Tirlok Chand and Another Vs the State of Hp and Others

In this writ petition, petitioners essentially seek enforcement of a contract agreement allegedly executed between them and respondent No.4 on 18.11.2019.

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2. Heard learned counsel for the parties and considered the case file.

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3. The case set up by the petitioners is that respondent No.1 entered into a Memorandum of Understanding (MoU) with respondent No.4 for execution of a Micro Hydroelectric Project by the name of ‘Khalara SHP

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1 Whether reporters of print and electronic media may be allowed to see the order? Yes.

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(2.5 MW)’ in District Kullu. Respondent No.4 on account of inter se disputes amongst its partners etc. could not start execution of the project work till 2019. On 18.11.2019, respondent No.4 allegedly entered into a contract with the petitioners (Annexure P-3), whereby a work order was placed upon them for ‘complete shifting & fabrication, Erection of Penstock & Steel Linear in HRT, Surge Shaft and Expenses Joint for Khalara SHEP (2.5 MW)’. It is the case of the petitioners that they have spent about Rs.15 Lakhs for construction of labour sheds and purchase of raw material towards the work order placed upon them by respondent No.4. The work of the project in question, however, was again stalled.

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Learned counsel for the petitioners, in fact, submits that the project work remained stopped till December, 2025 and it was in January, 2026 that the respondents commenced the construction work of Khalara SHEP (2.5 MW). Petitioner’s grievance is that even though in terms of the No Objection Certificate issued by the Gram Panchayat Shilanal, District Kullu on 17.08.2012 (Annexure P-1), respondent No.4 is to provide 70% employment to the unemployed villagers of the concerned Gram Panchayat and in terms of Clauses 20 & 35 of the

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MoU, it is required to deploy man power and give employment to the Himachalis, however, respondent No.4 is not enforcing the work order placed by it upon the petitioners on 18.11.2019 (Annexure P-3).

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4. The dispute raised in this writ petition relates to enforcement of the contractual obligations allegedly entered into by respondent No.4 with the petitioners. The remedy available to the petitioners lies in some other Forum and not by way of invoking jurisdiction under Article 226 of the Constitution of India. Reference in this regard can be made to Silppi Constructions Contractors Versus Union of India and another² , wherein, after considering several precedents on the subject, Hon’ble Apex Court reiterated that the Courts should exercise restraint while exercising powers of judicial review in contractual matters. It was held as under:-

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“19. This Court being the guardian of fundamental rights is duty-bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court in all the aforesaid decisions has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry.

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2 (2020) 16 SCC 489

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4

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The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in Judges’ robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. As laid down in the judgments cited above the courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give “fair play in the joints” to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer.”

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In view of above, relief claimed by the petitioners

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cannot be granted in this writ petition. Therefore, reserving liberty to the petitioners to seek appropriate remedy in accordance with law for the redressal of their grievances, this writ petition to stand disposed of. Pending miscellaneous application(s), if any, also stand disposed of.

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Jyotsna Rewal Dua Judge

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March 11, 2026 Mukesh

Tirlok Chand and Another v. the State of Hp and Others

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Tirlok Chand and Another v. the State of Hp and Others

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