M/S Vinod Kumar Malik vs Union Of India And 4 Others on 22 May, 2026

Allahabad High Court

M/S Vinod Kumar Malik vs Union Of India And 4 Others on 22 May, 2026

Author: Ajit Kumar

Bench: Ajit Kumar

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 


HIGH COURT OF JUDICATURE AT ALLAHABAD
 
WRIT - C No. - 35320 of 2025
 

 
M/s Vinod Kumar Malik
 

 

 
..Petitioner
 

 

 

 

 
Versus
 

 

 

 

 
Union of India and 4 others
 

 

 
..Respondent(s)
 

 

 
Counsel for Petitioner
 
:
 
Mr. Shashi Nandan, Senior Advocate, Mr. Devansh Misra, Advocate.
 
Counsel for Respondent(s)
 
:
 
A.S.G.I., Mr. M.C. Chaturvedi, Senior Advocate, Ms. Shweta Bharti, Mr. Tanmay Sadh, Mr. Devendra Kumar, Mr. Pranjal Mehrotra, Mr. Raghav Dwivedi, Mr. Sunil Kumar Yadav, Advocates.
 

 

 
Court No. - 1
 
HON'BLE AJIT KUMAR, J.

HON’BLE SWARUPAMA CHATURVEDI, J.

(Per: Swarupama Chaturvedi, J.)

For convenience, the judgement is structured as per the following index for proper consideration of the points involved in the petition.

Index

I.

Factual Background and Course of Proceedings

2

(A) Background Facts.

3

(B) Record of Proceedings..

5

II.

Submissions on behalf of the Parties..

6

(A) Submissions on behalf of Respondent No. 5 questioning . Maintainability of Writ Petition…

7

(i) Respondent No. 5 is not a State

7

(ii) Agreement is Determinable Contract.

11

(iii) Lack of Territorial Jurisdiction of this Court.

12

(B) Submissions on behalf of Petitioner meeting Preliminary….Objections

13

(C) Reply Submissions as to Maintainability by Respondent. …No. 5.

16

(D) Submissions on behalf of Petitioner on Merits.

16

(E) Reply Submissions on behalf of Respondent No. 5 on …Merits…………………..

18

(F) Submissions on behalf of Respondent No. 2 (NHAI).

21

III.

Points for Determination.

22

IV.

Discussion and Analysis.

22

(i) Maintainability in the Context of Article 12..

23

(ii) Nature of Contract and Scope of Writ Jurisdiction…

26

(iii) Territorial Jurisdiction..

29

V.

Conclusion..

30

VI.

Order…

34

I

Factual Background and Course of Proceedings

1. This writ petition has been filed under Article 226 of the Constitution of India seeking issuance of appropriate writs, orders and directions in the nature of certiorari for quashing of the notice dated 22.09.2025 bearing Tender No. 2025_NHAI_250002_1. Further, the Petitioner has prayed for quashing of the order dated 06.10.2025 issued by respondent no. 5 i.e., NHIT Southern Projects Private Limited (hereinafter referred to as NSPPL), who is a special purpose vehicle of National Highway Infra Trust (hereinafter referred to as NHIT). The Petitioner has also prayed for issuance of a writ in the nature of Mandamus restraining the respondent authorities from creating any third-party rights pursuant to the above-mentioned tender notice.

(A) Background Facts

2. The background fact appearing from the records of this petition is that the respondent no. 2, i.e., National Highway Authority of India (hereinafter referred to as NHAI) was set up by the NHAI Act 1988, which has set up the respondent no. 3, trust NHIT on 19.10.2020. It is an irrevocable infrastructure trust under the provisions of the Indian Trusts Act, 1882, which was registered on 20.10.2020, under the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations 2014 (hereinafter referred to as SEBI Regulations).

3. The investment manager of NHIT was National Highways Infra Investment Managers Private Limited (hereinafter referred to as NHIIMPL) which got incorporated on 25.07.2020 under the Companies Act 2013 (a wholly owned subsidiary of Government of India acting through Ministry of Road Transport and Highways). It was set up to act as the Investment Manager to the Infrastructure Investment Trust (InvtIT), as Investment Manager of NHIT. Further, National Highway InvtIT Project Management Private Limited (hereinafter referred to as NHIPMPL) got incorporated as private limited company on 09.03.2021 under Companies Act, 2013 which is respondent no. 4 in petition and acted as Project Manager for respondent no. 5 i.e., NSPPL. NSPPL, a private limited company incorporated on 08.03.2025 under Companies Act, 2013 as Special Purpose Vehicle (SPV).

4. The NHIPMPL published a tender notice on 29.05.2025, in which the petitioner, M/s Vinod Kumar Malik, a proprietorship entity engaged in providing manpower services, participated. The Notice Inviting Tender (hereinafter referred to as NIT) was published for providing manpower services for user fee collection at the Chhappar Toll Plaza on the Muzaffarnagar-Haridwar Section (Km 130+560 to Km 209+120 of old NH-58 / new NH-334) situated in the States of Uttar Pradesh and Uttarakhand.

5. The estimated project cost of the project was Rs.3.35 crores and the prescribed bid security was Rs. 7.06 lakhs. The contract period was stipulated to be one year, extendable by a further year upon mutual consent. The Petitioner was declared successful in the tender process. The Letter of Acceptance (hereinafter referred to as LOA) was issued accepting the Petitioner’s bid for a contract value of Rs.3,56,35,036/- and requiring furnishing of a performance bank guarantee of Rs. 35,63,504/-. Following the LOA, an agreement was executed between the Petitioner and Respondent No.5, NSPPL on 26.06.2025, thereafter, the Petitioner was officially handed over charge of the Chhappar Toll Plaza on National Highway No. 58 (New No. 334) and got instructed to commence operations from 11.07.2025.

6. On 18.08.2025, the respondent entity issued the notice to the Petitioner under Clause 10(i) of the General Conditions of Contract (hereinafter referred to as GCC), alleging multiple operational shortcomings, including insufficient deployment of manpower, failure to ensure toll collection, failure to disburse salaries in the presence of an authorized representative, failure to provide safety gear (shoes, high visibility jackets) to staff, and non-maintenance of attendance records.

7. Representatives of both sides held a meeting on 03.09.2025, thereafter, on 18.09.2025, the Petitioner submitted response to the aforesaid notice stating that minimum wages were paid via direct bank credit, the local exemption percentage had been reduced, adequate staff welfare was provided, and deployed personnel were equipped with the required safety gear.

8. Meanwhile, on 19.09.2025, an incident occurred at the Chhappar Toll Plaza during which toll operations were disrupted and vehicles allegedly passed without payment of user fee. In connection with the incident dated 19.09.2025, the respondent entity issued a second show-cause notice dated 22.09.2025 alleging violation of Clause 28 of the General Conditions of Contract pertaining to Abandonment and requiring the Petitioner to submit a written explanation within three days.

9. The Petitioner submitted its reply to the said show-cause notice through e-mail dated 23.09.2025, however, on 22.09.2025, a fresh NIT bearing Tender No. 2025_NHAI_250002_1 was published on the GeM Portal for the same work relating to the Chhappar Toll Plaza. Subsequently on 06.10.2025. As the contract of the Petitioner was terminated, so it became basis of the dispute leading to the present writ petition.

