As per case facts, JCL Infra Private Limited was awarded an EPC contract for traffic improvement and beautification at OTS Crossing, Jaipur, based on a Detailed Project Report (DPR). The ...
[2026:RJ-JP:20730]
HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
S.B. Civil Writ Petition No. 8120/2025
JCL Infra Private Limited, Having Its Registered Office At
Industrial Estate, Delhi Road, Partapur, Meerut - 250103 Through
Its Managing Director Mr. Ajai Kumar Gupta.
----Petitioner
Versus
1. Jaipur Development Authority, Through Its Secretary,
Ram Kishor Vyas Bhawan, Indira Circle, Jawahar Lal
Nehru Marg, Jaipur-302004.
2. Commissioner, Jaipur Development Authority, Ram Kishor
Vyas Bhawan, Indira Circle, Jawahar Lal Nehru Marg,
Jaipur Rajasthan, 302005.
3. Executive Engineer - ROB/RUB-V, Jaipur Development Au -
thority, Ram Kishor Vyas Bhawan, Indira Circle, Jawahar
Lal Nehru Marg, Jaipur-302004
----Respondents
Connected With
S.B. Civil Writ Petition No. 17571/2024
JCL Infra Private Limited, Having Its Registered Office At Indus-
trial Estate, Delhi Road, Partapur, Meerut - 250103 Through Its
Authorized Signatory Mr. Ajai Kumar Gupta.
----Petitioner
Versus
1. Jaipur Development Authority, Through Its Commissioner,
Ram Kishor Vyas Bhawan, Indira Circle, Jawahar Lal
Nehru Marg, Jaipur - 302004.
2. Jaipur Development Authority, Through Its Executive En-
gineer - Traffic - Ii, Room No. 110, Ff, Main Building, Ram
Kishor Vyas Bhawan, Indira Circle, Jawahar Lal Nehru
Marg, Jaipur - 302004.
3. Sincere Architects Engineers Pvt. Ltd., 42, Lal Singh Judo
Colony, Near Jaipuria Hospital, Tonk Road, Jaipur, Ra -
jasthan - 302018. Through Its Authorized Signatory.
----Respondents
[2026:RJ-JP:20730] (2 of 106) [CW-8120/2025]
For Petitioner(s) : Mr. S. S. Hora with
Mr. Adesh Arora
Mr. OP Singh Tanwar
For Respondent(s) : Mr. Amit Kuri with
Mr. Ayush Sharma
Mr. Devendra Gupta, Director
Engineer JDA-1
HON'BLE MR. JUSTICE SAMEER JAIN
JUDGMENT
REPORTABLE :
1.Arguments Concluded on: 23.04.2026
2.Judgment Reserved on: 23.04.2026
3.Full Judgment/Operative Part Pronounced:Full Judgment
4.Pronounced on: 02.06.2026
1. In the present batch of writ petitions, the scope of the
controversy involved, albeit not limited to but is broadly and
predominantly defined as enumerated ad infra:
SBCWP No. 8120/2025: Is filed assailing the arbitrary and
illegal actions of the respondents whereby the respondents have
re-invited tender including the component of OTS Flyover in
respect of preparation of detailed project report (hereinafter
referred to as ‘DPR’) for proposed elevated road from Transport
Nagar to Balagi Tri Junction, Jagatpura and from Jothwara at OTS
junction, JLN Marg, JDA Jaipur, to extent of flyover at OTS
Junction vide NIB No. EE-ROB/RUB-B/01/2025-26 dated
03.04.2025; primarily being governed by the Public Works
Financial and Accounts Rules, Part-II.
SBCWP No. 17571/2024 : Is filed assailing the letter dated
24.04.2024 issued by the Jaipur Development Authority
[2026:RJ-JP:20730] (3 of 106) [CW-8120/2025]
(hereinafter referred to as ‘JDA’), thereby withdrawing the work
allotted to the petitioner vide the Letter of Acceptance No.
JDA/EE/TR WORKS-II/LOA/2022-2023/DEC/01 (hereinafter
referred to as ‘LoA’) dated 14.12.2022, without affording any
rationale of such withdrawal.
Consequently, considering the fact that the writ petitions
warrant adjudication on common questions of law and fact; with
the consent of learned counsel appearing on behalf of all the
parties, S.B. Civil Writ Petition No. 8120/2025 titled as JCL
Infra Private Limited V. Jaipur Development Authority and
Ors. is being taken up as the lead case. It is cautiously clarified
that any discrepancies in the present batch of writ petitions,
pertain purely to the factual narratives contained therein and not
vis-a-vis the questions of law to be determined by this Court; the
instant judgment shall be applicable on both the petitions
connected herein/henceforth on mutatis mutandis basis.
SUBMISSIONS ADVANCED AND CONTENTIONS PROFFERED
BY THE LEARNED COUNSEL APPEARING FOR AND ON
BEHALF OF THE PETITIONER HEREIN ARE AD-SERIATIM:
2. At the threshold, and before adverting to the
substantive arguments, the chronological particulars giving rise to
the instant controversy, as submitted by the learned counsel
appearing for and on behalf of the petitioner are set forth
hereinbelow:
2.1 At the very outset, learned counsel appearing on behalf
of the petitioner submitted that the petitioner is a company duly
[2026:RJ-JP:20730] (4 of 106) [CW-8120/2025]
incorporated under the provisions of the Companies Act, 2013,
bearing CIN U24231UP1980PTC005098, and having its registered
office in Meerut. It was submitted that the petitioner has been
constrained to approach this Court on account of the manifestly
arbitrary, capricious, and unlawful actions of the respondent
authorities in re-inviting consultancy services for the preparation
of a DPR in respect of the OTS Flyover, notwithstanding the
undisputed position that the DPR for the said project had already
been prepared and the work stood duly awarded to the petitioner,
pursuant to a valid and concluded tender process, and that the
petitioner has, in furtherance thereof, incurred substantial financial
expenditure and mobilised significant resources of men and
machinery.
2.2 It was submitted that the respondents issued a Notice
Inviting Bid bearing NIB No. EE-ROB/RUB-B/01/2025-26 dated
03.04.2025 for “Consultancy Services for Preparation of DPR for
proposed elevated road from Transport Nagar to Balagiri Tri
Junction, Jagatpura and from Jhotwara ROB to Khatipura ROB and
flyover at OTS Junction, JLN Marg, JDA Jaipur.” Learned counsel
had clarified that the petitioner has confined its challenge only to
that segment of the impugned NIB which pertains to the OTS
Flyover, inasmuch as the said project had already been awarded to
the petitioner through a lawful tendering process and was already
under active execution.
2.3 Elaborating further, it was submitted that the petitioner
had been awarded the EPC contract vide LoA dated 14.12.2022
[2026:RJ-JP:20730] (5 of 106) [CW-8120/2025]
bearing No. JDA/EE TR Works-II/LOA/2022-2023/Dec/01 for the
work of “Traffic improvement and beautification work at OTS
Crossing, JLN Marg, JDA Jaipur,” which was predicated upon a DPR
earlier prepared by the respondents’ appointed consultants,
namely, Sincere Architects Engineers Pvt. Ltd. Pursuant thereto, a
valid and binding Contract Agreement bearing No. 01/2022-23
came to be executed between the parties on 27.12.2022, and that
the said DPR itself was the culmination of a prior tender process
wherein Sincere Architects Engineers Pvt. Ltd. had been duly
selected, and on the strength of which the petitioner emerged as
the successful bidder for execution of the EPC contract. Learned
counsel submitted that in pursuance of the said contract, the
petitioner duly mobilised its men, machinery, and financial
resources, and commenced execution of the work strictly in
accordance with contractual stipulations. The petitioner submitted
various survey reports, investigations, and detailed design
documents through communications dated 23.02.2023,
24.02.2023, 27.02.2023, 02.03.2023, and 13.03.2023, and
further sought requisite approvals, including vide letter dated
17.03.2023, for execution of the flyover and allied works at the
OTS crossing. It was vehemently contended that despite
scrupulous adherence by the petitioner to all contractual
obligations, inter alia, submission of disposal plans, traffic
movement plans, and detailed engineering drawings through
letters dated 22.03.2023, 27.03.2023, 11.04.2023, and
26.04.2023, the respondents failed to accord the necessary site
approvals, thereby stultifying the progress of the project. It was
[2026:RJ-JP:20730] (6 of 106) [CW-8120/2025]
submitted that the petitioner made repeated representations on
28.03.2023, 25.05.2023, 01.09.2023, 20.02.2024, and
05.01.2024 seeking approvals; however, the respondents
remained supine and failed to discharge their corresponding
contractual obligations.
2.4 As a consequence of such inaction, the petitioner has
suffered grave financial prejudice, with men and machinery lying
idle and investments aggregating approximately Rs. 40 Crores
already having been made, out of which work to the extent of Rs.
20.41 Crores stood completed and duly communicated to the
respondents. it was further submitted that despite repeated
requests, including communications dated 01.11.2023,
26.12.2023, and 20.02.2024, no payments were released by the
respondents, nor was any communication forthcoming.
Subsequently, to the utter astonishment of the petitioner, that the
respondents issued a letter dated 03.01.2024 alleging that no
drawings had been submitted, in complete disregard of the
extensive documentation furnished by the petitioner between
27.02.2023 and 03.01.2024. It was further contended that
paradoxically, thereafter, the respondents issued a project
extension letter dated 04.01.2024 extending the completion
timeline till 30.04.2024, thereby unequivocally acknowledging
both the subsistence of the contract and the satisfactory progress
of the petitioner’s work.
2.5 In response, to the said time extension the petitioner
furnished a comprehensive representation dated 05.01.2024
[2026:RJ-JP:20730] (7 of 106) [CW-8120/2025]
detailing the progress achieved and sought payment on account of
price variation arising from the extended contractual period
beyond twelve months, vide letter dated 08.01.2024; however,
the same elicited no response from the respondents. It was
further contended that during a meeting held on 01.03.2024,
certain concerns were raised regarding the technical feasibility of
the project at Jhalana Rotary and MNIT Gate opening; however,
the said concerns stood conclusively addressed by the
respondents’ own consultant, Sincere Architects Engineers Pvt.
Ltd., vide letter dated 26.03.2024, affirming the technical
feasibility of the project. Despite this, the petitioner’s subsequent
request for site instructions vide letter dated 27.03.2024 remained
unanswered.
2.6 Learned counsel submitted that in a gross violation of
the principles of natural justice and in complete arbitrariness, the
respondents, without affording any opportunity of hearing or
assigning cogent reasons, invoked Clause 32 of the contract and
withdrew the awarded work vide letter dated 24.04.2024. The
petitioner, aggrieved thereby, furnished a legal notice dated
10.05.2024 seeking revocation of the said withdrawal, which too
went unheeded. Thereafter, Sincere Architects Engineers Pvt. Ltd.
submitted a further communication dated 05.07.2024 enclosing
final drawings and reaffirming the feasibility of the project,
thereby dispelling any residual doubts. It was submitted that the
petitioner was constrained to furnish second legal notice dated
26.08.2024, which was similarly disregarded. Aggrieved by such
arbitrary withdrawal, the petitioner instituted S.B. Civil Writ
[2026:RJ-JP:20730] (8 of 106) [CW-8120/2025]
Petition No. 17571/2024 , wherein notices were issued on
18.12.2024 and duly served on 20.12.2024. However, during the
pendency of the said proceedings, the respondents proceeded to
re-invite consultancy bids for the very same project vide NIB
dated 03.04.2025, which, inter alia, includes the OTS Flyover,
despite the matter being sub judice and despite the petitioner’s
prior execution and substantial investment.
2.7 Learned counsel submitted that the impugned action of
re-inviting a DPR consultancy tender for the OTS Flyover is
nothing short of an attempt to restart the project de novo, in
brazen disregard of the DPR already prepared by Sincere
Architects Engineers Pvt. Ltd. and the petitioner’s execution of
work amounting to Rs. 20.41 Crores and investment of
approximately Rs. 40 Crores. Such conduct, is ex facie arbitrary
and violative of the doctrine of promissory estoppel, inasmuch as
the petitioner acted to its detriment on the basis of the
respondents’ unequivocal representations and contractual
assurances, and now stands placed in a position of severe financial
jeopardy. Learned counsel submitted that Clause 32 of the
contract contemplates only partial withdrawal of work and does
not sanction unilateral termination of the entire contract. The
respondents’ action in withdrawing the whole of the work under
the guise of Clause 32 is therefore wholly illegal, unsustainable,
and contrary to the express terms of the contract. It was further
submitted that the EPC contract provided for stage-wise
payments, which were liable to be sub-categorised in terms of the
[2026:RJ-JP:20730] (9 of 106) [CW-8120/2025]
corrigendum dated 20.10.2022, and the petitioner had duly
complied with the same vide its letter dated 31.01.2023.
3.Learned counsel appearing on behalf of the petitioner further
submitted that the petitioner is engaged, inter alia, in the
execution of large-scale infrastructure development projects,
possessing the requisite technical expertise, financial wherewithal,
and professional acumen for undertaking complex urban mobility
works. It was contended that the OTS Crossing situated on JLN
Marg, Jaipur, constitutes one of the most critically congested
traffic bottlenecks within the city, plagued by incessant vehicular
load and chronic traffic snarls. In order to ameliorate the said
congestion and to ensure a signal-free corridor facilitating
uninterrupted and seamless vehicular movement, coupled with the
augmentation of the aesthetic character of JLN Marg, the
respondents conceived a project for traffic improvement and
beautification of the said crossing, including the construction of a
flyover and allied infrastructural components. Thus, in furtherance
of the aforesaid objective, the respondents issued a tender inviting
bids for the execution of the said project, thereby initiating a
formal procurement process in accordance with law. The said bid
was invited under the following title:
"Traffic Improvement and beautification work at
OTS crossing JLN Marg, JDA Jaipur (Construction of
suspended bridge, Traffic Island, Roatries,
Underground art gallery, Pedestrian pathway,
Sculpture, fountain, improvement of existing
drainage system and road surface etc.) on
[2026:RJ-JP:20730] (10 of 106) [CW-8120/2025]
Engineering Procurement and Construction (EPC)
basis."
