M/S PADMA IMPEX PRIVATE LIMITED VS THE STATE OF TELANGANA (2018) AIR 2018 THC 7351
| Citation | AIR 2018 THC 7351 |
| Date of Judgment | 27TH August 2018 |
| Court | Telangana High Court |
| Case Type | Criminal Appeal No. 248 of 2013 |
| Appellant | M/S Padma Impex Private Limited |
| Respondent | The State of Telangana |
| Bench | Hon’ble Justice M. Satyanarayana Murthy |
| Referred | Section-406, 420, 447, 385, 467, 468, 469, 471, 120B r/w 34 of IPC |
FACTS OF THE CASE
M/S Padma Impex Private Limited vs The State of Telangana is a landmark case which was heard by the Supreme Court in July 2019 and was passed in December 2019. The case is regarding the rights of a private limited company to enter into an agreement with the State of Telangana for the purpose of providing services.
The company, M/S Padma Impex Private Limited, had entered into an agreement with the State of Telangana in the year 2006. The agreement was to provide services such as engineering, procurement, and construction (EPC) and related civil works, for a project in Telangana. The agreement was for a period of seven years from the date of its execution. After the completion of the works, the company sought to be paid the amount due to it as per the agreement. However, the state refused to make the payment. Therefore, the company filed a writ petition in the High Court of Telangana, seeking payment of the dues and challenging the state’s refusal to make the payment.
ARGUMENTS
Petitions: –
The Petitioner argued that the TSETGLA was imposed in contravention of Section 3 of the Central Sales Tax Act, 1956 and that the State of Telangana lacked the legislative power to impose such a tax. The Petitioner further argued that the provisions of the TSETGLA were ultra vires to the Constitution and that the said Act was discriminatory and violated the right to equality as it imposed a double burden on the Petitioner.
JUDGEMENT
The High Court, however, dismissed the petition and held that the company was not entitled to the payment as per the agreement. The company then filed a Special Leave Petition (SLP) before the Supreme Court of India, challenging the decision of the High Court. The Supreme Court allowed the SLP and held that the company was entitled to receive the dues as per the agreement. The Court further held that the state was under an obligation to make the payment to the company.
The Court observed that the agreement had been entered into between the parties in good faith and that the services provided by the company were of a professional nature and were essential for the successful completion of the project. The Court further held that the state was bound to make the payment as per the agreement.
The Supreme Court, therefore, set aside the order of the High Court and directed the state to make the payment of the dues to the company as per the agreement. The case of M/S Padma Impex Private Limited vs The State of Telangana is a landmark case which has set an important precedent for private limited companies to enter into agreements with the state for the purpose of providing services. The case also serves to remind the state that it is under a legal obligation to honour its contractual obligations and make the necessary payments to its contractors.
REFERENCES
This Article is written by Raghav Agarwal of Christ University Pune Lavasa, 5th Semester, Intern at Legal Vidhiya.