(B) Record of Proceedings

10. During the course of hearing in the present writ petition, various interim and procedural orders came to be passed by this Court on different dates of hearing. The development through proceedings in the petition is elaborated in following paragraphs.

11. When the petition was heard at the admission stage on 07.10.2025, the amendment application filed on behalf of the petitioner to challenge the notice dated 06.10.2025 inviting tender, was allowed and, considering the nature of the controversy, it was directed that no fresh tender pursuant to the notice dated 22.09.2022 issued by respondent no. 5 shall be finalized without leave of this Court.

12. On 04.11.2025, after hearing counsel for respective parties at length, it was directed that parties shall maintain status quo with regard to toll collection at Chhappar Toll Plaza. The Court further stayed the termination of the petitioners contract and also stayed the operation of the agreement executed on 06.10.2025 in between respondent no.5 with South Asia Tollways Pvt. Ltd.

13. When the hearing got commenced on 11.12.2025, learned counsel appearing for respondents raised preliminary objection as to the maintainability of the writ petition on the ground of contractual nature of the dispute, although it was further submitted by learned counsel appearing for both sides that efforts toward an amicable settlement was underway. In view thereof, the matter got adjourned to facilitate the settlement talk in between parties.

14. On 16.03.2026, respondent no. 5 contended that the petitioner had sent a communication regarding surrender of the Toll Plaza, which showed that the petitioner had not submitted complete fact before the Court on initial dates of hearing while praying for the interim order in its favour. Learned counsel for the petitioner sought and granted time to verify the said factual assertion.

15. When the matter was again listed on 19.03.2026, learned counsel appearing for parties apprised the Court that substantial consensus had been reached on most of the terms of settlement, except with regard to the monetary component, and that a counter-offer was under consideration between the parties, due to which a short adjournemnt was prayed for and was granted. On 08.04.2026, the court was informed that the parties could not agree on terms of settlement, consequently, the hearing got commenced on the issue of jurisdiction and maintainability, particularly concerning whether respondent no. 5 fell within the ambit of State under Article 12 of the Constitution of India.

16. Since pleadings between the parties had been exchanged, the matter was heard finally with consent of learned counsel for the parties. Submissions on the jurisdiction, maintainability of the writ petition as well as the merits were advanced together and heard at length. Upon conclusion of the arguments made by all the learned counsel representing various parties, on 24.04.2026 the judgment was reserved.

II

Submissions on Behalf of the Parties

17. Having heard Mr. Shashi Nandan, learned Senior Advocate assisted by Mr. Devansh Misra, representing the petitioner, Ms. Shweta Bharti, learned counsel assisted by Mr. Tanmay Sadh, representing respondent no.2, Mr. M.C. Chaturvedi, learned Senior Advocate assisted by Mr. Devendra Kumar, learned counsel for the NHAI, Mr. Pranjal Mehrotra, learned counsel for the Union of India and considering the submissions advanced on behalf of the respective parties we summarise below on preliminary objections as well as on merits.

(A) Submissions on behalf of Respondent No. 5 questioning Maintainability of Writ Petition

18. Three points have been raised questioning the maintainability of this petition. Firstly, (i) on the ground that respondent no. 5 is not a State within the meaning of Article 12 of the Constitution of India, secondly, (ii) contract agreement being determinable one, parties are bound by privity of contract and thirdly, (iii) this Court lacked territorial jurisdiction.

(i) Respondent No. 5 is not a State

19. Questioning the maintainability of the writ petition, learned counsel for the respondent Ms. Shweta Bharti contended that it was a contractual dispute in between petitioner and the respondent no.5. Ms. Bharti argued that the respondent no.5 was not a State within the meaning of Article 12 of the Constitution of India. It was submitted on behalf of the NSPPL that the genesis of respondent parties and their legal status was required to be seen before this Court embarked upon an enquiry as to the sustainibility of impugned orders.

20. Learned counsel submitted that the NHAI was constituted under the NHAI Act, 1988 for development, maintenance and management of national highways, with the object of ensuring transparency, competitive bidding and efficient implementation of contracts relating to national highway infrastructure. Learned counsel further submitted that the NHIT was established by NHAI on 19.10.2020 as an irrevocable infrastructure trust under the Indian Trusts Act, 1882 and was thereafter registered on 28.10.2020 as an Infrastructure Investment Trust under the SEBI (Infrastructure Investment Trusts) Regulations, 2014. Learned counsel also submitted that NHIIMPL was incorporated on 25.07.2020 for management and administration of the InvIT assets, whereas NHIPMPL was incorporated on 09.03.2021 for undertaking operations and maintenance of the trust assets.

21. It was further submitted that respondent no.5, NSPPL was incorporated on 08.03.2025 as a Special Purpose Vehicle (hereinafter referred as SPV) of NHIT. It was urged that the NHAI sponsored the trust but did not control as the investment was also made by private bank and other investors. NSPPL had entered into a concession agreements with NHAI under the Toll, operate and Transfer (hereinafter referred to as ToT) model for 20 years in respect to road stretch including the MuzaffarnagarHaridwar section of NH-334. It was further submitted that in the financial year 2024-25, NSPPL paid an aggregate concession fee of about Rs.1661 cores to NHAI, in consideration of which NSPPL had the right to collect toll for 20 years starting from 01.04.2025 and was responsible for operation and maintenance of the project road. Pursuant thereto, tenders were invited on 29.05.2025 for providing manpower services for collection of user fee at the Chhappar Toll Plaza.

22. Raising a preliminary objection regarding maintainability, learned counsel submitted that the dispute arose entirely out of a private commercial contract entered in between the petitioner and respondent no. 5 and that the same did not involve any public law element warranting interference under Article 226 of the Constitution of India. Learned counsel vehemently opposed the writ petition while raising a preliminary objection that the Respondent No.5 did not fall within the ambit of State under Article 12 of the Constitution of India.

23. It was submitted that respondent no. 5, NHIT Southern Projects Pvt. Ltd., was a private limited company incorporated on 08.03.2025 under the Companies Act, 2013, bearing CIN: U42101DL2025PTC444254. The alphabet indicator ‘PTC’ appearing in its CIN statutorily signified its status as a Private Company. Upon incorporation, Respondent No.5 acquired an independent legal personality and a separate corporate entity, completely distinct from its shareholders, promoters, or any other associated entity. Furthermore, the official Master Data of Respondent No.5, as available on the website of the Ministry of Corporate Affairs (MCA), categorically records its status as a non-government company. This statutory declaration conclusively reflects that Respondent No.5 is neither owned nor controlled by the Government in the manner contemplated for government companies, establishing that Respondent No.5 cannot be subjected to writ jurisdiction.

24. Respondents No.1 to 4 were neither decision-makers nor supervisory authorities in the impugned transaction, nor have they approved or sanctioned the tender or the impugned contract termination dated 26.06.2025. The petitioner had completely failed to establish any factual foundation demonstrating their involvement, and no statutory duty of Respondents No.1 to 4 had been breached, rendering their impleadment legally unsustainable and any executable order against them impossible.

