In a landmark judgment delivered on February 20, 2025, the Supreme Court of India weighed in on a crucial issue surrounding the conduct of Formula 4 racing in Chennai, Tamil Nadu. Racing Promotions Private Limited (RPPL) vs. Dr. Harish & Ors., revolved around the legality and fairness of a Memorandum of Understanding (MoU) between RPPL and the Sports Development Authority of Tamil Nadu (SDAT).
This ruling not only unpacks the complexities of public-private partnerships (PPPs) but also sets clear boundaries for judicial intervention in policy matters.
What is the Matter?
The dispute arose when the Madras High Court, responding to multiple public interest litigations (PILs), imposed conditions on the Formula 4 racing event in Chennai. The High Court allowed the event to proceed but required RPPL to reimburse ₹42 crores to the state government and deposit an additional ₹15 crores in advance for future events. It also directed the state government to take over the responsibility of conducting such events in the future. RPPL, in turn, challenged these directions, arguing that they interfered with the terms of the MoU and imposed financial obligations that were not part of the original agreement. The Supreme Court was thus tasked with determining whether the High Court had overstepped its authority.
The present appeals arise out of an order dated 19.02.2024 passed by the Madras High Court disposing of various writ petitions filed as public interest litigations (‘PILs’) against the conduct of Formula 4 racing in the city of Chennai, Tamil Nadu, in which the following directions were issued:
“22. Accordingly, this batch of writ petitions are disposed of, with the following directions
(i) The Formula 4 Race proposed to be conducted in the Chennai Racing Circuit is permitted to be held on the dates to be decided by the State Government in consultation with the stakeholders
(ii) The State Government shall ensure that the street race in the 3.7 km as stipulated, shall be carried on, with highest degree of public safety and avoiding inconvenience to the public, especially the in-patients of the Rajiv Gandhi Government General Hospital, Madras Medical College, and Omandurar Government Multi speciality Hospital. This can be ensured by installing necessary silencing equipment like sound silence panels/acoustic sound panel for noise control in the hospitals during the time of the
racing events.
(iii) The RPPL shall ensure that all public viewers will be provided with necessary protective gear for their safety during the Race
(iv) The RPPL shall reimburse the expenditure made by the State Government (i e) Rs 42 crores from the public exchequer, to them, prior to the conduct of the event
(v) The State Government must ensure that RPPL or anyone should deposit in advance (prior to next year and the upcoming third year's event) the stipulated expenditure of Rs 15 crores for the upcoming two years for holding the Street Circuit in Chennai
(vi) The RPPL cannot expect anything more than facilitation as well as arrangements along with co-ordination and co-operation of the State authorities, and the expenditure for the event will have to be completely borne out only by the RPPL
(vii) In future, the State is expected to take upon itself the responsibility of conducting of such event in furtherance of its policy to encourage the racing sport and seek the support of private bodies having experience and expertise in the field. This will ensure fairness and also dispel any doubt as to mala fides in distribution of the State largesse”
In its ruling, the Supreme Court made several significant observations. It reiterated that judicial review in contractual matters between the state and private entities is limited. Courts cannot rewrite the terms of an agreement or impose financial obligations beyond what was contractually agreed upon.
The judgment emphasized that the High Court’s directions—particularly the reimbursement and deposit requirements—were not legally tenable and exceeded the scope of judicial intervention. Citing legal precedents, the court reaffirmed that courts should not interfere with mutually agreed-upon contracts unless there is an evident breach of public interest.
Public-Private Partnerships: The ruling also addressed the broader question of public-private partnerships in sports. The court acknowledged that PPPs are an essential policy tool for governments to promote sports and public services. Given the limited resources of state governments, collaboration with private entities is often necessary to ensure the success of large-scale events.
The MoU between RPPL and SDAT was intended to foster motorsports in Tamil Nadu, aligning with the state’s goal of developing sports infrastructure and encouraging international sporting events.
Economic Benefits of Hosting Sporting Events
Beyond legal technicalities, the Supreme Court considered the economic implications of hosting international sporting events. Such events can generate significant tourism revenue, create jobs, and boost infrastructure development. An affidavit submitted by SDAT outlined the long-term economic benefits of hosting the Formula 4 championship, reinforcing the argument that the MoU served a larger public interest.
Unviability of State Taking Over Event Management
23. Once the High Court was satisfied that the decision to hold the sports event is a matter of policy, it could not have proceeded to interfere with the specific terms of the MoU entered into between the authority and the appellant herein. Issues such as the mutual obligations, including the apportionment of expenditure that the contracting parties must bear, are beyond the scrutiny of the High Court in a public interest litigation.2
Finally, direction (vii) calling upon the State itself to take up the responsibility of conducting such sports events ignores the principle of public-private partnership adopted by governments across the globe as a matter of good governance, which takes into account the limited resources of the State coupled with issues of efficiency and expertise. We are of the opinion that the High Court committed an error in issuing directions (iv), (v), (vi) and (vii), which cannot be sustained in law.
24. For the reasons stated above, we partly allow the appeals and set aside the directions of the High Court in paragraphs 22(iv), (v), (vi), and (vii) of the judgment and order in Writ Petition Nos. 33687,
33741, 33911 and 33914 of 2023 by order dated 19.02.2024.
A key aspect of the ruling was the court’s rejection of the High Court’s directive that the state government should take over event management.
The Supreme Court recognized that organizing international motorsport events requires specialized expertise, typically held by licensed private bodies. The role of the government, it clarified, should be primarily facilitative, providing logistical support rather than taking direct control.
Ultimately, the Supreme Court struck down the High Court’s financial directives and its suggestion that the government should assume control of such events. It held that these measures were beyond the scope of judicial review and could not be legally sustained.
This ruling carries important implications for the future of PPPs in sports. It reaffirms the legitimacy of private sector involvement in infrastructure development while setting clear limits on judicial intervention in policy matters. The judgment also reinforces the economic and social benefits of hosting international sporting events, positioning Tamil Nadu as a growing hub for motorsports and global sports events.
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