“We are of the considered opinion that this is the classic textbook case of arbitrariness,” Justice Pardiwala said while pronouncing the verdict.
New Delhi: Today (9th July): The Supreme Court set-aside the West Bengal authorities’ decision to cancel a contract for maintaining two underpasses in Kolkata awarded to a private party without providing any reason, labeling it as a “classic textbook case of arbitrariness.”
Chief Justice D Y Chandrachud, along with justices JB Pardiwala and Manoj Misra, also nullified the Calcutta High Court’s ruling that upheld the contract’s cancellation.
“We are of the considered opinion that this is the classic textbook case of arbitrariness,”
Justice Pardiwala said while pronouncing the verdict.
The bench had previously reserved its judgment on May 8, emphasizing that contracts with private parties should not be terminated without proper explanation, considering the investments made and expectations of returns.
The case involved a firm headed by Subodh Kumar Singh Rathour, had secured a 10-year contract to maintain underpasses on the Eastern Metropolitan Bypass in Kolkata, including rights for advertising. The Kolkata Metropolitan Development Authority (KMDA) terminated the contract on February 7, 2023, prompting legal challenges.
However, the Kolkata Metropolitan Development Authority (KMDA) terminated the contract on February 7, 2023. The KMDA specified that it would refund the licence fee paid by Rathour and compensate for the expenses incurred on construction activities and maintenance.
Senior advocate Rakesh Dwivedi, representing the KMDA, informed the Supreme Court that a new contract has been awarded to another party, and compensation can be provided to Rathour.
On the other hand, senior advocate Shyam Divan, speaking for Rathour, emphasized the need to set aside the communication that led to the contract’s cancellation to avoid disruption in the maintenance activities at the underpasses.
