2025 INSC 251 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 17308 OF 2017

SAJID KHAN ...APPELLANT(S)

VERSUS

L RAHMATHULLAH & ORS. …RESPONDENT(S)

WITH

CIVIL APPEAL NO. 17310 OF 2017

CIVIL APPEAL NO. 17309 OF 2017

CIVIL APPEAL NO. 17311 OF 2017

JUDGMENT

PAMIDIGHANTAM SRI NARASIMHA, J.

1. We are yet again seized with the common question in

recruitment jurisprudence, whether the appellants' qualifications

for the post in question meet the standard prescribed in the

recruitment notification. This issue is not novel, and this Court

has established clear guidelines for judicial review and restraint in

determining equivalency. Following these principles, having

Signature Not Verified

carefully examined the decision of the employer (U.T. of

Digitally signed by
KAPIL TANDON
Date: 2025.02.20
[Link] IST
Reason:

Lakshadweep) to recognize the appellants' qualifications as

1
equivalent, we found it to be both justifiable and reasonable.

Having considered the governing recruitment rules, submissions

of the learned counsel and relevant precedents, we allow the

appeal. Consequently, we set aside the High Court's decision,

which had held that the appellants lacked equivalent qualifications

and resulted in the termination of their appointments.

2. Facts: The brief facts leading to this appeal are as follows.

The Union Territory of Lakshadweep, Department of Electricity

had issued an advertisement for recruitment to the post of Junior

Engineer (Electrical), a Group ‘C’ post. The required qualification

was specified to be a Degree in Electrical Engineering from a

recognized university, or a Diploma in Electrical Engineering from

a recognized institution with two years of experience in any of the

fields specified under the relevant recruitment rules.

3. The appellants are all Diploma-holders in Electrical and

Electronics Engineering, whereas the respondents hold a Diploma

in Electrical Engineering. The appellants and the respondents had

participated in the selection process. Pursuant to the recruitment

process, the authority published a select list on 03.09.2008 as per

which the appellants were declared selected.

2
4. Aggrieved, the respondents, whose names did not figure in

the Select List, filed Original Applications1 before the Central

Administrative Tribunal 2, contending that the appellants held a

degree other than the ones specified in the advertisement, and as

such, not qualified to be appointed to the post.

5. CAT accepted the said contention and by the common order

dated 27.01.2010 allowed the original applications and set aside

the appellant’s selection. It relied on the text of the advertisement,

and held that unstated qualifications cannot be read as a part of

those which are specified.

6. Hence, the appellants filed writ petitions 3 before the High

Court challenging the CAT’s decision. The Division Bench of the

High Court, by the order impugned before us, dismissed the writ

petitions and upheld the decision of the CAT. The High Court was

of the view that (i) the advertisement was clear in its requirement,

and that the appellants did not possess what was required; (ii) the

relevant recruitment rules, namely the Lakshadweep Electricity

Dept. (Group C and D Technical Posts) Recruitment Rules, 2002,

did not provide for any equivalence between Diplomas in Electrical

1 Original Application Nos. 91 of 2009, 554 of 2008, and 638 of 2008.

2 Hereinafter referred to as ‘CAT’.
3 Writ Petition Nos. 15398 of 2010, 6014 of 2010, 14891 of 2010 and OP (CAT) No.1305 of

2010.

3
Engineering and Diplomas in Electrical and Electronics

Engineering; (iii) the Lakshadweep Administration had not issued

any official instruction granting such equivalence; and (iv)

candidates figuring in the ranked select-list have no indefeasible

right to selection.

7. In this view of the matter, the High Court directed that the

select list be recast by only including candidates who possessed

the exact qualification as prescribed by the advertisement, and the

eligible candidates from the fresh list shall replace the appellants.

The appellants in Civil Appeal Nos. 17308/2017, 17310/2017,

17309/2017 and 17311/2017 are candidates whose name figured

in the select list published by the recruiting authority. Respondent

nos. 6-10 in C.A. No. 17308/2017, respondent nos. 6-10 in C.A.

No. 17310/2017, respondent nos. 4-6 in C.A. No. 17309/2017 and

respondent no. 4 in 17311/2017 are employees who were not

selected in the process. These respondents were aggrieved by the

appellants’ appointment contending that the degrees held by the

appellants were dissimilar to the required qualifications.

8. This Court issued notice on 09.01.2015 and the judgment of

the High Court was stayed pending disposal of the Special Leave

Petition. Subsequently, leave to appeal was granted on 12.10.2017

4
and we have continued this order until these civil appeals are

heard. We have heard Mr. Shaji P. Chaly, Mr. Gaurav Agrawal,

learned senior counsels, Mr. Rajeev Mishra, Mr. Saiby Jose

Kidangoor, learned counsels appearing for the appellants and Mr.

Amarjit Singh Bedi, learned counsel appearing for the

respondents.

9. On behalf of the appellants, it was urged that the two degrees

are similar in nature and no formal declaration of their equivalence

was needed. The only difference between the two is that the

Diploma held by the appellants included a diploma in an additional

subject, i.e, electronics engineering. The syllabus for a Diploma in

Electrical and Electronics Engineering is the same as the one for a

Diploma in Electrical Engineering. Hence, it cannot be said that

the appellants lacked the prescribed qualification.

10. It is also submitted that the recruiting authority was of the

view that the appellants possessed the prescribed qualification and

the diplomas of the appellants were treated at par with the

prescribed qualifications after the Department had received a

clarification from the Directorate of Technical Education,

Thiruvananthapuram, Government of Kerala. While the employer

took an informed decision after a technical assessment of the

5
concerned qualifications, the respondents without establishing

how the appellants’ diplomas fall foul of the required qualifications

approached the CAT after the process was complete. They have

submitted that the tribunal and the High Court have committed

an error in both fact and law.

11. Mr. Amarjit Singh Bedi, learned counsel appearing on behalf

of the respondents, fervently and persuasively submitted that

equivalence between degrees is to be found in the rules or are to

be specified by the recruiting authority. In the absence of the same,

selections must and should be made strictly in light of the specified

qualifications. Mr. Bedi submitted that the advertisement does not

include a diploma in Electrical and Electronics Engineering,

thereby barring the appellants’ qualification.

12. He relied on the decision of this Court in Guru Nanak Dev

University v. Sanjay Kumar Katwal4, wherein it was stated that

the qualifications have to be taken as exactly as specified, and that

any equivalency cannot be implied or assumed. He would submit

that deviating from the advertisement and accepting candidates

with different qualifications amounts to a fraud on the public, as

held in District Collector & Chairman, Vizianagaram v. M.

4 (2009) 1 SCC 610.

