Contracts awarding work to private parties should not be cancelled without assigning reasons, the Supreme Court said on May 8, as it reserved its judgement on an appeal against a Calcutta High Court order.
A bench comprising Chief Justice D.Y. Chandrachud and justices J.B. Pardiwala and Manoj Misra said private parties, who make investments after bagging a contract, have a reasonable expectation of getting a return. "How can a contract be terminated without assigning any reason? A private person invests in pursuance of the award of contract," the CJI said.
Referring to the facts of the case, the CJI said no reason was given for cancellation of the contract.