25. Furthermore, the petitioner had intentionally impleaded these state actors to artificially clothe a purely private contractual dispute with a public law character. This is a misconceived attempt to mislead the Court for entertaining a purely contractual dispute under writ jurisdiction. The core matter was entirely a private contractual conflict between the Petitioner and respondent no. 5, which was a private entity standing completely beyond the definition of ‘State’ as provided under Article 12 of the Constitution of India.

26. It was further contended that the relationship between Respondent No.5 and NHAI is purely contractual and commercial in nature and that mere regulatory supervision does not convert a private entity into a State within the meaning of Article 12 of the Constitution of India. It is the basic point of dispute which was to be seen and according to that particular nature of function, it is to be determined that whether an entity is to be considered as public entity or it is a private entity against which the writ cannot be issued.

27. Learned counsel placed reliance upon Kishor Madhukar Pinglikar Vs. Automotive Research Association of India (2023) 20 SCC 719 and R.S. Madireddy Vs. Union of India 2024 SCC OnLine SC 965 to contend that deep and pervasive financial, functional and administrative control is a sine qua non for treating an entity as State, whereas mere regulatory control is insufficient. Reliance was also placed upon ICSSSR Vs. Neetu Gaur 2025 SCC OnLine SC 593 and Manoj Petroleum Vs. Union of India 2025 SCC OnLine All 1309 in support of the aforesaid submissions.

28. Elaborating upon the preliminary objections, learned counsel for the respondent submitted that the Respondent No.3, NHIT, was merely a contributory irrevocable private trust set up under the Indian Trusts Act, 1882, and registered with SEBI under the Infrastructure Investment Trusts Regulations, 2014. NHAI did not exercise any operational, managerial, or day-to-day decision-making control over NHIT or its SPVs instead, their functioning is strictly governed by the SEBI InvIT Regulations, 2014. Crucially, once an asset stood monetized under this framework, NHAI did not possess any control over respondent no. 5, and the same was managed entirely by its independent Board of Directors. Therefore, the lack of deep and pervasive state control completely ousted the colorable claim of Article 12 applicability. Learned counsel appearing for NHAI also supported this contention.

29. Learned counsel further submitted that the dispute raised in the present writ petition pertained entirely to enforcement and continuation of a private commercial contract and is devoid of any public law element. It was argued that the petitioner is essentially seeking restoration of a contractual arrangement, which falls squarely within the realm of private law and cannot be agitated in writ jurisdiction. In support of the aforesaid contention, reliance was placed upon Joshi Technologies International Inc. Vs. Union of India (2015) 7 SCC 728, K.K. Saksena Vs. International Commission on Irrigation and Drainage (2015) 4 SCC 670 and Ramakrishna Mission Vs. Kago Kunya (2019) 16 SCC 303.

30. Learned counsel further contended that respondent no. 5 remained a purely contractual service provider, engaged for operational assistance under a commercial arrangement for which the payment is already made for 20 years, and there was absolutely no governmental control or delegation of sovereign function. The statutory framework, it is argued, governs the subject matter of the contract but does not alter the private character of the contracting entity or elevate it to the status of State or an instrumentality thereof under Article 12 of the Constitution.

(ii) Agreement is Determinable Contract

31. Learned counsel for the respondent invited the attention of this Court to the fact that the agreement dated 26.06.2025 is determinable ex-facie on its face. Clause 10, sub-clause (i) of the agreement expressly reserves to the either-party an unconditional right to terminate the contract upon a 45 days’ written notice. Because this right of exit is woven into the very fabric of the contract, NSPPL acted strictly within the four corners of the agreed mechanism by terminating the Manpower Services Agreement vide Termination letter dated 06.10.2025, following the expiration of the mandated notice period.

32. This termination was neither sudden nor arbitrary as NSPPL gave sufficient opportunities to the Petitioner to cure its persistent and documented breaches, which it miserably failed to do. The Termination letter explicitly cited eight prior communications including six explicit emails between July and August 2025, a Notice of Intention to Terminate dated 18.08.2025, and a subsequent non-compliance email dated 29.09.2025. This extensive record expressly evidences that the Petitioner’s replies were fully considered, and a reasoned conclusion was reached that the underlying defaults remained unresolved, severely impacting project operations and statutory compliance.

33. The legal consequences of terminating such a determinable contract are unambiguous and non-negotiable under Section 14(d) of the Specific Relief Act (SRA), 1963, which categorically bars the specific performance of any contract that is, in its nature, determinable. It is a settled position of law, authoritatively affirmed by the Apex Court in Indian Oil Corporation Ltd. Vs. Amritsar Gas Service and Others (1991) 1 SCC 533 and recently reiterated in K.S. Manjunath and Ors. Vs. Moorasavirappa and Ors. (2025) SCC OnLine SC 2378, that if a contract is revocable by either party, the sole available remedy is the award of compensation or damages and not restoration, reinstatement, or compelled continuation.

34. Learned counsel for the respondent contended that, the petitioners prayer seeking to set aside the termination and judicially resurrect a determinable contract was fundamentally misconceived, legally impermissible, and relief that this Court in M/s Ambe Carrier & Another Vs. State of U.P. & Ors., WRIC. No. 45762 of 2014 vide order dated 09.09.2014 had explicitly declined to grant under writ jurisdiction. No amount of equitable pleading could override this absolute statutory bar over the express objection of the terminating party.

(iii) Lack of Territorial Jurisdiction of this Court

35. Learned counsel for the respondent further opposed the maintainability of the petition by submitting that the present Writ Petition is not maintainable before this Court for absolute lack of territorial jurisdiction. It was contended that the core dispute arises out of an agreement with National Highways Invit Project Managers Private Limited, which was subsequently modified by a Corrigendum dated 02.05.2025. As per the revised Clause 19 of Section VI explicitly reproduced in the pleadings, the parties mutually agreed that the agreement shall be construed and interpreted in accordance with and governed by the Laws of India and Delhi shall have jurisdiction over all matters arising out of or relating to this agreement. This exclusive jurisdiction is further cemented by the amended Clause 20(d), which mandates that any dispute between the SPV and the Contractor shall be referred to Delhi only. Consequently, the present petition is liable to be dismissed on the threshold of maintainability alone.

36. It was further submitted that this Court lacks territorial jurisdiction to entertain the present dispute. The parties have contractually agreed to confer exclusive jurisdiction upon the competent courts at Delhi under Clauses 19 and 20(d) of the GCC, a binding choice-of-court arrangement authoritatively upheld by the Apex Court in Swastik Gases Pvt. Ltd. Vs. Indian Oil Corporation Ltd. (2013) 9 SCC 32. Having participated in the tender process without demur and accepted benefits thereunder, the Petitioner is legally estopped from challenging the terms of the contract under the principle that a party cannot approbate and reprobate.

