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2018 DIGILAW 660 (JHR)

Sunita Singh, wife of Sri. Kamlesh Kumar Singh v. South Eastern Railway through Senior Divisional Manager

2018-03-21

RAJESH SHANKAR

body2018
ORDER : The present writ petition has been filed for quashing the letter of demand dated 27.04.2016 and 05.05.2016 issued by the respondent no. 5– Chief Commercial Inspector, Chakradharpur and respondent no. 2 – Senior Divisional Commercial Manager, South Eastern Railway, Chakradharpur respectively, whereby the demand has been made for licence fee and also for quashing the letter of termination of contract of parking stand issued on 07.07.2016 by the respondent no. 3 –Divisional Commercial Manager, Chakradharpur in favour of the petitioner. 2. The factual background of the case as stated in the writ petition is that the respondents issued Tender Notice No. Com. 75/Cycle Stand/CKP/15 dated 05.01.2015 for running and managing the parking stand for two wheeler/cycle at Chakradharpur Railway Station for three years. Pursuant thereto, the petitioner applied and was allotted the tender and the Letter of Acceptance was issued on 10.04.2015. The petitioner thereafter deposited the advance licence fee for three months and security deposit by way of Bank Guarantee. A contract agreement was also executed between the parties being Com.75/Cycle Stand/CKP/15 dated 09.07.2015. 3. The case of the petitioner is that for few months, the petitioner worked properly, however, in the month of September-October 2015, the respondents curtailed the area of the parking stand of the petitioner and started another parking space which affected her business which caused delay in deposit of licence fee for the period of 22.10.2015 to 21.07.2016. In the meantime, the husband of the petitioner also fell ill and due to the said reason also, the petitioner was unable to deposit the Advance Licence Fee in time. The respondents issued letter dated 27.04.2016 and 05.05.2016 informing inter alia that the licence fee for the period from 22.10.2015 to 21.07.2016 is due, whereupon the petitioner filed representation before the respondents on 27.06.2016 and requested for grant of further time to clear the dues by 31.07.2016, however, no order was passed on the said representation. Thereafter, vide order dated 07.07.2016, the respondents terminated the contract of the petitioner granted for operation of Parking Stand at Chakradharpur Railway Station for 3 years. 4. Mr. V.P Singh, the learned Senior Counsel for the petitioner submits that the action taken by the respondents in starting another parking stand after reducing the area of the allotted parking space to the petitioner is arbitrary, illegal and malafide. 4. Mr. V.P Singh, the learned Senior Counsel for the petitioner submits that the action taken by the respondents in starting another parking stand after reducing the area of the allotted parking space to the petitioner is arbitrary, illegal and malafide. It is further submitted that the action of the respondent in taking forceful possession of the parking stand from the petitioner is also illegal and arbitrary. The respondents illegally forfeited the security amount of the petitioner and proceeded for fresh advertisement for running and managing the parking stand. It is also submitted that the respondents should not have opened another parking stand at Chakradharpur Railway Station till the agreement executed with the petitioner was in force and if at all they chose to do so, the same should have either been given to the petitioner or have reduced the licence fee of the petitioner for the contract period. Moreover, the respondents did not disclose the fact to the petitioner at the time of allotting the tender that they would start another parking space at Chakradharpur Railway Station by reducing the parking area allotted to the petitioner. The petitioner suffered huge financial loss owing to the fact that the people started preferring the new parking stand which is equipped with proper floor and sheds. 5. The learned counsel for the respondents submits that as per Clause 8 of the agreement, it was mandatory on the part of the petitioner to make payment of the licence fee quarterly. However, after two quarterly installments, the petitioner failed to make payment and as such, the letter dated 27.04.2016 was issued requesting her to make payment of Rs. 3,37,947/- as a licence fee for the period from 22.10.2015 to 21.07.2016. It is further submitted that in spite of the receipt of the letter dated 27.04.2016, the petitioner did not clear the dues and as such, by invoking Clause 9 of the agreement, a letter dated 05.05.2016 was issued whereby the petitioner was directed to deposit the amount of Rs. 3,44,657/- (due licence fee as well as penalty) within seven days, however, the same was also not responded by her. 3,44,657/- (due licence fee as well as penalty) within seven days, however, the same was also not responded by her. Thus, the licence of the petitioner was terminated vide letter dated 07.07.2016 by invoking Clause 9 of the Agreement and the bank guarantee submitted by the petitioner as security deposit was forfeited in terms of Clause 10 of the Agreement and possession of the parking stand was also taken. It is also submitted that the action taken by the respondents is in conformity with the terms and conditions of the agreement and as such, the same cannot be termed as illegal and arbitrary. The petitioner was given sufficient opportunity to clear the dues, however, she failed to comply the same, as a result of which the respondent authorities had no option but to invoke the provisions of Clause 9 of the said agreement. It is further submitted that the petitioner was enjoying the parking area of 660.11 sq. meter as mentioned in Clause 1 of the agreement and area allotted to the petitioner was not curtailed. Moreover, no interference was made causing any loss to the petitioner in running the parking stand as claimed by her. Once it was noticed by the respondent authorities that the parking area allotted to the petitioner had become overcrowded and several vehicles were being parked outside the parking area, it was decided to open another parking area for accommodating the extra vehicles parked in the peripheral area and on the side of the roads which used to create much inconvenience to the daily commuters. The petitioner has miserably failed to fulfil the contractual obligation and as such, the respondents invoked Clause 9 of the agreement