The doctrine of severability establishes that an arbitration clause remains independent of the underlying contract. Consequently, parties must exhaust the agreed-upon arbitral process; invoking extraordinary writ jurisdiction to bypass this mechanism is impermissible unless exceptional, rare circumstances warrant direct judicial intervention.

JUDGMENT :

Meenakshi Madan Rai, J.

1. The Petitioner is a Company incorporated under the Companies Act, 1956 and claims to be a Special Purpose Vehicle, incorporated for the sole purpose of developing the Ting-Ting Hydroelectric Project, on river Rathong Chu, in West Sikkim. The Company identified the Project site in 2005 and accordingly approached the Respondents. Respondent No.2 accepted the proposal vide letter dated 05-12-2005 and the Respondent No.1 issued a Letter of Intent (LoI), dated 12-01-2006, entrusting the promoters of the Petitioner with the development of the Project. The Implementation Agreement (IA)/ Deed of Agreement, dated 03-09- 2008, was executed between the Petitioner and the Respondent No. 1, for the said Project, along with a Supplementary Agreement/Deed of Agreement, dated 11-03-2010, for a period of thirty-five years, ending on 03-09-2043.

2. The Petitioner Company now alleges that, during the subsistence of the IA (supra) between the Petitioner and the Respondents, the Respondent No.1 has arbitrarily and illegally issued a Request for Proposal (RFP), bearing No.022/ Power/IPP/2025-26/03, dated 19-09-2025, for development of the Ting-Ting Hydroelectric Project, on Build, Own, Operate and Transfer (BOOT) basis, in Gyalshing District of Sikkim.

3. The Petitioner seeks the following reliefs;

(a) Issue a writ of certiorari or any other appropriate writ, order, or direction quashing and setting aside the Request for Proposal (RFP) No.022/Power/ IPP/2025- 26/03, dated 19-09-2025, issued by the Respondent No.1, for development of the 99 MW Ting-Ting Hydroelectric Project;

(b) Direct the Respondents to implement the Project as per the Existing Implementation Agreement, dated 03-09-2008, with the Petitioner;

(c) Pending final disposal of the present Petition, stay the operation, implementation, and effect of the Request for Proposal (RFP) No.022/Power/IPP/2025-26/03, dated19-09-2025 issued by the Respondent No.1;

(d) Till the disposal of the instant Writ Petition, restrain the Respondents from creating any third-party interests in the Project including (without limitation) by way of awarding the Project to any other entity or taking any further steps pursuant to the said RFP which would render the present proceedings infructuous;

(e) Pass such other or further orders as this Hon’ble Court may deem just, necessary and proper and in the interest of justice in the facts and circumstances of the case.

4. As per Learned Senior Counsel for the Petitioner, an amount of Rs.30,00,00,000/- (Rupees thirty crores) only, has been invested in the Project and non-refundable processing fees of Rs.9,00,000/- (Rupees nine lakhs) only, as stipulated in the IA (supra) has also been paid. Necessary clearances were obtained from various authorities from 2007 to 2012. The State Government however on 08-02-2012 abruptly communicated to the Petitioner about the closure of the Project, by Notification of the Governor, on grounds of Public Interest (Religious Sentiments), sans formal termination of the IA. Approximately fifteen letters were exchanged between the Petitioner and the Respondents pertaining to the closure of the Project. Without any response to the correspondence, the State Government issued a communication dated 05-05-2014, requesting the Petitioner to appoint an Arbitrator as per Article 9 of the IA, invoked by the Petitioner vide notice dated 03-03-2014. It is contended