37. Furthermore, applying the strict constitutional test under Article 226(2) as enunciated in National Textile Corporation Ltd Vs. Haribox Swaliram (2004) 9 SCC 786 and State of Goa v. Summit Online Trade Solutions (P) Ltd (2023) 7 SCC 791, a mere location of the toll plaza is an incidental fact that does not constitute a material, essential, or integral part of the cause of action. The true lis between the parties revolves entirely around two pivotal events i.e., the termination dated 06.10.2025 and the fresh tender dated 22.09.2025 both of which were initiated, issued, and made effective exclusively from New Delhi. Consequently, the judgment in Maharashtra Chess Association Vs. State of Tamil Nadu (2020) 13 SCC 285 is wholly inapplicable here, and jurisdiction vests in the High Court of Delhi on both contractual and constitutional grounds.

(B) Submissions on behalf of Petitioner meeting Preliminary Objections

38. At the outset Mr. Shashi Nandan, learned senior counsel submitted that the respondent no. 5 is an instrumentality of the State within the meaning of Article 12 of the Constitution of India and therefore the dispute is not a general contractual dispute in between two parties. He further submitted that the respondent no. 5 is described as a private company limited, but the true character of the company can only be seen after lifting the corporate veil.

39. To further support his arguments, he urged that the respondent no. 5 is, in substance, discharging a public function of the NHAI, learned senior counsel referred detailed statutory framework governing national highways. He further submitted that under the National Highways Act, 1956, particularly Sections 4, 7(1), 7(2), 8-A(1), 8-A(2), 8-A(3), 9 and 9(2)(a), all national highways vest in the Union of India, which retains sovereign authority over regulation, maintenance, and levy of user fees, while also being empowered to contract out operational functions. Learned counsel submitted it as a statutory control, and further referred Sections 2(e), 2(f), 2(g), 3, 4, 23, 28 and 38 of the Control of National Highway (Land and Traffic) Act, 2002, to demonstrate Central Government ownership over highway land.

40. Learned senior counsel further referred Sections 2(e), 2(f), 12, 14, 15 and 16(2)(a), 16(2)(d), 16(2)(e), 16(2)(f), 16(2)(g) and 16(2)(k) of the NHAI Act, 1988, which in general provide for transfer of assets and infrastructure to the Authority and expressly enables it to create agencies or entrust private entities with functions relating to construction, maintenance, and management of highways. Learned counsel also referred provisions of National Highway (Collection of Fees by Any Person) Rules, 1997, particularly Sections 3, 4, 6 and 7, read with Sections 2(b), 2(ii), 2(d) and Rules 3, 5 and 9 of the National Highway (Rate of Fees) Rules, 1997, to contend that even where fee collection is undertaken through private contractors or franchisees, such collection is strictly on behalf of the Government of India and forms part of a regulated statutory scheme.

41. Learned senior counsel argued that upon piercing the corporate veil, it becomes evident that respondent no. 5 is merely a subsidiary and extension of NHIT, which itself has been constituted under the aegis of the NHAI as its sponsor. In support of his submissions, he demonstrated the shareholding structure of Respondent No.5, which, according to his submission, reflects that its entire shareholding vests in the NHIT in a way.

42. It was also pointed out by learned senior counsel that the tender process in question was undertaken by Respondent No.4, NHIPMPL, which is stated to be a subsidiary of NHIT and is disclosed in its Master Data as a government company. It was thus urged that the nomenclature of Respondent No.5 as a private company is only a mask and that, in substance, it functions as an extended arm of NHAI, a statutory authority constituted under law.

43. Learned senior counsel, while referring to the functions performed by the respondents, submitted that under Section 8-A of the National Highways Act, 1956, national highways vest in the Central Government. He further contended that the NHAI, being a statutory authority, has been established for the development, maintenance and management of national highways, which also includes collection of user fee (toll). Learned senior counsel further referred to Section 16 of the NHAI Act and submitted that the statutory scheme contemplates assignment of such functions to authorized operators for the purpose of efficient management and collection of the toll.

44. It was also contended that the Respondent No.5, discharges an important public function pertaining to the management and operation of national highways while acting on behalf of NHAI. Learned senior counsel submitted that Respondent No.5 enjoys a monopoly in inviting tenders and awarding contracts relating to collection of user fee at toll plazas, which directly impacts the public at large and, therefore, its actions are amenable to judicial review under Article 226 of the Constitution of India.

45. In this backdrop, it is urged that Respondent No.5 is not acting as a purely private commercial entity but is operating within a statutory and delegated framework of highway administration, thereby discharging functions which are public in nature and integrally connected with sovereign control over national highways.

46. In support of the proposition that even private entities discharging public functions are subject to writ jurisdiction, he placed reliance on BCCI Vs. Cricket Association of Bihar (2015) 3 SCC 251 and Zee Telefilms Ltd. Vs. Union of India (2005) 4 SCC 649. Learned senior counsel further submitted that even in the contractual matters, arbitrary State action can be tested on the touchstone of Article 14 of the Constitution of India. In this regard, he relied upon M.P. Power Management Company Ltd. Vs. Sky Power South East Solar India Pvt. Ltd., (2023) 2 SCC 703.

47. Mr. Shashi Nandan further argued that the contractual stipulations between the parties cannot curtail or oust the constitutional jurisdiction of the High Court under Article 226 of the Constitution of India. He further argued that the exclusive jurisdiction clause of any agreement cannot operate as an absolute bar, particularly when a substantial part of the cause of action has arisen within the territorial jurisdiction of this High Court. To buttress his submission, he relied upon Maharashtra Chess Association (supra).

(C) Reply Submissions as to Maintainability by Respondent No. 5

48. Learned counsel Ms. Bharti submitted that various statutory provisions referred by learned senior counsel for the petitioner, are over stretched and proceeded on misreading of the statutory scheme governing national highways. It was urged that although national highways vested in the Union and were regulated under the National Highways Act, 1956 and other related enactments, such regulatory provisions did not automatically convert every entity engaged in execution of contracts relating to highways into an instrumentality of the State or a statutory authority.

49. Refuting the submissions made on behalf of the petitioner, learned counsel for the respondent submitted that the provisions relied upon under the NHAI Act, 1988 merely empower the Authority to undertake functions relating to development, maintenance and management of highways and to engage contractors or agencies for efficient execution of such tasks. However, such engagement was purely contractual in nature and did not result in delegation of sovereign or statutory power to the contractor or private company executing the work.

50. In answer to the submissions advanced by the petitioner, learned counsel for the respondent submitted that the National Highway (Collection of Fees by Any Person) Rules, 1997 and the National Highway (Rate of Fees) Rules, 1997 only regulate the manner in which user fee was to be collected and ensure uniformity in collection on behalf of the concessioning authority. It was contended that mere collection of user fee under a regulatory framework did not confer any statutory status upon the collecting agency, nor did it render such an agency a repository of public power.

(D) Submissions on behalf of Petitioner on Merits

51. Learned senior counsel submitted that pursuant to the notice dated 18.08.2025 issued under Clause 10(i) of the GCC, the petitioner submitted reply dated 18.09.2025 clarifying that minimum wages were being disbursed through direct bank transfer, and the percentage of local exemptions had been reduced. He also submitted that adequate welfare facilities had been extended to the deployed personnel, and all 129 staff members stationed at the toll plaza had been provided with the essential safety gear.