6
Tripura Sundari Devi.5 Relying on Ashok Kumar Sharma v.

Chander Shekhar,6 it was submitted that a public authority shall

be strictly held to what it represented. He concluded his

submission by arguing that if equivalent degrees are to be

included, many candidates who did not participate in the process

would have applied.

13. Analysis: We have given our anxious consideration to the

arguments advanced. The relevant rules for the concerned post,

namely, the Lakshadweep Electricity Department (Group ‘C’ and

‘D’ Technical Posts) Recruitment Rules, 2002 prescribe the

requirements in its Schedule, indicating the name of the post,

scale of pay, age, and the qualifications required. As against

Column no. 8 of the schedule, the Rules prescribe the “educational

and other qualifications for direct recruits” as follows:

THE SCHEDULE

[…]

1. Name of the Post Junior Engineer

[…] […] […]
8. Educational and other 1. Degree in Electrical
qualifications required Engineering of a
for direct recruits recognized University
OR
Diploma in Electrical
Engineering of a

5 (1990) 3 SCC 655.

6 (1997) 4 SCC 18.

7
 recognized institution
with 2 years Experience
in any one of the following
field.

(1) Running and

maintenance of DG Sets
(2) Generation, Transmission
& Distribution of
Electricity
(3) Internal electrification of
building
[…]
14. […] […]

14. Soon after these rules, which came into force in 2002, the

administration sought a clarification from the Director, Technical

Education, Kerala regarding the equivalence of the Diploma in

Electrical and Electronics Engineering of the Board of Technical

Education, Tamil Nadu with the Diploma in Electrical Engineering

issued by the Board in Kerala. The relevant portion from the letter

dated 11.02.2003 seeking clarification stated as follows:

“[…] The prospectus showing the syllabus and marks

statements for all the semesters for the three year diploma
in Electrical and Electronics Engineering issued by the
Department of Technical Education, Govt of Tamil Nadu,
obtained from one of the contestant are forwarded herewith
as desired. It is requested to kindly clarify whether the three
year Diploma in Electrical and Electronics Engineering
conducted by the Department of Technical Education, Govt
of Tamil Nadu can be considered equivalent to the
qualification of three year diploma in Electrical Engineering
conducted by the Department of Technical Education, Govt
of Kerala so as to adjudge the suitability of the candidature
of certain contestants. […] ”

8
15. The Department of Technical Education, Govt of Kerala

issued a response to the said clarification on 26.02.2003 stating

that both the qualifications are treated to be equivalent in the State

of Kerala. The relevant portion of this clarification is reproduced as

follows:

“[…] I am to inform you that the Diploma Certificate issued

by the Board of Technical Education, Tamil Nadu is
recognized by the Government of Kerala in the respective
branches as per G.O. (MS)-526/Public Services Department
dt. 17.7.1965. […]”

16. Hence, in the year 2003 itself, the Lakshadweep

administration had sought a clarification from another state

government’s department of education about the equivalence

which is the basis of the dispute before us. This position continued

without any dispute. On 03.08.2006, the administration issued an

advertisement for the post of Junior Engineer (Electrical). The

stipulation of qualifications in the advertisement has to be read in

this context, and the relevant portion of the advertisement is

reproduced as follows:

“[…]

F. No. 36/1/2006-Estt/Ele(1) Dated 03.08.2006

NOTICE

Applications are invited for the appointment to the post of the

Junior Engineer (Electrical) in the scale of pay of Rs. 5000-150-
8000 under the Lakshadweep Electricity Department from the
qualified local candidates from Lakshadweep Island.

9
 Qualifications required as per the existing recruitment Rules for
the appointment to the above said post are given below.
i. No. of post 2 (Two)
[…] […] […]
iii. Educational Degree in Electrical Engineering
Qualification of a recognized University OR
Diploma in Electrical
Engineering of a recognized
institution with 2 years
experience in any one of the
following field.
(1) Running and maintenance of
Diesel Generating Sets
(2) Generation, Transmission &
Distribution of Electricity
(3) Internal electrification of
building.
[…]”

17. Given that the recruiting authority had sought a clarification

on whether a Diploma in Electrical and Electronics Engineering is

equivalent to a Diploma in Electrical Engineering and accepted a

clarification to the effect, we do not see any reason in denying such

an equivalence for the purposes of the advertisement. Even the

respondents in filing the OA, did not lay any foundation about why

such equivalence should be denied. Pertinently, the administration

had taken a categorical stand before CAT and the High Court that

the two degrees are considered equivalent for the purposes of

recruitment to the said post. Both CAT and the High Court have

ignored the fact that the recruiting authority had attempted to

10
assess similarities between the two qualifications before issuing

the advertisement.

18. In circumstances where the appointing authority has not

objected to the qualifications of the appellants and there is no

apparent or glaring difference in the qualifications, we see no

reason for courts to interfere and set-aside the appointments made

after due consideration. It is the appointing authority which has to

take the decision on whether the candidate possesses what is

required by the post in cases of disputed equivalence. This Court

has stated the same in categorical terms in its decision Anand

Yadav v. State of U.P.7:

“32. We may also notice another important aspect i.e. the

employer ultimately being the best judge of who should be
appointed. The choice was of Respondent 2 who sought the
assistance of an expert committee in view of the
representation of some of the appellants. The eminence of
the expert committee is apparent from its composition. That
committee, after examination, opined in favour of the stand
taken by the appellants, and Respondent 2 as employer
decided to concur with the same and accepted the
committee's opinion. It is really not for the appellants or the
contesting respondent to contend how and in what manner
a degree should be obtained, which would make them
eligible for appointment by Respondent 2.”
(emphasis supplied)

7 (2021) 12 SCC 390.

11
19. The recruiting authority has scrutinised the qualifications

before deciding that they satisfy what is enumerated in the

advertisement. It is not the case of the respondents that the

authority in the present case has not applied its mind in

scrutinising the appellants’ diplomas. In Mukul Kumar Tyagi v.

State of U.P.,8 this Court had an occasion to consider the

approach to be adopted by the recruiting agency/employer while

considering the issue of equivalence of qualifications and directed

as under:

“59. The equivalence of qualification as claimed by a candidate

is matter of scrutiny by the recruiting agency/employer. It is the
recruiting agency which has to be satisfied as to whether the
claim of equivalence of qualification by a candidate is
sustainable or not. The purpose and object of qualification is
fixed by employer to suit or fulfil the objective of recruiting the
best candidates for the job. It is the recruiting agency who is
under obligation to scrutinise the qualifications of a candidate as
to whether a candidate is eligible and entitled to participate in
the selection. More so when the advertisement clearly
contemplates that certificate concerning the qualification shall be
scrutinised, it was the duty and obligation of the recruiting
agency to scrutinise the qualification to find out the eligibility of
the candidates. The self-certification or self-declaration by a
candidate that his computer qualification is equivalent to CCC
has neither been envisaged in the advertisement nor can be said
to be fulfilling the eligibility condition.”
(emphasis supplied)

8 (2020) 4 SCC 86.

