The court affirmed the validity of public-private partnerships in organizing sporting events, emphasizing limited judicial review in contractual matters between the State and private entities.

JUDGMENT :

PAMIDIGHANTAM SRI NARASIMHA, J.

1. Leave granted.

2. The present appeals arise out of an order dated 19.02.2024 passed by the Madras High Court disposing of various writ petitions filed as public interest litigations (‘PILs’) against the conduct of Formula 4 racing in the city of Chennai, Tamil Nadu, in which the following directions were issued:

“22. Accordingly, this batch of writ petitions are disposed of, with the following directions

(i) The Formula 4 Race proposed to be conducted in the Chennai Racing Circuit is permitted to be held on the dates to be decided by the State Government in consultation with the stakeholders

(ii) The State Government shall ensure that the street race in the 3.7 km as stipulated, shall be carried on, with highest degree of public safety and avoiding inconvenience to the public, especially the in-patients of the Rajiv Gandhi Government General Hospital, Madras Medical College, and Omandurar Government Multi-speciality Hospital. This can be ensured by installing necessary silencing equipment like sound silence panels/acoustic sound panel for noise control in the hospitals during the time of the racing events.

(iii) The RPPL shall ensure that all public viewers will be provided with necessary protective gear for their safety during the Race

(iv) The RPPL shall reimburse the expenditure made by the State Government (i e) Rs 42 crores from the public exchequer, to them, prior to the conduct of the event

(v) The State Government must ensure that RPPL or anyone should deposit in advance (prior to next year and the upcoming third year's event) the stipulated expenditure of Rs 15 crores for the upcoming two years for holding the Street Circuit in Chennai

(vi) The RPPL cannot expect anything more than facilitation as well as arrangements along with co-ordination and co-operation of the State authorities, and the expenditure for the event will have to be completely borne out only by the RPPL

(vii) In future, the State is expected to take upon itself the responsibility of conducting of such event in furtherance of its policy to encourage the racing sport and seek the support of private bodies having experience and expertise in the field. This will ensure fairness and also dispel any doubt as to mala fides in distribution of the State largesse”

3. The directions contained in paragraphs 22(iv) to (vii) alone are impugned before us.

4. The short facts that are necessary for us are that Racing Promotion Private Ltd, hereinafter referred to as the appellant, is involved in sponsoring and conducting the Formula 4 championship, which is a motorsport series of races. The appellant entered into a Memorandum of Understanding (MoU) dated 16.08.2023 with the Sports Development Authority of Tamil Nadu, hereinafter referred to as SDAT, for a term of three years for organising the event. The MoU sets out the obligations of both parties, and the relevant clauses are that while the appellant is under an obligation to spend Rs. 202 crores as part of its responsibility, the SDAT is required to spend Rs. 42 crores towards license and operations fee, roads, and miscellaneous expenditures including road beautification and painting. The relevant portion of the clauses are as under: