The Rajasthan High Court, Jaipur Bench, allowed the writ petitions filed by JCL Infra Private Limited and set aside the arbitrary actions of the Jaipur Development Authority (JDA) in withdrawing the awarded EPC contract and re-inviting tenders for the Detailed Project Report (DPR) of the OTS Flyover project on JLN Marg, Jaipur.
Justice Sameer Jain held that the actions of JDA were manifestly arbitrary, violative of principles of natural justice, and contrary to the terms of the contract.
Facts of the Case
JCL Infra was awarded the EPC contract for “Traffic Improvement and Beautification Work at OTS Crossing, JLN Marg, Jaipur” vide Letter of Acceptance dated 14.12.2022 for a value of approximately Rs. 184.30 Crores. A formal contract agreement was executed on 27.12.2022.
The petitioner claimed to have mobilized resources, submitted multiple drawings, designs, traffic plans, and executed work worth Rs. 20.41 Crores, with total investment around Rs. 40 Crores. Despite repeated requests, JDA allegedly failed to grant necessary approvals and hand over the site properly.
On 24.04.2024, JDA unilaterally withdrew the entire work under Clause 32 of the contract without issuing a show-cause notice or providing reasons. Subsequently, during the pendency of the writ petition, JDA re-invited tenders for preparation of a fresh DPR for the same project, including the OTS Flyover component.
Key Legal Issues
- Maintainability of writ petition in contractual matters involving State instrumentality.
- Validity of unilateral withdrawal of contract without opportunity of hearing.
- Scope and interpretation of Clause 32 of the contract.
- Applicability of promissory estoppel and legitimate expectation.
- Arbitrariness in re-inviting tender for a project where substantial work had already been done.
Petitioner’s Arguments
- The withdrawal order was non-speaking, vague, and passed in violation of natural justice.
- Delay was attributable to JDA’s failure to approve drawings and hand over site, not to the petitioner.
- Clause 32 does not permit wholesale withdrawal of the entire contract.
- Petitioner had invested heavily and executed significant work on the strength of the contract.
- Re-tendering for DPR was illegal as a valid DPR already existed and work was underway.
- Action violated Articles 14, 19(1)(g), and principles of promissory estoppel.
Respondents’ Stand (JDA)
- Petitions not maintainable due to lack of proper authorization.
- Petitioner suppressed material facts and was guilty of delay and non-compliance.
- Withdrawal was justified due to site constraints and technical issues.
- Fresh DPR was necessary for better project planning.
High Court’s Decision
The Court rejected JDA’s preliminary objections regarding maintainability and authorization. It held that:
- The impugned withdrawal letter dated 24.04.2024 was arbitrary, non-reasoned, and passed without affording any opportunity of hearing, violating principles of natural justice.
- JDA failed to demonstrate any default by the petitioner; on the contrary, extensions were granted acknowledging ongoing work.
- Clause 32 cannot be invoked for complete termination of the contract in the manner done by JDA.
- The doctrine of promissory estoppel applied strongly in favour of the petitioner.
- Re-invitation of tender for DPR of the same project was unsustainable when substantial progress had already been made.
The Court quashed the withdrawal letter and the fresh NIB to the extent it related to the OTS Flyover component. It directed JDA to consider the petitioner’s claims for payment and price variation in accordance with the contract.
This judgment reinforces that government authorities cannot act arbitrarily in contractual matters, especially after a contractor has made substantial investments relying on the awarded contract. It underscores the duty of fairness, transparency, and adherence to natural justice even in pure contractual disputes involving public bodies.
Case Details
Case Title: JCL Infra Private Limited v. Jaipur Development Authority & Ors.
Case Nos.: S.B. Civil Writ Petition No. 8120/2025 (Lead Case) connected with S.B. Civil Writ Petition No. 17571/2024
Court: Rajasthan High Court, Jaipur Bench
Coram: Hon’ble Mr. Justice Sameer Jain
Date of Judgment: 02nd June 2026
Click HERE for full Judgment.
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