Holding

The Supreme Court held that the High Court cannot interfere with or rewrite the contractual terms of the MoU once the decision to hold the event is a policy matter, and therefore the directions modifying the MoU are ultra vires and must be set aside.

Summary

Racing Promotions Private Limited (RPPL) entered into a three‑year Memorandum of Understanding (MoU) with the Sports Development Authority of Tamil Nadu (SDAT) to organise Formula 4 motor‑racing events. Several public‑interest litigations were filed challenging the event on grounds of safety, noise, and the use of public funds, prompting the Madras High Court to issue directions that altered the MoU, including reimbursement of Rs 42 crore to RPPL and requiring the State to conduct future events itself. RPPL appealed, arguing that the High Court had exceeded its jurisdiction by rewriting contractual terms in a PIL. The Supreme Court examined the scope of judicial review over public‑private partnership contracts and held that once a decision to hold the event is a policy matter, courts cannot interfere with the mutual obligations and financial apportionment stipulated in the MoU. Consequently, the Court set aside the High Court’s directions that modified the MoU and partially allowed the appeals. The decision re‑affirms the limited role of courts in altering contractual arrangements between the State and private entities in the context of policy decisions.

Issues considered

Whether the High Court erred in modifying the terms of the MoU between RPPL and SDAT in a public‑interest litigation.
Whether the apportionment of expenditure and other contractual obligations under a public‑private partnership can be subject to judicial review in a PIL.
Whether a direction requiring the State to conduct future sporting events itself is legally permissible.
Whether courts may prescribe new contractual terms for a government‑private agreement.

Legislation cited

Contract Act, 1872

Headnote

Issue for Consideration Whether the High Court erred in modifying the terms of a Memorandum of Understanding (MoU) between a private party and a governmental authority in a Public Interest Litigation (PIL). Headnotes† Scope of Judicial Review – Matters concerning State or its instrumentality with private participation, particularly regarding scope and ambit of work and finances – Scope of judicial review limited – Issues such as mutual obligations, including the apportionment of expenditure that contracting parties must bear – Beyond the

Subjects

Scope of Judicial reviewPublic-private partnershipContractual obligationsPublic Interest LitigationMatter of policy

Judgment

[2025] 2 S.C.R. 1608 : 2025 INSC 252

Racing Promotions Private Limited
v.
Dr. Harish & Ors.
(Civil Appeal No(s). 2755-2758 of 2025)
20 February 2025
[Pamidighantam Sri Narasimha* and Manoj Misra, JJ.]

Issue for Consideration
Whether the High Court erred in modifying the terms of a
Memorandum of Understanding (MoU) between a private party
and a governmental authority in a Public Interest Litigation (PIL).

Headnotes†
Scope of Judicial Review – Matters concerning contractual
relationship of the State or its instrumentality with private
participation, particularly regarding scope and ambit of work
and finances – Scope of judicial review limited – Issues
such as mutual obligations, including the apportionment of
expenditure that contracting parties must bear – Beyond the
scrutiny of the High Court in a PIL – Impugned directions of
the High Court set aside – Appeals partly allowed:
Held: Memorandum of Understanding (MoU) between Appellant,
a private party, and Sports Development Authority of Tamil Nadu
(SDAT), the nodal governmental authority, to conduct Formula 4
motorsport racing – PIL filed in High Court raising several objections
against event – High Court vide impugned order decided not to
interfere with the government’s policy decision but issued directions
modifying the terms of the MoU – Held, once the High Court was
satisfied that the decision to hold the event was a policy matter, it
could not have proceeded to interfere in the terms of the MoU –
Issues such as the mutual obligations of the contracting parties,
including the apportionment of expenditure are beyond the scope
of judicial review in a PIL – Direction to government to conduct
such sports events on its own ignores the principle of public-private
partnership adopted by governments as a matter of good
governance – Impugned directions cannot be sustained in law.
[Paras 18-23]

* Author
[2025] 2 S.C.R. 1609

Racing Promotions Private Limited v. Dr. Harish & Ors.