4. Learned counsel appearing on behalf of the petitioner
further submitted that the total EPC contract value, as delineated
in the LoA dated 14.12.2022, stood at Rs. 184.30 Crores. It was
submitted that the Special Conditions incorporating RPWR-100
were expressly made applicable and formed an integral part of the
contract (entered inter-se the parties) in terms of Annexure-19
i.e. the contract agreement, having been mutually agreed upon
between the parties. Learned counsel submitted that the
stipulated period for commencement and completion of the project
was from 06.01.2023 to 05.01.2024. However, the said period was
extended vide communication dated 04.01.2024 (Annexure-13) till
30.04.2024, thereby acknowledging the subsistence of the
contract and the continuing obligations of the parties.
Notwithstanding the same, in a wholly unilateral and ex parte
manner, the respondents invoked Clause 32 of the Contract
Agreement and withdrew the entire scope of work vide letter
dated 24.04.2024, which action has been impugned by the
petitioner in S.B. Civil Writ Petition No. 17571/2024 .
5. Learned counsel, in order to demonstrate the sequence
of events and the manifest arbitrariness of the respondents’
conduct, invited the attention of this Court to the following
chronology of material facts:
5.1 That initially, on 02.02.2021 and 03.02.2021, a Letter
of Acceptance was issued to consultants for preparation of the
DPR, followed by a work order amounting to Rs. 4.58 Crores
[2026:RJ-JP:20730] (11 of 106) [CW-8120/2025]
(Annexure-4). The said consultants prepared the DPR, which
subsequently formed the very foundation for the EPC tender
floated by the respondents and ultimately awarded to the
petitioner.
5.2 That on 14.12.2022, the respondents issued a LoA in
favour of the petitioner awarding the EPC contract for the OTS
flyover, based on the DPR prepared by the respondents’
consultants (Annexure-2). This culminated in the execution of a
formal Contract Agreement on 27.12.2022 between the petitioner
and the respondents, wherein RPWR-100 was incorporated as part
of the Special Conditions of Contract.
5.3 That on 31.01.2023, the petitioner addressed a
communication to the respondents proposing bifurcation of work
and stage-wise payments, as permissible under the corrigendum,
thereby demonstrating its readiness to proceed in a structured
and compliant manner (Annexure-24).
5.4 That on the same date, the respondents responded to
an earlier communication of the petitioner dated 30.01.2023,
raising certain queries and requirements with respect to site office
arrangements, GAD drawings, traffic diversion plans, and tree-
cutting permissions.
5.5 That in compliance thereof, the petitioner, vide letter
dated 23.02.2023, sought in-principle approval inter alia, general
Arrangement of Bridge Over Nallah on Gopalpur side [Drawing No.
OTS/JAIPUR/Nallah Bridge/01 (Conceptual Drawing)]; General
Arrangement of Flyover at OTS X-ing [Drawing No.
OTS/JAIPUR/Flyover/01 R-3]; Project Plan at OTS Crossing
[2026:RJ-JP:20730] (12 of 106) [CW-8120/2025]
[Drawing No.OTS/JAIPUR/OVERALL GAD Sheet 01 REV R-1];
Traffic Diversion Plan (Drg. No. OTS/JAIPUR/Traffic Diversion-
Sheet 01 REV 1); Land Acquisition Plan (Drg. No.
OTS/JAIPUR/Land Acquisition 01 Rev 1) thereby evidencing due
diligence and adherence to procedural requirements.
5.6 That despite continuous engagement, the petitioner,
vide letter dated 26.12.2023, once again apprised the respondents
of the mounting financial losses and requested payment for the
work already executed to the tune of Rs. 20.41 Crores. However,
in a stark departure from the factual record, the respondents
issued a communication dated 03.01.2024 alleging that no
drawings had been submitted by the petitioner, in complete
disregard of the extensive documentation furnished throughout
the year 2023.
5.7 That inconsistently, on the very next day i.e.,
04.01.2024, the respondents extended the project deadline till
30.04.2024 without any request from the petitioner, thereby
tacitly admitting that the delay was not attributable to the
petitioner.
5.8 That the petitioner, vide letter dated 05.01.2024,
referred to as many as eighteen prior communications and
reiterated that despite submission of all requisite drawings, plans,
and reports, no approvals or permissions had been granted,
resulting in substantial financial losses (Annexure-8). A
comprehensive list evidencing sixty-four communications sent by
the petitioner to the respondents was also placed on record
(Annexure-10).
[2026:RJ-JP:20730] (13 of 106) [CW-8120/2025]
5.8 That the petitioner, vide representation dated
08.01.2024, sought payment on account of price variation
occasioned by the extension of the contract beyond twelve
months. Thereafter, in a meeting culminating on 26.03.2024, the
respondents’ own consultants categorically clarified the technical
feasibility of the project, inter alia, stating that the proposed
structure would not interfere with the MNIT entrance and that the
rotary could be suitably shifted, thereby obviating the need for
additional land at OTS (Annexure-16, Pg. 489–491).
5.9 That in light of the aforesaid clarification, the petitioner,
vide letter dated 27.03.2024, requested directions to resume and
proceed with the pending work. However, instead of facilitating
execution, the respondents, in a wholly arbitrary and high-handed
manner, invoked Clause 32 of the Contract Agreement and
withdrew the entire project vide letter dated 24.04.2024, without
issuing any show cause notice or affording an opportunity of
hearing (Annexure-18).
5.10 That the petitioner promptly served a legal notice dated
10.05.2024 challenging the illegal withdrawal and seeking revival
of the project along with payment of outstanding dues amounting
to Rs. 20.41 Crores (Annexure-20). Thereafter, even the
respondents’ own consultants, vide communication dated
05.07.2024, furnished detailed drawings, including traffic
movement plans, land acquisition requirements, and general
arrangement drawings, thereby reaffirming the feasibility and
viability of the original DPR (Annexure-21).
[2026:RJ-JP:20730] (14 of 106) [CW-8120/2025]
5.11 That the petitioner issued a second legal notice dated
26.08.2024 reiterating its grievances, which also remained not
responded. In the interregnum, the respondents, vide letter dated
29.08.2024, called upon the petitioner to collect its bank
guarantees amounting to Rs. 5.52 Crores (Annexure P-4), which
were thereafter dispatched by post on 16.12.2024 (Annexure P-
5).
5.12 That the petitioner, vide letter dated 24.12.2024,
accepted the same under protest (Annexure P-6).
5.13 That in a most arbitrary and untenable development,
the respondents issued a fresh Notice Inviting Bid dated
03.04.2025 for preparation of a DPR for the same OTS flyover
project, valued at Rs. 6.67 Crores (Annexure-1, Pg. 34), thereby
effectively nullifying the earlier DPR, the concluded EPC contract,
and the petitioner’s substantial financial investment. Such action,
it was submitted, is ex facie illegal, arbitrary, and wholly
unsustainable in the eyes of law.
6. Learned counsel appearing on behalf of the petitioner
has assailed the impugned withdrawal notice dated 24.04.2024,
purportedly issued under Clause 32 of the Contract Agreement, as
being ex facie illegal, arbitrary, and vitiated by manifest non-
application of mind, qua which it was contended that the said
notice is liable to be set aside on, inter alia, the following grounds:
6.1 That the impugned notice is conspicuously vague,
bereft of reasons, and wholly non-speaking in nature, thereby
failing to disclose any intelligible basis for the drastic action
undertaken. Thus, such an unreasoned order stands in stark
[2026:RJ-JP:20730] (15 of 106) [CW-8120/2025]
contravention of the mandate of Clause 32 of the Contract
Agreement, which necessitates a reasoned determination founded
upon objective material and due consideration of relevant facts.
6.2 That the impugned notice itself contains a categorical
admission to the effect that the work under the contract could not
be completed within the stipulated or even the extended period on
account of prevailing site conditions and other attendant
circumstances. This, unequivocally establishes that the delay was
occasioned by factors beyond the control of the petitioner and,
therefore, cannot, by any stretch of reasoning, be attributed to
any default or lapse on the part of the petitioner.
6.3 That the impugned action is in flagrant violation of the
settled principles of natural justice. Clause 32 mandatorily
envisages that prior to invoking such a drastic measure, the
contractor ought to be afforded a reasonable opportunity of being
heard.
7. However, in the present case, no such opportunity was
granted to the petitioner, thereby rendering the action wholly
arbitrary and unsustainable in law. It was vehemently contended
that the doctrine of audi alteram partem has been palpably
breached, resulting in grave prejudice to the petitioner and
infringing the fundamental rights guaranteed under Articles 14,
19(1)(g), and 21 of the Constitution of India. In support of the
said contention, reliance was placed upon the ratio encapsulated
in State of Uttar Pradesh vs. Sudhir Kumar Singh & Ors.,
(2021) 19 SCC 706.
[2026:RJ-JP:20730] (16 of 106) [CW-8120/2025]
8. It was further submitted that a plain reading of Clause
32 would reveal that the power of withdrawal cannot be exercised
in respect of the entire contract on a wholesale basis. Rather, the
said clause contemplates invocation on a “risk and cost” basis,
confined to such portion of the work where failure is demonstrably
attributable to the contractor. In the present case, however, the
respondents have proceeded to withdraw the entire contract
without any such attribution or bifurcation, thereby acting in
patent excess of their contractual authority. Moreover, the
question as to whether the delay is attributable to the petitioner or
is a consequence of the respondents’ own lapses, as such failure
to hand over the site and non-approval of drawings, stands
conclusively answered in favour of the petitioner. It was submitted
that repeated delays on account of non-approval by the JDA
despite persistent follow-ups by the petitioner, are duly evidenced
from communications placed on record.
9. It was further contended that the conduct of the
respondents is wholly inconsistent with their present stance. The
grant of extension of time without imposition of any liquidated
damages, the unilateral release of the bank guarantee, and the
subsequent issuance of a fresh tender without invoking the “risk
and cost” mechanism or making any reference to Clause 2 of the
contract, collectively and unmistakably demonstrate that the delay
was neither attributable to the petitioner nor treated as such by
the respondents themselves. Learned counsel at this juncture had
drawn attention of the Court to the fact that the impugned
withdrawal notice itself acknowledges site-related impediments
[2026:RJ-JP:20730] (17 of 106) [CW-8120/2025]
and other extraneous factors, which, in essence, substantiates the
petitioner’s consistent stand. It was further submitted that
objections raised by MNIT/OTS in relation to site conditions and
execution constraints constituted the principal impediment in
carrying out the work, and these factors, being entirely beyond
the petitioner’s control, cannot be fastened upon it.
10. Further, it was contended that under the terms of the
Contract Agreement, the obligation to hand over the site in a
timely and workable condition squarely rested upon the
respondents, which obligation they have conspicuously failed to
discharge. In this regard, reliance was placed upon relevant
Clause in Annexure 3 I.e. contract dated 27.12.2022, which is
reproduced as under:
“Summary of Work
...
Lank is available. If additional land is required, then it
shall be made available by JDA."
11. Learned counsel further submitted that the petitioner
had duly invoked its contractual entitlement towards price
variation on account of delays attributable to the respondents, by
way of a detailed communication dated 08.01.2024 (Annexure–
15). It was contended that once such a claim has been raised in
consonance with the contractual stipulations, the respondents are
estopped from adopting a diametrically opposite stand so as to
attribute delay or non-performance upon the petitioner. Learned
counsel further submitted that the cumulative circumstances,
namely, persistent non-approval of drawings, failure to hand over
the site within time, grant of extension without levy of any penalty
[2026:RJ-JP:20730] (18 of 106) [CW-8120/2025]
or liquidated damages, and the unilateral return of the bank
guarantee, unequivocally establish the absence of any default on
the part of the petitioner.
12. It was further urged that it is a settled principle of
administrative law that an order must stand or fall on the reasons
contained therein, and the same cannot be supplemented by
subsequent affidavits or justifications sought to be introduced at
the stage of reply to the writ petition. Thus, any attempt on the
part of the respondents to improve upon or validate the impugned
action by introducing fresh grounds dehors the original record is
impermissible in law. In support of this proposition, reliance was
placed upon the dictum enunciated in Mohinder Singh Gill vs.
Chief Election Commissioner, (1978) 1 SCC 405.
13. Learned counsel had next contended that the present
case squarely attracts the doctrines of promissory estoppel and
legitimate expectation. It was submitted that acting upon the
unequivocal assurances and contractual obligations undertaken by
the respondents, the petitioner had mobilized extensive resources,
conducted surveys, prepared detailed drawings and designs,
procured requisite materials, and incurred substantial financial
expenditure. In such circumstances, it is impermissible for the
respondents to resile from their promise and arbitrarily withdraw
the project, particularly on account of extraneous considerations
such as a change in government or administrative stance;
nonetheless, such conduct, is antithetical to the principles of
fairness, reasonableness, and the well-established Wednesbury
doctrine governing administrative discretion. It was also
[2026:RJ-JP:20730] (19 of 106) [CW-8120/2025]
contended that the State, being an instrumentality under Article
12 of the Constitution of India, is under a constitutional and legal
obligation to act in a transparent, fair, non-discriminatory, and
reasonable manner. The impugned action, whereby the
respondents have unilaterally withdrawn the work order for
reasons attributable to their own lapses, constitutes a clear
abdication of such obligations.
14. In support of the submissions made insofar, learned
counsel had placed reliance upon, inter alia, IFGL Refractories
Ltd. vs. Orissa State Financial Corporation & Ors., 2020 SCC
OnLine SC 208; U.P. Power Corporation Ltd. vs. Sant Steels
& Alloys (P) Ltd., (2008) 2 SCC 777; and Sivanandan C.T.
vs. High Court of Kerala, (2024) 3 SCC 799.
15. It was further contended that the stand taken by the
respondents in their reply reveals that the issuance of a fresh DPR
was motivated by a change in governmental policy consequent
upon a change in political leadership; however, governance is a
continuous process, and the State, as a legal entity, remains
bound by its contractual commitments irrespective of political
transitions. Thus, the contractual obligations cannot be jettisoned
on account of shifting political considerations, as the same would
erode the sanctity of contracts and undermine public confidence in
governmental dealings. In the conspectus of the aforesaid facts,
learned counsel submitted that the project pertaining to the OTS
crossing was not conceived as an ad hoc or casual initiative, but
rather as a meticulously planned infrastructure undertaking of
considerable magnitude, aimed at alleviating traffic congestion
[2026:RJ-JP:20730] (20 of 106) [CW-8120/2025]
and ensuring seamless vehicular movement along the arterial JLN
Road, Jaipur. It was submitted that the petitioner has already
invested an amount approximating Rs. 40 Crores in furtherance of
the said project and has executed substantial portions of the work.
