Priyanka Jaiswal vs Northern Railway Ambala Division And Others

CWP-32481-2026 -1-
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
CWP-32481-2026
Date of Decision: 30.10.2026

PRIYANKA JAISWAL ... PETITIONER
VS.
NORTHERN RAILWAY (AMBALA DIVISION-COMMERCIAL) AND
OTHERS
... RESPONDENTS
Reserved on: 01.10.2026
Operative Part pronounced or Full? :- FULL
Uploaded on: 02.11.2026
CORAM: HON'BLE MR. JUSTICE SUVIR SEHGAL
HON'BLE MR. JUSTICE RAJESH GAUR
Argued by: Ms. Aarzu Khattar, Advocate,
for the petitioner (through V.C.).
Mr. Yashpal Sharma, Advocate and
Mr. Arshad Ali, Advocate,
for the respondent(s).
*
SUVIR SEHGAL , J.
1. Petitioner has invoked the extraordinary writ jurisdiction of this
Court under Article 226 of the Constitution of India seeking issuance of a
writ in the nature of mandamus directing respondents to refund the earnest
money/security deposit of Rs.24,10,000 along with interest, deposited in
connection with a contract awarded by the Northern Railway. Petitioner has
further sought a declaration that the contract stood validly surrendered
under Clause 17.1 of the Standard Conditions of Contract and that the
forfeiture/withholding of the security deposit is illegal, arbitrary and
violative of Article 14 of the Constitution of India.
2. Facts, in brief, may be noticed. Pursuant to an e-auction
conducted by the Northern Railway, petitioner was awarded a contract for
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CWP-32481-2026 -2-
Comprehensive Parking cum Access Control Rights at Ambala Cantonment
Railway Station (Main Side) for the period commencing from 11.04.2025 to
10.04.2030. A contract agreement dated 25.03.2025 (Annexure P-1) was
executed between the parties which was governed by the Standard
Conditions of Contract for Commercial Earning and Non-Fare Revenue
(NFR) contracts awarded thorugh e-auction, as provided in Freight
Marketing Circular No. 11 of 2022 issued by the Railway Board. Vide
communication dated 14.08.2025 (Annexure P-2), petitioner surrendered
the contract under clause 17.1 of the Standard Conditions of Contract
pointing out that it had suffered financial losses. In the said notice,
petitioner stated that the surrender would become effective upon completion
of 06 months of operation i.e. 10.10.2025 and requested for refund of the
security amount. After seeking clarification, Northern Railways vide its
communication dated 22.09.2025 (Annexure P-7) informed the petitioner
that it was required to complete a minimum of six months contract period
which should be followed by a 30 days notice. Petitioner's surrender notice
was not accepted. Vide impugned communication dated dated 9.10.2025
(Annexure P-8), Railway Authorities terminated the contract with effect
from 11.10.2025 invoking clause 13.2 of the Standard Conditions of the
Contract on account of non-deposit of the advance licence fee for the third
quarter within the stipulated time. Vide this communication, petitioner was
further informed that the security deposit has been forfeited and petitioner
was directed to hand over the possession of the contractual premises.
Petitioners served notices upon the respondents before approaching this
Court by way of present writ petition.
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CWP-32481-2026 -3-
3. Ms. Aarzu Khattar, counsel for the petitioner contends that
both the conditions laid down under clause 17.1 of the Standard Conditions
of the Contract stood complied with as petitioner intended to exit from the
contract after completion of six months of the contractual period by serving
a 30 days notice. She asserts that in this background, the respondents are
bound to refund the security deposit and its forfeiture is illegal. She asserts
that accepting the surrender notice, respondents addressed communication
dated 9.10.2025 (Annexure P-8) and terminated the contract with effect
from 11.10.2025 and upon doing so, they could not forfeit the security
amount deposited by the petitioner. Still further, by making a reference to
the internal communication dated 13.10. 2025 (Annexure P-9) addressed by
the Chief Commercial Manager, Northern Railway Headquarters, she
highlighted that there was an ambiguity regarding the interpretation of
Clause 17.1 and that different divisions of Northern Railway had adopted
divergent interpretations. She emphasises that some divisions were following
the '5+1 month model' whereas the others were insisting on a 30 days notice
after the completion of six months contractual period. She points out that
this has resulted in arbitrariness and the dispute is amenable to the writ
jurisdiction of this Court under Article 226 of the Constitution of India.
