Furkan Ahmed Salim Ahmed vs. Union Of INDIA Through The Seniro Divisional Commercial Manager

Held

The Court held that the Railways could not claim to have terminated the contract of the petitioner prior to the expiry of the extended grace periods, especially in view of the Court's order dated 06.09.2023. The Court found that the contract of the petitioner had been terminated prematurely. The Court noted that the petitioner had the legal period available until 07.09.2023 to deposit the installment along with the penalty. The Court also acknowledged the petitioner's bonafide stand in offering to pay further interest/penalty from 08.09.2023 till 15.09.2023, despite not being at fault. Consequently, the Court directed the Respondent-Railways to allow the Petitioner to deposit a Demand Draft along with the penalty component on or before 16.09.2023, up to 05.00 p.m. By consent, Writ Petition No. 11148 of 2023 and the Civil Application were disposed of. Writ Petition No. 11060 of 2023 was also disposed of with liberty to the petitioner to file a fresh petition if necessary.

Facts

The petitioners, Furkan Ahmed Salim Ahmed, filed two writ petitions before the Bombay High Court, Bench at Aurangabad. Writ Petition No. 11060 of 2023 concerned the shifting of a canteen, while Writ Petition No. 11148 of 2023 related to the operation of a Rail Coach Restaurant. On September 6, 2023, the Court had passed an order allowing the petitioner to deposit quarterly fees for a further period of three months, subject to the outcome of the petitions. The respondent, Union of India through the Senior Divisional Commercial Manager, had initially waived service of notice. However, subsequent communications revealed that the petitioner's license was terminated due to default in payment of license fee, with the due date for deposit being between August 10-24, 2023. The petitioner claimed to have attempted to deposit the amount as per the court's order but faced issues with the Railways' portal.

Key Issues

1. Whether the termination of the petitioner's contract by the Railways was premature, considering the extended grace periods and penalties allowed under the amended policy, and in light of the Court's order dated 06.09.2023? (Question of law and fact, concerning the interpretation and application of Railway Board's policy on payment defaults and the Court's interim order). Petitioner's arguments: The petitioner argued that their contract was terminated prematurely. They contended that the Railways' system automatically cancelled the contract, which was not permissible before the expiry of the extended grace periods. The petitioner also claimed to have made bonafide efforts to deposit the amount, including offering to pay additional penalty, despite the Railways' portal not being open on crucial dates. They relied on the amended policy allowing for extended grace periods with varying penalties. Revenue/State's arguments: The respondent (Union of India) communicated that the petitioner's license had already been terminated due to default in payment of license fee. They presented communications indicating the termination was a system-driven event and highlighted the due dates for payment and the expiry of grace periods.