after issuing due notice to the petitioner and took over the possession of the said stand which is fully justified and lawful and in consonance with the terms and conditions of the agreement. It is further submitted that by the opening of second parking area, no pecuniary loss has been caused to the petitioner, rather the said area was always overcrowded with vehicles throughout the year as the people used to prefer the parking stand of the petitioner being adjacent to the station premises. It is further submitted that by the opening of second parking area, no pecuniary loss has been caused to the petitioner, rather the said area was always overcrowded with vehicles throughout the year as the people used to prefer the parking stand of the petitioner being adjacent to the station premises. It is further submitted that the second parking area caused no adverse impact on the income of the petitioner as the said parking area was opened at the distance of about 100 meters, on the way of NH-75. 6. Heard the learned counsel for the parties and perused the materials placed on record. The petitioner has sought intervention of this court under Article 226 of the Constitution of India against the cancellation of her contract relating to the parking stand at Chakradharpur Railway Station and forfeiture of security deposit alleging violation of terms and conditions of the contract. 7. The power under Article 226 of the Constitution of India is plenary in nature and is not subjected to any other provision of the Constitution. The High Courts have, however, imposed self-restraints in exercise of such extraordinary jurisdiction to issue a prerogative writ which is not to be exercised in a routine manner to the exclusion of other available remedies unless such action of the State or its instrumentality is found to be arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 of the Constitution of India or for other valid and legitimate reasons, for which the Court thinks it necessary to exercise the said jurisdiction. 8. The Hon’ble Supreme Court has time and again emphasised on the yardsticks for the High Court in dealing with the contract matters under Article 226 of the Constitution of India. In the case of “Joshi Technologies International Inc. Vs. Union of India” reported in (2015) 7 SCC 728 , the Hon’ble Supreme Court held as under:- “69. The position thus summarised in the aforesaid principles has to be understood in the context of discussion that preceded which we have pointed out above. As per this, no doubt, there is no absolute bar to the maintainability of the writ petition even in contractual matters or where there are disputed questions of fact or even when monetary claim is raised. At the same time, discretion lies with the High Court which under certain circumstances, it can refuse to exercise. As per this, no doubt, there is no absolute bar to the maintainability of the writ petition even in contractual matters or where there are disputed questions of fact or even when monetary claim is raised. At the same time, discretion lies with the High Court which under certain circumstances, it can refuse to exercise. It also follows that under the following circumstances, “normally”, the Court would not exercise such a discretion: 69.1. The Court may not examine the issue unless the action has some public law character attached to it. 69.2. Whenever a particular mode of settlement of dispute is provided in the contract, the High Court would refuse to exercise its discretion under Article 226 of the Constitution and relegate the party to the said mode of settlement, particularly when settlement of disputes is to be resorted to through the means of arbitration. 69.3. If there are very serious disputed questions of fact which are of complex nature and require oral evidence for their determination. 69.4. Money claims per se particularly arising out of contractual obligations are normally not to be entertained except in exceptional circumstances. 70. Further, the legal position which emerges from various judgments of this Court dealing with different situations/aspects relating to contracts entered into by the State/public authority with private parties, can be summarised as under: 70.1. At the stage of entering into a contract, the State acts purely in its executive capacity and is bound by the obligations of fairness. 70.2. State in its executive capacity, even in the contractual field, is under obligation to act fairly and cannot practise some discrimination. 70.3. Even in cases where question is of choice or consideration of competing claims before entering into the field of contract, facts have to be investigated and found before the question of a violation of Article 14 of the Constitution could arise. If those facts are disputed and require assessment of evidence the correctness of which can only be tested satisfactorily by taking detailed evidence, involving examination and cross-examination of witnesses, the case could not be conveniently or satisfactorily decided in proceedings under Article 226 of the Constitution. In such cases the Court can direct the aggrieved party to resort to alternate remedy of civil suit, etc. 70.4. Writ jurisdiction of the High Court under Article 226 of the Constitution was not intended to facilitate avoidance of obligation voluntarily incurred. 70.5. In such cases the Court can direct the aggrieved party to resort to alternate remedy of civil suit, etc. 70.4. Writ jurisdiction of the High Court under Article 226 of the Constitution was not intended to facilitate avoidance of obligation voluntarily incurred. 70.5. Writ petition was not maintainable to avoid contractual obligation. Occurrence of commercial difficulty, inconvenience or hardship in performance of the conditions agreed to in the contract can provide no justification in not complying with the terms of contract which the parties had accepted with open eyes. It cannot ever be that a licensee can work out the licence if he finds it profitable to do so: and he can challenge the conditions under which he agreed to take the licence, if he finds it commercially inexpedient to conduct his business. 70.6. Ordinarily, where a breach of contract is complained of, the party complaining of such breach may sue for specific performance of the contract, if contract is capable of being specifically performed. Otherwise, the party may sue for damages. 