

The Court reasoned that administrative hurdles, such as the need to submit a "fresh proposal" for financial sanction, are internal matters of the State and cannot serve as a valid justification for the continued suffering of a supplier who has fulfilled their contractual obligations.

The Court noted that the Petitioner had already been deprived of their funds for a significant period (FY 2020-2023) and that further delay would necessitate a punitive interest component to be recovered from the personal salaries of delinquent officers to ensure accountability.

The Court directed the respondents to complete all formalities and release the amount within 3 months of receiving the judgment copy.

If payment is not made within the specified 3 months, interest shall accrue at 8% per annum, which must be paid by the State and subsequently realized from the salaries of the "erring officials".