Contractor Bill Approved but Unpaid

Reviewed on: 2026-06-12.

Direct answer: If your bill is approved and the expenditure sanctioned but the money has not reached your account, the block is inside the spending office, not the treasury. The bill has passed the engineer-in-charge and the sanction is recorded, but the drawing and disbursing officer (DDO) has not raised the payment, usually because of a budget or fund-allotment shortfall, a pending recovery adjustment, or a file simply sitting unattended. Your job is to confirm in writing that the sanction exists, ask the DDO when the bill voucher will be raised, and use RTI to obtain the sanction order, the file noting and the budget position. This is different from a bill stuck at the treasury, where the office has done its part and the payment is held at the Pay and Accounts Office.

“Approved but unpaid” has a narrow meaning. Three things have already happened: the work or supply is measured or verified, the bill is checked and admitted, and an expenditure sanction has been accorded. What has not happened is the actual disbursement. So do not waste effort re-proving the work. Prove instead that the sanction is in place and that disbursement is the only step left. Then chase the officer who controls disbursement.

In most government offices the drawing and disbursing officer prepares the bill voucher and presents it for payment. The DDO can only draw against an available budget head and allotment. So a sanctioned bill stalls for predictable reasons:

• No funds released under the budget head for the quarter, so the DDO cannot draw.
• A recovery or deduction (security, liquidated damages, income tax, GST TDS, labour cess) is unresolved and the bill is parked.
• The sanction is conditional on a document you have not filed, such as a no-claim certificate or a guarantee bond.
• The file is lying with the dealing assistant or the DDO without action.

Ask the office which of these applies. The answer tells you whether to file a missing document, wait for a fund release, or push a dormant file.

1. Write to the DDO and the sanctioning authority. Quote the bill number, the sanction order number and date, and ask for the expected date of payment and the reason for the hold.
2. Confirm the budget position. Ask whether funds are allotted under the relevant head for the current period. If not, ask when the allotment is expected.
3. Clear any pending recovery or document the office names, in one clean submission, and get an acknowledgement.
4. Escalate to the head of office if the DDO does not act, attaching your earlier letters.
5. File an RTI for the sanction order, the noting and the budget and payment status.
6. Refer to MSME Samadhaan if you are a registered micro or small enterprise and the delay has crossed the agreed or 45-day limit.

The department is a public authority. Use RTI to get the documents that prove the sanction and expose the delay.

To, The Public Information Officer
[Name of department / office], [place]

Subject: Information under the RTI Act, 2005 on a sanctioned but unpaid bill

I am the contractor / supplier for [work / supply] under work order / PO no.
[.....]. My bill no. [.....] dated [.....] has been approved and sanctioned
vide sanction order no. [.....] dated [.....] but remains unpaid.

Please provide:
1. A certified copy of the expenditure sanction order for the above bill.
2. The present location of the bill / payment file and the officer holding it.
3. Date-wise movement (noting / order sheet) of the file after the sanction
   was accorded.
4. Whether budget / funds are allotted under the relevant head for payment of
   this bill, and if not, the expected date of allotment.
5. Details of any recovery, deduction or pending document on account of which
   payment is withheld.
6. The reasons recorded on file for the delay in disbursement.

I am enclosing the prescribed fee. [Name, address, mobile, email, date]

The PIO must reply within 30 days. If the reply is silent or evasive, file a first appeal. See how to file RTI online and first and second appeals.

A road-marking contractor in Coimbatore raised a final bill of Rs 3.7 lakh on a corporation works division. The bill was admitted and sanctioned in February. By June nothing had been paid. His RTI reply showed the sanction was valid, but funds under the maintenance head were exhausted for the quarter, and a fresh allotment was awaited in the next quarter. Armed with that, he stopped chasing the wrong officer and instead wrote to the head of office asking for the bill to be queued for payment the moment the allotment arrived, and to be told the allotment date. He also filed an MSME Samadhaan reference for the interest on the delay, since he was Udyam-registered. The payment cleared in the first week of the new quarter, and the interest claim ran on the council's file.

If you are registered on Udyam as a micro or small enterprise, the MSMED Act, 2006 entitles you to payment within the agreed date or 45 days, and to compound interest at three times the RBI bank rate if the buyer, including a government department, delays. A “no funds” or “file pending” reason inside the office does not extinguish that entitlement. You can file a reference on the MSME Samadhaan portal with your Udyam certificate, the work order, the sanctioned bill and proof of supply or completion.

• Chasing the engineer who already cleared the bill. Once it is sanctioned, the engineer's part is done. Chase the DDO and the budget.
• Re-submitting the whole claim. You do not need to re-prove the work. Prove the sanction and ask for disbursement.
• Ignoring a small pending document. A missing no-claim certificate or bond can hold a large bill. File it and get an acknowledgement.
• Sitting quietly past the MSME deadline. If you are eligible, the interest clock runs. Raise it.

Sanction and disbursement are separate steps. After sanction the DDO must draw the bill against an available budget allotment. A fund shortfall, an unresolved recovery, or a dormant file commonly holds a sanctioned bill inside the office.

Here the office has not yet sent the bill out for payment. In a treasury-pending case the office has done its part and the payment is held at the Pay and Accounts Office or treasury. The remedy and the officer to chase are different.

No. RTI gets you the sanction order, the file movement and the budget position. That information lets you target the right officer and, if you are an MSME, support an interest claim. The payment itself moves through the office or the appropriate forum.

Ask in writing for the date of the next budget allotment and a commitment to queue your bill for payment on receipt. Keep that reply. Persistent denial of a sanctioned dues can be raised with the head of department and, for an MSME, before Samadhaan.

For a high-value or long-delayed sanctioned bill, a legal notice followed by a recovery suit is an option. For a registered MSME, the Samadhaan council route is usually faster and carries statutory interest.

No. Statutory deductions are adjusted, not used to freeze the entire payment. Ask for the net amount to be released after lawful deductions.

• Contractor bill pending in treasury
• Bill cut without a measurement book copy
• Work completion certificate delayed
• CPGRAMS complaint unresolved for a payment
• All practical guides

Download the sanctioned-but-unpaid contractor bill checklist (PDF).