12
20. Similarly, in Maharashtra Public Service Commission v.

Sandeep Shriram Warade 9 it was held that:

“9. The essential qualifications for appointment to a post are

for the employer to decide. The employer may prescribe
additional or desirable qualifications, including any grant of
preference. It is the employer who is best suited to decide
the requirements a candidate must possess according to the
needs of the employer and the nature of work. The court
cannot lay down the conditions of eligibility, much less can
it delve into the issue with regard to desirable qualifications
being on a par with the essential eligibility by an interpretive
re-writing of the advertisement. Questions of equivalence
will also fall outside the domain of judicial review. If the
language of the advertisement and the rules are clear, the
court cannot sit in judgment over the same. If there is an
ambiguity in the advertisement or it is contrary to any rules
or law the matter has to go back to the appointing authority
after appropriate orders, to proceed in accordance with law.
In no case can the court, in the garb of judicial review, sit in
the chair of the appointing authority to decide what is best
for the employer and interpret the conditions of the
advertisement contrary to the plain language of the same.”

21. Though there a number of decisions on this very principle,10

we will conclude with a recent decision of this Court in Union of

India v Uzair Imran,11 emphasizing the restraint a court must

exercise while determining equivalence between qualifications. The

relevant portion is as under:

9 (2019) 6 SCC 362.

10 Mohd Shujat Ali v. Union of India, (1975) 3 SCC 76; Dr. B.L. Asawa v. State
of Rajasthan, 1982 (2) SCC 55; Zahoor Ahmad Rather v. Sheikh Imtiyaz Ahmad,
(2019) 2 SCC 404.
11 2023 SCC OnLine SC 1308.

13
 “14. Normally, it is not the function of the court to determine
equivalence of two qualifications and/or to scrutinise a
particular certificate and say, on the basis of its appreciation
thereof, that the holder thereof satisfies the eligibility criteria
and, thus, is qualified for appointment. It is entirely the
prerogative of the employer, after applications are received from
interested candidates or names of registered candidates are
sponsored by the Employment Exchanges for public
employment, to decide whether any such candidate intending
to participate in the selection process is eligible in terms of the
statutorily prescribed rules for appointment and also as to
whether he ought to be allowed to enter the zone of
consideration, i.e., to participate in the selection process. It is
only when evidence of a sterling quality is produced before the
court which, without much argument or deep scrutiny, tilts the
balance in favour of one party that the court could decide either
way based on acceptance of such evidence.”
(emphasis supplied)

22. The burden to show that the recruiting authority accepted

the qualifications of the appellants illegally or arbitrarily was on

the respondents who had approached the CAT by filing OAs. There

is nothing on record to show that they had adduced any convincing

material evidence to prove that the qualifications prescribed are

very different from the qualifications possessed by the appellants.

On the other hand, the employer has indicated the efforts made by

it in satisfying that the qualifications are equivalent and that

Diploma in Electrical and Electronics Engineering is the same as

the qualification prescribed in the advertisement. The entire case

of the respondents is based on the difference in nomenclatures of

14
the two diplomas which stops there and has nothing to do with the

core substance of the courses, including teaching, duration,

curriculum or the pedagogy. The Court has held that conditions of

recruitment such as required qualifications for a post, have to be

viewed reasonably. 12

23. Even if some ground exists for the High Court to exercise

judicial review, the standard that the High Court would adopt, as

indicated in Uma Shankar Sharma v. Union of India,13 would

be to see that, “the terms and conditions of service are [intended

to be] construed reasonably, and too technical a view can defeat

the essential spirit and intent embodied in them.” In light of the

law re-iterated above and considering the fact that the employer

has not objected to the appellants’ diplomas, it was not appropriate

for the High Court to take a technical view of the matter and set

aside the appointments.

24. In this view of the matter the decisions of the CAT and that

of the High Court are not sustainable in law. Accordingly, we allow

the present appeals by the appointed candidates and set aside the

impugned judgment and order dated 20.11.2014 passed by the

12 Punjab University v. Narinder Kumar, (1999) 9 SCC 8.

13
(1980) 3 SCC 202.

15
High Court in Writ Petition Nos. 15398 of 2010, 6014 of 2010,

14891 of 2010 and OP (CAT) No.1305 of 2010.

………………………………....J.
[PAMIDIGHANTAM SRI NARASIMHA]

………………………………....J.
[MANOJ MISRA]

NEW DELHI;
FEBRUARY 20, 2025.

16
2025 INSC 253 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 2759/2025

ARISING OUT OF SLP (C) NO. 18062 OF 2024

BANK OF BARODA ...APPELLANT(S)

VERSUS

FAROOQ ALI KHAN & ORS. …RESPONDENT(S)

JUDGMENT

PAMIDIGHANTAM SRI NARASIMHA, J.

1. Leave granted.

2. The question for our consideration is whether the High Court

could have justifiably invoked judicial review under Article 226 of

the Constitution to interdict personal insolvency proceedings

initiated against respondent no.1 under Section 95 of the

Insolvency and Bankruptcy Code, 2016 1 by holding that his

liability as a debtor has been waived. The High Court jurisdiction

was invoked against the order of the Adjudicating Authority dated

Signature Not Verified

16.02.2024 appointing a resolution professional and directing him

Digitally signed by
KAPIL TANDON
Date: 2025.02.20
[Link] IST
Reason:

1
Hereinafter ‘IBC’.

1
to examine the application under Section 95 and file a report under

Section 99 of the IBC. Having considered the facts, legal

submissions, and for the reasons to follow, we set aside the

judgment and order passed by the High Court and restore the

proceedings before the Adjudicatory Authority from the time of its

order dated 16.02.2024 directing the resolution professional to

submit a report as provided under Section 99 of the IBC.

3. The relevant facts are that respondent no. 1 was a promoter

and director of one Associate Décor Limited 2. While corporate

insolvency resolution proceeding3 has been initiated against the

corporate debtor as well, this is not the subject matter of the

present appeal, which is restricted to the personal insolvency

proceedings against respondent no. 1. Commencing from 2010,

the corporate debtor took various loans from the appellant and

respondent nos. 3 and 4, who are a consortium of banks.

Respondent no. 1 entered into a deed of guarantee for securing

these loans on 10.07.2014. Due to default in payments by the

corporate debtor, and after initiation of CIRP against it, the

appellant issued a demand notice dated 11.08.2020 and invoked

the deed of personal guarantee calling upon respondent no. 1 and

2
Hereinafter ‘corporate debtor’.
3
Hereinafter ‘CIRP’.

2
other guarantors to pay an amount of Rs. 244 crores. However, by

letter dated 14.12.2020, respondent no. 1 and other guarantors

offered Rs. 25 crores as full and final settlement.