52. Mr. Shashi Nandan further submitted that the respondent authorities were satisfied with the explanation furnished by the petitioner and had verbally discharged the earlier notice, though no formal communication to the said effect was ever issued.

53. Learned counsel further submitted that the incident dated 19.09.2025 at the Chhappar Toll Plaza was an unforeseen act of civil commotion, which would fall within the ambit of the force majeure clause contained in Clause 8 of the GCC. It was argued by Mr. Nandan that despite the disruption, the petitioner restored manpower deployment and resumed toll operations within eight to ten hours.

54. Assailing the subsequent actions of the respondents, learned Senior Counsel argued that although the show-cause notice dated 22.09.2025 granted three days time to the petitioner for submitting its response, the respondents, acting in a premeditated and arbitrary manner, floated a fresh tender bearing Tender No. 2025_NHAI_250002_1 for the identical work on the very same date, without awaiting expiry of the stipulated period and without considering the petitioners explanation submitted through e-mail dated 23.09.2025.

55. It was further submitted that notwithstanding the issuance of the fresh tender, the petitioner continued to provide manpower services at the toll plaza in terms of the agreement dated 26.06.2025. Learned Senior Counsel also submitted that the respondents failed to clear the pending bills of the petitioner pertaining to the months of July and August 2025.

56. Learned Senior Counsel vehemently argued that the impugned termination order dated 06.10.2025 had been passed in a wholly arbitrary and mechanical manner and was vitiated for want compliance of the principles of natural justice. According to the petitioner, the said order was a non-speaking order passed without due consideration of the petitioners reply and in complete disregard of the principles of natural justice.

57. It was thus contended that the entire course adopted by the respondents clearly demonstrated a predetermined intent to remove the petitioner, inasmuch as the process for inviting fresh bids had already been initiated even before expiry of the reply period granted under the show-cause notice. Learned counsel submitted that such action not only rendered the subsequent termination unsustainable in law but also struck at the very root of fairness in administrative decision-making. Mr. Shashi Nandan concluded his submission while placing reliance upon ABL International Ltd. Vs. Export Credit Guarantee Corporation of India Ltd (2004) 3 SCC 553. Thus, according to him arbitrary action on the part of a State authority, even in matters arising out of commercial contracts, was amenable to judicial review under Article 226 of the Constitution of India.

(E) Reply Submissions on behalf of Respondent No. 5 on Merits

58. Learned counsel for the respondent invited the attention of this Court to the fact that the fresh tender notice dated 22.09.2025 was legally issued prior to the final termination letter and the same cannot be seen as pre-meditated and it was infact necessary to be advertised considering the critical, round-the-clock nature of toll operations, which require uninterrupted functioning and cannot be left unattended.

59. Learned counsel placed reliance upon Radha Krishna Agarwal Vs. State of Bihar (1977) 3 SCC 457 to contend that rights arising purely out of contractual obligations cannot ordinarily be enforced through writ jurisdiction unless a statutory obligation is involved. Reliance was also placed upon Pimpri Chinchwad Municipal Corporation Vs. Gayatri Construction Company, (2008) 8 SCC 172, to contend that disputes relating to interpretation and enforcement of contractual terms are matters falling within the domain of civil courts or arbitration proceedings. Learned counsel further relied upon Bareilly Development Authority Vs. Ajai Pal Singh, (1989) 2 SCC 116 and submitted that where a contract is non-statutory and governed solely by its contractual terms, no writ can ordinarily be issued for enforcement of contractual rights or for remedying an alleged breach thereof.

60. Learned counsel submitted that an agreement was executed between the petitioner and respondent no. 5 at New Delhi and a subsequent work order was issued directing commencement of services from 11.07.2025. Inviting attention to the contractual stipulations, learned counsel submitted that the agreement expressly required the contractor to maintain the highest standards of ethics and abstain from corrupt or fraudulent practices. It was argued that Clause 10 of the contract specifically empowered either party to terminate the agreement before expiry of the stipulated term by giving a 45-day written notice. The said clause further entitled the SPV to procure services from another agency at the risk and cost of the contractor in case of breach of contractual obligations, apart from encashing the performance security and debarring the contractor.

61. Learned counsel for the respondent proceeded to place reliance upon Clause 28 of the GCC to contend that in the event of abandonment of user fee collection by the contractor, the SPV was fully empowered to take over the toll plaza and terminate the contract. Learned counsel submitted that the petitioners performance remained highly unsatisfactory from the inception of the contract period and repeated instances of non-compliance were noticed by the authorities. Consequently, a notice dated 18.08.2025 was issued under the GCC proposing termination of the contract, to which the petitioner submitted a reply on 18.09.2025.

62. It was further submitted that while consideration of the petitioners reply was pending, a serious incident occurred on 19.09.2025 and 20.09.2025 at the Chhappar Toll Plaza. According to the respondents, the petitioners employees staged a protest following the death of one employee and completely abandoned the toll plaza, resulting in stoppage of toll collection and free passage of vehicles, thereby causing substantial financial losses to the authority.

63. Learned counsel submitted that in view of the aforesaid incident and the petitioners inability to ensure uninterrupted toll operations, a further show-cause notice dated 22.09.2025 was issued to the petitioner. It was contended that user fee collection on national highways is an essential and time-sensitive public function and, therefore, in order to ensure continuity of toll operations and prevent further financial losses, Respondent No. 4 took a conscious decision to initiate a fresh tender process for engagement of another agency.

64. It was argued that the fresh tender process was initiated strictly in accordance with the contractual terms and after following due process of law, without any illegality or procedural infirmity. Learned counsel further submitted that upon culmination of the tender process, LoA dated 01.10.2025 was issued in favour of the successful bidder, namely South Asian Tollways Pvt. Ltd. Thereafter, the petitioners contract was formally terminated vide order dated 06.10.2025 and the petitioner was directed to vacate the site by 07.10.2025. It was submitted that a fresh agreement with the newly selected agency was executed on 07.10.2025 to ensure uninterrupted movement of traffic and smooth collection of toll revenue.

65. Defending the validity of the termination order dated 06.10.2025, learned counsel submitted that the same is a detailed and reasoned order which specifically refers to prior communications exchanged between the parties, records the various defaults committed by the petitioner with reference to the relevant contractual clauses, and also notes that the petitioners explanations furnished during the notice period were considered but found unsatisfactory. In support of the aforesaid submission, reliance was placed upon S.N. Mukherjee Vs. Union of India, (1990) 4 SCC 594, and Cyril Lasrado Vs. Juliana Maria Lasrado, (2004) 7 SCC 431, to contend that the impugned order satisfies the requirement of a speaking order in law.

66. Clarifying the sequence of events, learned counsel submitted that the fresh tender dated 22.09.2025 was a pre-emptive measure necessitated to ensure continuity of toll operations and the same was not issued solely on account of the show-cause notice dated 22.09.2025 under Clause 28 of the GCC. According to the respondents, the process for inviting fresh bids had already been triggered pursuant to the earlier notice of intention to terminate dated 18.08.2025 issued under Clause 10 of the GCC.

