Authority: Supreme Court of India (Bench of Justices K.V. Viswanathan and Arun Palli)

Order Date: 28 July 2026

Case Overview

  • Parties: Appellant – M/S Shri Sai Associates; Respondents – State of Chhattisgarh and others, including Respondent No. 6 (original contractor).
  • Contract Background: On 09‑02‑2021 the State awarded Respondent No. 6 a contract under the Pradhan Mantri Gram Sadak Yojana (PMGSY) to construct two bridges over the Lawa River in Jashpur district (one 3200 m, another 6000 m) and to provide five‑year maintenance.
  • Work Order issued on 01‑03‑2021; work commenced but remained incomplete despite extensions. Respondent No. 6 cited Covid‑19, design changes, rains, material cost hikes, elections and festivals as reasons.
  • Termination: The State (Respondent No. 5) terminated the contract on 04‑07‑2024 for non‑completion.
  • Liquidated Damages: On 05‑11‑2024 the State demanded Rs 112.80 lakhs as liquidated damages, conditioning deposit of the amount.
  • Fresh Tender: The State issued a fresh tender on 25‑11‑2024 for the balance work; Shri Sai Associates was declared the highest bidder, received a letter of acceptance on 27‑12‑2024, and a work order on 02‑01‑2025. The site was handed over on 24‑01‑2025 after removal of Respondent No. 6’s machinery.
  • High Court Proceedings: Respondent No. 6 filed a writ petition (W.P. (C) No. 1403/2025) on 06‑03‑2025 challenging the termination, the liquidated‑damages order, the fresh tender and the award to the appellant. The High Court, relying on an affidavit dated 17‑03‑2025 in which Respondent No. 6 claimed 95 % completion of one bridge and 100 % of the other pending works, set aside the termination order, the liquidated‑damages order and the fresh tender, and permitted Respondent No. 6 to complete the work by 31 December 2025.
  • The Supreme Court noted that the High Court gave relief solely on the basis of the self‑serving affidavit, without any response from the State or examination of the termination clause, and that the writ petition was filed after an undue delay of eight months.

Final Outcome

  • The Supreme Court set aside the High Court’s impugned order dated 29‑04‑2025, thereby dismissing Respondent No. 6’s writ petition.
  • The appeal filed by Shri Sai Associates is allowed; the appellant may continue the bridge works.
  • Respondent No. 6 is directed to pursue any grievance through appropriate civil remedies; no order as to costs is made.
  • All pending applications in the matter are ordered disposed of.

Topics: Contract Termination, Infrastructure Procurement