The High Court of Jammu & Kashmir and Ladakh at Jammu on Thursday took up a petition filed by Eduspark International Pvt. Ltd., challenging a penalty and recovery order issued under the Himayat skill development scheme.
The Court did not go into the merits of the dispute immediately. Instead, it raised a crucial question: Can the company maintain a writ petition when the agreement it signed contains an arbitration clause?
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The order was passed by Justice Wasim Sadiq Nargal in WP(C) No. 3731/2025 dated February 11, 2026 .
Background of the Case
Eduspark International Pvt. Ltd. was part of a consortium engaged under the Himayat scheme, a special initiative under the Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) meant to skill rural youth and provide employment.
In 2018, the company entered into a Memorandum of Understanding (MoU) for training 1,000 candidates. Later, its consortium partner exited the project in 2021, leaving Eduspark to continue alone.
The dispute arose after the Himayat Mission Management Unit (HMMU) issued:
- A penalty notice of ₹5.65 lakh, and
- A recovery notice of ₹2.82 crore with 10% annual interest, to be recovered as arrears of land revenue.
Both notices were dated November 10, 2025.
Eduspark approached the High Court seeking to quash these notices.
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Arbitration Clause Becomes Central Issue
During the earlier hearing in December 2025, the Court flagged an important concern. The MoU signed between the parties contains an arbitration clause.
Justice Nargal asked the petitioner’s senior counsel to explain why the company had approached the High Court under Article 226 of the Constitution instead of invoking arbitration.
“The petitioner is privy to the MoU which contains an arbitration clause,” the Court noted, questioning the maintainability of the writ petition .
In response, the petitioner filed a supplementary affidavit arguing that the clause did not amount to a valid arbitration agreement under the Arbitration and Conciliation Act, 1996. It also contended that the penalty was arbitrary and issued without following principles of natural justice - meaning, without fair hearing and proper reasoning.
The company argued that the High Court could still intervene despite the arbitration clause.
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Pending Appeal Raises Court’s Concern
Another issue emerged during the hearing.
The petitioner informed the Court that it had already filed an appeal in May 2022 before the Principal Secretary, Rural Development and Panchayati Raj, against an earlier closure order and penalty.
According to the submissions, that appeal has remained undecided for nearly four years.
Justice Nargal expressed strong concern over this delay.
“This is very shocking that an appeal… preferred in the month of May, 2022 till date has not been decided,” the Court observed .
The Court noted that it was unaware, at this stage, whether the delay was attributable to the petitioner or the authorities.
Court’s Directions
Before examining the merits of the penalty and recovery, the Court decided to first settle the issue of maintainability.
The respondents were directed to file a reply limited to:
- Whether the writ petition is maintainable in view of the arbitration clause, and
- The reasons for the inordinate delay in deciding the pending appeal.
The Additional Advocate General, appearing for the authorities, was directed to file an affidavit explaining the delay. The Court also asked for the scanned record of the appellate proceedings.
The matter has been listed for continuation on March 2, 2026.
For now, the Court has deferred passing any interim order on the recovery.
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Decision
The High Court issued notice to the respondents and directed them to file a detailed reply on the question of maintainability and the delay in deciding the petitioner’s appeal.
Interim relief has been deferred. The matter will be considered further on the next date of hearing.
Case Title: Eduspark International Pvt. Ltd. vs Union of India & Others
Case No.: WP(C) No. 3731/2025
Decision Date: 11 February 2026