4. After issuing a Demand Notice in Form B under Rule 7(1) of

the Insolvency and Bankruptcy (Application to Adjudicating

Authority for Insolvency Resolution Process for Personal

Guarantors to Corporate Debtors) Rules, 20194 on 22.02.2021, the

appellant filed an application under Section 95(1) of the IBC read

with Rule 7(2) of the Rules to initiate personal insolvency

proceedings against respondent no. 1.

5. The Adjudicating Authority, by order dated 16.02.2024,

appointed a resolution professional and directed him to examine

the application and submit his report as provided in Section 99 of

the IBC for approval or rejection of the application. On objections

raised by respondent no. 1 on limitation and the validity and

existence of the personal guarantee, the Adjudicating Authority,

relying on the judgment of this Court in Dilip B. Jiwrajka v. Union

of India 5, stated that “the issue/objections raised by the Ld.

Counsel for the Personal Guarantor will be considered after the

4
Hereinafter ‘Rules’.
5
(2024) 5 SCC 435.

3
submission of the report by the Resolution Professional and

response of the Personal Guarantor on the same”.

6. Respondent no. 1 preferred a writ petition before the High

Court under Article 226 of the Constitution to prohibit the

Adjudicating Authority from entertaining the personal insolvency

petition against him, primarily on the ground that his liability as a

personal guarantor stood waived and discharged. The High Court,

vide the order impugned before us, allowed the writ petition and

held that the personal insolvency proceedings are not

maintainable as respondent no. 1’s liability as a guarantor had

stood waived. In order to arrive at this finding, the High Court

examined various documents pertaining to the guarantee and the

loans. It further held that this Court in Jiwrajka (supra) was not

considering an application that was not maintainable before the

Adjudicating Authority, and thereby distinguished the same.

Pursuant to the impugned order passed by the High Court, the

Adjudicating Authority disposed of the insolvency proceedings

against respondent no. 1 by order dated 19.06.2024.

7. We have heard Mr. Tushar Mehta, learned Solicitor General

for the appellant and Mr. Shyam Mehta, learned senior counsel for

respondent no. 1 in detail.

4
8. The simple question for our consideration is whether the High

Court correctly exercised its writ jurisdiction to interdict the

personal insolvency proceedings under the IBC against respondent

no. 1. It is necessary to appreciate the statutory scheme regarding

the admission of an application for initiating personal insolvency

under Part III, Chapter III of the IBC. This Court in Jiwrajka

(supra), while deciding the constitutional validity of Sections 95 to

100, has delved into the same and has held as follows. Pursuant

to an application for initiating personal insolvency proceedings

under Section 94 or Section 95, the Adjudicating Authority

appoints a resolution professional under Section 97. The

resolution professional performs distinct functions under Part II

(dealing with corporate insolvencies) and Part III (dealing with

personal insolvencies) of the IBC. 6 Under Part III, Chapter III, the

resolution professional performs a facilitative role of collating

information, as provided under Section 99 of the IBC, in which the

resolution professional examines the application, determines

whether the debt has been repaid, and submits a report to the

Adjudicating Authority recommending the admission or rejection

of the application. 7 It is only after the submission of this report

6
Jiwrajka (supra), para 50.
7
Ibid, paras 54 and 55.

5
that the Adjudicating Authority’s adjudicatory functions

commence under Section 100. At this stage, the Adjudicating

Authority determines whether to admit or reject the application for

initiating insolvency. 8 These principles have been summarized as

follows:

“86.1. No judicial adjudication is involved at the stages envisaged in

Section 95 to Section 99 IBC;
[…]
86.3. The submission that a hearing should be conducted by the
adjudicatory authority for the purpose of determining “jurisdictional
facts” at the stage when it appoints a resolution professional under
Section 97(5) IBC is rejected. No such adjudicatory function is
contemplated at that stage. To read in such a requirement at that
stage would be to rewrite the statute which is impermissible in the
exercise of judicial review;
[…]
86.6. No judicial determination takes place until the adjudicating
authority decides under Section 100 whether to accept or reject the
application. The report of the resolution professional is only
recommendatory in nature and hence does not bind the adjudicatory
authority when it exercises its jurisdiction under Section 100.”

9. The Adjudicating Authority, by its order dated 16.02.2024,

has followed the procedure envisaged under Sections 95 to 100 of

the IBC, and has also relied on the afore-stated principles in

Jiwrajka (supra). It specifically observed that respondent no. 1’s

objections regarding limitation and waiver of the guarantee will be

considered once the resolution professional submits his report.

This is the correct approach as the appointment of a resolution

8
ibid, paras 60 and 74.

6
professional, at the very threshold, is statutorily mandated under

Section 97 of the IBC. As has been held by this Court in Jiwrajka

(supra), the Adjudicating Authority does not adjudicate any point

at this stage and need not decide jurisdictional questions regarding

existence of the debt before appointing the resolution

professional.9 This is because Section 99 requires the resolution

professional to, at the first instance, gather information and

evidence regarding repayment of the debt, and ascertain whether

the application satisfies the requirements of Section 94 or

Section 95 of the IBC. The existence of the debt will first be

examined by the resolution professional in his report, and will then

be judicially examined by the Adjudicating Authority when it

decides whether to admit or reject the application under

Section 100. 10

10. In light of this statutory scheme, which has been followed by

the Adjudicating Authority, we are of the view that the High Court

incorrectly exercised its writ jurisdiction as: first, it precluded the

statutory mechanism and procedure under the IBC from taking its

course, and second, to do so, the High Court arrived at a finding

regarding the existence of the debt, which is a mixed question of

9
ibid, paras 72, 86.1 and 86.3.
10
ibid, para 74.

7
law and fact that is within the domain of the Adjudicating

Authority under Section 100 of the IBC. 11

11. It is well-settled that when statutory tribunals are constituted

to adjudicate and determine certain questions of law and fact, the

High Courts do not substitute themselves as the decision-making

authority while exercising judicial review. 12 In the present case, the

proceedings had not even reached the stage where the

Adjudicatory Authority was required to make such determination.

Rather, the High Court exercised jurisdiction even prior to the

submission of the resolution professional’s report, thereby

precluding the Adjudicating Authority from performing its

adjudicatory function under the IBC.