Thence, in such circumstances, the arbitrary withdrawal of the
contract, for reasons not attributable to the petitioner, amounts to
a gross breach of contractual and constitutional obligations.
Sequentially, whilst placing reliance upon the judgment passed in
Muhammed Nizar vs. State of Kerala, 2021 Supreme (Ker.)
636, and Vice-Chairman & Managing Director, City and
Industrial Development Corporation of Maharashtra Ltd. vs.
Shishir Realty Pvt. Ltd., (2022) 16 SCC 527, it was submitted
that the respondents cannot be permitted to take a volte-face
without cogent and legally sustainable justification, particularly
when such action undermines the sanctity of contractual relations
and adversely impacts public interest.
16. Learned counsel had also assailed the proposal of a
newly conceived flyover, contending that the same reflects a
regressive and restrictive approach towards traffic management
on JLN Road, allegedly undertaken to accommodate certain
influential institutions such as MNIT/OTS. In this regard, reliance
was placed upon the dictum encapsulated in State of Tamil
Nadu & Ors. vs. K. Shyam Sunder, (2011) 8 SCC 737. It was
next contended that the contractual framework governing the
petitioner permitted stage-wise payments and sub-categorization
of works, as envisaged under the EPC contract and specifically
delineated under the head “Payment” (Annexure–3). Learned
[2026:RJ-JP:20730] (21 of 106) [CW-8120/2025]
counsel submitteds that further clarification in this regard was
provided under Note–1 of the corrigendum dated 20.10.2022
(Annexure–23), and the petitioner had duly proposed bifurcation
and sub-categorization of works vide letter dated 31.01.2023,
thereby permitting rationalization or narrowing of scope along with
corresponding financial adjustments.
17. It was further submitted that the State is bound to act
fairly even in contractual matters, and the jurisdiction under
Article 226 of the Constitution of India is clearly maintainable
where the action of the State is arbitrary, illegal, or shocks the
conscience of the Court. In support of this proposition, reliance
was placed upon the dictum enunciated in Subodh Kumar Singh
Rathore vs. Chief Executive Officer & Ors., (2024) 15 SCC
461; ABL International Ltd. & Anr. vs. Export Credit
Guarantee Corporation of India Ltd., (2004) 3 SCC 553; and
Gujarat State Financial Corporation vs. Lotus Hotels (P)
Ltd., (1983) 3 SCC 379.
18. Additionally, it was submitted that the petitioner is
entitled to price variation strictly in terms of the contractual
provisions, for which a formal requisition had already been
submitted upon extension of the contract period. Reliance has
been placed upon Clause 45 of the RPWA-100 (Annexure–19),
which expressly governs the consideration and applicability of
price variation under stipulated conditions; and that the objection
raised by the respondents with regard to the locus standi of the
petitioner-company is wholly misconceived and untenable. It was
submitted that under Order XXIX Rule 1 of the Code of Civil
[2026:RJ-JP:20730] (22 of 106) [CW-8120/2025]
Procedure, the Managing Director is duly authorized to sign and
verify pleadings on behalf of the company. In the present case, a
valid Board Resolution dated 09.09.2024 (Annexure P–9) is placed
on record, authorizing the institution of the present proceedings.
Nevertheless, a company, being a distinct juristic entity, is fully
competent to authorize its directors or shareholders to act on its
behalf, and such authorization is, at best, a procedural
requirement. In support of this contention, reliance was placed
upon the authoritative pronouncement of the Hon’ble Supreme
Court in United Bank of India vs. Naresh Kumar, (1996) 6
SCC 660. Thus, it was stoutly pleaded that in view of the
aforementioned, the objection raised by the respondents deserves
to be rejected outright as being devoid of merit, and the instant
petitions deserve to be allowed.
SUBMISSIONS ADVANCED AND CONTENTIONS PROFFERED
BY THE LEARNED COUNSEL APPEARING FOR AND ON
BEHALF OF THE RESPONDENTS HEREIN ARE AD-SERIATIM:
19. Per contra, learned counsel appearing for the
respondents had, with considerable vehemence, opposed the
maintainability as well as the merits of the present writ petitions,
advancing the following submissions in a structured and multifold
manner:
20. At the very threshold, it was contended that the writ
petitions suffer from a foundational defect of maintainability,
inasmuch as they are not instituted by a duly authorized and
competent person on behalf of the petitioner-company. It was
submitted that no valid power of attorney or contemporaneous
[2026:RJ-JP:20730] (23 of 106) [CW-8120/2025]
authorization in favour of Shri Ajai Kumar Gupta was placed on
record, at the time of institution of the proceedings. Therefore, in
absence of such specific authorization, the petitions, filed
ostensibly on behalf of a juristic entity, are rendered non est in the
eyes of law, as per the ratio encapsulated in State of Travancore
v. Kingston Computers (P) Ltd., (2011) 11 SCC 524 ,; thus,
the proceedings initiated without proper authorization are liable to
be dismissed at the very inception, and so is the instant
petition(s).
21. It was further urged that the petitioner had approached
this Court with unclean hands and is guilty of gross suppression of
material facts; in this regard learned counsel submitted that
several communications issued by the JDA spanning a period of
approximately fifteen months, highlighting persistent deficiencies
in design, structural inadequacies, and non-compliance with
contractual obligations, have been deliberately withheld from the
Court, by the learned counsel representing the petitioner.
Nevertheless, such concealment, strikes at the very root of
equitable jurisdiction under Article 226 of the Constitution of
India, as also held in the ratio encapsulated in Prestige Lights
Ltd. v. State Bank of India, (2007) 8 SCC 449 , whereby it was
held that suppression of material facts disentitles a petitioner from
any discretionary relief. Further, on the substantive plane, it was
contended that the lis in question emanates purely from a
contractual relationship and is replete with seriously disputed
questions of fact. These include, inter alia, attribution of delay,
quantification of alleged pre-execution expenditure to the tune of
[2026:RJ-JP:20730] (24 of 106) [CW-8120/2025]
Rs. 20.41 Crores, interpretation and applicability of contractual
clauses, and the propriety of administrative decisions. It was
submitted that such issues cannot be adjudicated in writ
jurisdiction, which is ill-suited for evidentiary evaluation, and the
appropriate remedy lies before competent civil or commercial
courts for adjudication and award of damages; in support of the
said contention reliance was placed upon the dictum passed in
Radhakrishna Agarwal v. State of Bihar, (1977) 3 SCC 457.
22. Justifying the impugned action, learned counsel further
submitted that the withdrawal of the work order was squarely in
consonance with Clause 32 of the Contract Agreement, which
vests wide and unqualified discretion in the Engineer-in-Charge.
Elaborating the said contention, it was submitted:
22.1 That the Engineer-in-Charge constitutes a competent
authority under the contractual framework;
22.2 That Clause 32, by its very nature, permits withdrawal
of the work “for any reason whatsoever,” thereby conferring a
broad, non-restrictive power upon the respondents;
22.3 That multiple notices, correspondences, and review
meetings addressing delays, non-performance, and deficiencies
effectively constituted continuous notice to the petitioner, thereby
satisfying the requirements of natural justice, including the princi-
ple of audi alteram partem.
23. It was further contended that the EPC contract, being a
comprehensive and indivisible framework, does not admit of
unilateral modification, reduction, or re-categorization of work in
the manner suggested by the petitioner. Learned counsel had
[2026:RJ-JP:20730] (25 of 106) [CW-8120/2025]
additionally submitted that the respondents invoked the doctrine
of public trust and fiscal prudence, qua which it was submitted
that the decision to withdraw the contract was guided by
paramount public interest, particularly in light of the petitioner’s
failure to demonstrate any tangible progress over an extended
period of more than one year. It was argued that judicial review in
such policy-driven contractual decisions is exceedingly limited. To
support the said contention, learned counsel had placed reliance
upon the ratio enunciated in Jagdish Mandal v. State of Orissa,
(2007) 14 SCC 517 , and it was further submitted that where
public interest outweighs private commercial considerations, the
Court ought to exercise restraint. Auxiliary, amplifying the
allegations against the petitioner, it was contended that the
petitioner has acted in a manner tantamount to fraud by
suppressing critical facts pertaining to the submission and
approval of General Arrangement Drawings (GAD), which
constituted a sine qua non for commencement of substantive
work. Reference was made to the meeting dated 08.02.2023 and
document D-22 (letter dated 31.01.2023), evidencing that the
drawings submitted were grossly inadequate and fell short of
contractual requirements. It was further contended that the
petitioner lacks locus standi to assail the subsequent Notice
Inviting Bid (NIB) dated 03.04.2025 for DPR consultancy services,
on the following grounds:
23.1 That the earlier contract stood validly withdrawn under
Clause 32 of the GCC, thereby severing any subsisting legal
relationship;
[2026:RJ-JP:20730] (26 of 106) [CW-8120/2025]
23.2 That the fresh NIB pertains to an entirely distinct
project conceived under the Chief Minister’s Budget 2025–26,
involving construction of a flyover at the OTS junction with a
significantly altered financial outlay (Rs. 80 crores as against the
earlier Rs. 184 crores), rendering both projects mutually exclusive
and legally unconnected.
24. It was subsequently submitted that entertaining the
present petitions would set a deleterious precedent, enabling
unsuccessful or disgruntled contractors to stall or derail public
infrastructure projects through protracted litigation, particularly on
tenuous grounds of geographical or conceptual overlap. It is also
contended that any interim orders passed in the earlier
proceedings cannot enure to the benefit of the petitioner in the
context of the present, independent tender process. Learned
counsel reiterated that the appropriate forum for adjudication of
such disputes lies in a full-fledged civil or commercial trial, where
evidentiary appreciation can be undertaken, especially in light of
Sections 14 and 73 of the Indian Contract Act, 1872.
25. It was further emphatically contended that time was
the essence of the contract, which commenced on 06.01.2023 and
was to be completed by 05.01.2024. Despite repeated extensions
and opportunities, the petitioner failed to adhere to the stipulated
timelines and did not achieve even pro-rata progress. Apart from
delays, fundamental breaches of essential contractual conditions
are alleged, including failure to establish the JDA supervision
office, non-submission of comprehensive and approved drawings,
absence of a detailed traffic diversion plan in consultation with
[2026:RJ-JP:20730] (27 of 106) [CW-8120/2025]
traffic authorities, and failure to furnish periodic progress reports
and measurement records. Thus, the decision to withdraw the
contract was not arbitrary but was preceded by due application of
mind, taking into account multiple external factors such as
objections raised by MNIT Jaipur (letter dated 29.02.2024),
communications from OTS authorities (dated 19.02.2024),
concerns relating to the Bisalpur water tank, impediments in piling
operations, traffic management constraints, and the necessity to
reduce lane configurations from eight to six. These considerations
necessitated a fresh DPR and issuance of a new NIB aimed at
optimal utilization of public funds with reduced financial burden.
Learned counsel had placed reliance upon the ratio enunciated in
Air India Ltd. v. Cochin International Airport Ltd., (2000) 2
SCC 617, to submit that in matters of contractual and policy
decisions, the State enjoys considerable latitude, and a shift in
policy in furtherance of public good must prevail over private
commercial interests. Thus, the doctrines of promissory estoppel
and legitimate expectation are wholly inapplicable in the present
factual matrix, particularly in view of the petitioner’s own defaults,
negligible progress, and non-compliance with contractual
milestones. The extension of time and release of bank guarantees,
demonstrate the bona fide conduct of the respondents and cannot
be construed as admission of fault.
26. In culmination, it was submitted that the JDA has acted
as a prudent and model public authority, guided by considerations
of public interest, financial discipline, and contractual propriety.
The impugned action, being lawful, justified, and non-arbitrary,
[2026:RJ-JP:20730] (28 of 106) [CW-8120/2025]
warrants no interference under writ jurisdiction. Accordingly, it is
prayed that the writ petitions be dismissed with exemplary costs.
DELIBERATION OF RIVAL CONTENTIONS AND THE
ADJUDICATORY FINDINGS:
27. Upon according solicitous consideration to the rival
contentions advanced by the learned counsel qua the substantive
particulars delineated supra, and upon a meticulous scrutiny of the
documentary evidence in conjunction with the governing legal
tenets, the judgments cited at the Bar, and the records made
available for perusal by the respondent-JDA this court proceedeth
to record its opinion, noteworthy record and adjudicatory
determinations on the issues framed, ad-seriatim:
28. This Court has carefully perused the pleadings on
record, including the writ petitions, replies, rejoinders, and
additional documents placed before it. The original records
produced pursuant to the directions of this Court by the
respondent-JDA have also been minutely examined. Particular
attention has been accorded to the Contract Agreement dated
27.12.2022, the General and Special Conditions governing the
field, as well as the various communications exchanged between
the parties. Upon such comprehensive consideration, this Court is
of the opinion that certain aspects emerging from the record
assume material significance for adjudication of the controversy at
hand. A perusal of the original records produced by JDA, more
particularly File No. 5, which pertains to the financial bid and allied
decision-making process, reveals certain note sheets that throw
considerable light on the manner in which the impugned decision
[2026:RJ-JP:20730] (29 of 106) [CW-8120/2025]
came to be taken. These note sheets, forming part of the official
record, are relevant for examining the decision-making process
and the contemporaneous reasoning, if any, which guided the
respondents. The said note sheets, as extracted and reproduced
from the official records, are set out hereunder for ready reference
and consideration:
[2026:RJ-JP:20730] (30 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (31 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (32 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (33 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (34 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (35 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (36 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (37 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (38 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (39 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (40 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (41 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (42 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (43 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (44 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (45 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (46 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (47 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (48 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (49 of 106) [CW-8120/2025]
Relevant correspondence and note-sheets as on record of JDA, are
reproduced as under:-
[2026:RJ-JP:20730] (50 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (51 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (52 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (53 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (54 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (55 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (56 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (57 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (58 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (59 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (60 of 106) [CW-8120/2025]
[2026:RJ-JP:20730] (61 of 106) [CW-8120/2025]
29. Further, this Court also examined the Contract
Agreement along with the Special Conditions governing the
execution of the work. The relevant clauses of the Special
Conditions of Contract, as forming part of the record produced by
the respondent–JDA and applicable to the contractual relationship
inter se the petitioner and the respondents, are reproduced
hereinbelow for ready reference and proper appreciation of the
controversy:
Contract For Works
General Rules And Directions For the Guidance of
Contractors
Conditions of contract:-
Clause 1: Security Deposit
xxxxx
Clause 2: Compensation for Delay
xxx
Note: xxxxxx
The contractor shall, further be hornind to carry out
the work in accordance with the date and quantity
entered.
