Vishnu Prakash R. Pungalia Ltd. Challenged Cancellation of Jaipur–Sawai Madhopur Doubling Project Contract; HC Directs Contractor to Pursue Contractual Remedy
Jodhpur: The Rajasthan High Court has refused to interfere with the Railway’s decision to cancel the contract of Vishnu Prakash R. Pungalia Ltd., encash its bank guarantees and re-tender the remaining work, holding that the dispute should be pursued through the contractual remedy available to the company.
Contractor Blamed Railway, Railways Held Contractor Responsible
The dispute arose from a railway infrastructure contract for the Jaipur–Sawai Madhopur doubling project. The company claimed that the work was delayed because the Railway failed to provide drawings, approvals, NOCs and clear work sites on time.
The Railway rejected these allegations, stating that the contractor had made inadequate progress despite repeated notices and opportunities. It eventually cancelled the contract on January 13, 2026.
Court Says Dispute Needs Detailed Examination
Justice Sameer Jain, while delivering the judgment, observed that determining who was responsible for the delay would require examination of site records, drawings, approvals, progress reports and other evidence. Such disputed contractual matters, the Court said, cannot ordinarily be decided in a writ petition.
The Court also held that the Jodhpur Bench lacked territorial jurisdiction, as the work site and major contract-related events were situated in Jaipur. The company’s registered office and the banks issuing its guarantees being located in Jodhpur were not sufficient to confer jurisdiction.
Since the contract contained an alternative dispute-resolution mechanism, the Court declined to exercise its writ jurisdiction under Article 226.
The court granted the company 45 days to pursue the appropriate contractual remedy and directed that status quo be maintained during this period.
The Court clarified that it had not decided who was responsible for the delay or whether the Railway’s cancellation of the contract was ultimately justified.