M/S Morgan Enterprises vs. The State Of Telangana

Facts

M/s Moroan Enterprises, represented by its proprietor Shri Shrad Singh, was granted a license to operate a two-wheeler parking stall (Stall No. 94-A) at MGBS, Hyderabad, by the Telangana State Road Transport Corporation (TSRTC) for a period of four years, commencing from February 17, 2023. The petitioner had participated in a tender process and became the successful bidder, agreeing to pay Rs. 2,50,000/- per month, including Rs. 45,000/- towards GST. The petitioner invested significantly in erecting a shed and modernizing the parking system. However, on June 15, 2023, TSRTC issued a notice for termination of the license, effective September 15, 2023, citing a policy decision to provide a modern digitalized parking system for better customer service. The petitioner challenged this termination notice, alleging it was issued without due process, was arbitrary, and discriminatory.

Held

The High Court dismissed the writ petition, holding that the termination of the license by the TSRTC was not arbitrary or malafide. The Court found that the termination was in line with the terms of the license agreement, specifically Clause 23, which permitted the Corporation to terminate the license by giving three months' advance notice. The Court reasoned that the decision to provide a modern digitized parking system was a policy decision taken in the interest of public at large and for better service to passengers, aligning with the Corporation's statutory and public duties. The Court relied on the Supreme Court's pronouncements in "Joshi Technologies International Inc." and "Rajasthan State Industrial Development and Investment Corporation and another v. Diamond and Gem Development Corporation Limited and another," emphasizing that writ jurisdiction is not a substitute for contractual remedies and that commercial difficulties do not justify non-compliance with contractual terms. The Court noted that the petitioner had not made out a case for interference under Article 226 of the Constitution. However, the Court granted the petitioner the liberty to submit a representation to the Corporation for handing over the site back to them after the digitization work is completed, for the remainder of the license period, requesting the Corporation to consider it on humanitarian grounds, protecting the petitioner's right to livelihood.

Key Issues

1. Whether the termination of the license by the Telangana State Road Transport Corporation (TSRTC) for Stall No. 94-A at MGBS, Hyderabad, vide notice dated June 15, 2023, was arbitrary, illegal, and discriminatory, violating the principles of natural justice and Article 19(1)(g) of the Constitution of India? Petitioner's Arguments: The petitioner contended that the termination notice was issued without providing an opportunity for explanation or following due process. They argued that the action was arbitrary and discriminatory, impacting their right to livelihood. They relied on the fact that they had invested substantially in the premises and had only operated for less than four months of the four-year license period. Respondents' Arguments: The respondents (TSRTC) argued that the termination was a policy decision to modernize the parking system and centralize management under a single entity for better public service. They asserted that the termination was within the ambit of the license agreement, specifically Clause 23, which allowed for termination with three months' advance notice. They contended that this decision was applicable to all existing contractors and was in the public interest. They relied on Supreme Court judgments in "Joshi Technologies International Inc." and "Rajasthan State Industrial Development and Investment Corporation and another v. Diamond and Gem Development Corporation Limited and another" to argue that writ jurisdiction is not maintainable for avoiding contractual obligations and that commercial difficulties do not justify non-compliance with contract terms.