STATE OF ORISSA vs M/S SAMANTARY CONSTN.PVT.LTD.

The Supreme Court upheld the arbitration award dated 29th June 2003, which granted the Contractor Rs. 4.45 crore for work done on the Mahanadi Barrage project, while allowing a counterclaim of Rs. 1.37 crore by the State. The Court found that the termination of the contract was illegal, thus entitling the Contractor to hire charges for seized machinery, ultimately awarding Rs. 3 crore for this claim. The judgment reinforces the principle that illegal termination of a contract cannot justify the seizure of assets under the contract, as per the General Conditions of Contract.