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

Held

The Court held that the Petitioner had a valid period available to deposit the license fee and penalty until 07.09.2023, as per the Railways' policy, which allowed for grace periods with escalating penalties. The Court found that the Railways could not take a stand that they had terminated the contract prior to the expiry of this period. The Court noted that the contract was terminated by the system automatically, but found this termination to be premature. The Court acknowledged the Petitioner's bonafide stand in offering to pay even 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 of the Petitioner, Writ Petition No.11060 of 2023 and the Civil Application were disposed of. Writ Petition No. 11148 of 2023, concerning the shifting of the canteen, was also disposed of with liberty to the Petitioner to file a fresh petition if the Railways insisted on shifting or passed other orders.

Facts

The Petitioner, Furkan Ahmed Salim Ahmed, operates a Rail Coach Restaurant. The Railways issued a tender for a five-year period. The Petitioner challenged the termination of his license due to alleged default in payment of license fee. The Petitioner had previously been permitted by the Court to operate the restaurant upon depositing quarterly fees. The Railways, through communications, indicated the Petitioner's license was terminated due to default in payment of license fee, which was due between 10.08.2023 to 24.08.2023. The Petitioner contended that the Railways did not open their portal for payment on 06.09.2023 and 07.09.2023, despite the Court's order and the expiry of the grace period on 07.09.2023. The Petitioner offered to deposit the DD with additional penalty.

Key Issues

1. Whether the termination of the Petitioner's license by the Railways was premature, considering the available grace periods and penalties as per the Railways' policy? 2. Whether the Petitioner had a valid period available to deposit the license fee and penalty as per the policy, and if the Railways' action of terminating the contract was justified? Petitioner's Arguments: The Petitioner argued that the Railways' termination of the contract was premature. The Petitioner contended that as per the Railways' policy, a grace period of 7 days with a 0.5% penalty was allowed, followed by an additional 7 days with a 0.75% penalty, and a further 7 days with a 1% penalty. The Petitioner claimed that the last segment of the grace period expired on 07.09.2023, and the Railways terminated the contract before this date. The Petitioner also argued that the Railways failed to open their portal for payment on 06.09.2023 and 07.09.2023, despite the Court's order and the Petitioner's readiness to deposit the amount. Revenue's Arguments: The Revenue (Union of India through Senior Divisional Commercial Manager) initially stated that the Petitioner's license was terminated due to default in payment of license fee, which was due between 10.08.2023 to 24.08.2023. However, subsequent communications indicated that the termination was automatic by the system. The Revenue relied on the communication dated 11.09.2023 from Shri Rajesh Abrol, GM.EPS Spl. Projects, which detailed the policy and the expiry of grace periods.