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1990 DIGILAW 349 (KAR)

KARNATAKA WOOD AND PLYWOOD INDUSTRIES PVT. LTD v. UNION OF INDIA

1990-07-23

H.G.BALAKRISHNA

body1990
BALAKRISHNA, J. ( 1 ) THE petitioners are aggrieved by the demand made by respondent-3 for payment of an increased licence fee of Rs. 25,540-40 per annum with effect from 1-4-1981. ( 2 ) ORIGINALLY the licence fee fixedwas in the order of Rs. 3,961-63 per annum and it is stated that it was on the basis of 6% of the market value of the land in consonance with the norms laid down by the Railway Administration. The new norms adopted by respondents 2 to 4 are that instead of revising the licence fee every five years in the case of large stations and commercial centres and every ten years in the case of other stations, the licensees or the land would be required to pay annually an increase in the licence fee of 20% per annum for very important stations, 15% for important stations and 10% for other stations. It is also provided that where there is phenominal increase in the land value, the railways are authorised to revise as may be considered suitable. It is further pointed out that the petitioners do not have an exclusive monopoly of user of the land. ( 3 ) THE main contention of the learned Counsel appearing for the petitioners is that the increase is arbitrary and is amenable to writ jurisdiction. The petitioners have sought for a direction to the respondents to forbear from enforcing the demand made under Annexure-G. ( 4 ) ON the other hand, it is the caseof the respondents that the relationship between the petitioners and the Railways is governed by an agreement dated 9-10-1974 which is Annexure-F. It is contended on behalf of the Railways that the railways have the right to review the rate of licence fee periodically and enhance the same if it is considered necessary. It ts also contended that under clause 18 of the said agreement, the provision for arbitration affords adequate remedy to the petitioners if they are aggrieved by the demand made under Annexure-G. ( 5 ) THE point for consideration iswhether it is feasible for this Court in the circumstances of this case to exercise its discretion in the matter of determination of the reasonable licence fee to be paid by the petitioners to the respondents. ( 6 ) AT the out set, it appears to methat since the entire case revolves on the question whether enhancement of the licence fee is arbitrary or reasonable, facts have to be investigated into and a determination based on the accepted norms is to be applied. Necessarily this court will have to go into disputed questions of fact and I think the rationality of the enhancement and the proper quantification of the licence fee could be better done by the Arbitrator empowered to do so under clause 18 of the agreement. ( 7 ) ACCORDING to clause 18 "in caseany doubt, difference or dispute shall arise between the licensee on the one hand and the Government on the other hand, as to the true intent and meaning of these presents or of any article, clause or thing herein contained, then in every such case, the doubt, difference or dispute shall be referred to the General manager of this Railway and his decision thereon shall be final, binding and conclusive". ( 8 ) THERE can be no doubt about the fact that the dispute which has arisen in regard to the licence fee and the demand made under Annexure-G is arbitrable and the petitioners have a right to invoke the arbitration clause for a decision of the general Manager as provided under clause 18 of the agreement. Both the party would be having a reasonable opportunity for representing their case and for adjudication of the dispute before the Arbitrator quite as effectively as an arbitration could make it. ( 9 ) FOR the above reasons, this writ petition is disposed of by the following order :- liberty is reserved to the petitioners to invoke arbitration clause 18 under the agreement dated 9-10-1974 under annexure-F for an adjudication of the dispute regarding the demand made by the respondents under Annexure-G in respect of the reasonableness of the enhancement of the licence fee made thereunder and for arriving at a just and reasonable quantification of licence fee in the facts and circumstances of the case by arbitration to be made by the General Manager of southern Railway, Madras. The Arbitrator is required to complete the arbitration and pass the award within a time limit of six months from the date of raising of demand by the petitioners. It is further directed that the petitioners shall deposit regularly a sum of Rs. The Arbitrator is required to complete the arbitration and pass the award within a time limit of six months from the date of raising of demand by the petitioners. It is further directed that the petitioners shall deposit regularly a sum of Rs. 9,000/- per annum which includes the licence fee of Rs. 3,961-63 per annum, pending completion of the arbitration. --- *** --- .