In case the delay inched to the tenderk is
attributable to the contractor, the spanwise
compensation, as lag down in this clause shall
be mandatory. However in case the slow
progess in on etime span is covered up within
original stipulated period then the amount of
such compensation levied earlier shall be
refunded. The price escalatiói, if any,
admissible under clause 45 of Conditions of
Contract would be admissible only on such
rates and cost of work, as would be
admissible if work would have been carrid out
in that particular time span. The Engineer-in.
charge shall review the progress achieved in every
time span, and grant stagewise extension in čase of
slow progress with compensation, if the delay is
attributable to contractor, otherwise without
compensation.
However, if for any special job, a time schedule has
been submitted by the contractor before execution
of the agreement, and it is entered in agreement as
[2026:RJ-JP:20730] (62 of 106) [CW-8120/2025]
well as samé has been accepted by the Engineer-
in-charge, the contractor shall complete the work
within the said time schedule. In the event of the
contractor failing to comply with this condition, he
shall be liable to pay compensation as this clause
shall not exceed 10% of the value of the contract.
While granting extension in time attributable to the
Government, reasons shall be recorded för each
delay.
Clause 3 : Risk & Cost Clause
The Engineer-in-charge or the Competent Authority
defmd under rules may, without prejudice to his
rights against the Contractor, in respect of any
delay or inferior workmanship or otherwise, or any
claims för damages in respect of any breaches of
contract and without prejudice to any rights or
remedies under any of provisions of this contract or
otherwise, and whether the dáte för completion has
or has not clapsed by notice in writing, absortek
determine the contract in any of the following
cases.
(i) If Contractor having been given by the
Engineer-in-charge, a notice in writing to
rectify, reconstruct or replace any defective
work or that the work is being performed in
any inefficient or otherwise improper or
unworkmanlike manner, shall omit to comply
with the requirements of such notice för a
periód of seven days, thereafter, or if the
contractor shall delay or suspend the
execution of the work so that either in the
judgement of the Engineer-in-charge (which
shall be final-and binding) he will be unable to
secure completion of the work by the dáte för
completion of he already, failed to complete
ihe work by that date.
(ii) If the Contractor, being company, shall pass a
resolution or the Court shall make an order that the
company shall be wound up or if a receiver or a
manager, on behalf of a creditor, shall be appointed
or if circumstances shall arise, which entitle the
Court or Creditor to appoint a receiver or a
manager or which entitle the Court to make a
winding up order.
[2026:RJ-JP:20730] (63 of 106) [CW-8120/2025]
(iii) If the contractor commits breach of any
of the terms and conditions of this contract.
(iv) If the Contractor commits any acts
mentioned in Clause 19 hereof.
when the Contractor has made himself liable for
action under any of the cases aforesaid, the
Engineer-in-charge on behalf of the Governor of
Rajasthan shall have powers ...
a)To determine or rescind the contract, as
aforesaid (of which determination or
rescission notice in Contractor under the hand
of the Engineer-in-charge shall be conclusive
evidence) upon such determination or notice
in writing to the rescission, the earnest
money, full security deposit of the contract
shall be liable to be forfeited and shall be
absolutely at the disposal of the Government.
b)To employ labour paid by the Department and to
supply materials to debiting the Contractor with the
cost of the labour and the price of the materials (of
the amount of which cost and price materials to
carry out the work or any part of the work, certified
by the Engineer-in-charge shall be final and
conclusive against the Contractor) and crediting
him with the value of the work done in all respects
in the same manner and at the same rates, as if it
had been carried out by the Contractor under the
terms of this contract. The certificate of the
Divisional Officer, as to the value of the work done,
shall be final and conclusive evidence against the
Contractor provided always that action under the
sub- clause shall only be taken after giving notice
in writing to the Contractor. Frivided also that if the
expenses incurred by the department are less than
amount payable to the Contractor at his agreement
rates, the difference shall not be paid to the
Contractor.
c)After giving notice to the Contractor to measure
up the work of the contractor and to take fuch part
thereof, as shall be unexecuted out of his hands
and to give it to another contractor to complete, in
which čase any expenses which may be "incurred in
excess of the sum which would have been paid to
the original contractor, if the whole work had been
executed by him [of the amount of which excess,
the certificate in writing of the Engineer-in-charge
[2026:RJ-JP:20730] (64 of 106) [CW-8120/2025]
shall be final and conclusivej shall be borne and
paid by the originál contractor and may be
deducted From any money due to him by
Government under this contractor on any other
account. Whatsoever, or from his Earnest money.
Security Deposit, Enlistment security or the
proceeds or sales therof, or a'ufficient part thereof
as the ease may be. In the event of any one or
more of the above courese being adopted by the
Engineer-in-charge, the contractor shall have no
claim to compensation tor any loss sustained by
him by reason of his having purchased or procured
any materials or entered into any engagements or
made any advances on account or with a view to
the performance of contract. And, in čase action is
taken under any of privisions aforesaid, the
Contractor shall not be exaction of the work or the
entitled to recover or be paid, any work thereof or
actually performed under this contract unless and
the Engineer-in-charge has certified, in writing, the
performance of such work and the value payable in
respect thereof, and he shall only be entitled to be
paid the value so certified.
Clause 4: Contractor remains liable to pay
compensation, if action not taken under
Clause 3:
i) XXXXX
ii) In the event of the Engineer-in-charge
putting in force, powers vested in hins under
the precedin.' Hause 3 he may, if he so
desires, také possession of all or any tools,
plants, maierials and stores, in or upon the
works or the sue, thereof, or belonging to the
contractor or procured by him and inteded to
be used for the excction of the work or any
part thereof, paying or allowing for the same
in account, at the contract rates or, in čase of
these not being applicable, at current market
rates, to b artified by the Chief Engineer or
duly authorised Engineer [whose certificate,
thereof, shall be final and conclusive]. therwise
the Engineer-in chargé may, bè notice in writing to
the contractor or his clerk of the works, foreman,
or other authorised agent, require him to remove
such tools plánt, materials or stores form the
[2026:RJ-JP:20730] (65 of 106) [CW-8120/2025]
premises [within a time to be specified such
notice), and in the event of the Contractor failing to
comply with any requisition, the Chief Engineer or
other duly athorised Engineer may remove them at
the contractors expenses seTl them by auction or
priváte såle on.ccount of the contractor and at his
risk in all respects, and the certificat; of the Chief
Engineer or other duly authorised Engineer is to the
expense of any such removai, and the amount of
the proceeds and expense of any such Såle shall be
final and conclusive against the Contractor.
Clause 13: No compensation fór alteration in
or restraction of work to be carried out:
If, any time after the commencement of the
work, the Government, shall för any reason,
whatsoever, not require the whole work
thereof, as specified in the tender, to bé
carried out, the Engineer-in-charge shall give
notice in writing, of the fact to the Contractor,
who shall have no claim to any paymentys or
compensation, whatsoever, on account of any
profit or advantage which he might have
derived from the execution of the work in full
but which he did not derive in consequence of
the full amount of the work not having been
carried out, Neither, shall he have any claim
för compensation by reasons of alterations
having made in the originál specifications,
drawings and design and instructions, which
shall involve any cutrilment of the work, as
originally contemplated. Provided, that the
contractor shall be paid the charges for the
cartage only, of materials, actually brought to
theb site of the work by him för bonafide use
and rendered surplus as a result of the
adandonment or curtailment of the work any
portion thereof, and taken them back by the
Contractor provided, however that the
Engineer-in-charge shall have, in all such
cases, the option of taking over all or any
such materials at their purchase price or at
local market rates whichever may be less. In
the čase of such stores, having been issued from
Government stores, charges recovered, including
storage charges shall be refunded after lacking into
[2026:RJ-JP:20730] (66 of 106) [CW-8120/2025]
consideration any deduction fór claim on account of
any deterioration or damage while in the custody of
the contractor, and in this respect the decision of e
Engineer-in-charge shall be final.
Clause 21: Standing Comniittee for Settlement
of disputes:
If any question, difference of objection,
whatsoever shall arise in any way, in
connection with of arising out of this decision
of any such matter, as herein before provided
has been otherwise provided for and whether
it has been finally decided Instrument of the
meaning of operation of any part thereof, of
the right duties or liabilites of either part
then, save in so far, as the accordingly, or
whether the contract should be terminated, or
has been rightly terminated and as regards
the rights or obligations of the parties as the
result of such termination, shall be referrred
for decision to the empowered Standing
Committe, which would consist of the
followings.
(i) Addutinistrative Secretary concerned.
(ii) Finance Secretary or his nominee, not below the
rank of Deputy Secretary and/or Chief Accounts
officer
(iii) Law Secretary or his nominee, not below the
rank of Joint Legal Remembrancer.
(iv) Chief Engineer-cum-Addi, Secretary of the
concerned department.
(v) Chief Engineer concerned (Member-Secretary)
The Enginner-in-chargem on receipt of application
alon with non refufndable prescribed fee, (the fee
would be two percent of the amount in dišpute, not
exceeding Rs. One lac) from the contractor shall
refer the disputes to the committee within a periód
of oné month from dnte of receipt of application.
Procedure and Application för referring cases
för settlement by the Standing Committee
shall be as given in Form RPWA90
Clause 32: Withdrawal of work from the
Contractor:
If the Engineer-in-charge shall at any time
and för any reasons, whatever, including
inability to maintain prorata progress think
[2026:RJ-JP:20730] (67 of 106) [CW-8120/2025]
any portion of the work should not be
executed or should be withdrawn from the
contractor, he may by notice in writing to that
effect require the Contractor not to execute
the portion of the work specified in the notice,
or may withdeaw from the Cotractory the
portion of work, so specified, and the
Contractor shall nột bé entitled to any
compensation, by reason of soul portion of
work having been withdrawn from him. The
Enginee-in-chagre may supplement the work
by engaging another agerevare d portion of
the work at the cost of the originalo
contractory without prejudice to his rights
under clause 2 clause 2. He allo be competent
to levy compensation för delay in progress.
The recovery of excess cost shall be made
from next availar 3 running bili or any other
claim and shall nôt bé deferred.
Clause 37: Refund of Security Deposit:
Security will be refunded after the expiry of
the periód as prescribed below :-
(a) In case of contract relating to hiring of trucks
and other T &P trasnporation including the loading
unloading of materials, the amount of Security
Deposit is refundable alon with the final bill
(b) Suppliers of material: As per privisions of the
G.F. & A.R.
(c) Ordinary repairs: 3 months after completion of
the work provided the final bili has been paid.
(d) Originál works/special repairs works: Security
deposit will be refunded six months after
completion, or expiry of oné full rámy season, or
after expiry of defect liability periód as defined in
the special condition of agreement, whichever is
later provided the final bili has been paid.]
(e) In čase of PWD originál works/special repairs
works costing more than Rs. 10.00 lacs, partial
amount of Security Deposit will be refunded during
the defect liability periód @ 10% of ŠD amount
after lapse of one year of completion and there
after 10% of originál amount of ŠD at the end of
each subsequent year. The remaining amount of
ŠD bé refunded after the expiry of defect
liability periód.
[2026:RJ-JP:20730] (68 of 106) [CW-8120/2025]
Clause 45: Price Variation Clause:
If, during the progress of the contract of value
exceeding Rs. 50 lackh (accepted tendered
amount minus cost of im supplied 'by the
department), and where stipulated
completion period'is more than 3 months
(both the conditions shoi fulfilled), the price,
of any
materials/bitumen/diesel/petrol/cement arid
steel incorporated'in the works (nôt being
materials supplied by the department) and/or
wages of labour- increases or decreases, as
compared to the price and/or wages prevail;
the last dáte of submission of bids the
amounts payable to contractors for the work
shall be adjusted for increase or decrease in
the rates of materials (excepting those
materials supplied y the
department)/labour/bitumen/diesel and
petrol/cement/steel.
'[Increase or decrease in the cost of labour
/material/bitcemen/diesel/petrol and cement steel
shall be calculated quarter accordance with the
following formula:]
Clause 46: Force Majeure:
Neither party shall be liable to each other, för any
loss or damage, occasioned by or arising out of acts
or God such-as unprecedented floods, volcanic
eruptions, earthquake of other invasion of nature
and other acts.
Clause 48: Post payment Audit & Technical
Examination:
The Government shall have right to cause an
audit and technical examination of the works,
and the final bills of the contractor, including
all supporting vouchers, abstracts etc., to be
made witha-years after payment of the final
bili, and if, as a result of Such audit and
technical examination, any súm is found to
have been over paid in respect of any work
done by the Contractor under the contract/or
any work claimed by him to have been done
by him under the contract and found not to
have been executed below specification, the
[2026:RJ-JP:20730] (69 of 106) [CW-8120/2025]
Contractor shall be liable to refund the
amount of over payment,, and it shall be
lawful för department to recover the same
from him in the manner prescribed in Clause
50 or in any other manner legally permissible
and if it is found that the contractor was paid
less than what was due to him under the
contract in respect of any work executed by
him under it, the amount of such under
payment shall be duly paid by the Government
to the Contractor.
Clause 50: Recovery from Contractors:
Whenever any claim against the Contractor
for the payment of a sum of money arises out
of or under the contract, the Department shall
be entitled to recover šuch súm bé
appropiating in part or whole of the
Performance Guarantiee and/or Sceruity
Deposit. Security Deposit at the time of enlistment
of the Contractor. In the event of the security being
insufficinet, or if no security has been taken,
therealfirt,, may become due to the Contractor,
under this or any other contract with the Governor
of Rajasthan. Should this súm bé nôt sufficient to
cover the full amount recoverable the Contractor
shall pay to he Department on demand the balance
remaining dues.
The department shall, further, háve the right to
effect such recoveries under Public Demands
Recovery Act."
