Summary
The Supreme Court set aside directions of the Madras High Court, issued in public interest litigation against a Formula 4 street race in Chennai, which required the private promoter to reimburse the State's Rs. 42 crore spend, deposit future costs in advance and bear the whole expenditure, and required the State to conduct such events itself, holding that a High Court cannot rewrite the terms of a State instrumentality's MoU or override a public-private partnership policy.
Issues
- Whether, having accepted that hosting the race was a policy decision, the High Court could in a PIL alter the apportionment of expenditure fixed by the MoU between the State sports authority and the private promoter.
- Whether the High Court could direct the State to conduct such sporting events itself in future.
- The scope of judicial review over contracts between the State or its instrumentalities and private parties.
Held
- The directions requiring the promoter to reimburse the State's expenditure, to make advance deposits for the next two editions and to bear the entire cost amounted to prescribing new terms for the MoU, under which the promoter and the Sports Development Authority of Tamil Nadu had, after deliberation, each undertaken defined deliverables and costs. (¶¶ 17, 18, 19)
- Judicial review of contractual arrangements between the State or its instrumentalities and private participants, particularly on the scope of work and finances, is limited, especially where nobody alleges distribution of largesse, waste of public funds or defalcation. (¶ 20)
- Once the High Court accepted that holding the event was a matter of policy, it could not interfere with the specific terms of the MoU; mutual obligations, including apportionment of expenditure between contracting parties, lie beyond scrutiny in a public interest litigation, and courts cannot rewrite contracts. (¶ 23)
- The State may adopt public-private partnership as a policy, given its limited resources and the efficiency and expertise of private enterprise; the direction that the State itself should conduct such events in future ignored this principle and could not be sustained. (¶¶ 21, 22, 23)
- The unchallenged directions on public safety, noise control near hospitals and protective gear for spectators were left intact. (¶¶ 3, 17, 24)
Result
Appeals partly allowed; directions in paragraphs 22(iv) to 22(vii) of the High Court's order set aside; no order as to costs.