Case Law Cited
Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd.
[2005] 3 SCR 666 : (2005) 6 SCC 138; Arun Kumar Agrawal v.
Union of India [2013] 3 SCR 508 : (2013) 7 SCC 1; Silppi
Constructions Contractors v. Union of India [2019] 10 SCR 932 :
(2020) 16 SCC 489; Orissa State Financial Corporation v. Narsingh
Ch. Nayak (2003) 10 SCC 261; Orix Auto Finance (India) Ltd. v.
Jagmander Singh [2006] 2 SCR 169 : (2006) 2 SCC 598; General
Assurance Society Ltd. v. Chandumull Jain [1966] 3 SCR 500 :
AIR 1966 SC 1644; Rajasthan State Industrial Development
and Investment Corporation v. Diamond & Gem Development
Corporation Ltd. [2013] 4 SCR 331 : (2013) 5 SCC 470; Shree
Ambica Medical Stores v. Surat People’s Coop Bank Ltd. [2020]
3 SCR 359 : (2020) 13 SCC 564; Venkataraman Krishnamurthy v.
Lodha Crown Buildmart Pvt. Ltd. (2024) 4 SCC 230 – referred to.

List of Acts
Contract Act, 1872.

List of Keywords
Scope of Judicial review; Public-private partnership; Contractual
obligations; Public Interest Litigation; Matter of policy.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No(s). 2755-2758
of 2025
From the Judgment and Order dated 19.02.2024 of the High
Court of Judicature at Madras in WP Nos. 33687, 33741, 33911
and 33914 of 2023

Appearances for Parties
Advs. for the Appellant:
A.D.N Rao, Arvind Nayyar, Sr. Advs., Ms. Theepa Murugesan,
Kaushal Kishor, Ms. Sanya Bhatia, Gaurav Singh.
Advs. for the Respondents:
Jaideep Gupta, Sr. Adv., D.Kumanan, Ms. Deepa S, Sheikh F Kalia,
Veshal Tyagi, Chinmay Anand Panigrahi, Ms. Preetika Dwivedi,
Abhishek Mohanty, C. Paramasivam, Ms. Adviteeya, Rakesh K.
Sharma.
1610 [2025] 2 S.C.R.

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Judgment / Order of the Supreme Court

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 by the State Government in consultation
with the stakeholders
(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 public safety and avoiding inconvenience
to the public, especially the in-patients of the Rajiv Gandhi
Government General Hospital, Madras Medical College,
and Omandurar Government Multi-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
[2025] 2 S.C.R. 1611

Racing Promotions Private Limited v. Dr. Harish & Ors.

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 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
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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. Particulars Cost (in INR)
No.
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 Festival 10,00,00,000
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
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.
[2025] 2 S.C.R. 1613

Racing Promotions Private Limited v. Dr. Harish & Ors.

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 &
operation fee Racing Permit, Pit
(“Fees”) Building, 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.
(i) Local police permission for traffic control and other law
and order required for the Festival;
(ii) Fire department support;
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(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 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
[2025] 2 S.C.R. 1615

Racing Promotions Private Limited v. Dr. Harish & Ors.

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 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.
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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.”
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.
[2025] 2 S.C.R. 1617

Racing Promotions Private Limited v. Dr. Harish & Ors.

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 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
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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
(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 -
[2025] 2 S.C.R. 1619

Racing Promotions Private Limited v. Dr. Harish & Ors.

(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
(i) Additional Director, Information Department
(j) Member Secretary, Sports Development Authority of
Tamil Nadu
(k) Additional Commissioner of Police (Traffic), Greater
Chennai Police
(l) 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 including issues of adequate safety precautions,
traffic management, protection of spectators, safeguarding
1620 [2025] 2 S.C.R.

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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
monetary support towards license fee, event management,
prize money, publicity and media management amongst
other things along with the necessary coordination with
[2025] 2 S.C.R. 1621

Racing Promotions Private Limited v. Dr. Harish & Ors.

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, 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
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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
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.
[2025] 2 S.C.R. 1623

Racing Promotions Private Limited v. Dr. Harish & Ors.

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.
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

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.
1624 [2025] 2 S.C.R.

Supreme Court Reports

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 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.

Result of the case: Appeals partly allowed.

†
Headnotes prepared by: Aishani Narain, Hony. Associate Editor
(Verified by: Shibani Ghosh, Adv.)