67. Learned counsel further submitted that the petitioner has suppressed material facts from this Court and, therefore, the writ petition deserves dismissal on the ground of lack of bona fides alone. It was contended that the petitioner failed to disclose that the tender process initiated through the NIT dated 22.09.2025 had already culminated in finalization of bids on 01.10.2025 and that physical tolling operations had already been handed over to the newly appointed agency at 8am on 07.10.2025. According to the respondents, interim protection was obtained by the petitioner without disclosing the aforesaid developments to the Court.

68. Referring to subsequent developments, learned counsel submitted that the petitioner has also challenged termination notice dated 31.01.2026 through an amendment application allowed at later stage of hearing, i.e., on 24.04.2026. It was argued that the said subsequent termination was independently issued under Clause 16 of Section VI of the GCC on account of continued defaults committed by the petitioner even after reinstatement pursuant to the interim order dated 26.11.2025 passed by this Court. According to the respondents, despite a warning dated 18.12.2025, the petitioner continued to commit defaults resulting in financial losses exceeding Rs. 3 crores to Respondent No.5 and, therefore, subsequent challenge introduces an altogether fresh cause of action beyond the scope of the original writ petition.

(F) Submissions on behalf of Respondent No. 2 (NHAI)

69. Learned counsel appearing for respondent no. 2 has supported the arguments advanced on behalf of respondent no. 5, both on count of maintainability of the writ petition before this Court questioning the status of respondent no. 5 as a State and also the parties to the contract being under obligation on principle of privity of contract. Reliance was placed upon various authorities cited by respondent no. 5.

III

Points for Determination

70. In the light of the pleadings on record and submissions advanced by learned counsel for the parties, the following questions arise for consideration in this petition under Article 226 of the Constitution of India:

i. Whether Respondent No.5 falls within the judicial review under Article 226 of the Constitution, and whether it can be treated as State or an instrumentality thereof under Article 12 of the Constitution of India.

ii. Whether the dispute arises out of a purely commercial contract or whether the impugned actions in the facts of the present case disclose any element of public function, and if so, whether the issuance of Notice Inviting Tender dated 22.09.2025 and termination of contract dated 06.10.2025 are open to judicial review.

iii. Whether this Court has territorial jurisdiction under Article 226(2) of the Constitution, having regard to the place of cause of action and the effect of the jurisdiction clause conferring exclusive jurisdiction on courts at Delhi.

IV

Discussion and Analysis

71. Having heard learned counsel for the parties and upon consideration of the pleadings and material brought on record, we proceed to examine points before this court for determination but before adverting to point-wise consideration, it is noted that learned counsel for the parties have relied upon several judicial precedents in support of their respective submissions, which have already been noticed in the above paragraphs of this judgment. The Court has duly considered all judgements cited by parties, however, to avoid repetition, the discussion and analysis herein is based upon all the submissions, pleadings on record and judgments cited by parties, without referring them individually again unless the reference to the same in firm necessity by us.

72. During the course of hearing, main objection had been raised by the respondents regarding maintainability of the writ petition, the nature of the dispute, and the jurisdiction of this Court in the facts of the case. Since these objections go to the root of the matter, they are being considered first.

(i) Maintainability in the Context of Article 12

73. Learned senior counsel appearing for the petitioner had submitted that Respondent No.5 was engaged in toll operations on a National Highway, which is a public utility activity, and therefore discharges functions having a clear public character. It is contended that toll collection directly affected the public at large, and consequently, the actions of Respondent No.5 cannot be kept outside the purview of judicial review under Article 226 of the Constitution. In support of his above submissions, he took us to a number of provisions of the National Highway Act, 1956, the Control of National Highways (Land and Traffic) Act, 2002, the National Highways Authority Act, 1988, the National Highways (Collection of Fees by any Person for the Use of Section of National Highways/Permanent Bridge/Temporary Bridge on National Highways) Rules, 1997 and the National Highway (Rate of Fees) Rules, 1997 which we have already referred to above.

74. On the other side, respondents have raised a preliminary objection that respondent no. 5 was a private limited company, having no governmental shareholding or deep and pervasive control by the State, which was necessary for the writ jurisdiction. It was submitted that its relationship with the NHAI was purely contractual in nature, and a mere fact that it was engaged in highway-related operations, did not alter its private character so as to bring it within the ambit of Article 12 of the Constitution.

75. It is well settled in a catena of judgements of the Supreme Court that the scope of judicial review under Article 226 is wider than the definition of “State” under Article 12, and in appropriate cases even a private body may be amenable to writ jurisdiction if it discharges statutory functions or performs duties having public law consequences. However, every activity connected with public infrastructure does not, by itself, acquire a public law character so as to invite writ jurisdiction in all disputes arising therefrom.

76. The Court is required to examine the real nature of the relationship between the parties and also the source of the impugned action. In the present case, the rights and obligations inter se the parties arise out of the agreement dated 26.06.2025. The grievance relates to issuance of Notice Inviting Tender, alleged breaches, and consequent termination of the contract. If we look at complete ambit of the dispute, none of these actions are shown to be traceable to any statutory or sovereign power exercised by respondent no. 5. Main function of the company is toll collection but the genesis of the dispute is breach of contract and nothing, which can be referable to the public function under which the dispute has occurred. Reference here may be heard of Bareilly Development Authority (Supra).

77. After careful perusal of records, submissions by counsel, going through laws, provisions of National Highway Act, 1956, the Control of National Highways (Land and Traffic) Act, 2002, the National Highways Authority Act, 1988, the National Highways (Collection of Fees by any Person for the Use of Section of National Highways/Permanent Bridge/Temporary Bridge on National Highways) Rules, 1997 and the National Highway (Rate of Fees) Rules, 1997 and going through cited judgements on these relevant issues by both sides, we are of the considered view that merely because the contract pertained to toll collection on a National Highway it does not by itself would convert the dispute into a dispute involving public law. The record does not indicate that respondent no. 5 is financially, functionally, or administratively dominated by the State so as to satisfy the tests under Article 12. Looking to the structure of bodies created and incorporated as we find that there is absolutely no control by NHAI and the company has invested its money, and the contract is made because the investment is for collecting toll for 20 years to make profit out of that investment after recovering its investment cost, which is already paid. For reference see the case of ICSSSR (Supra) and Manoj Petroleum (Supra).

78. In this regard, reference may also be made to the decision of the Supreme Court in S. Shobha v. Muthoot Finance Ltd., 2025 SCC OnLine SC 177, wherein the Supreme Court reiterated that the crucial test for determining amenability to writ jurisdiction is the nature of the function being discharged and the existence of a public duty in relation to the impugned action. The Supreme Court observed that merely because a private body is subject to statutory regulation or operates in a regulated field, it does not ipso facto become State under Article 12. It was held that a writ would lie against a private body only where the action complained of, bears a direct nexus with discharge of a public duty or statutory obligation. Relevant paragraphs are reproduced hereinbelow:

8. A body, public or private, should not be categorized as amenable or not amenable to writ jurisdiction. The most important and vital consideration should be the function test as regards the maintainability of a writ application. If a public duty or public function is involved, any body, public or private, concerned or connection with that duty or function, and limited to that, would be subject to judicial scrutiny under the extraordinary writ jurisdiction of Article 226 of the Constitution of India.