12. While there is no exclusion of power of judicial review of High

Courts, and the limits and restraint that the constitutional court

exercises and must exercise are well articulated 13, the primary

issues involved in the present case, including the factual

determination of whether the debt exists, is part of the statutory

and regulatory regime of the Insolvency and Bankruptcy Code. In

11
ibid.
12
Thansingh Nathmal v. Superintendent of Taxes, Dhubri, AIR 1964 SC 1419, para 7; United Bank of India v.
Satyawati Tondon, (2010) 8 SCC 110, paras 43, 45; Commissioner of Income Tax v. Chhabil Dass Agarwal,
(2014) 1 SCC 603, para 15; South Indian Bank Ltd v. Naveen Mathew Philip, 2023 SCC OnLine SC 435, para 14.
13
Whirlpool Corporation v. Registrar of Trade Marks, Mumbai, (1998) 8 SCC 1, para 15; Harbanslal Sahnia v.
Indian Oil Corporation Ltd, (2003) 2 SCC 107, para 7.

8
fact, the entire rationale behind appointing a resolution

professional under Section 97 is to facilitate this determination by

the Adjudicating Authority. The High Court ought not to have

interdicted the proceedings under the statute and assumed what

it did while exercising jurisdiction under Article 226 of the

Constitution.14 In this view of the matter, we are of the opinion that

the High Court was not justified in allowing respondent no. 1’s writ

petition. The High Court should have permitted the statutory

process through the resolution professional and the Adjudicating

Authority to take its course.

13. In Mohammed Enterprises (Tanzania) Ltd v. Farooq Ali Khan, 15

while setting aside the judgment of the same High Court interfering

with the CIRP proceedings against the same corporate debtor, we

expressed the same principle in the following terms:

“15…High Court should have noted that Insolvency and Bankruptcy

Code is a complete code in itself, having sufficient checks and
balances, remedial avenues and appeals. Adherence of protocols and
procedures maintains legal discipline and preserves the balance
between the need for order and the quest for justice. The supervisory
and judicial review powers vested in High Courts represent critical
constitutional safeguards, yet their exercise demands rigorous
scrutiny and judicious application. This is certainly not a case for the
High Court to interdict CIRP proceedings under the Insolvency and
Bankruptcy Code.”

14
See Union of India v. V.N. Singh, (2010) 5 SCC 579; Executive Engineer Southern Electricity Supply Company
of Orissa Ltd. v. Seetaram Rice Mill, (2012) 2 SCC 108, para 80; Radha Krishan Industries v. State of Himachal
Pradesh, (2021) 6 SCC 771, para 27.6.
15
2025 SCC OnLine SC 23.

9
14. In view of the above reasons, we allow the present appeal and

set aside the impugned order dated 28.05.2024 by the Karnataka

High Court in Writ Petition No. 6288/2024 (GM-RES).

Consequently, the appellant’s application in C.P.(IB)

No. 139/BB/2022 is restored to the record of the National

Company Law Tribunal, Bengaluru, and it shall proceed from the

stage of passing of the order dated 16.02.2024. Considering the

fact that the matter has been pending since 2021, we request the

Tribunal to decide the same as expeditiously as possible.

15. No order as to costs.

16. Pending applications, if any, disposed of.

………………………………....J.
[PAMIDIGHANTAM SRI NARASIMHA]

………………………………....J.
[MANOJ MISRA]

NEW DELHI;
FEBRUARY 20, 2025.

10
2025 INSC 252 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 2755-2758/2025

ARISING OUT OF SLP(C) NOS. 10926-10929 OF 2024

RACING PROMOTIONS PRIVATE LIMITED ...APPELLANT(S)

VERSUS

DR. HARISH & ORS. …RESPONDENT(S)

JUDGMENT

PAMIDIGHANTAM SRI NARASIMHA, J.

1. Leave granted.

2. The present appeals arise out of an order dated 19.02.2024

passed by the Madras High Court disposing of various writ

petitions filed as public interest litigations (‘PILs’) against the

conduct of Formula 4 racing in the city of Chennai, Tamil Nadu, in

which the following directions were issued:

“22. Accordingly, this batch of writ petitions are disposed of, with
the following directions
(i) The Formula 4 Race proposed to be conducted in the Chennai
Racing Circuit is permitted to be held on the dates to be decided
Signature Not Verified
by the State Government in consultation with the stakeholders
Digitally signed by (ii) The State Government shall ensure that the street race in the
3.7 km as stipulated, shall be carried on, with highest degree of
KAPIL TANDON
Date: 2025.02.20
[Link] IST

public safety and avoiding inconvenience to the public, especially

Reason:

the in-patients of the Rajiv Gandhi Government General Hospital,

Madras Medical College, and Omandurar Government Multi-

1
 speciality Hospital. This can be ensured by installing necessary
silencing equipment like sound silence panels/acoustic sound
panel for noise control in the hospitals during the time of the
racing events.
(iii) The RPPL shall ensure that all public viewers will be provided
with necessary protective gear for their safety during the Race
(iv) The RPPL shall reimburse the expenditure made by the State
Government (i e) Rs 42 crores from the public exchequer, to them,
prior to the conduct of the event
(v) The State Government must ensure that RPPL or anyone
should deposit in advance (prior to next year and the upcoming
third year's event) the stipulated expenditure of Rs 15 crores for
the upcoming two years for holding the Street Circuit in Chennai
(vi) The RPPL cannot expect anything more than facilitation as
well as arrangements along with co-ordination and co-operation
of the State authorities, and the expenditure for the event will
have to be completely borne out only by the RPPL
(vii) In future, the State is expected to take upon itself the
responsibility of conducting of such event in furtherance of its
policy to encourage the racing sport and seek the support of
private bodies having experience and expertise in the field. This
will ensure fairness and also dispel any doubt as to mala fides
in distribution of the State largesse”

3. The directions contained in paragraphs 22(iv) to (vii) alone are

impugned before us.

4. The short facts that are necessary for us are that Racing

Promotion Private Ltd, hereinafter referred to as the appellant, is

involved in sponsoring and conducting the Formula 4

championship, which is a motorsport series of races. The appellant

entered into a Memorandum of Understanding (MoU) dated

16.08.2023 with the Sports Development Authority of Tamil Nadu,

hereinafter referred to as SDAT, for a term of three years for

organising the event. The MoU sets out the obligations of both

parties, and the relevant clauses are that while the appellant is

2
under an obligation to spend Rs. 202 crores as part of its

responsibility, the SDAT is required to spend Rs. 42 crores towards

license and operations fee, roads, and miscellaneous expenditures

including road beautification and painting. The relevant portion of

the clauses are as under:

‘MEMORANDUM OF UNDERSTANDING’

This Memorandum of Understanding (“MOU”) is made in Chennai on

16th day of August 2023 (“Effective Date”) by and between.
A. Racing Promotions Private Limited…
AND
B. Sports Development Authority…

1. Principles of Collaboration
1.1 The Parties recognize each other’s interest and expertise and
hereby agree to work together for the organization and
promotion of the Festival.
1.2 The Parties agree that….

