Contractual rights following Letter of Intent cannot be enforced through writ jurisdiction under Article 226.

In brief

The question

1. Whether the rights accrued to a petitioner pursuant to the issuance of Letters of Intent and award of tenders can be enforced through a writ petition under Article 226 of the Constitution of India.

The court held

The Court held that a writ petition is not the appropriate forum to enforce contractual rights or to remedy an alleged breach of a non-statutory contract.

It also directed

The Petitioner must seek redress through the arbitration clause or a civil suit for damages/compensation.

The writ petition was dismissed as not maintainable under Article 226.

01Facts

The Petitioner was declared the successful bidder for two construction projects (Mini Indoor Stadiums in Ambedkar Nagar) invited by Respondent No. 3 (U.P. State Construction and Infrastructure Development Corporation).

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Letters of Intent (LoI) were issued to the Petitioner on April 21 and 22, 2026.

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Subsequently, the State Government issued an order on April 29, 2026, replacing Respondent No. 3 with Respondent No. 7 (U.P. Projects Corporation Limited) as the nodal agency for the projects, citing unsatisfactory execution by the former.

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Consequently, the Petitioner was restrained from work, and Respondent No. 7 issued new e-tenders for the same projects.

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The Petitioner challenged the government order and the new tenders via writ jurisdiction.

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02Issues

i.1. Whether the rights accrued to a petitioner pursuant to the issuance of Letters of Intent and award of tenders can be enforced through a writ petition under Article 226 of the Constitution of India.

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ii.2. Whether the court should entertain a writ petition when the dispute arises from a non-statutory contract and an alternative remedy (arbitration or civil suit) is available.

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03Law Applied

Disputes involving non-statutory, purely contractual rights cannot be agitated under Article 226 of the Constitution, as held in Bareilly Development Authority v. Ajai Pal Singh.

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Interpretation of contract terms is a matter for arbitration or civil courts as established in State of U.P. v. Bridge & Roof Co.

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Writ courts are prohibited from compelling authorities to remedy a simple breach of contract as per Zonal Manager, Central Bank of India v. Devi Ispat Ltd.

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Where an efficacious alternative remedy exists, the exercise of discretionary writ jurisdiction should be the exception, not the rule, affirming the principle in Rikhab Chand Jain v. Union of India and Thansingh Nathmal v. A. Mazid.

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04Reasoning

The Court reasoned that the relationship between the Petitioner and Respondent No. 3 is situated within the realm of private contract law, not statutory law.

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The grievance regarding the transfer of the project nodal agency is essentially a matter between the State and Respondent No. 3; the Petitioner cannot engage in "proxy litigation" to challenge the State's administrative decision to change its nodal agency.

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The Court observed that resolving the dispute would require an interpretation of the specific terms of the contract and the Letters of Intent, which is an exercise meant for an Arbitral Tribunal or a Civil Court, rather than a writ court.

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The Petitioner’s claims for loss of profit or damages are consequential reliefs arising from an alleged breach of contract, for which common law remedies are sufficient and efficacious.

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05Holding

The Court held that a writ petition is not the appropriate forum to enforce contractual rights or to remedy an alleged breach of a non-statutory contract.

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The Petitioner must seek redress through the arbitration clause or a civil suit for damages/compensation.

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The writ petition was dismissed as not maintainable under Article 226.

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LawLens.Allahabad High Court

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