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Kaushal Sharma vs. National Highway and Infrastructure Development Corporations NHIDCL

Writ Petition (Civil) · 2026:DHC:9014Decided 9 Oct 2026New Delhi Bench
W.P.(C) 15036/2026CNR: DLHC010490482026
Justice Amit Mahajan

Background

A contractor under a road-infrastructure (EPC) agreement with NHIDCL sought to stop the agency from taking coercive action under its termination notice and from encashing his performance bank guarantee, in a dispute over which party had actually terminated the contract first.

Decision Breakdown

The Court found this was fundamentally a contractual dispute, and the agreement itself contained a dispute-resolution/arbitration clause that both sides acknowledged covered precisely this disagreement. Citing Supreme Court precedent, it held that where a government contract provides its own arbitration mechanism, the High Court will ordinarily decline to use its special writ powers and leave parties to that mechanism, including for interim relief regarding the bank guarantee, which could equally be sought from an arbitrator under Section 9 of the Arbitration Act. The petition was dismissed, with liberty to pursue the arbitration route.

Lesson Learnt

If a government or private contract contains an arbitration clause, a party generally cannot sidestep it by going straight to the High Court with a writ petition: interim protection, including over bank guarantees, should instead be sought through the arbitration process itself.

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