2. Term and Termination…

3. Obligation of the Parties

3.1 RPPL shall be responsible for the following deliverables and
costs.
a)
Sr. No. Particulars Cost (in INR)
1. Circuit Electronic System 34,00,00,000
2. Patended Debris Fence Panel 48,00,00,000
3. TechPro Barrier 20,00,00,000
4. Tyre Barrier 6,00,00,000
5. Kerbs 4,00,00,000
6. Hospitality for the Festival 4,00,00,000
7. Race Operations for the 10,00,00,000
Festival
8. Event Management for the 10,00,00,000
Festival
9. Marketing of the Festival 10,00,00,000
10. Formula 4 Cars 20,00,00,000

3
 11. IRL Cars 10,00,00,000
12. Fire & Medical for the Festival 2,00,00,000
13. Grand Stands 8,00,00,000
14. Festival miscellaneous costs 8,00,00,000
15. Other miscellaneous costs 8,00,00,000
Total 2,02,00,00,000

b) Further, in addition to the aforementioned deliverables, RPPL shall

also be responsible for pit building, concrete blocks and circuit lighting
system.

3.2 The Host City shall be responsible for the following deliverables
and costs:
a)
Sr. Item Cost (in INR) Remarks
No
.
1 License and 30,00,00,000 For License & Racing
operation fee Permit, Pit Building,
(“Fees”) Concrete Blocks, Circuit
Lighting System
2 Roads 6,00,00,000
3 Miscellaneous 6,00,00,000
(including
without
limitation ad
beautification
and painting)
Total 42,00,00,000

b) The Host City shall pay the Fees to RPPL in 3 instalments, 50%
advance upon signing of the MOU, 25% within 60 days of signing of
the MOU and 25% within 120 days of signing of the MOU. Any
revisions to the same shall be mutually agreed, upon between the
Parties in writing.
c) It is clarified that the costs mentioned in Clause 3.2(a) shall be only
for the first year of the Term. The estimated costs to be borne by the
Host City are INR 15,00,00,000 (Indian Rupees Fifteen Crores Only),
per year, for the remainder of the Term, to be paid 90 days before the
Festival. Any revisions to the same shall be mutually agreed upon
between the Parties in writing.
d) Further, in addition to the aforementioned deliverables, the Host
City shall also be responsible for the following.

4
 (i) Local police permission for traffic control and other law and order
required for the Festival;
(ii) Fire department support;
(iii) Pollution control measures,
(iv) Health, safety and sanitation measures,
(v) Permission for radio frequencies,
(vi) Permission required for storage of fuel;
(vii) No objection certificate from the relevant district magistrate;
(viii) VIP movement protocols,
(ix) Maintenance department;
(x) Agreement letter from hospital for admitting and treating injured
drivers on priority basis.
(xi) Any other reasonable assistance required by RPPL for the
Festivals.
3.3 Any modifications to the costs and/or the deliverables of either
Party shall be mutually agreed upon between the Parties in writing in
good faith.
4. Testing…
5. Miscellaneous…”

5. Pursuant to a decision to conduct the fifth round of the races

in the city of Chennai, the Government of Tamil Nadu issued a

Press Release dated 02.11.2023 regarding the conduct of the event

between 08.12.2023 to 10.12.2023.

6. At this stage, various writ petitions in the form of public

interest litigation were instituted before the High Court raising

multiple objections. Broadly, the grounds raised in these petitions

pertained to public inconvenience, lack of safety measures, noise

pollution, environmental and ecological damage, and the lack of

5
transparency in the use of public funds for the event in a manner

that benefits a private party, i.e., the appellant.

7. The High Court, by way of the impugned order, held that it

will not interfere with the policy decision of the government to

promote and encourage motor racing as a sport. It also took note

of the submission of the learned Advocate General before it that all

requisite approvals for the event had been taken, and

precautionary and safety measures were being taken to prevent

public inconvenience and noise pollution. However, it observed

that the event was being conducted by the appellant, which is a

private party, and the role of the State Government was limited to

facilitating the event. The revenue and profits would accrue only

to the appellant, and the State Government would not have any

share in the same as per the MoU. In this light, the High Court

issued the directions that are impugned before us.

8. We have heard the learned senior counsels appearing for the

parties and have also perused their written submissions.

9. A detailed counter affidavit is filed on behalf of the Sports

Development Authority which sufficiently answers all the

questions, including those that are expressed by the High Court in

the order impugned before us. It is therefore necessary to extract

6
the relevant portions of the counter affidavit. To start with, the

affidavit explains the role, purpose, and object of the constitution

of the SDAT and the role that is assigned to it for development of

sports and necessary infrastructure.

“2. It is submitted that the Sports Development Authority of Tamil

Nadu (hereinafter referred as SDAT) is the nodal government
authority in the State of Tamil Nadu for the promotion of sports
and the development and welfare of sportspersons. Over the
years SDAT has taken various initiatives to promote several
sports through various measures like creating infrastructure,
enable specialised training, provide financial support etc.

3. It is submitted that the SDAT aims to make Tamil Nadu a

global sports hub. One of the measures that SDAT has taken to
achieve this objective is by hosting several National and
International championships of various sports in the State.

4. It is submitted that by conducting these national and

international level events, the sporting infrastructure of
international standards are being created systematically for
various sports. Therefore, upcoming sportspersons will have the
opportunity to train in stadiums, turfs, tracks, gyms and other
facilities which are of international standards to further develop
their skills in their respective sports. When these events are
conducted, the sportspersons are exposed to the new techniques
of other State and Country players, which could also be a
learning opportunity for our sportspersons. Conducting these
sporting events at National and International level would also
bring a greater influx of fans and followers of these sports which
will create a vibrant sports culture amongst the youth in the
State. This involvement of youth in sports would promote positive
behaviour and sense of responsibility. The creation of this
infrastructure within the State and better access to these
sporting events will also enable budding sportspersons from
weaker economic backgrounds to participate in the national and
international events and thus enable greater diversity in sports.
It is SDAT’s aim to use sports as a means of fostering and
building strong community ties and understanding among
different groups.”