9. We may sum up thus:

(3) Although a non-banking finance company like the Muthoot Finance Ltd. with which we are concerned is duty bound to follow and abide by the guidelines provided by the Reserve Bank of India for smooth conduct of its affairs in carrying on its business, yet those are of regulatory measures to keep a check and provide guideline and not a participatory dominance or control over the affairs of the company.

(4) A private company carrying on banking business as a Scheduled bank cannot be termed as a company carrying on any public function or public duty.

(5) Normally, mandamus is issued to a public body or authority to compel it to perform some public duty cast upon it by some statute or statutory rule. In exceptional cases a writ of mandamus or a writ in the nature of mandamus may issue to a private body, but only where a public duty is cast upon such private body by a statute or statutory rule and only to compel such body to perform its public duty.

(6) Merely because a statue or a rule having the force of a statute requires a company or some other body to do a particular thing, it does not possess the attribute of a statutory body.

(7) If a private body is discharging a public function and the denial of any rights is in connection with the public duty imposed on such body, the public law remedy can be enforced. The duty cast on the public body may be either statutory or otherwise and the source of such power is immaterial but, nevertheless, there must be the public law element in such action.

(emphasis supplied)

79. Applying the aforesaid principles to the facts of the present case, mere engagement of Respondent No.5 in toll operations on a National Highway, or the existence of a statutory framework regulating such activity, would not by itself render every contractual dispute amenable to writ jurisdiction. What remains material is whether the impugned action in the present dispute involves discharge of any public duty or exercise of public function, or whether it essentially arises from assertion of contractual rights and obligations under a commercial arrangement.

80. It is also an undisputed fact that the contract between the parties contains an arbitration clause for resolution of disputes arising therefrom. The issues raised primarily concern alleged breaches of contractual obligations and termination under the agreement, which clearly fall within the domain of private law remedies.

(ii) Nature of Contract and Scope of Writ Jurisdiction

81. The next point is whether the dispute is purely contractual in nature or whether the impugned actions disclose any element of public function so as to warrant interference under Article 226.

82. Learned counsel for the petitioner has submitted that the issuance of Notice Inviting Tender dated 22.09.2025 was premature and undertaken before expiry of the time granted to respond to earlier communications, which showed that respondent no.5 had acted against petitioner with premeditated mind. It was further contended that the termination order dated 06.10.2025 was arbitrary and pre-decided, as the steps to give contract to another agency commenced even before completion of the contractual process.

83. The respondents, on the other hand, refuted the above-mentioned allegations and contented that the petitioner committed repeated defaults in performance of contractual obligations, resulting in disruption of toll operations, which was the work, which had to be continuously ongoing. Unless the new contract was invited to takeover, the old one could not be relieved and in the light of this, it was further urged that the contract itself contained express provisions enabling termination and substitution in case of breach, and the impugned actions were traceable to such contractual stipulations.

84. After perusal of contract, we have noticed that the terms of the GCC governing the relationship between the parties contains a force majeure clause which provides that neither party shall be deemed to be in default in performance of its obligations if such performance is prevented or delayed due to events beyond reasonable control, including but not limited to acts of God, natural calamities, epidemic conditions, governmental action, or judicial orders. The clause further stipulates a mechanism requiring the affected party to issue notice within a stipulated period and contemplates consultation between the parties in the event such conditions continue beyond a specified duration, including the possibility of early termination.

85. Further, the contract also contains an express termination clause empowering either party to terminate the agreement upon prior notice. In addition, the contract contemplates termination for just cause, including breach of terms, violation of conditions, or suppression of facts, coupled with consequences such as risk-and-cost arrangements, imposition of penalties, forfeiture of security deposits, and other commercial consequences flowing from default. The agreement also provides for penal consequences in cases of excess fee collection or violation of operational norms, including forfeiture and debarment from future assignments.

86. The existence of such detailed contractual mechanisms indicates that the relationship between the parties is structured as a determinable commercial arrangement governed by mutually agreed terms, including remedies for breach and exit options. The dispute arising between the parties is thus required to be examined in the backdrop of such clear stipulations in the contract while assessing whether there is something actually warranting judicial review under Article 226.

87. It is well settled principle of law that mere allegation of arbitrariness in a contractual matter does not change the nature of dispute. Judicial review under Article 226 is not intended to be exercised for enforcement or escape from the contractual rights, obligations or adjudication of disputed questions arising from commercial agreements, except where arbitrariness or statutory obligation is involved. Reference here may be made to the authority of Radha Krishna Agarwal (supra).

88. In the present case, the dispute revolves around performance of contractual obligations, alleged breaches, issuance of notices, invocation of termination clauses, and consequential commercial arrangements. These issues necessarily involve disputed questions of fact and interpretation of contractual terms, which is clearly in the ambit of private law dispute and writ jurisdiction cannot be invoked for resolution. See the cases of Pimpri Chinchwad Municipal Corporation (supra), Joshi Technologies International Inc. (supra), K.K. Saksena (supra) , and Ramakrishna Mission (supra).

89. The contract is determinable in nature and contains an arbitration clause for resolution of disputes. The petitioner, in effect, seeks restoration of a terminated commercial arrangement, which falls clearly within the realm of private law. [Bareilly Development Authority (supra)].

(iii) Territorial Jurisdiction

90. The respondents have raised an objection regarding territorial jurisdiction as well, which is raised after relying upon the clause in the agreement conferring exclusive jurisdiction upon courts at Delhi. It is submitted that the impugned decisions were taken at Delhi and, therefore, this Court lacks jurisdiction. The GCC contains provisions relating to dispute resolution and jurisdiction. Clause 20 of the General Conditions originally provided for resolution of disputes through competent courts, with an earlier stipulation indicating jurisdiction within the respective State. The said clause was subsequently modified by corrigendum dated 02.05.2025. By virtue of the said corrigendum, it has been stipulated that any dispute or difference arising out of or in connection with the contract shall be subject to the jurisdiction of Delhi.

91. Learned counsel appearing on behalf of the respondent, while opposing the writ petition, had submitted that this court did not have territorial jurisdiction to entertain this matter. It is well settled law that parties cannot, by agreement, take away the constitutional rights and, therefore, jurisdiction of a High Court under Article 226 of the Constitution cannot be taken away by any agreement in between parties. But this cannot be seen as such jurisdiction related clauses in the agreement are not relevant for understanding the contractual intention of the parties and the forum contemplated for adjudication of disputes although the jurisdiction under Article 226 falls on different footing. The effect of the jurisdiction clause in the agreement is to be examined in light of Article 226(2) of the Constitution and the place where a part of the cause of action arises.

92. In the present case, the toll plaza is situated within the State of Uttar Pradesh, where the contractual operations were carried out. The alleged defaults, operational incidents, and consequences arising from the impugned termination are all substantially connected with the said location. Accordingly, a material and integral part of the cause of action has arisen within the territorial jurisdiction of this Court. The jurisdiction clause contained in the agreement, even as modified, cannot override the constitutional mandate under Article 226(2), and the objection raised by the respondents is therefore rejected.