70.7. Writ can be issued where there is executive action unsupported by law or even in respect of a corporation there is denial of equality before law or equal protection of law or if it can be shown that action of the public authorities was without giving any hearing and violation of principles of natural justice after holding that action could not have been taken without observing principles of natural justice. 70.8. If the contract between private party and the State/instrumentality and/or agency of the State is under the realm of a private law and there is no element of public law, the normal course for the aggrieved party, is to invoke the remedies provided under ordinary civil law rather than approaching the High Court under Article 226 of the Constitution of India and invoking its extraordinary jurisdiction. 70.9. The distinction between public law and private law element in the contract with the State is getting blurred. However, it has not been totally obliterated and where the matter falls purely in private field of contract, this Court has maintained the position that writ petition is not maintainable. The dichotomy between public law and private law rights and remedies would depend on the factual matrix of each case and the distinction between the public law remedies and private law field, cannot be demarcated with precision. The dichotomy between public law and private law rights and remedies would depend on the factual matrix of each case and the distinction between the public law remedies and private law field, cannot be demarcated with precision. In fact, each case has to be examined, on its facts whether the contractual relations between the parties bear insignia of public element. Once on the facts of a particular case it is found that nature of the activity or controversy involves public law element, then the matter can be examined by the High Court in writ petitions under Article 226 of the Constitution of India to see whether action of the State and/or instrumentality or agency of the State is fair, just and equitable or that relevant factors are taken into consideration and irrelevant factors have not gone into the decision-making process or that the decision is not arbitrary. 70.10. Mere reasonable or legitimate expectation of a citizen, in such a situation, may not by itself be a distinct enforceable right, but failure to consider and give due weight to it may render the decision arbitrary, and this is how the requirements of due consideration of a legitimate expectation forms part of the principle of non-arbitrariness. 70.11. The scope of judicial review in respect of disputes falling within the domain of contractual obligations may be more limited and in doubtful cases the parties may be relegated to adjudication of their rights by resort to remedies provided for adjudication of purely contractual disputes. 71. Keeping in mind the aforesaid principles and after considering the arguments of the respective parties, we are of the view that on the facts of the present case, it is not a fit case where the High Court should have exercised discretionary jurisdiction under Article 226 of the Constitution. First, the matter is in the realm of pure contract. It is not a case where any statutory contract is awarded.” 9. Having gone through the aforesaid judgments of the Hon’ble Supreme Court, it may be construed that there is no absolute bar in entertaining a writ petition in a contractual matter where some disputed question of facts are involved. However, if the dispute involved in a matter is completely factual which can only be determined after thorough appreciation of the evidences led by the parties, the writ petition should not be entertained. However, if the dispute involved in a matter is completely factual which can only be determined after thorough appreciation of the evidences led by the parties, the writ petition should not be entertained. Each and every case is to be dealt with on its own fact. If the materials on record are clearly evincible, the writ court may exercise the power of judicial review under Article 226 of the Constitution of India. 10. In the present case, admittedly the petitioner has committed delay in payment of licence fee for the period from 22.10.2015 to 21.07.2016 due to which the respondents served notices to her. However, the petitioner failed to make payment of the dues amount and as such, the order of termination of agreement and forfeiture of security deposit was passed and the possession of the parking stand was taken from the petitioner. The thrust of the argument of the learned Senior Counsel for the petitioner is that the respondents arbitrarily curtailed the area of the parking stand allotted to the petitioner and opened another parking stand due to which she suffered substantial financial loss which resulted in delay of deposit of the licence fee. The respondents have however strongly denied the contention of the petitioner and have replied that the petitioner was in possession of area of 660.11 sq. meter as per the sketch appended to the agreement and the area of the parking stand allotted to the petitioner was never curtailed. The respondents have also contended that the parking stand used to be overcrowded which prompted the respondents to start another parking stand situated at about 100 meters away from the parking stand allotted to the petitioner and people preferred the parking stand allotted to the petitioner being nearer to the railway station. The respondents have thus denied the allegation of the petitioner that she suffered substantial business loss due to start of another parking stand. According to the respondents, these grounds have been made out by the petitioner only to justify her delay in making payment of licence fee. Thus, both the parties have their own factual claims. They have raised several question of facts which cannot be adjudicated in extraordinary writ jurisdiction of this Court. 11. In view of the aforesaid discussion, I am not inclined to exercise the extraordinary writ petition of this Court. The writ petition is accordingly dismissed. Thus, both the parties have their own factual claims. They have raised several question of facts which cannot be adjudicated in extraordinary writ jurisdiction of this Court. 11. In view of the aforesaid discussion, I am not inclined to exercise the extraordinary writ petition of this Court. The writ petition is accordingly dismissed. The petitioner is, however, at liberty to take appropriate recourse against the action of the respondent-Railway before the appropriate court/forum in accordance with law.