7
10. The SDAT has also explained the consequential economic

benefit that the State derives from conducting such events and this

is explained as under:

“5. It is submitted that there is also greater economic benefits to

the State while conducting these National and International
events by generating tourism revenue, job creation,
infrastructure developments, increased investment, media rights
and sponsorship, local business growth etc. The influx of tourists
boosts revenue for hotels, restaurants, transportation services
and local attractions. While hosting large scale sporting events it
generates numerous job opportunities, both temporary and
permanent. These jobs span various sectors, including
construction, event management, hospitality, security, and retail.
Preparing for international sports events often necessitates the
development or improvement of sports facilities, transportation
networks, and other infrastructure. These enhancements can
have long-term economic benefits, facilitating future events and
boosting local economies. High-profile sports events can attract
domestic and foreign investment. Businesses may invest in
sponsorships, infrastructure, and services to capitalize on the
event's visibility and associated economic activity. Local
businesses benefit from the increased foot traffic and spending
associated with large sports events. This includes not only
businesses directly related to the event, such as sports shops
and venues, but also those in hospitality, retail and
entertainment. International sports events can generate
significant revenue through the sale of broadcasting rights and
sponsorship deals. This not only brings in immediate income but
also enhances the country’s global visibility and attractiveness
for future events. Post-event, the facilities developed for
International sports events can be used for local and National
events, community activities, and as training centers for athletes.
This ongoing use can provide continued economic benefits.
Therefore, the conducting of larger scale sporting events will
boost the economy of the State in wider perspective.”

11. After explaining in detail how the State successfully

conducted national and international events from 2022, deriving

great benefits and securing large number of medals for the State

in the various sports/games that were held from time to time, the

8
affidavit goes on to explain the infrastructure that the State of

Tamil Nadu has created for motor sports in the following terms:

“9. With regard to the sport of racing (both four and two-
wheelers), Tamil Nadu occupies a pride of place for several
reasons. The foremost reason is that the birth of motor sports in
India was from Chennai (then known as Madras) with the
establishment of the Madras Motorsports Club (still in existence).
Consequently, Chennai also became the headquarters for the
Federation of Motor Sports Clubs of India (FMSCI) which is the
apex body governing motorsports in India. One of the country's
premier internationally recognised race tracks is also situated at
Irungattukottai in the outskirts of Chennai. Hence, SDAT decided
to host the Formula 4 (F4) Indian Championship, a motorsport
series of races at Chennai with the Racing Promotions Private
Limited (herein after referred to as RPPL) i.e. the petitioner in this
Special Leave Petition. RPPL is the only license holder to hold the
F4 Indian Championship Formula 4, which is accredited by the
International Governing body of Motorsports i.e, Federation
Internationale l'Automobile. Earlier, RPPL has conducted this
racing event at Hyderabad and Noida in the year of 2023. An
economic study conducted by Neilson Sports Analysis calculated
that the racing sport event named Greenko Hyderabad E-Prix,
2023 hosted by Formula E in collaboration with the Telangana
Government delivered an economic impact of nearly about 84
million US Dollar and significant inward investment to their local
economy.”

12. Addressing the issue arising for consideration in the batch of

writ petitions, the SDAT has referred to the reason for entering into

the MoU and has explained the same in the following terms:

“11. It is submitted that after careful consideration of the

potential long term gains that the State stood to gain from hosting
this event, an MoU was entered into between SDAT and the RPPL
to conduct the Indian Racing League and Formula 4. These two
events together was called the Indian Racing Festival in Chennai
and would be conducted annually for a period of three years. (F4
in year 1 & F3 in year II & Year III) As per the MOU, SDAT shall
be responsible for the obligations set out in Clause 3.2 of the MoU
which is as follows -
(a) License and Operations Fee
(b) Roads

9
 (c) Miscellaneous (including without limitation and beautification
and painting).”

13. In order to assure this Court that the decision to enter into

the MoU was not unilateral and that the said decision was taken

after much deliberation, the SDAT explained the background

indicating the constitution of a high-level working committee to

coordinate the organisation of the event and also indicated the

officials involved in the decision making as follows:

“13. It is submitted that SDAT had formed a High-level Working

Committee to coordinate the organizing of this racing event. The
committee held several meetings with the following officials to
oversee and monitor the organising of the event -
(a) Commissioner, Greater Chennai Corporation
(b) Director General of Police, Tamil Nadu
(c) Additional Chief Secretary to Government, Highways and
Minor Ports
(d) Additional Chief Secretary to Government, Youth Welfare and
Sports Department
(e) Director General of Police /Commissioner of Police, Greater
Chennai Police
(f) Principal Secretary to Government, Public Works Department
(g) Managing Director, Tamil Nadu Tourism Development
Corporation
(h) Joint Commissioner (Works), Greater Chennai Corporation
(1) Additional Director, Information Department
(j) Member Secretary, Sports Development Authority of Tamil
Nadu
(k) Additional Commissioner of Police (Traffic), Greater Chennai
Police
(1) Director (Distribution), Tamil Nadu Generation & Distribution
Corporation Limited
(m) Deputy Secretary to Government, Health & Family Welfare
Department
(n) Lieutenant General, General Officer Commanding (GOC),
Dakshin Bharat Area, Chennai
(o) Naval officer in Charge (Tamil Nadu)
(p) Chairman, Racing Promotions Private Ltd. (RPPL)
A meeting was held on 24.11.2023 with above-mentioned
officials of the High-level Working Committee and each and every
aspect of this event was carefully deliberated and decided

10
 including issues of adequate safety precautions, traffic
management, protection of spectators, safeguarding of places
around the circuit, mitigation of pollution etc to be taken care of.
The army and the navy representatives provided their consent to
the conduct of the Race since the circuit passed near the Army
and Naval areas.”

14. Referring to the issue relating to safety, the SDAT explained

in detail the steps taken to ensure that the event is conducted after

taking sufficient precautions. The relevant portion of the affidavit

is as under:

“15. It is reiterated before this Hon'ble Court that all measures

for safety and precaution have been provided. It is submitted that
appropriate alternate traffic diversions have been identified and
will be implemented; the event will be conducted at a sufficient
distance from the hospitals and will not cause any inconvenience
to the public and also in-patients in the hospital. It is reiterated
that appropriate safety protocols will be implemented - the
viewer grand stands will be barricaded and the crash barriers
will also be installed to ensure maximum protection for the
spectators. Fire extinguishers will be placed at designated sites
to ensure fire safety.”

15. Referring to the specific direction of the High Court in

paragraph 22(vii) that in future the State itself should take upon

the responsibility of conducting such events, the SDAT explained

the consequence as under:

“19. A direction has been issued at para 22 (vii) of the impugned

common order of the Hon'ble High Court of Madras in W.P. Nos.
33687, 33741, 33911 and 33914 of 2023 that in future the State
Government should conduct this event by itself. It is submitted
that such a direction is not legally possible or feasible.
Licenses/rights for international events are granted only to
associations/national sports federations by the international
sports body. A city or State is then permitted to host this
international event in association with the license/rights holder
for the event. In such situation, it is submitted that the State
Government supports the conduct of sporting events by providing

11
 monetary support towards license fee, event management, prize
money, publicity and media management amongst other things
along with the necessary coordination with various government
Departments for the successful conduct of the event.