30. On the basis of the material available on record, the
terms and conditions of the Contract Agreement, as well as the
original files produced by the respondent–JDA, the following
factual and legal aspects emerge for consideration:
30.1 It is borne out from the record that pursuant to the
Budget Declaration for the financial year 2021–2022, the Hon’ble
Chief Minister of the State, under the then existing Government,
envisaged development of the OTS Crossing, situated on the
[2026:RJ-JP:20730] (70 of 106) [CW-8120/2025]
prominent Jawahar Lal Nehru Marg (JLN Marg), Jaipur. The said
location, being one of the most congested traffic bottlenecks in the
city, was identified for comprehensive infrastructural intervention
with the avowed objective of ensuring signal-free movement of
traffic, easing congestion, and enhancing the aesthetic value of
the corridor.
30.2 In furtherance thereof, a tender came to be floated by
the Jaipur Development Authority (JDA) with an extensive and
composite scope of work, which, inter alia, included “Traffic
Improvement and beautification work at OTS Crossing, JLN Marg,
JDA Jaipur (Construction of suspended bridge, traffic island,
rotaries, underground art gallery, pedestrian pathways, sculptures,
fountains, improvement of existing drainage system and road
surface, etc.) on Engineering, Procurement and Construction
(EPC) basis.”
30.3 The nature of the project thus reflects that it was not
merely a construction contract but a holistic urban infrastructure
project conceived with both functional and aesthetic objectives.
30.4 The record further reveals that the total contract value
under the EPC mode was quantified at Rs. 184.30 Crores. The
Letter of Acceptance (LOA) was issued in favour of the petitioner
on 14.12.2022, followed by execution of the formal Contract
Agreement on 27.12.2022, governed by the General Conditions
(RPWR-100) and the Special Conditions forming part thereof.
30.5 As per the contractual stipulations, the date of
commencement of the work was fixed as 06.01.2023, with a
stipulated period of completion of 12 months, i.e., by 05.01.2024.
[2026:RJ-JP:20730] (71 of 106) [CW-8120/2025]
It is an admitted position that during the subsistence of the
contract, the respondent–JDA granted suo motu extension of time
up to 30.04.2024, without levy of any penalty.
30.6 However, prior to the expiry of the extended period, the
respondents issued a communication dated 24.04.2024,
purporting to withdraw the contract by invoking Clause 32 of the
Special Conditions of Contract, which constitutes the primary
cause of action for the present proceedings.
30.7 It is further noteworthy that subsequent to such
withdrawal, the respondents proceeded to release the petitioner’s
bank guarantees on 16.12.2024, unconditionally. The petitioner,
however, accepted the same under protest, thereby preserving its
right to challenge the underlying action.
31. The petitioner has, thus, approached this Court by way
of the present petitions, assailing the legality and validity of the
withdrawal of the work order dated 24.04.2024 as being arbitrary
and unsustainable; and challenging the subsequent issuance of a
fresh Notice Inviting Bid (NIB) dated 03.04.2025, to the extent it
pertains to preparation of a DPR for the OTS flyover project,
during the pendency of the earlier writ petition. In light of the
above factual matrix, it is evident that the first cause of action
arose upon issuance of the withdrawal letter dated 24.04.2024,
whereby the respondents unilaterally rescinded the contract. The
legality, justification, and sustainability of the said communication
thus assume central importance in the adjudication of the present
dispute. The contents of the said withdrawal letter dated
24.04.2024, being material for examining the decision-making
[2026:RJ-JP:20730] (72 of 106) [CW-8120/2025]
process and the reasons recorded therein, are reproduced
verbatim hereunder:
"The aforesaid work was awarded to you vide this
office Work Order No JDA/EE TR
Works-II/WO/2022-2023/Dec/01 dated
27.12.2022 amounting Rs. 1,84,30,00,000.00
with stipulated dates of commencement and
completion as 06.01.2023 and 05.01.2024
respectively. The work was not started during the
stipulated period and also cannot be taken-up as
per EPC stipulation due to site conditions and
various to reasons. Therefore, the competent
authority of JDA has taken action as per the
relevant clause of agreement (R.P.W.R. 100) and
decided to withdraw the whole work of "Traffic
improvement and beautification work at OTS
crossing JLN Marg, JDA, Jaipur (Construction
of suspended bridge, Traffic island, Rotaries,
Underground art gallery, Pedestrian pathway,
Sculpture, fountain, improvement of existing
drainage system and road surface, etc.) on
Engineering, Procurement and Construction
(EPC) basis" amounting to Rs. 18430.00 lakhs
under Clause-32 of the Contract Agreement
(R.P.W.R. 100)."
32. The subsequent cause of action arose during the
pendency of the earlier writ proceedings, upon issuance of a fresh
Notice Inviting Bids (NIB) dated 03.04.2025 (Annexure–1),
whereby the respondents initiated a new tendering process for
preparation of a Detailed Project Report (DPR), inter alia, covering
the development of the OTS flyover. The issuance of the said NIB
assumes significance for multiple reasons. Firstly, it pertains, at
least in part, to the very subject matter and geographical location
forming the basis of the earlier contract awarded to the petitioner.
Secondly, the initiation of a fresh tender process, without resolving
or lawfully terminating the existing contractual relationship, raises
[2026:RJ-JP:20730] (73 of 106) [CW-8120/2025]
serious concerns regarding the continuity, fairness, and
transparency of State action. It is the case of the petitioner that
the fresh NIB is not an independent or distinct project, but is
intrinsically connected with, and substantially overlaps the scope
of, the original contract, thereby rendering the same arbitrary and
legally unsustainable. The respondents, on the other hand, have
sought to justify the same as a policy decision based on a revised
DPR and altered project configuration. In these circumstances, the
issuance of the NIB dated 03.04.2025 constitutes a distinct and
recurring cause of action, giving rise to an independent challenge
in Writ Petition No. 8120/2025, while also having a direct bearing
on the legality of the earlier withdrawal of the petitioner’s
contract.
33. Consequently, for the purposes of clarity and procedural
convenience, this court proceed to frame the following issues for
its determination:
Issue No. 1: Whether the present petitions are maintain -
able, as the same revolve around a dispute which is con -
tractual in nature, and allegedly improper authorization of
the deponent?
34. The respondents have raised a preliminary objection
assailing the maintainability of the present writ petitions on two
counts: firstly, that the petition has not been instituted by a duly
authorized person on behalf of the petitioner-company; and
secondly, that the dispute arises out of a contractual relationship
and is, therefore, not amenable to writ jurisdiction.
[2026:RJ-JP:20730] (74 of 106) [CW-8120/2025]
(A) Objection regarding authorization of the deponent
35. Insofar as the first limb of objection is concerned, it
was contended that the writ petition has been filed by Mr. Ajai
Kumar Gupta, Managing Director of the petitioner–company,
without proper authorization. Upon consideration of the record,
this Court finds that the petitioner is a company, which is a juristic
person distinct from its shareholders and directors, and
necessarily acts through natural persons. It is not in dispute that
Mr. Ajai Kumar Gupta is not only a shareholder but also the
Managing Director of the petitioner-company and has executed
the contract in question on behalf of the company. A resolution
authorizing him in this regard has also been placed on record.
Thus, the legal position in this regard is no longer res integra, as
in the ratio encapsulated in United Bank of India vs. Naresh
Kumar, (1996) 6 SCC 660, it has been categorically held that
since a company is a juristic entity, pleadings on its behalf have to
be signed and verified by a competent person, and even in the
absence of initial authorization, such defect is curable and can be
ratified subsequently. Further, under Order XXIX Rule 1 of the
Code of Civil Procedure, a company is competent to authorize any
person to sign and verify pleadings on its behalf, and such
authorization need not necessarily be contemporaneous, but can
be established on record at any stage. Thence, in view of the
aforesaid settled legal position and the material available on
record, this Court is satisfied that the objection raised by the
respondents is purely technical in nature and stands duly cured.
Accordingly, the same is rejected.
[2026:RJ-JP:20730] (75 of 106) [CW-8120/2025]
(B) Objection regarding maintainability of writ petition in
contractual matters
36. The second limb of objection pertains to the
maintainability of the writ petition on the ground that the dispute
arises out of a contract. Albeit it is true that ordinarily disputes
arising out of contractual obligations are not entertained in writ
jurisdiction, the said rule is subject to well-established exceptions;
as where the action of the State or its instrumentalities is
arbitrary, violative of principles of natural justice, or involves a
public law element, the writ court would be justified in exercising
jurisdiction under Article 226 of the Constitution. In the present
case, it is not disputed that a validly executed EPC contract
existed between the parties. The grievance of the petitioner,
however, is not confined to mere enforcement of contractual
terms. Rather, the challenge is directed against the manner in
which the contract has been withdrawn.
37. The record reveals that the contract was withdrawn
vide order dated 24.04.2024, which is alleged to have been
passed ex parte, without affording any opportunity of hearing to
the petitioner. It was further contended that the invocation of
Clause 32 of the Special Conditions of Contract is misconceived
and dehors the contractual framework. Additionally, it has been
brought on record that extensions of time were granted by the
respondents, and bank guarantees were dealt with unilaterally,
indicating subsistence of the contractual relationship; the delay, if
any, was attributable to the respondents themselves; and
thereafter, a fresh tender was floated by altering and reducing the
[2026:RJ-JP:20730] (76 of 106) [CW-8120/2025]
scope of work, allegedly without safeguarding the petitioner’s
interests and without resorting to “risk and cost” provisions.
The petitioner has also invoked the doctrines of promissory
estoppel and legitimate expectation, asserting that the
respondents, having induced the petitioner to act upon the
contract and having permitted continuation of work through
extensions, could not have abruptly withdrawn the contract in an
arbitrary manner. The aforesaid facts, taken cumulatively,
demonstrate that the controversy involves allegations of
arbitrariness, lack of fairness, and violation of natural justice by a
State instrumentality, thereby introducing a clear public law
element into the dispute; and in such circumstances, this Court is
of the considered view that the present case falls within the
recognized exceptions where judicial review in contractual matters
is permissible. Accordingly, the writ petitions are held to be
maintainable. To extract more strength, this Court deems it
appropriate to assert reliance upon the ratio encapsulated in Tata
cellular v. Union of India: (1994) 6 SCC 651 , Sudhir Kumar
Singh (supra) and ABL International Ltd. (Supra). The
relevant portion of the Sudhir Kumar Singh (supra) is
reproduced as under:
"21. Dr Singhvi's preliminary objection as to Re-
spondent 1 having to approach a civil court, and
not a writ court, for actions that pertain to
breach of contract, need not detain us. In ABL
International Ltd. v. Export Credit Guarantee
Corpn. of India Ltd. [ABL International
Ltd. v. Export Credit Guarantee Corpn. of In -
dia Ltd., (2004) 3 SCC 553] , this Court held
[2026:RJ-JP:20730] (77 of 106) [CW-8120/2025]
that it was no longer res integra that a writ
petition under Article 226 of the Constitution
is maintainable at the instance of an ag -
grieved party to enforce a contractual oblig -
ation of the State or its instrumentality
when the State acts in an arbitrary manner,
as follows : (SCC pp. 564-67, paras 8-14)….
11. In Gujarat State Financial Corpn. v.
Lotus Hotels (P) Ltd. [Gujarat State
Financial Corpn. v. Lotus Hotels (P) Ltd.,
(1983) 3 SCC 379] this Court following an
earlier judgment in Ramana Dayaram
Shetty v. International Airport Authority of
India [Ramana Dayaram Shetty v.
International Airport Authority of India,
(1979) 3 SCC 489] held : (Gujarat State
Financial Corpn. case [Gujarat State
Financial Corpn. v. Lotus Hotels (P) Ltd.,
(1983) 3 SCC 379], SCC p. 380)
‘The instrumentality of the State which
would be “other authority” under Article 12
cannot commit breach of a solemn
undertaking to the prejudice of the other party
which acted on that undertaking or promise
and put itself in a disadvantageous position.
The appellant Corporation, created under the
State Financial Corporations Act, falls within
the expression of “other authority” in Article
12 and if it backs out from such a promise, it
cannot be said that the only remedy for the
aggrieved party would be suing for damages
for breach and that it could not compel the
Corporation for specific performance of the
contract under Article 226.’
22. This principle in ABL International Ltd.
[ABL International Ltd. v. Export Credit
Guarantee Corpn. of India Ltd., (2004) 3 SCC
553] has been consistently upheld by this
[2026:RJ-JP:20730] (78 of 106) [CW-8120/2025]
Court in Noble Resources Ltd. v. State of Orissa
[Noble Resources Ltd. v. State of Orissa,
(2006) 10 SCC 236], para 15; Food Corpn. of
India v. SEIL Ltd. [Food Corpn. of India v.
SEIL Ltd., (2008) 3 SCC 440], para 16;
Central Bank of India v. Devi Ispat Ltd.
[Central Bank of India v. Devi Ispat Ltd.,
(2010) 11 SCC 186: (2010) 4 SCC (Civ) 401],
para 28; and Surya Constructions v. State of
U.P. [Surya Constructions v. State of U.P.,
(2019) 16 SCC 794], para 3.
43. Judged by the touchstone of these tests, it
is clear that Respondent 1 has been completely
in the dark so far as the cancellation of the
award of tender in his favour is concerned, the
audi alteram partem rule having been breached
in its entirety. As has been correctly argued by
Shri Rakesh Dwivedi, prejudice has indeed been
caused to his client, not only from the fact that
one year of the contract period has been taken
away, but also that, if the impugned High Court
judgment [Sudhir Kumar Singh v. State of U.P.,
2019 SCC OnLine All 5798] is to be set aside
today, his client will be debarred from bidding
for any of the Corporation's tenders for a period
of three years.
45.We, therefore, uphold the impugned judg-
ment [Sudhir Kumar Singh v. State of U.P., 2019
SCC OnLine All 5798] of the High Court on the
ground that natural justice has indeed been
breached in the facts of the present case, not
being a case of admitted facts leading to the
grant of a futile writ, and that prejudice has in-
deed been caused to Respondent 1. In view of
this finding, there is no need to examine the
[2026:RJ-JP:20730] (79 of 106) [CW-8120/2025]
other contentions raised by the parties before
us."
Issue No. 2 – Whether the invocation of Clause 32 of the
Special Conditions of Contract and consequent withdrawal
of the contract is legally sustainable in the facts of the
present case?
