Judicial review in government contracts is limited, ensuring non-arbitrariness, and contract termination on grounds of corruption can occur without pre-notice when grounded in statutory provisions.

JUDGMENT :

PRAVEER BHATNAGAR, J.

1. These two writ petitions, having been heard together, are decided by this common judgment.

2. The present writ petitions under Article 226 of the Constitution of India arises out of and relates to the tender process initiated by the respondent– Jaipur Vidyut Vitran Nigam Limited, (hereinafter, to be referred as 'JVVNL') under Tender-NIT No. JVVNL/SE(TW)/TN-545 & JVVNL/SE(TW)/TN-546 and the contract awarded pursuant thereto for execution of works relating to 33/11 KV Grid Sub-Stations on 'BOOT' model basis.

3. The petitioner has approached this Court assailing the termination of the said contract vide order dated 09.04.2025, along with the consequential actions including issuance of show- cause notice and the order of debarment dated 13.08.2025 and has prayed for quashing of the said orders on the ground that the same are arbitrary, violative of the principles of natural justice, contrary to the terms of the contract and in breach of the provisions of the Rajasthan Transparency in Public Procurement Act, 2012 (in short, ‘Act of 2012’) and the Rajasthan Transparency in Public Procurement Rules, 2013 (in short, ‘Rules of 2013’) framed thereunder.

Argument Advanced by Counsel for the Petitioner:-

4. Learned Senior counsel appearing on behalf of the petitioner submits that the impugned termination order dated 09.04.2025 and the consequential debarment order dated 13.08.2025 are ex facie arbitrary, unreasonable and unsustainable in law. It is contended that the respondents have acted in a pre-determined manner, without adhering to the contractual framework governing the parties and have sought to justify the termination retrospectively by relying upon internal enquiry reports and audit observations. It is argued that once a contract is lawfully awarded after scrutiny by the respondents’ own committees and substantial work has been executed thereunder, the respondents cannot abandon the contractual terms and resort to extra-contractual considerations to terminate the agreement.

5. Learned counsel for the petitioner further submits that the preliminary objection raised by the respondents regarding non- maintainability of the present writ petition is unsustainable in law. It is argued that the jurisdiction of this Court under Article 226 is not ousted merely because the dispute arises out of a contractual relationship. In order to buttress his argument reliance was placed on the case of ABL International Ltd. v. Export Credit Guarantee Corporation of India Ltd. , (2004) 3 SCC 553 , Vice Chairman & Managing Director, CIDCO v. Shishir Realty Pvt. Ltd., (2022) 16 SCC 527 , Subodh Kumar Singh Rathour v. Kolkata Metropolitan Development Authority , (2024) SCC OnLine SC 1682 and State of U.P. v. Sudhir Kumar Singh , (2021) 19 SCC 706 , wherein the Hon’ble Apex Court held that when the State or its instrumentalities are parties to a contract, they remain bound by the mandate of Article 14 to act fairly, reasonably and non-arbitrarily and that arbitrary repudiation or termination of contractual obligations is amenable to judicial review.

6. Learned counsel further submits that the mere existence of disputed questions of fact does not, by itself, bar the exercise of writ jurisdiction and while placing reliance on the judgments of Unitech Ltd. v. Telangana State Industrial Infrastructure Corporation , (2021) 16 SCC 35 and UMC Technologies Pvt. Ltd. v. Food Corporation of India , (2021) 2 SCC 551 , it is contended that where the ch