20. It is also submitted that, providing logistics and monitoring

for conduct of international and national sporting events is a
global practice to nurture excellence in sports, building capacity,
economic benefits and city branding. It is on this basis that the
State Government hosts sporting events in co-ordination with the
National/International Federations and licensed bodies.

21. Infact there is precedent of the State Government being a

major sponsor of an international sporting event, namely the
Chennai Open ATP Tennis Tournament for several years, where
even World Champions like Rafael Nadal have come and
participated. Likewise, the Government of Tamil Nadu had
organized the 44th Chess Olympiad along with International
Chess Federation (FIDE - the acronym is as per its French name),
the Asian Men's Hockey Championship with Hockey India
Federation and Asian Hockey Federation (AHF), the World
Surfing League competition in co-ordination with the
International Surfing Federation. The successful conduct of these
events is due to the support and infrastructure provided by the
State Government to these recognized/licensed sporting bodies
who have the expertise and domain knowledge regarding their
respective sports.”

16. In view of the above, the SDAT submitted that the direction

of the Madras High Court for the State to conduct the event by

itself in the future will be unviable. It is also submitted that the

implementation of the direction would cause “great loss to the city

and its sportsperson and also affect the long-term goal of

promoting and situating Chennai as a global sports centre”.

17. The appellant has no objection with respect to the caution

expressed by the High Court about public safety and health. They

do not challenge directions (i), (ii), and (iii) in paragraph 22,

12
requiring necessary precaution to be taken before permitting the

sports event. The appellant is aggrieved about the direction in

paragraph 22(iv) to reimburse Rs. 42 crores spent by the State, the

direction in paragraph 22(v) that the Government must ensure

that the appellant must make an advance deposit of Rs. 15 crores

for the upcoming two events, and the further direction in para

22(vi) where it was directed that the appellant cannot expect

anything more than facilitation from the State and that the entire

expenditure for the event will have to be borne by them. These

directions are challenged before us on various grounds.

18. We have examined the facts and circumstances of the case in

detail and have studied the Memorandum of Understanding in

detail. We are of the opinion that directions (iv), (v), and (vi) relate

to prescription of new terms and conditions for the Memorandum

of Understanding between the parties. Direction (vi) relates to the

policy decision of the State.

19. We have already extracted the relevant clauses of the MoU as

per which the appellant has an obligation to spend Rs. 202 crores

towards various heads under clause 3.1(a) of the MoU. The next

clause provides the obligations of the Host City as per which the

Host City is obligated to provide deliverables amounting to Rs. 42

13
crores. These contractual clauses were entered into after a great

amount of deliberation.

20. The Sports Development Authority is an instrumentality of

the State and acts as a nodal Governmental Authority for

promoting sports and the welfare of sports persons. It is nobody’s

case that the State through SDAT is distributing largesse or that

public funds are being frittered away or that there is any

defalcation of funds. The scope of judicial review in matters

concerning contractual relationship of the State or its

instrumentality with private participation, particularly as regards

the scope and ambit of work and finances, are limited. This aspect

is clear from a large number of decisions of this Court, which need

not be dealt with in detail. 1

21. To ensure equitable distribution of goods and services and to

be assured that they subserve the common good, the State has the

authority to formulate a suitable policy. Initially, such policy is

focussed on the government identifying resources and expanding

them to subserve common good. At one stage, to increase their

capacity, governments had even nationalised private resources to

1 Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd., (2005) 6 SCC 138, paras

11-12; Arun Kumar Agrawal v. Union of India, (2013) 7 SCC 1, para 41; Silppi Constructions
Contractors v. Union of India, (2020) 16 SCC 489, paras 19-20.

14
subserve the public interest. However, experience has shown that

the resources generated by the government were inadequate and

also that the management of these resources was inefficient and

ineffective. Over a period, the policy shifted towards public-private

partnerships or private finance initiatives. The shift is based on the

experience that delivery of goods and services as part of public

service can be provided more effectively by means of contracting

with private enterprise than by direct provision by the

Government. This micro-economics, as perceived in public

finance, involves private participation and it can now be seen in

three strategic investments. First, where the private sector

provides capital to build infrastructure, and the State leases them

out. Second, where private sector participation is involved in

building infrastructure such as airports, metro rail transport,

bridges by using their own resources, for which they would secure

their consideration through tolls and usage charges. There are also

instances where assets are built partly through private

contributions and partly through government funding. The

rationale for this micro-economic strategy is the limited resources

of the State and the understanding about their functioning as

lacking flexibility, or effective expertise.

15
22. The case at hand involves the conduct of the sports event

through the collaborative effort of the instrumentalities of the State

of Tamil Nadu, being the SDAT, and the appellant, a private

enterprise.

23. Once the High Court was satisfied that the decision to hold

the sports event is a matter of policy, it could not have proceeded

to interfere with the specific terms of the MoU entered into between

the authority and the appellant herein. Issues such as the mutual

obligations, including the apportionment of expenditure that the

contracting parties must bear, are beyond the scrutiny of the High

Court in a public interest litigation. 2 Finally, direction (vii) calling

upon the State itself to take up the responsibility of conducting

such sports events ignores the principle of public-private

partnership adopted by governments across the globe as a matter

of good governance, which takes into account the limited resources

of the State coupled with issues of efficiency and expertise. We are

2 Orissa State Financial Corporation v. Narsingh Ch. Nayak, (2003) 10 SCC 261, para 6; Orix
Auto Finance (India) Ltd v. Jagmander Singh, (2006) 2 SCC 598, para 9. Further, it is also a
settled position that courts cannot rewrite contractual terms between the parties, see General
Assurance Society Ltd v. Chandumull Jain, AIR 1966 SC 1644, para 11; Rajasthan State
Industrial Development and Investment Corporation v. Diamond & Gem Development
Corporation Ltd, (2013) 5 SCC 470, para 23; Shree Ambica Medical Stores v. Surat People’s
Coop Bank Ltd, (2020) 13 SCC 564, para 20; Venkataraman Krishnamurthy v. Lodha Crown
Buildmart Pvt Ltd, (2024) 4 SCC 230, paras 21-22.

16
of the opinion that the High Court committed an error in issuing

directions (iv), (v), (vi) and (vii), which cannot be sustained in law.

24. For the reasons stated above, we partly allow the appeals and

set aside the directions of the High Court in paragraphs 22(iv), (v),

(vi), and (vii) of the judgment and order in Writ Petition Nos. 33687,

33741, 33911 and 33914 of 2023 by order dated 19.02.2024.

25. No order as to costs.

26. Pending applications, if any, stand disposed of.

………………………………....J.
[PAMIDIGHANTAM SRI NARASIMHA]

………………………………....J.
[MANOJ MISRA]

NEW DELHI;
FEBRUARY 20, 2025.

17