38. This Court has carefully perused the impugned order of
withdrawal as well as Clause 32 of the Special Conditions of
Contract. A conjoint reading of the same indicates that invocation
of Clause 32 is not unfettered, but is conditioned upon the
existence of certain foundational requirements. The following
ingredients must necessarily be satisfied before resorting to such
drastic action:
(i) existence of a justifiable and valid reason;
(ii) failure on the part of the contractor to maintain the stipulated
progress of work;
(iii) lapse or default attributable to the contractor in execution of
any part of the work;
(iv) issuance of a specific notice in writing calling upon the
contractor to remedy such default and failure to comply therewith;
(v) consequent engagement of another agency for execution of
the work;
(vi) continuation of the work in public interest through such
alternate agency; and
(vii) invocation of “risk and cost” provisions, including recovery of
losses occasioned due to such default from the contractor.
[2026:RJ-JP:20730] (80 of 106) [CW-8120/2025]
39. Upon a meticulous examination of the record,
particularly the note-sheets spanning from the year 2023 till
20.04.2024, it emerges that although reasons were recorded for
withdrawal of the contract, the same were not attributable to any
default on the part of the petitioner. On the contrary, the material
on record demonstrates that the impediments in execution arose
on account of factors beyond the control of the petitioner, inter
alia, including operation of the Model Code of Conduct, which
restrained decision-making by the authorities; objections and
protests raised by MNIT, OTS; difficulties in shifting of the Bisalpur
pipeline; requirement of felling of a substantial number of trees;
and proposed alteration in the scope of work, which, as per the
respondents themselves, was not permissible under the EPC
framework. These circumstances clearly indicate that the delay, if
any, was institutional and administrative in nature, and cannot be
fastened upon the petitioner.
40. It is further noteworthy that the petitioner was granted
extension of time suo motu by the respondents, without
imposition of any liquidated damages or penalty, as contemplated
under the relevant contractual clauses. Even more significantly,
after withdrawal of the contract, the bank guarantees furnished by
the petitioner were released without any deduction or adjustment
towards alleged losses. Such conduct on the part of the
respondents unequivocally establishes that the petitioner was not
treated as being in default; no loss was attributed to the
petitioner; and thus the essential preconditions for invoking
Clause 32, particularly those relating to default and risk-and-cost
[2026:RJ-JP:20730] (81 of 106) [CW-8120/2025]
consequences, were conspicuously absent. Withal, in the absence
of these foundational requirements, the invocation of Clause 32
stands vitiated and unsustainable in law.
41. This Court likewise finds substance in the contention of
the petitioner that the stand now sought to be advanced by the
respondents is contrary to their own record; as the note-sheets
and contemporaneous correspondence, including letters dated
25.03.2023, 12.06.2024 addressed to the Chief Secretary,
communications from MNIT, the extension granted on 04.01.2024,
extending the contract till 30.04.2024, and the release of bank
guarantees on 29.07.2024, collectively demonstrate that the delay
was not attributable to the petitioner. It is a settled principle of
law that the validity of an administrative order must be judged on
the basis of the reasons contained therein and cannot be
supplemented by fresh reasons at a later stage. In this regard,
reliance is appositely placed on the principle laid down in
Mohinder Singh Gill (supra) , wherein it has been held that an
order must stand or fall on the reasons contained in it, and cannot
be improved upon subsequently, for orders “are not like old wine
becoming better as they grow older.” The relevant extract
therefrom is reiterated hereinbelow:
“8. The second equally relevant matter is
that when a statutory functionary makes an
order based on certain grounds, its validity
must be judged by the reasons so mentioned
and cannot be supplemented by fresh
reasons in the shape of affidavit or
otherwise. Otherwise, an order bad in the
beginning may, by the time it comes to
court on account of a challenge, get
validated by additional grounds later
[2026:RJ-JP:20730] (82 of 106) [CW-8120/2025]
brought out. We may here draw attention
to the observations of Bose, J. in
Gordhandas Bhanji [Commr. of
Police, Bombay v. Gordhandas Bhanji,
1951 SCC 1088 : AIR 1952 SC 16]:
“Public orders, publicly made, in
exercise of a statutory authority cannot
be construed in the light of explanations
subsequently given by the officer
making the order of what he meant, or
of what was in his mind, or what he
intended to do. Public orders made by
public authorities are meant to have public
effect and are intended to affect the actings
and conduct of those to whom they are
addressed and must be construed objectively
with reference to the language used in the
order itself.”
Orders are not like old wine becoming better
as they grow older.”
(Emphasis supplied)
42. In view of the aforesaid analysis, this Court holds that
the invocation of Clause 32 and the consequent withdrawal of the
contract is arbitrary, dehors the contractual framework, and
unsustainable in law, the essential preconditions for its invocation
having not been satisfied.
43. However, the pleadings in the reply affidavit and the
submissions advanced on behalf of the respondents by the Officer
In-charge Shri Sanjeevan Jain, and learned counsel representing
for and on behalf of JDA, qua the above-discussed appear to be an
afterthought and a misrepresentation of the factual position as
borne out from the official record. This Court cannot remain
oblivious to the conduct of the officers of the respondent–authority
and the submissions advanced on their behalf, which are found to
be contrary to the contemporaneous record and the contractual
[2026:RJ-JP:20730] (83 of 106) [CW-8120/2025]
framework governing the parties. Such conduct, particularly on
the part of a State instrumentality, deserves to be viewed
seriously and is accordingly taken note of adversely.
Issue No. 3 – Whether the Doctrines of Promissory
Estoppel and Legitimate Expectation be applicable in the
prevailing circumstances?
44. From the material placed on record, it stands
established that the petitioner, acting upon the assurances flowing
from a duly executed and legally enforceable EPC contract, had
altered its position to its detriment. The petitioner had mobilized
substantial resources, undertaken surveys, prepared drawings and
designs, procured materials to the extent of approximately Rs. 20
crores and incurred overall financial expenditure of nearly Rs. 40
crores in furtherance of the project. In such circumstances, the
principles of promissory estoppel and the doctrine of legitimate
expectation are clearly attracted. The respondents, having induced
the petitioner to act upon the contract and having permitted
continuation of the project over a considerable period, cannot be
permitted to resile from their promise in an arbitrary and
unilateral manner. The justification sought to be advanced by the
respondents, including change in Government or administrative
difficulties in execution of the project, cannot absolve them of
their obligations under a concluded and binding contract, as it is
well settled that State action must be informed by fairness,
reasonableness and non-arbitrariness, and the State cannot be
[2026:RJ-JP:20730] (84 of 106) [CW-8120/2025]
permitted to wriggle out of its contractual commitments on
extraneous or political considerations.
45. Thence, the impugned action of withdrawal of the
contract, coupled with the issuance of a fresh tender for
preparation of DPR, clearly indicates that the decision is not
founded on any contractual default attributable to the petitioner,
but is rather a consequence of a change in policy coinciding with
change in Government. Such action, in the considered opinion of
this Court, is arbitrary, capricious and violative of Article 14 of the
Constitution of India, and falls foul of the mandate governing
“State” under Article 12. In this regard, reliance placed by the
petitioner on the judgments in IFGL Refractories Ltd. (supra),
U.P. Power Corporation Ltd. (supra), and Sivanandan C.T.
(supra), is well-founded, as the said authorities reiterate that the
State and its instrumentalities are bound by the doctrines of
fairness, promissory estoppel and legitimate expectation, and
cannot act to the prejudice of a party who has altered its position
based on a representation or promise. Accordingly, the present
issue is answered in favor of the petitioner. Relevant portion of the
above said judgments can be summarized by reproducing the
relevant extract of the judgment IFGL Refractories Ltd.
(supra), which is as under:
“115. According to this Court, the true
principle of promissory estoppel seemed
to be that where one party has, by his
words or conduct, made to the other a
clear and unequivocal promise which is
intended to create legal relations or effect
[2026:RJ-JP:20730] (85 of 106) [CW-8120/2025]
a legal relationship to arise in the future,
knowing or intending that it would be
acted upon by the other party to whom
the promise is made. Where it is in fact so
acted upon by the other party, the
promise would be binding on the party
making it, and he would not be entitled
to go back upon it, if it would be
inequitable to allow him to do so, having
regard to the dealings which have taken
place between the parties. This would be
so irrespective of whether there is any pre-
existing relationship between the parties or
not.
116. It was further observed that it is not
necessary, in order to attract the applicability
of the doctrine of promissory estoppel, that
the promisee, acting on the promise, should
suffer any detriment. What is necessary is
only that the promisee should have
altered his position in reliance on the
promise. This Court was of the view that
the doctrine of promissory estoppel is
also applicable against the government,
where the government makes a promise
knowing or intending that it would be
acted upon by the promisee. Where, in
fact, the promisee, acting on it, alters his
position, the government would be held
bound by the promise. The promise would be
enforceable against the government at the
instance of the promisee, notwithstanding
that there is no consideration for the promise
and the promise is not recorded in the form
of a formal contract.
……..
[2026:RJ-JP:20730] (86 of 106) [CW-8120/2025]
133. This litigation is a fine specimen of the
bureaucratic lethargy. It is this bureaucratic
lethargy which gave rise to this long drawn
litigation. This Court in many of its decisions
has reminded various State Governments
that if the object of formulating the industrial
policy is to encourage investment,
employment and growth, the bureaucratic
lethargy of the State apparatus is clearly a
factor which will discourage
entrepreneurship.”
(Emphasis supplied)
Issue No. 4 - Nature, Scope, and Validity of the power
exercised under Clause 32 of the Contract by the
respondents:
47. In the present case, this Court finds that the delay in
execution of the project is not attributable to the petitioner, but is
squarely traceable to the respondents themselves. A bare perusal
of the impugned order dated 24.04.2024, purportedly issued
under Clause 32 of the Special Conditions of Contract, reveals that
no specific fault or breach has been imputed to the petitioner. The
impugned order employs vague and non-specific expressions such
as “site conditions” and “various reasons”, without delineating any
concrete default on the part of the petitioner. Such generalized
observations, in the absence of any specific finding of breach, fall
short of the requirements necessary for invoking a penal
contractual clause like Clause 32. On the contrary, the
contemporaneous record, including the note-sheets and official
correspondence placed before this Court ( inter alia,
[2026:RJ-JP:20730] (87 of 106) [CW-8120/2025]
communications addressed by the respondent–JDA to the Chief
Secretary; objections and correspondence emanating from MNIT,
OTS; difficulties in acquisition and handing over of clear and
encumbrance-free site; and other infrastructural and
administrative constraints affecting execution ), unequivocally
establishes that the impediments in execution existed from the
very inception of the contract till its withdrawal, and were entirely
beyond the control of the petitioner. The cumulative effect of
these documents clearly attributes the delay to systemic and
administrative shortcomings on the part of the respondent-JDA,
rather than any lapse on the part of the petitioner.
47. It is a settled principle that where delay is attributable
to the employer, the contractor cannot be penalized for non-
performance within the stipulated time . The absence of any
allegation of default, coupled with the existence of documented
impediments attributable to the respondents, renders the
invocation of Clause 32 wholly untenable. In this backdrop, it
becomes apposite to refer to the relevant provisions of the bid
document, particularly those contained in Schedule ‘C’ (Annexure–
3), which govern the obligations of the employer in providing
requisite site conditions and facilitating execution of the work. The
said clauses, which have a direct bearing on the issue at hand, are
reproduced hereunder:
“SCHEDULE C. – LIST OF DRAWINGS
TO BE SUPPLIED BY THE BIDDER
A.The successful bidder has to submit at
least three conceptual plans for the project
before the JDA committee and the committee
reserves the right for approval of plan.
[2026:RJ-JP:20730] (88 of 106) [CW-8120/2025]
B.The successful bidder has to submit the
planning and working drawings of approved
plan and finally to be vetted from MNIT/IIT
at his own cost. The structural design should
be prepared using latest software. The same
will need approval by JDA before execution.
C.The successful bidder must note that all
activities related to project must be completed
within 12 months of speculated period”
A condition for approval under the heading '"Scope of work &
specification" sub heading "Super-Structure" (Annexure-3) of the
Contract Agreement, which is reproduced as under:-
“SUPER STRUCTURE
1. The super structure shall be steel
based plate or composite girder of
grade E350 BR steel, preferably precast
and/or with sacrificial shuttering. The
make of steel plates can only be
SAIL/JINDAL/TATA STEEL. The contractor
shall be responsible for preparation of
QAP/WPSS and preliminary fabrication
drawings. After the preparation of these
documents, they shall be duly checked
and approved or get proof checked
from IIT/reputed institutions
empanelled consultant as approved by
EIC at his own cost and got approved
by JDA prior to use. Any direction by JDA
shall be incorporated as regards the same.
…..
21. All fabrication of structural steel work
should be carried out by Research Designs
and Standards Organization (RDSO) approved
vendors.”
48. The contractual framework, particularly the
aforementioned clauses as contained in Schedule ‘C’ (Annexure–
3), casts an obligation upon the employer to provide requisite site
conditions and facilitate unhindered execution of the work. Failure
[2026:RJ-JP:20730] (89 of 106) [CW-8120/2025]
on the part of the employer to discharge these foundational
obligations cannot be used as a ground to penalize the contractor.
Thus, in the present case, the material on record unmistakably
establishes that the respondents themselves failed to provide the
necessary conditions for execution of the project. Consequently,
the petitioner cannot be held responsible for non-achievement of
progress within the stipulated timeline.
49. In view of the aforesaid analysis, this Court holds that
the delay in execution of the contract is squarely attributable to
the respondents, and not to the petitioner. The essential
precondition for invoking Clause 32, namely default or failure on
the part of the contractor, being absent, the action of the
respondents in withdrawing the contract is rendered arbitrary,
unjustified, and contrary to the contractual provisions.
50. It is further noteworthy, that the contractual matrix
governing the parties unequivocally establishes that the obligation
to provide a clear, encumbrance-free site vested solely with the
respondent–JDA. The “Summary of Work” and the relevant clauses
of the Special Conditions of Contract make it abundantly clear that
the petitioner’s obligations were contingent upon the respondents
first fulfilling their foundational duties, namely:
(i)making available the land,
(ii)ensuring a clean and obstruction-free site, and
(iii)facilitating approvals of drawings and designs within a
reasonable time frame.
