Case Law Details
A.S. Motors Pvt. Ltd. Vs Union of India & Ors. (Supreme Court of India)
Supreme Court held that an aggrieved party is entitled to receive compensation from the party who has broken the contract whether or not actual damage or loss is proved to have been caused by the breach.
Facts- National Highway Authority of India Ltd. (NHAI for short) invited tenders for award of a contract for collection of fee for the use of National Highways from Km. 61.00 to Km.103 on Morena-Gwalior Section of National Highway No.3.
Appellant too among others made an offer which was accepted by the NHAI asking the appellant to submit a demand draft for a sum of Rs.2,20,00,125/- towards performance security and a bank guarantee for a similar amount to be valid for a period of 15 months for the due observance of the terms and conditions contained in the contract. Both these requirements were satisfied by the appellant with the result that a contract for collection of user fee commencing from 1st April, 2006 to 31st March, 2007 was finally allotted in its favour.
Certain violations were in due course noticed by the NHAI including complaints to the effect that the appellant was collecting excess fee from vehicles passing through Toll Plaza. This resulted in the termination of the collection contract by the competent authority in terms of a letter dated 27th July, 2006, and forfeiture of the performance security of Rs.2,20,00,125/-. Termination ordered by the respondent triggered litigation between the parties that took several rounds before the High Court.
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