4. Before examining petitioner's grievance on merits, this Court
considers it appropriate to address the question as to whether petitioner
ought to be relegated to the alternative dispute resolution mechanism
expressly provided under the contract. A perusal of the Standard Conditions
of Contract forming part of the agreement (Annexure P-1) executed between
the parties reveals that Clause 22 specifically provides for dispute resolution
and arbitration. Clause 22 reads as follows:-
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“22 Dispute resolution and arbitration:
22.1 As per the provisions of Indian Railways Standard
'General Conditions of Contract' for Works Contracts-
issued by Engineering Department in April 2022.”
5. Thus, by express incorporation, parties have agreed to adopt the
dispute resolution mechanism contemplated under the Indian Railways
Standard General Conditions of Contract, April 2022. Clause 63 and 64 of
the General Conditions provide for settlement of disputes through the
mechanism of arbitration subject to the prescribed procedure and provisions
related to the accepted matters.
6. The controversy raised in the present writ petition concerning
surrender of contract, termination and refund, if any, of the security deposit
is one arising out of contractual relationship between the parties.
7. While considering a dispute arising out of a contract containing
an arbitration clause, Hon'ble Supreme Court of India in State of UP and
Others Vs. Bridge and Roof Co. (India) Ltd. ( 1996) 6 SCC 22 held that
where the parties have themselves agreed upon a particular mode of
resolution of contractual disputes, ordinarily there is no justification for by-
passing such mechanism and invoking the extraordinary writ jurisdiction of
the High Court. It was observed that availability of an effective alternative
remedy, particularly arbitration, constitutes a valid ground for the High
Court to decline to exercise its discretionary writ jurisdiction. Similarly, in
Kerala State Electricity Board and Another Vs. Kurien E. Kalathil and
Others (2000) 6 SCC 293, Hon'ble Supreme Court of India held that the
disputes concerning interpretation of contractual terms and the respective
rights and liabilities of the parties arising therefrom, are ordinarily matters
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to be adjudicated by the competent civil Court or by arbitration where
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provided under the contract. The fact that one of the contacting parties is a
statutory authority or an instrumentality of the State does not convert a
contractual dispute into a public law controversy warranting interference
under Article 226 of the Constitution of India. Similar view has been taken
in Assistant Commissioner of State Tax and others versus Commercial
Steel Limited (2022) 16 SCC 447.
8. Applying the aforesaid principles to the facts of the present
case, this Court finds that the controversy is essentially contractual in
nature. The question whether the respondents have correctly interpreted
Clause 17.1 or whether their action in terminating the contract and forfeiting
the security deposit is legally sustainable, can be examined through the
dispute resolution mechanism contemplated under the contract. Petitioner
entered into the contractual arrangement with full knowledge of the terms
and conditions governing the contract including clause 22 thereof, which
provides for dispute resolution and arbitration. After having voluntarily
accepted the contractual stipulations, petitioner cannot be permitted to
bypass the agreed mechanism merely because a dispute has arisen regarding
the interpretation of those conditions. Petitioner has not been able to
demonstrate any exceptional circumstance or breach of any fundamental
right which would enable this Court to exercise its extraordinary jurisdiction
in preference to the remedy already agreed.
9. In view of the foregoing discussion and the law laid down by
the Hon'ble Supreme Court, this court is of the considered opinion that the
petitioner ought to avail the alternate remedy of dispute resolution and
arbitration contemplated in the contractual agreement.
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10. Consequently, present writ petition is dismissed on the ground
of availability of alternative contractual remedy of arbitration without
expressing any opinion on the rival claims of the parties.
11. It is made clear that the petitioner shall be at liberty to invoke
the dispute resolution mechanism provided under clause 22 of the Standard
Conditions of the Contract read with the applicable provisions of the Indian
Railways Standard General Conditions of Contract, April 2022, in
accordance with law. Nothing said hereinabove shall be construed to be an
expression of opinion on the merits of the dispute between the parties
12. Pending miscellaneous application(s), if any, shall stand
disposed of.
(SUVIR SEHGAL)
JUDGE
(RAJESH GAUR)
JUDGE
30.10.2026
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Whether speaking/reasoned : Yes/No
Whether Reportable : Yes/No
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