LHC Suspends Punjab Electric Bus Contract Cancellation

The Lahore High Court (LHC) on Tuesday suspended the Punjab government’s electric bus contract cancellation, calling the move arbitrary and lacking legal authority, which could cause losses to the supplier.

Justice Jawad Hassan of the LHC Rawalpindi bench issued the interim order while hearing a petition by Universal Motors (Pvt) Limited challenging the December 26, 2025, cancellation notice.

Universal Motors had signed a Rs4.588 billion contract on May 5, 2025, to supply 100 nine-metre electric buses as part of Punjab’s plan to introduce 500 eco-friendly buses across the province.

The company had secured an advance payment bond of Rs458.85 million and completed a large part of the order, including delivering a prototype bus on September 18.

The petitioner argued that the government’s cancellation ignored contractual clauses and violated principles of fairness, being issued without prior notice or reasons. Counsel emphasized that the contract allowed termination under specific conditions but did not authorize outright cancellation.

The assistant attorney general defended the notice as lawful. However, Justice Hassan said the petitioner had made substantial progress and partial payment had already been released, establishing a prima facie case.

The court directed that the cancellation shall not be implemented until the next hearing on January 12, 2026, issuing notices to the Punjab government to appear with the complete record.

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The ruling underscores the court’s role in ensuring accountability in major provincial projects and protecting suppliers from arbitrary government actions.