51. The record further demonstrates that the petitioner
had, in fact, diligently performed its reciprocal obligations. The
[2026:RJ-JP:20730] (90 of 106) [CW-8120/2025]
drawings and designs were prepared and submitted for approval;
procurement of steel was undertaken strictly from approved
manufacturers; and substantial mobilization of resources was
effected. However, the corresponding approvals and site
facilitation, which were prerequisites for meaningful execution,
remained pending due to administrative and institutional
constraints attributable to the respondents. The contemporaneous
correspondence forming part of the note-sheet assumes critical
importance. The letters exchanged between the parties, including
Annexure–13 i.e. letter dated 04.01.2024, whereby extension of
time was granted unilaterally without imposition of liquidated
damages, constitute a clear and unequivocal acknowledgment by
the respondents that the delay was not attributable to the
petitioner. This Court is of a stern view that in contractual
jurisprudence, such conduct amounts to a waiver of alleged
breach and operates as an admission against the employer .
Further, the petitioner’s representation/letter (Annexure–15)
seeking price variation upon extension of time reinforces the
position that the contract was treated as subsisting by both
parties. The respondents neither rejected the continuation of the
contract on grounds of default nor invoked any penal provisions
contemporaneously. Therefore, the fact of considerable
significance is that the respondents returned the bank guarantees
furnished by the petitioner without invoking Clauses 2, 3, and/or
37 of the Special Conditions of Contract, which otherwise provide
for consequences in the event of contractor default. This omission
is not merely procedural but substantive in nature, it thus,
[2026:RJ-JP:20730] (91 of 106) [CW-8120/2025]
unequivocally establishes that no breach or default was ever
crystallized against the petitioner.
52. In such circumstances, the subsequent invocation of
Clause 32 for withdrawal of work is ex facie inconsistent with the
prior conduct of the respondents and is legally untenable. A
contracting authority cannot approbate and reprobate, having
treated the contract as valid and subsisting, it cannot later
attribute delay to the contractor without any intervening material
change. This Court also finds substance in the petitioner’s
contention that the issuance of a fresh Notice Inviting Bid (NIB)
for preparation of a new DPR for the very same project is
manifestly arbitrary. The record does not disclose any rational or
technical basis necessitating a fresh DPR. On the contrary, the
material indicates that the core objectives of the project i.e.
decongestion of traffic, seamless flow, and enhancement of
aesthetic value of JLN Marg-remained unchanged across the
relevant period. In consequence, the attempt of the respondents
to draw a distinction between the projects of the years 2021–22
and 2024–25 is not borne out from any contemporaneous record.
Such a plea appears to be an afterthought devised to justify an
otherwise arbitrary decision, particularly when no substantive
alteration in scope, alignment, or purpose has been demonstrated.
53. Consecutively, it is equally germane to jot down that
the abrupt abandonment of the ongoing contractual process,
despite the petitioner having invested an amount exceeding Rs. 40
crores and the contract itself having been extended for a period of
two years, is not only inequitable but also violative of the
[2026:RJ-JP:20730] (92 of 106) [CW-8120/2025]
principles of fairness and reasonableness which govern State
action under Article 14 of the Constitution. The legal position in
this regard stands settled by the judgment of the Hon’ble
Supreme Court in K. Shyam Sunder (supra), wherein it has
been held that a change in government or policy cannot, by itself,
be a ground to annul or disturb a concluded and legally
enforceable contract, unless it is demonstrated that the earlier
decision was contrary to statutory provisions or against public
interest. The relevant extract from the ratio encapsulated in K.
Shyam Sunder (supra), is reproduced hereinbelow:
"35. Thus, it is clear from the above, that
unless it is found that act done by the
authority earlier in existence is either
contrary to statutory provisions, is
unreasonable, or is against public interest,
the State should not change its stand merely
because the other political party has come
into power. Political agenda of an
individual or a political party should not
be subversive of rule of law.”
(Emphasis laid)
54. The same has also been held in the dictum enunciated
in Shishir Realty Pvt. Ltd. (supra). The relevant portion of the
same is reproduced as under:-
"61. When a contract is being evaluated,
the mere possibility of more money in
the public coffers, does not in itself
serve public interest. A blanket claim by
the State claiming loss of public money
cannot be used to forego contractual
obligations, especially when it is not
based on any evidence or examination.
The larger public interest of upholding
contracts and the fairness of public
authorities is also in play. The courts need to
[2026:RJ-JP:20730] (93 of 106) [CW-8120/2025]
have a broader understanding of public
interest, while reviewing such contracts.
…
63. Similarly, this Court in A.P. Dairy
Development Corpn. Federation v. B.
Narasimha Reddy [A.P. Dairy Development
Corpn. Federation v. B. Narasimha Reddy,
(2011) 9 SCC 286] held as under : (SCC p.
306, para 40)
“40. In the matter of the Government of
a State, the succeeding Government is
duty-bound to continue and carry on the
unfinished job of the previous
Government, for the reason that the
action is that of the “State”, within the
meaning of Article 12 of the
Constitution, which continues to subsist
and therefore, it is not required that the
new Government can plead contrary to
the State action taken by the previous
Government in respect of a particular
subject. The State, being a continuing body
can be stopped from changing its stand in a
given case, but where after holding enquiry it
came to the conclusion that action was not in
conformity with law, the doctrine of estoppel
would not apply. Thus, unless the act
done by the previous Government is
found to be contrary to the statutory
provisions, unreasonable or against
policy, the State should not change its
stand merely because the other political
party has come into power . ‘Political
agenda of an individual or a political party
should not be subversive of rule of law.’
The Government has to rise above the nexus
of vested interest and nepotism, etc. as the
principles of governance have to be tested
on the touchstone of justice, equity and fair
play.”
(emphasis supplied)
55. Further, upon a comprehensive perusal of the
contractual stipulations, this Court is of the considered view that
[2026:RJ-JP:20730] (94 of 106) [CW-8120/2025]
the existing contract itself provided sufficient flexibility to
accommodate necessary modifications. It is evident that justifiable
and material alterations in the scope of work could have been
undertaken, particularly if such changes were effected in a timely
manner and upon due consideration of expert opinion. Notably,
the appointed consultant under the contract continued to remain
engaged and available for such evaluative inputs. The contractual
framework, in fact, envisaged stage-wise execution and
corresponding payments, coupled with sub-categorization of work
components. In such a scenario, it was well within the domain of
the respondents to restructure, reduce, or expand the scope of
work, and to proceed with execution in a phased manner, rather
than abandoning the contract in its entirety. Moreover, a specific
clause under the Special Conditions of Contract expressly
contemplates variation, alteration, or modification of the
contractual scope, even stipulating that no additional
compensation would be payable on such account. This clearly
indicates that the contract was designed to be adaptable to
evolving project requirements. Consequently, any required
adjustments could have been mutually deliberated and resolved
between the parties, without resorting to termination or
withdrawal.
56. This position finds support from the judgment in
enunciated in Yash Construction Company v. The Secretary,
Ministry of Road Transport and Highways (MoRT & H), Writ
Petition No. 9620/2022 , decided on 16.12.2022, wherein it has
been recognized that modifications in contractual scope, where
[2026:RJ-JP:20730] (95 of 106) [CW-8120/2025]
contractually permissible, ought to be addressed within the
framework of the existing agreement rather than leading to its
abrupt discontinuation. The relevant extract from the said ratio is
reiterated hereinbelow:
“23.To sum up, the decision of the
respondents to abort the process of
tender wherein the Petitioners were the
successful L1 bidders on the sole ground
that the notice inviting tender stipulated 24
months as the period for completion of the
work instead of 18 months and even when
the petitioners expressed their
readiness and willingness to complete
the work at the same cost offered by
them which does not suffer from the sin
of post tender negotiations, the
decisions of the respondents is clearly
arbitrary and would lead to a loss of
public money. The cases are fit to be
interfered with.”
(emphasis supplied)
57. It is also opined that when a contract is entered into
between the State or its instrumentalities and a private party upon
a duly concluded tender process, any dispute arising out of such
contractual relationship does not entirely oust the jurisdiction of
this Court under judicial review. It is well-settled that the actions
of the State, even in contractual matters, must withstand the test
of fairness, reasonableness, and non-arbitrariness, as enshrined
under Article 14 of the Constitution of India. Thus, the State
cannot be permitted to cloak arbitrary or unreasonable conduct
behind the mere existence of a contract, nor can it evade judicial
scrutiny on the specious plea of availability of alternate remedies.
The doctrine of fairness permeates all State actions, and
contractual dealings are no exception, particularly where such
[2026:RJ-JP:20730] (96 of 106) [CW-8120/2025]
actions bear a public law element. In exercising the power of
judicial review, this Court is therefore required to examine
whether the decision-making process adopted by the State is just,
transparent, and free from arbitrariness, and not merely whether
the action is in strict conformity with the terms of the contract.
The presence of contractual stipulations or dispute resolution
mechanisms does not denude this Court of its constitutional
obligation to ensure adherence to the mandate of Article 14.
58. In this regard, reliance is placed upon the celebrated
judgment of Subodh Kumar Singh (supra), wherein it has been
held that State action in contractual matters remains amenable to
judicial review, particularly when it is demonstrated that such
action is arbitrary, unfair, or actuated by extraneous
considerations, notwithstanding the existence of contractual
remedies. The relevant extract of the said judgment is reproduced
hereinbelow:
"126. The sanctity of public tenders lies in
their role in upholding the principles of equal
opportunity and fairness. Once a contract
has come into existence through a valid
tendering process, its termination must
adhere strictly to the terms of the
contract, with the executive powers to be
exercised only in exceptional cases by the
public authorities and that too in loathe.
The courts are duty bound to zealously
protect the sanctity of any tender that has
been duly conducted and concluded by
ensuring that the larger public interest of
upholding bindingness of contracts are
[2026:RJ-JP:20730] (97 of 106) [CW-8120/2025]
not sidelined by a capricious or arbitrary
exercise of power by the State. It is the
duty of the courts to interfere in
contractual matters that have fallen prey
to an arbitrary action of the authorities in
the guise of technical faults, policy
change or public interest, etc.
127. The sanctity of contracts is a
fundamental principle that underpins the
stability and predictability of legal and
commercial relationships. When public
authorities enter into contracts, they
create legitimate expectations that the
State will honour its obligations.
Arbitrary or unreasonable terminations
undermine these expectations and
erode the trust of private players from
the public procurement processes and
tenders. Once a contract is entered,
there is a legitimate expectation that
the obligations arising from the contract
will be honoured and that the rights
arising from it will not be arbitrarily
divested except for a breach or non-
compliance of the terms agreed
thereunder. In this regard we may make a
reference to the decision of this Court in
Sivanandan C.T. v. High Court of Kerala
wherein it was held that a promise made by a
public authority will give rise to a legitimate
expectation that it will adhere to its
assurances.
….
130. Cancellation of a contract
deprives a person of his very valuable
rights and is a very drastic step, often
[2026:RJ-JP:20730] (98 of 106) [CW-8120/2025]
due to significant investments having
already been made by the parties
involved during the subsistence of the
contract. Failure on the part of the
courts to zealously protect the binding
nature of a lawful and valid tender
would erode public faith in contracts
and tenders. Arbitrary terminations of
contract create uncertainty and
unpredictability, thereby discouraging
public participation in the tendering
process. When private parties perceive that
their contractual rights can be easily
trampled by the State, they would be
dissuaded from participating in public
procurement processes which may have a
negative impact on such other public-private
partnership ventures and ultimately it is the
public who would have to bear the brunt
thereby frustrating the very object of public
interest.
131.We caution the public authorities to
be circumspect in disturbing or wriggling out
of its contractual obligations through means
beyond the terms of the contract in exercise
of their executive powers. We do not say for
a moment that the State has no power to
alter or cancel a contract that it has entered
into. However, if the State deems it
necessary to alter or cancel a contract
on the ground of public interest or
change in policy then such
considerations must be bona fide and
should be earnestly reflected in the
decision-making process and also in the
final decision itself. Otherwise, it would
[2026:RJ-JP:20730] (99 of 106) [CW-8120/2025]
have a very chilling effect as
participating and winning a tender
would tend to be viewed as a situation
worse than losing one at the threshold.”
(emphasis supplied)
CONCLUSION:
59. In addition to the findings recorded hereinabove, this
Court deems it appropriate to observe that the present writ
petitions are maintainable inasmuch as the challenge laid is not to
a mere contractual dispute but to the arbitrary and unreasonable
exercise of State power, thereby attracting the rigours of Article 14
of the Constitution of India. The decision making process adopted
by the respondents fails to satisfy the settled parameters of
judicial review, being vitiated by non-application of mind,
disproportionality, and manifest unreasonableness, particularly
when less drastic alternatives such as modification of scope,
phased execution, or contractual adjustments, were admittedly
available under the contract itself. The contemporaneous record
further establishes that the respondents, by granting extensions
without levy of liquidated damages, returning bank guarantees,
and permitting continued performance, had effectively waived any
alleged default and induced legitimate expectation in favour of the
petitioner, who, acting upon such representation, altered its
position by making substantial financial investments. The
subsequent attempt to attribute delay to the petitioner is thus hit
by the doctrines of promissory estoppel and waiver, and cannot be
countenanced.
[2026:RJ-JP:20730] (100 of 106) [CW-8120/2025]
60. Further, the abrupt abandonment of the subsisting
contract and initiation of a fresh DPR process, in absence of any
documented policy change or technical justification, is not only
arbitrary but also indicative of malice in law, being founded on
extraneous considerations rather than public interest. The
respondents have failed to demonstrate that such action advances
any larger public good; rather, the same results in avoidable delay,
escalation of costs, and wastage of public resources, thereby
failing the test of proportionality. This Court also finds that the
impugned action is contrary to the principles governing State
contracts, as the petitioner has approached this Court with clean
hands and established its continuous readiness and willingness to
perform, while the respondents’ own record belies their stand
taken before this Court, rendering their defence unsustainable.
61. It is noteworthy that this Court has rendered its
findings strictly on the basis of contemporaneous official record
produced by the respondents themselves, and not on disputed
questions of fact, thereby obviating the necessity of relegating the
petitioner to an alternate remedy. The record, particularly the
internal note-sheets of the respondent–authority, unmistakably
reflects an admission on the part of the State that the withdrawal
of the contract was occasioned on account of site-related
constraints and other administrative reasons, none of which can
be attributed to the petitioner. It is hereby opined that from the
very inception of the contract, the petitioner was kept uninformed
of the material impediments affecting execution, on the contrary,
encouraged to proceed with mobilization, resulting in substantial
[2026:RJ-JP:20730] (101 of 106) [CW-8120/2025]
investment in machinery, manpower, and procurement of
materials. Despite the existence of contractual provisions
permitting alteration or modification of scope of work, the
respondents, for reasons best known to them, failed to exercise
such enabling provisions; and instead of adopting a pragmatic and
legally permissible course of restructuring the project, the
respondents proceeded to abruptly terminate a legally enforceable
contract by erroneously invoking Clause 32 of the contract, and
this Court is of an opinion that invocation of Clause 32 without
determination of default renders the action void ab initio, as also
addressed in details hereinabove; and that the same was wholly
inapplicable in the absence of any contractor default.
