The court reaffirmed that contractual disputes with an arbitration clause are not maintainable under Article 226 unless exceptional circumstances arise, emphasizing lawful forfeiture of security for breach of contractual obligations.

ORDER :

NUPUR BHATI, J.

1. This writ petition has been filed by the petitioner under Article 226 of the Constitution of India, seeking following reliefs:-

“(i) The impugned order dated 04.06.2025 (Annex.22) may kindly be declared arbitrary, unjust and same may kindly be quashed and set aside.

(ii) The respondent authorities may kindly be directed to deposit the amount of performance security in the account of the petitioner firm with interest.

(iii) The respondent authorities may kindly be directed to provide the relaxation in the weekly remittance fees as per the request made by the petitioner as the petitioner firm sustained losses.

(iv) The respondent authorities may kindly be directed to provide the relaxation as per the clause 26 of the contract.

(v) The respondent authorities may kindly be directed not to impose any penalty on due amount and not to blacklist the petitioner firm for further contract in respondent department.

(vi) The respondent authorities may kindly be restrained from debarring the petitioner firm from the participating in bid process of any procurement and blacklisting the petitioner firm.

(vii) Any other appropriate writ, order or direction which this Hon'ble Court deems just and proper may kindly be passed in favour of the petitioner.”

2. It is inter alia indicated in the petition that the petitioner is a registered firm with the Government of India under GST registration (Annex.1), for which the GST department has issued a registration certificate as per Rule 10(1) of the GST Rules. The respondent State Highway Authority issued NIT dated 06.06.2024 (Annex.2) for collection of user fee at the Toll Plaza located at Khood-Dataram to Renwal km “00.00 to 51+040”, prescribing the bidding process, the projected toll collection of Rs. 6.22 crore for one year, the contract period of one year, and the applicable fee for various categories of vehicles.

2.1. Clause 2.21 of the NIT provided that user fees shall be collected by the successful bidder and the agreed amount, as referred to in para (h) of the preamble and clause 5 of the contract, shall be remitted to the authority on a weekly basis, latest by Tuesday of every week, by way of demand draft, and the petitioner-firm participated in the bid process. The technical bid was opened on 20.06.2024 and the financial bid on 12.07.2024, whereafter the petitioner was found to be the highest bidder and, taking into consideration its bid amount of Rs. 7,11,75,000/- as annual remittance, respondent–Member WC&O, Rajasthan State Highway Authority, issued the letter of acceptance dated 29.07.2024 (Annex.3), prescribing the weekly remittance as Rs. 13,65,000/-.

2.2. In pursuance of the said letter of acceptance, an agreement dated 02.09.2024 (Annex.4) was executed between the State Highway Authority and the petitioner-firm, containing, inter alia, clauses relating to termination, pre-mature termination, and termination due to force majeure; clause 36 provided for termination of contract by the authority, whereas clause 36(5) provided for pre-mature termination of the contract at the request of the contractor.

2.3. Under clause 36(5), the contractor was entitled, within 30 days of taking over the toll plaza, to seek pre-mature termination if it felt it had erred in assessing realizable user fee, subject to continuing collection and remittance till handing over to a new agency and to appropriation of 25% of performance security by the authority as mutually agreed genuine pre-estimated compensation and damages, while the balance performance security w