V

Conclusion

93. Upon consideration of the pleadings, submissions, and materials on record, and for the reasons recorded in the foregoing discussion, we are of the considered view that the dispute can still be of the nature involving private law remedies even if the activity of the company is in a nature of public function. The overall function of the company and the point of dispute can be seen separately yet in totality to determine its real nature and the available alternate remedy. The cases of ABL International Ltd. (supra), Zee Telefilms Ltd. (supra) and BCCI (supra) are not applicable on facts and circumstances of the present petition and accordingly are found to be of no help to the petitioner.

94. Respondent no. 5 cannot be treated as State or an instrumentality thereof within the meaning of Article 12 of the Constitution, as the relationship between the parties is governed by a purely contractual arrangement. No material has been placed on record to indicate any substantial and effective governmental control, nor is there anything to suggest that respondent no. 5 exercises statutory or sovereign power in the discharge of its functions and the dispute is arising in the course of that function. The mere fact that the contract pertains to toll operations on a National Highway, by itself, is insufficient to alter the essentially private and contractual character of the arrangement under which the dispute occurred, which is clearly due to contractual dispute.

95. The provisions of the National Highways Act, 1956, the Control of National Highways (Land and Traffic) Act, 2002, the National Highways Authority of India Act, 1988, the National Highways (Collection of Fees by any Person for the Use of Section of National highways/permanent Bridge/temporary Bridge on National Highways) Rules, 1997 and the National Highway (Rate of Fees) Rules, 1997 that have been cited by learned Senior Advocate, are in our considered view, regulatory measures to lay down guidelines for National Highway Authority to acquire the land for constructing National Highways, its procedures, design and also its regular maintenance by creating toll plazas to charge user fee. Thus, even if from principles that have been basic in nature to govern contracts term, it would not make such contract statutory in nature and would certainly not take away its determinable character. Parties, therefore, would continue to govern by principles of privity of contract. In many cases, Government outsources its work, though statutorily such work is governmental task which is in duty for it to discharged, an outsourced agency may further enter into a contract with an individuals a service providers for human workforce. This man power resource agreement, therefore, would certainly fall in a realm of pure private determinable contract to bind the parties under the terms of contract, their rights to walk out of it and so also resolution of factual disputes through arbitration clause provided under the agreement. The work, though is essentially on the guidelines provided by the Government, it would still not be involving a public law element. The argument as advanced by learned Senior Advocate appearing for the petitioner if accepted, it would frustrate the arbitration clause provided under the contract and would create unnecessary invade in the obligations governed by the privity of contract. So even while piercing the corporate veil, we do not see the contractual obligations created under the contract between the respondent no. 5 and the petitioner, to be in any manner bringing any public law element to the nature of work to be executed by such second party to the agreement. Collection of user fee as a rule under the guidelines, would still stand governed by the terms of the contract on solemn principles of privity of contract between the parties.

96. A company may perform a public duty in general, but the writ court does not automatically enter every dispute arising out of it. What is material is whether the impugned action in the specific dispute is an exercise of public function or merely an assertion of contractual or commercial rights. Even where an entity is engaged in activities of a public character in a broader sense, such as toll collection on a national highway, the present controversy may still remain purely contractual in nature, concerning issues such as termination of contract, alleged breach, and substitution of new agency, and therefore fall outside the scope of writ jurisdiction. The dispute in the present case pertain to enforcement of contractual terms, which are appropriately referable to alternative remedy or arbitration. Accordingly, the matter does not warrant exercise of extraordinary writ jurisdiction under Article 226.

97. A breach of contract by a party to the contract whether maliciously or by way of arbitrary exercise of power contrary to the provisions reached under the agreement, would still invite an actionable claim under ordinary civil law for which forum of a court of competent jurisdiction is always there, and/or also resolution of disputes by invoking arbitration clause.

98. Here in this case, we are conscious of this fact that pleadings have also been exchanged on merits of the case but any attempt or venture by us to embark upon an enquiry as to the rival contentions advanced on the determination of contract, would require us to appreciate not only bare facts but the evidence that are to be placed before us. The fact in issue relevant to the controversy raised relates to the discharge of duty/obligations by second party to the contract, not being in terms of the agreement and this requires in depth appreciation of evidence to be led by the parties. This Court being a Court of records would certainly be inviting pleadings based on admitted positions where of course, the Court would not require to conduct any trial to appreciate the documents led in evidence, more especially in the circumstances, when a better forum in terms of arbitration is prescribed and provided and the parties have voluntarily entered an agreement to bind themselves by the said clause under the agreement. We find this case to be involving serious disputed questions of facts as to the issue raised regarding non-discharge of duties as per the terms of the contract by the second party. We may add here that there is no quarrel as to the principle of law cited before us through various authorities but the question is as to whether in a given facts and circumstances, those principles would warrant interference by this Court in exercise of it power of judicial review under Article 226 of the Constitution of India. We have already discussed above that the disputed questions of facts have been raised and, therefore, even though principles are not questionable, we do not find those judgments to be of any help to the petitioner in maintaining this petition on merits by passing forum of arbitration.

99. It is further worth noticing that the contract under the agreement was to provide services for a period of 1 year plus 12 months extension subject to satisfactory performance. The contract was entered between the parties on 26.06.2025 and came to be terminated, in mid term by respondent no. 5. Though the petitioners contract was terminated, mid term, by respondent no. 5 on 06.10.2025, however, pursuant to the interim orders dated 04.11.2025 and 26.11.2025 passed by this Court, Petitioner has been made to continue until today i.e. 22.05.2026, so almost they have continued a month less than 1 year. Had the petitioner continued under the contract in ordinary course, their extension would have been done only subject to satisfactory work. The respondents have questioned the satisfactory work by the petitioner by issuing show cause notice. Thus, it becomes question of appreciation of defence set up by the petitioner for which an appropriate forum would be arbitration proceedings.

100. In our considered view, the objection regarding territorial jurisdiction cannot be accepted. It is noted that this Court has jurisdiction under Article 226(2) of the Constitution, as a substantial and integral part of the cause of action has admittedly arisen within its territorial limits. The dispute relates to contractual operations carried out at the toll plaza situated within the State of Uttar Pradesh, and the alleged defaults, incidents, and consequences flowing from the impugned actions are closely connected with the said location. In these circumstances, the mere fact that certain decisions were taken or communications were issued from New Delhi, or that the agreement contains a jurisdiction clause in favour of courts at New Delhi, cannot have the effect of excluding the constitutional jurisdiction of this Court. It is well settled that such contractual clauses cannot oust or curtail the jurisdiction conferred under Article 226 of the Constitution. Accordingly, the objection is rejected.

VI

Order

101. In view of the above discussions and conclusion, on each of the points for determination, no case for interference under Article 226 of the Constitution is made out. Accordingly, we decline to grant indulgence in the petition to interfere on merits. However, it is always open for the petitioner to avail the alternative remedies as otherwise available in law including the arbitration.

102. Accordingly, the writ petition fails and is dismissed, subject to observations made hereinabove. Interim order, if any, stands discharged. Consequences to follow.

103. No order as to costs.

(Swarupama Chaturvedi,J.)    (Ajit Kumar,J.)
 

 
May 22, 2026
 
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