JUDGMENT : JYOTSNA REWAL DUA, J. 1. Petitioner was awarded a contract for operating parking lot for two wheelers and four wheelers by the respondent-Northern Railway over an area of 1643.02 sq. mtrs. near Outward Goods Shed in Shimla Railway Station with currency period 29.04.2024 to 28.04.2027 i.e. for duration of three years. The contract agreement also encapsulated ‘additional special conditions for parking contract’. Condition No.2 thereof envisaged additional license fee chargeable for grant of additional area for parking and reads as under:- “2. License fee for an additional area: In case additional area is given to licensees) will be in the same proportion as the area, for example if additional 25 mt area is given to licensee who has a running parking on a 100 mt area, the additional license fee will be increased by 25% (Twenty five percent). The same principal shall be applied in cases where the area is reduced due to Railways' need for land. The license fee shall be varied proportionately accordance with parking area and parking rates only. As far as possible, allotment of additional area after awarding. the contract should be avoided.” On 02.08.2024, petitioner requested for additional space of about 76 sq.mts. in Railway parking for smooth running of his contract of parking lot. While the aforesaid application was pending, petitioner on 17.09.2024, requested for allotment of further area for parking purposes adjacent to Baba Balku Museum in OWGS Parking. On 26.11.2024, respondents considered and allowed petitioner’s first application made for additional area of 76 sq. mtrs.. Total area awarded to the petitioner, thereby increased from 1643.02 sq. mtrs.+ 76 sq. mtrs. =1719.02 sq. mtrs.. License fee payable by the petitioner was also enhanced corresponding to the increase. 2. Petitioner’s grievance is to a termination notice served upon him by the respondents on 15.07.2025 on the ground that petitioner had applied for additional parking space, which if allotted, would make his total parking space as 2541.81 sq. mtrs. i.e. increase of 54.70% from the original area of 1643.02 sq. mtrs. Essentially for the reason that petitioner had applied for increase by 54.70% from the original allotted area, the respondents terminated petitioner’s contract agreement on 23.02.2024. Feeling aggrieved, petitioner has filed this writ petition for grant of following substantive reliefs:- “a) Issue an appropriate writ, order, or direction, quashing and setting aside the Termination Notice dated 15.07.2025 issued by the Respondents. b). Feeling aggrieved, petitioner has filed this writ petition for grant of following substantive reliefs:- “a) Issue an appropriate writ, order, or direction, quashing and setting aside the Termination Notice dated 15.07.2025 issued by the Respondents. b). Issue an appropriate writ, order, or direction, directing the Respondents to withdraw the impugned termination notice and allow the Petitioner to continue with the operation of the parking contract as per the terms and conditions of the Contract Agreement dated 23.02.2024, including the additional area of 76 sqm. c). Issue an appropriate writ, order, or direction, directing the Respondents to consider the Petitioner's request for additional parking area in accordance with the spirit and terms of the contract, particularly Clause 3 of the Special Conditions for Parking Contracts.” In terms of an interim order passed in this writ petition on 25.07.2025, operation of impugned termination notice dated 15.07.2025 (Annexure P-5) was stayed. Consequently, petitioners is continuing to operate his parking lot. 3. Reply filed by the respondents refers to some violations of terms and conditions of contract by the petitioner in past and in having been imposed penalty of Rs.10,000/- vide Annexure R-2 dated 29.07.2024, however, the same is not relevant for the purpose of controversy raised in the present petition with regard to termination of petitioner’s contract agreement on account of his having applied for additional parking area. Respondents have further relied upon following clause 17.2 of ‘Standard Conditions of Contract for the contracts awarded though e-auction’:- “17.2 By Railway Administration: Railway shall have the right to terminate the contract/ Agreement without any financial repercussion on either side for any reason whatsoever after serving one month's notice to the contractor. Railway shall also reserve the right to terminate the contract, with immediate effect, without any financial repercussions on either side in case of operational exigencies or in cases where the asset, for which the contract was awarded, is not available for commercial exploitation due to some other development or change in site or any other reason. Full EMD or SD and lump-sum freight/ rent/ license fee paid by the contractor, shall be refunded to the contractor without any interest.” The above clause is not attracted to the instant case as the respondents have given a specific reason in the impugned notice for terminating petitioner’s contract viz his applying for additional area for running the parking lot. Full EMD or SD and lump-sum freight/ rent/ license fee paid by the contractor, shall be refunded to the contractor without any interest.” The above clause is not attracted to the instant case as the respondents have given a specific reason in the impugned notice for terminating petitioner’s contract viz his applying for additional area for running the parking lot. The impugned termination of contract comes with financial repercussion for the petitioner. 4. Learned counsel for the petitioner has placed reliance upon Subodh Kumar Singh Rathour Vs. The Chief Executive Officer and Ors. , AIR 2024 SC 3784 in support of his submission that the writ petition would be maintainable in such like contractual matters where action impugned is illegal, arbitrary, unfair and unreasonable. Relevant paras from the decision are as under:- “126. The sanctity of public tenders lies in their role in upholding the principles of equal opportunity and fairness. Once a contract has come into existence through a valid tendering process, its termination must adhere strictly to the terms of the contract, with the executive powers to be exercised only in exceptional cases by the public authorities and that too in loathe. The courts are duty bound to zealously protect the sanctity of any tender that has been duly conducted and concluded by ensuring that the larger public interest of upholding bindingness of contracts are not sidelined by a capricious or arbitrary exercise of power by the State. It is the duty of the courts to interfere in contractual matters that have fallen prey to an arbitrary action of the authorities in the guise of technical faults, policy change or public interest etc. 127. The sanctity of contracts is