62. What further compounds the arbitrariness of the
respondents’ conduct is the immediate issuance of a fresh tender
for preparation of a DPR qua the same OTS flyover project,
without disclosing any rational basis or change in circumstances
warranting such action. This decision, viewed in light of the
existing contractual framework and the petitioner’s ongoing
performance, is manifestly arbitrary and indicative of non-
application of mind. The submissions advanced on behalf of the
respondents attributing delay and non-performance to the
petitioner stand squarely contradicted by their own record,
including the note-sheets and official correspondence placed
before this Court. Such conduct not only undermines the
credibility of the decision-making process but also borders upon
misrepresentation before the Court. From the material placed on
record, it prima facie emerges that the withdrawal of the contract
[2026:RJ-JP:20730] (102 of 106) [CW-8120/2025]
was influenced by extraneous considerations, including the need
to accommodate objections raised by certain institutions such as
MNIT and OTS, as well as other influential stakeholders. The
consequential decision to alter the project configuration, inter alia,
reducing the flyover capacity from eight lanes to six lanes and
eliminating service roads, further demonstrates a departure from
the original project objectives, thereby frustrating the very
purpose for which the contract was awarded. In light of the
foregoing analysis, this Court is of the considered opinion that the
impugned action of the respondents is arbitrary, unreasonable,
and violative of Article 14 of the Constitution of India, and the
principle of legitimate expectation, and cannot be sustained in law.
DIRECTIONS:
63. The writ petitions are accordingly allowed in terms of
the prayers made, with the following directions:
63.1 The impugned order dated 24.04.2024, issued under
Clause 32 of the Special Conditions of Contract, is hereby quashed
and set aside.
63.2 The Notice Inviting Bid (NIB/NIT) for preparation of
DPR, to the extent it pertains to the OTS flyover project, is also
quashed.
63.3 The petitioner shall get all consequential benefits, and it
be entitled to pursue its lawful claims arising out of the contract in
accordance with law.
63.4 The respondents are directed to proceed with the
execution of the project forthwith, in accordance with the
subsisting contract, and to take all necessary steps to ensure its
[2026:RJ-JP:20730] (103 of 106) [CW-8120/2025]
timely completion. While doing so, the respondents shall duly
consider price variation, contractual adjustments, and other
permissible claims, in accordance with law and the terms of the
contract.
63.5 The respondents shall also ensure that the project is
implemented in its true spirit, in alignment with the policy vision
reflected in the State Budget announcements for the years 2021–
2022 and 2024–2025.
64. This Court further deems it necessary to direct an
inquiry into the decision-making process leading to the withdrawal
of the contract, in view of the glaring inconsistencies between the
stand taken by the respondents before this Court and the
contemporaneous official record, including the note-sheets and
internal communications. The material placed on record prima
facie discloses that the impugned decision was not founded upon
any objective assessment of contractual breach, but was instead
influenced by extraneous considerations and administrative lapses,
thereby resulting in arbitrary exercise of power. This Court is of a
stern view that in matters involving public contracts, the State and
its instrumentalities are under a heightened obligation to act in a
fair, transparent, and accountable manner, particularly when
decisions entail significant financial implications and affect public
interest. The present case reveals that despite the availability of
lawful and contractual alternatives, the respondents chose to
adopt a course which not only defeated a subsisting contract, but
also led to potential loss to the public exchequer and delay in
execution of a project of public importance. Further, the fact that
[2026:RJ-JP:20730] (104 of 106) [CW-8120/2025]
the respondents have advanced submissions before this Court
which are not borne out from their own record raises serious
concerns regarding the integrity of the decision making process;
and it is opined that such conduct, if left unchecked, would erode
public confidence in administrative functioning and undermine the
rule of law.
65.This Court further considers it apposite to underscore that
while the State is entitled to act in furtherance of sovereign and
public interest, such doctrine cannot be invoked as a carte blanche
to justify actions which are otherwise arbitrary, disproportionate,
or unsupported by the record. The doctrine of sovereign interest,
read in conjunction with the principles of public trust, fairness in
administrative action, and accountability, mandates that every
decision of the State must demonstrably serve a legitimate public
purpose and withstand judicial scrutiny on the touchstone of
Article 14 of the Constitution of India. Any departure from an
existing contractual obligation must therefore be founded upon
cogent, transparent, and bona fide considerations, and not on
extraneous or undisclosed factors. Simultaneously, this Court
deems it necessary to observe that the Officer-in-Charge
representing the department before the Court bears a solemn
responsibility. Such officer, while swearing affidavits and placing
records before the Court, acts not merely as a departmental
functionary but as an extended arm of the justice delivery system,
rendering assistance to the learned counsel representing the
State. The officer thus assumes a position akin to that of an officer
of the Court, and is expected to maintain the highest standards of
[2026:RJ-JP:20730] (105 of 106) [CW-8120/2025]
candour, accuracy, and responsibility in all submissions made on
affidavit. Any statement made must be strictly in consonance with
the official record, and due diligence is expected before affirming
pleadings. Casual, misleading, or inconsistent averments not only
impair the adjudicatory process but also amount to a serious
dereliction of duty, warranting appropriate scrutiny.
66.Thus, a structured inquiry to ascertain the circumstances
under which such decision was taken, to identify any procedural
irregularities, lapses, or misconduct, and to ensure that
accountability is fixed upon the officers responsible, be taken.
Such a direction is not punitive in nature but is essential to uphold
the principles of good governance, administrative accountability,
and transparency in State action. Accordingly, the Chief Secretary,
of the State of Rajasthan, is directed to take appropriate measures
in this regard, strictly in consonance with the directives
enumerated herein, against the erring officer(s), within an upper
limit of two months from the date of pronouncement of this
judgment.
67. In addition, this Court deems it appropriate to record
that prima facie misrepresentation has been made before this
Court by the Officer-in-charge/erring officers, whose pleadings
were found to be inconsistent with the official record. The
competent authority is directed to initiate appropriate proceedings
and take action in accordance with law.
68. Consequently, the instant petitions stand allowed, with
above mentioned directions. There shall be no order as to costs.
Pending applications, if any, shall stand disposed of accordingly.
[2026:RJ-JP:20730] (106 of 106) [CW-8120/2025]
69.Registrar (Judicial) is directed to retain a xerox copy of file
no. 5 and 6 from the records furnished by the respondent-JDA;
and thereafter return the records, in toto, to the concerned officer,
strictly in compliance with the due procedure.
(SAMEER JAIN),J
Pooja /
In a significant ruling from the Rajasthan High Court Judgments, a recent decision underscores the critical importance of fairness and transparency in public contracting. This in-depth Contractual Dispute Analysis delves into the arbitrary withdrawal of a major infrastructure project, highlighting the court's strong stance against unilateral governmental actions. This landmark case, along with numerous other vital rulings, is now available on CaseOn, offering legal professionals easy access to comprehensive legal documentation and analysis.
JCL Infra Private Limited (the Petitioner) was awarded an Engineering, Procurement, and Construction (EPC) contract by the Jaipur Development Authority (JDA) for “Traffic improvement and beautification work at OTS Crossing, JLN Marg, JDA Jaipur.” This comprehensive project, valued at Rs. 184.30 Crores, aimed to alleviate traffic congestion and enhance the aesthetic value of a critical urban corridor. The contract was based on a Detailed Project Report (DPR) prepared by JDA’s consultants, Sincere Architects Engineers Pvt. Ltd. The work was set to commence on January 6, 2023, with a stipulated completion period of 12 months, i.e., by January 5, 2024.
However, despite the Petitioner mobilizing substantial resources (investing approximately Rs. 40 Crores, with Rs. 20.41 Crores of work completed) and diligently submitting required plans and reports, the project faced significant delays. These delays, as asserted by the Petitioner, were primarily due to the JDA's failure to provide site approvals and a clear, obstruction-free site. Subsequently, the JDA extended the project deadline suo motu until April 30, 2024, without imposing any penalties. To the Petitioner's astonishment, the JDA later issued a letter on April 24, 2024, withdrawing the entire work by invoking Clause 32 of the Special Conditions of Contract, without providing a rationale or prior hearing. Following this, the JDA proceeded to release the Petitioner’s bank guarantees unconditionally. Further compounding the issue, the JDA issued a fresh Notice Inviting Bid (NIB) on April 3, 2025, for consultancy services to prepare a DPR for the very same OTS Flyover project, effectively nullifying the existing contract and substantial investment.
The Rajasthan High Court framed several key issues for its determination:
The Respondents initially challenged the maintainability of the writ petitions on two grounds: alleged lack of proper authorization for filing on behalf of the Petitioner-company, and the dispute arising purely from a contractual relationship, thus falling outside writ jurisdiction.
Rule: The Court referenced United Bank of India vs. Naresh Kumar, (1996) 6 SCC 660, affirming that a company’s pleadings can be signed by a competent person, and authorization can be established at any stage, making such objections technical and curable. For contractual disputes, the Court cited Tata Cellular v. Union of India (1994) 6 SCC 651, Sudhir Kumar Singh (supra), and ABL International Ltd. (supra), stating that writ petitions are maintainable against State instrumentalities when their actions are arbitrary, violate natural justice, or involve a public law element.
Analysis: The Court found the authorization objection purely technical and cured by a submitted Board Resolution. Regarding contractual disputes, the Court determined that the Petitioner’s grievance extended beyond mere contractual enforcement, alleging arbitrariness, lack of fairness, and violation of natural justice by a State instrumentality. These elements introduced a public law dimension, making the writ petitions maintainable.
The JDA invoked Clause 32 of the Special Conditions of Contract to withdraw the work, citing “site conditions and various reasons” for the project’s lack of progress.
Rule: Clause 32 allows withdrawal under specific conditions: a justifiable reason, contractor’s failure to maintain stipulated progress, default attributable to the contractor, a specific written notice to remedy the default, and the possibility of engaging an alternate agency with “risk and cost” provisions. The Court also relied on Mohinder Singh Gill vs. Chief Election Commissioner (1978) 1 SCC 405, which holds that an administrative order’s validity must be judged solely on the reasons contained therein, not by later justifications.
Analysis: The Court meticulously reviewed the JDA’s internal note-sheets and correspondence, finding no specific fault or breach attributed to the Petitioner in the withdrawal order. Instead, the record consistently indicated that project impediments—such as the Model Code of Conduct, objections from MNIT/OTS, pipeline shifting issues, tree felling requirements, and proposed scope alterations—were administrative and institutional, entirely beyond the Petitioner’s control. The JDA’s suo motu extension of time without penalties and the unconditional release of bank guarantees further demonstrated that the Petitioner was not considered in default. Therefore, the essential preconditions for invoking Clause 32 were not met. The Court concluded that the JDA’s subsequent arguments were an “afterthought” and inconsistent with their own contemporaneous records.
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The Petitioner argued that having invested substantially based on the contract and assurances, the JDA could not arbitrarily withdraw the project.
Rule: The Court cited IFGL Refractories Ltd. vs. Orissa State Financial Corporation & Ors., 2020 SCC OnLine SC 208; U.P. Power Corporation Ltd. vs. Sant Steels & Alloys (P) Ltd., (2008) 2 SCC 777; and Sivanandan C.T. vs. High Court of Kerala, (2024) 3 SCC 799. These precedents affirm that the State, as an instrumentality under Article 12, is bound by fairness, promissory estoppel, and legitimate expectation. It cannot resile from promises that induced detrimental reliance from a party. Furthermore, State of Tamil Nadu & Ors. vs. K. Shyam Sunder, (2011) 8 SCC 737, and Shishir Realty Pvt. Ltd. vs. City and Industrial Development Corporation of Maharashtra Ltd., (2022) 16 SCC 527, establish that a change in government or policy cannot be the sole basis to annul a valid contract unless the original decision was unlawful or against public interest.
Analysis: The Court found that the Petitioner had altered its position detrimentally by mobilizing resources and incurring significant financial expenditure based on the JDA’s contractual assurances. The JDA’s justification citing a change in government policy was deemed arbitrary and capricious, violating Article 14 of the Constitution. The project’s core objectives remained unchanged, and the original contractual framework allowed for modifications or phased execution, which the JDA failed to explore. The abrupt abandonment of the contract, despite substantial investment and extended timelines, was deemed inequitable and inconsistent with principles of fairness and reasonableness.
The High Court found that the JDA’s decision-making process was flawed, characterized by “non-application of mind, disproportionality, and manifest unreasonableness.” The Court observed that less drastic alternatives, such as modifying the scope or phasing the execution, were available under the existing contract. The JDA’s actions—granting extensions without liquidated damages, returning bank guarantees, and permitting continued performance—were interpreted as a waiver of any alleged default by the Petitioner and an inducement of legitimate expectation. The subsequent attempt to blame the Petitioner for delays was thus rejected as being contrary to the doctrines of promissory estoppel and waiver.
The Court further noted that the issuance of a fresh NIB for the same project, without a rational or technical basis, was “manifestly arbitrary” and “indicative of non-application of mind.” The JDA’s submissions before the Court were found to be “squarely contradicted by their own record,” bordering on “misrepresentation.” The withdrawal was influenced by “extraneous considerations, including the need to accommodate objections raised by certain institutions such as MNIT and OTS, as well as other influential stakeholders,” departing from the original project objectives. This conduct was deemed arbitrary, unreasonable, and violative of Article 14.
Based on its comprehensive analysis, the Rajasthan High Court issued the following directions:
This judgment serves as a robust reminder of the principles governing State action in contractual matters. For lawyers and law students, it elucidates several critical points:
This case is a testament to the judiciary’s commitment to safeguarding contractual fairness and preventing arbitrary exercises of power by the State, offering valuable insights into administrative law and public procurement.
All information provided in this article is for informational purposes only and does not constitute legal advice. While efforts have been made to ensure accuracy, readers should not act upon this information without seeking professional legal counsel. CaseOn.in is not responsible for any actions taken based on the information presented herein.
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