Rabik Raja.S vs. The Senior Divisional Commercial Manager

Facts

The petitioner, S. Rabik Raja, operates catering stalls at Tirunelveli Railway Junction under a license granted by the respondent, Southern Railways. The annual license fee for the catering stall and platform vending was Rs. 5,55,556/-, with payments due by May 31st annually. The petitioner failed to pay the license fee for 2022-2023 on time, citing the impact of the COVID-19 lockdown on his business and subsequent personal health complications. He represented to the respondent seeking time to pay. The respondent issued a notice dated 06.10.2022, demanding the entire outstanding amount of Rs. 5,85,998/- within seven days. The petitioner filed a writ petition challenging this notice and seeking to pay Rs. 3,00,000/- immediately and the balance by 31.12.2022 with 18% interest.

Held

The Court allowed the writ petition. It acknowledged the petitioner's inability to pay on time due to the COVID-19 pandemic's impact. The Court directed the petitioner to pay Rs. 3,00,000/- to the respondent on or before 20.10.2022, and the respondent was directed to accept this payment. The Court further directed that the remaining amount payable by the petitioner shall be paid on or before 30.12.2022, along with 18% interest. Consequently, the impugned proceedings dated 06.10.2022 were set aside. The Court's reasoning was based on providing reasonable time to the petitioner, considering the extraordinary circumstances of the pandemic and his stated willingness to pay with interest. The ratio decidendi is that in exceptional circumstances, courts may grant leniency in payment schedules for contractual obligations, especially when the delay is attributable to unforeseen events and the party demonstrates a genuine intent to fulfill their obligations.

Key Issues

1. Whether the petitioner is entitled to a Writ of Certiorarified Mandamus to quash the respondent's proceedings dated 06.10.2022 and to direct the respondent to accept a partial payment of Rs. 3,00,000/- and grant time for the remaining payment of Rs. 2,85,998/- by 31.12.2022, considering his representation dated 03.10.2022. Petitioner's arguments: The petitioner contended that the delay in payment was due to the severe impact of the COVID-19 lockdown on his business and his subsequent health issues. He expressed his willingness to pay Rs. 3,00,000/- immediately and the remaining amount by 30.12.2022 with 18% interest, seeking reasonable time. He argued that his intention was not to evade payment but to seek a concession. Respondent's arguments: The respondent argued that as per the tender and contractual agreement, the license fee must be paid regularly, with delayed payments attracting 18% interest. They stated that the Railway Board guidelines do not vest discretionary power in the respondent to permit part payment or installment payments. They prayed for the dismissal of the writ petition.