The Right to Do Business Is Subject to Reasonable Restrictions in the Interest of Public Welfare and Economic Balance: Delhi High Court

Title: D.G. Raj Commercial Pvt. Ltd. and Anr. v. General Manager, Northern Railway and Ors.
Decided on:  1st August, 2023

+  W.P.(C) 7222/2019 & CM APPL. 30010/2019CORAM:  HON’BLE THE CHIEF JUSTICE SATISH CHANDRA SHARMA                                    HON’BLE MR. JUSTICE SANJEEV NARULA SHARMA  


The Delhi High Court has dismissed a petition challenging a tender floated by the Northern Railway. The court refused to agree with the petitioners’ claim that their right to conduct business under Article 19(1)(g) of the Constitution of India was being violated by the tender. The court held that the right to conduct business is subject to reasonable restrictions in the interest of public welfare and economic balance.


The petitioners had a long-standing association with the Northern Railways and had entered into contracts for leasing parcel vans for train operations. They raised concerns when the Northern Railways issued a tender for leasing similar parcel cargo express trains to another destination, potentially impacting their business. The petitioners requested the withdrawal of the tender but were not successful. They approached the High Court seeking relief.

Advocate Manish Kohli represented the petitioners, while CGSC Arunima Dwivedi appeared for the respondent.


The Delhi High Court observed that the right to conduct business is not an absolute right and can be subject to reasonable restrictions. The court noted that the Northern Railways’ decision to introduce new trains was aimed at enhancing railway services and meeting public needs. The court emphasized that measures to improve railway operations should not be hindered by speculative concerns about their impact on the petitioners’ business.

The court also examined the petitioners’ locus standi to challenge the tender. It noted that the petitioners had willingly participated in the tender process and had even secured the bid but failed to complete the necessary formalities. The court stated that opportunistic litigation undermines the fairness of the tendering process and creates unpredictability.

The court also considered the terms of the existing agreement between the parties and found that the petitioners did not possess exclusive rights for the train route in question, making their claim less tenable.


The Delhi High Court dismissed the petition and imposed a cost of Rs. 50,000 on the petitioners to be deposited in the Delhi Police Welfare Fund. The court held that the petitioners had gained an unfair advantage by securing an interim stay on the tender, depriving the respondent of potential financial benefits. The court clarified that their attempt to prevent Northern Railways from issuing tenders for the relevant routes throughout the agreement’s duration was not justified.

In conclusion, the court dismissed the petition, emphasizing that the right to conduct business must be balanced with the broader interests of public welfare and efficient functioning of essential services like the railway system.

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Written by- Ankit Kaushik

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