a fundamental principle that underpins the stability and predictability of legal and commercial relationships. When public authorities enter into contracts, they create legitimate expectations that the State will honour its obligations. Arbitrary or unreasonable terminations undermine these expectations and erode the trust of private players from the public procurement processes and tenders. Once a contract is entered, there is a legitimate expectation, that the obligations arising from the contract will be honoured and that the rights arising from it will not be arbitrarily divested except for a breach or non-compliance of the terms agreed thereunder. Once a contract is entered, there is a legitimate expectation, that the obligations arising from the contract will be honoured and that the rights arising from it will not be arbitrarily divested except for a breach or non-compliance of the terms agreed thereunder. In this regard we may make a reference to the decision of this Court in Sivanandan C.T. v. High Court of Kerala, (2024) 3 SCC 799 wherein it was held that a promise made by a public authority will give rise to a legitimate expectation that it will adhere to its assurances. The relevant portion reads as under:- “18. The basis of the doctrine of legitimate expectation in public law is founded on the principles of fairness and non-arbitrariness in Government dealings with individuals. It recognises that a public authority's promise or past conduct will give rise to a legitimate expectation. The doctrine is premised on the notion that public authorities, while performing their public duties, ought to honour their promises or past practices. The legitimacy of an expectation can be inferred if it is rooted in law, custom, or established procedure xxx xxx xxx 45. The underlying basis for the application of the doctrine of legitimate expectation has expanded and evolved to include the principles of good administration. Since citizens repose their trust in the State, the actions and policies of the State give rise to legitimate expectations that the State will adhere to its assurance or past practice by acting in a consistent, transparent, and predictable manner. The principles of good administration require that the decisions of public authorities must withstand the test of consistency, transparency, and predictability to avoid being regarded as arbitrary and therefore violative of Article 14.” (Emphasis supplied) 128. Cancellation of a contract deprives a person of his very valuable rights and is a very drastic step, often due to significant investments having already been made by the parties involved during the subsistence of the contract. Failure on the part of the courts to zealously protect the binding nature of a lawful and valid tender, would erode public faith in contracts and tenders. Arbitrary terminations of contract create uncertainty and unpredictability, thereby discouraging public participation in the tendering process. Failure on the part of the courts to zealously protect the binding nature of a lawful and valid tender, would erode public faith in contracts and tenders. Arbitrary terminations of contract create uncertainty and unpredictability, thereby discouraging public participation in the tendering process. When private parties perceive that their contractual rights can be easily trampled by the State, they would be dissuaded from participating in public procurement processes which may have a negative impact on such other public-private partnership ventures and ultimately it is the public who would have to bear the brunt thereby frustrating the very object of public interest. 129. We caution the public authorities to be circumspect in disturbing or wriggling out of its contractual obligations through means beyond the terms of the contract in exercise of their executive powers. We do not say for a moment that the State has no power to alter or cancel a contract that it has entered into. However, if the State deems it necessary to alter or cancel a contract on the ground of public interest or change in policy then such considerations must be bona-fide and should be earnestly reflected in the decision-making process and also in the final decision itself. We say so because otherwise, it would have a very chilling effect as participating and winning a tender would tend to be viewed as a situation worse than losing one at the threshold. H. FINAL CONCLUSION 130. We are of the considered opinion that the litigation at hand is nothing but a classic textbook case of an arbitrary exercise of powers by the respondent in cancelling the tender that was issued in favour of the appellant and that too at the behest of none other than the concerned Minister-In-Charge and thereby rendering the Notice of Cancellation dated 07.02.2023 illegal.” Subodh Kumar Singh Rathour inter-alia outlines duty of the Courts to interfere in contractual matters that have fallen prey to an arbitrary action of the authorities in guise of technical faults, policy or public interest etc. which are not bonafide. In the instant case, objection relating to petition’s maintainability has not even been raised by the respondents. No disputed question of fact is involved in this writ petition. The impugned notice issued by the respondents on 15.07.2025, terminating petitioner’s contract agreement only on the ground of his having applied for additional parking area, is an unreasonable and arbitrary action. In the instant case, objection relating to petition’s maintainability has not even been raised by the respondents. No disputed question of fact is involved in this writ petition. The impugned notice issued by the respondents on 15.07.2025, terminating petitioner’s contract agreement only on the ground of his having applied for additional parking area, is an unreasonable and arbitrary action. Termination of petitioner’s contract for running the parking lot only on the ground of his having applied for additional area defies even common prudence. Respondents could have rejected petitioner’s request for allotment of additional area over and above 1719.02 sq. mtrs. already allotted and approved in his favour. It is not the case of the respondents that petitioner had refused to operate the parking lot minus the additionally applied for area. Respondents terminating petitioner’s contract of parking lot under impugned order, therefore, has to be held as illegal, unreasonable and arbitrary exercise. 5. In view of above, this writ petition is allowed. Impugned termination notice darted 15.07.2025 (Annexure P-5) is quashed and set aside. Petitioner shall be allowed to continue to run the parking lot in terms of his contract agreement Annexure P-1 read with Annexure P-3 dated 26.11.2024, in accordance with law. Pending miscellaneous application(s), if any, also to stand disposed of.