Quick Summary: ALR Constructions lost a court case against the Superintending Engineer over a canceled road maintenance contract. The court decided the cancellation was allowed under the contract's rules.
ALR Constructions had a deal with the National Highways Authority to take care of a road in Tamil Nadu. The agreement was made on August 14, 2018, and the project was finished by June 30, 2022. They were supposed to maintain the road until June 30, 2026.
The road was supposed to become a toll road by October 7, 2024. However, the National Highways Authority said the road didn't meet the necessary standards. So, the Superintending Engineer sent a cancellation notice on March 6, 2025, ending the maintenance agreement.
"The road in question did not meet those standards." - Court Document
ALR Constructions argued that the cancellation notice was unfair because they weren't given prior warning. They pointed to a part of the contract (Clause 23.1.2) that required a warning before cancellation.
Justice G.R. Swaminathan decided that the cancellation was allowed under Clause 23.3 of the contract, which lets the authority cancel without warning for their own convenience. The notice was given 30 days before the cancellation took effect.
"The termination shall take effect 30 (thirty) days from the date of notice hereunder." - Clause 23.3
After the cancellation, a three-party agreement was attempted but was not seen as valid due to a protest by ALR Constructions. The court also noted that any money matters under Clause 23.6.2 should be handled separately between the contractor and the authority.
"The provisions set out in Clause 23.6.2 will definitely kick in." - Court Document
The court dismissed ALR Constructions' complaint, stating that the cancellation notice was legally correct.
