Bombay High Court
Yespal Keval Singh Chandi vs Union Of India And 2 Ors on 7 September, 2015
Bench: S.C. Dharmadhikari
writ petitionL.2322.15.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION(L)NO. 2322 OF 2015
Yespal Keval Singh Chandi ..Petitioner
Vs.
Union of India through General Manager
Wester Railway and Others ..Respondents
WITH
WRIT PETITION(L)NO.2283 OF 2015
M/s SRI Salasar Cargo Movers through
Prop.Lalit Shah ..Petitioner
Vs.
Union of India ..Respondents
Ms. Ankita Singhania i/b Mr Arvind Kumar Dubey,for the Petitioner
in WP(L)No.2322/15.
Mr. Rohan Cama i/b Mr Arvind Kumar Dubey, for the Petitioners in
WP(L)No.2283/15.
Mr Chetan Agarwal a/w Mr Sagar Tambe,for the Respondents in
WP(L)No.2322/15.
Ms Sangita Yadav i/b Mr Suresh Kumar, for the Respondent in
WP(L)No.2283/15.
Aswale 1/19
::: Uploaded on - 07/09/2015 ::: Downloaded on - 10/09/2015 20:11:00 :::
writ petitionL.2322.15.doc
CORAM:- S.C.DHARMADHIKARI &
B.P. COLABAWALLA, JJ.
Reserved On :- August 24, 2015.
Pronounced On :- September 7, 2015.
JUDGMENT: [ Per B. P. Colabawalla, J. ]
1. By these Petitions filed under Article 226 of the
Constitution of India, the Petitioners have challenged the legality
and validity of the order dated 28th July, 2015 passed by the Chief
Operations Manager (Western Railway), under which the decision of
the Divisional Authority cancelling/terminating the lease contracts of
the Petitioners, with forfeiture of Security Deposit and cancellation
of registration, as punitive measures, was confirmed. The
Petitioners are further barred from applying for fresh registration for
a period of five years.
2. Since the facts in both these Petitions and the point of
law to be considered are more or less the same, both these Petitions
are being disposed of by this common judgment.
Aswale 2/19
writ petitionL.2322.15.doc
3. The facts in Writ Petition (L) No.2322 of 2015 are as
follows:-
(a) The Petitioner is engaged in the business of transport of
goods/cargo including taking on lease from the Railways
Train goods compartments i.e. SLR 4 ton Luggage Rack.
(b) Pursuant to a tender notice, the Petitioner and the
Respondents entered into an "Agreement for Leasing of
Parcel Space in Brake Van / Parcel Van/ Assistant
Guard Cabin" dated 9th December, 2013. This
agreement stipulates that w.e.f. 11st December 2013, the
Railway administration would provide 04 (MSLR-IV)
tonnes parcel space to the Petitioner (leaseholder) in
Train No.12925 from BDTS to ASR for a period of three
years. There were several other terms and conditions in
the said agreement which inter alia provided for
overloading and penalty, failure of the leaseholder to
Aswale 3/19
writ petitionL.2322.15.doc
fulfill his obligation after having started loading,
preparation of manifest, loading of heavy packages in
Assistant Guard Cabin etc. Apart from the contract for
this Train namely Train No.12925, the Petitioner and the
Respondents have entered into agreements/contracts
with reference to other Trains as well. It is the case of
the Petitioner that he has been loading and unloading
goods as per the said agreement and performed all his
duties and actions as stipulated in the agreement.
(c) Since the Respondent Authorities found that there was
overloading in some of the Trains, by a communication
dated 10th January, 2015 the Divisional Railway
Manager (Commercial), Mumbai Central, brought the
aforesaid facts to the notice of the Petitioner and
terminated all the contracts of the Petitioner and
cancelled their registration with forfeiture of registration
fees, as punitive measures. The Petitioner was further
debarred from applying for a fresh registration for a
Aswale 4/19
writ petitionL.2322.15.doc
period of 5 years.
(d) Being aggrieved by this decision, the Petitioner preferred
an Appeal before the Chief Commercial Manager
(Respondent No.2) without any success. Being
aggrieved and dissatisfied by the termination letter dated
10th January, 2015 as well as the order in Appeal dated
18th February, 2015, the Petitioner then approached this
Court by filing Writ Petition (L) No.978 of 2015. This
Court by its order dated 25th June, 2015 set aside the
order of the Appellate Authority and remanded the
matter back for deciding the Appeal afresh. This was
done on the ground that no personal hearing was given
to the Petitioner. It was also ordered that since the Chief
Commercial Manager is the Appellate Authority who
has terminated the contract, any other officer of the same
rank would decide the Appeal, after giving a personal
hearing to the Petitioner.
Aswale 5/19
writ petitionL.2322.15.doc
(e) Pursuant thereto, the Appellate Authority after giving a
personal hearing and examining the matter, gave a
reasoned order dated 28th July, 2015 dismissing the
Appeal of the Petitioner and upholding the termination
of all contracts of the Petitioner. Being aggrieved by
this order in Appeal, the Petitioner is before us.
4.
The facts in Writ Petition (L) No.2283 of 2015 are as
under:-
(a) Here also the Petitioner is the proprietary concern of one
Lalit Sharma and is engaged in the business of transport
of goods and cargo including taking on lease from the
railways Train goods compartments i.e. Parcel Van. In
the facts of this case, an agreement dated 23rd October,
2012 was entered into between the Petitioner and the
Respondent for leasing parcel space in Parcel Van in
Train No.12925/12926 Paschim Express Ex. BDTS-
ASR-BDTS for a period of three years and on the terms
Aswale 6/19
writ petitionL.2322.15.doc
and conditions, more particularly, set out therein (said
agreement). Like in the case of the Petitioner in other
case, here also there were other agreements/contracts
that were entered into for other Trains.
(b) As there were infractions committed by the Petitioner, a
show cause notice dated 18th February, 2015 was issued
to the Petitioner, under which the Petitioner was called
upon to explain why the contracts awarded to him
should not be terminated along with forfeiture of the
security deposit and cancellation of registration, and
further, why he should not be debarred from applying for
a fresh registration for a period of five years. This show
cause notice was replied to by the Petitioner vide his
letter dated 25th February, 2015. Thereafter, the
Respondent by its communication dated 16th March,
2015, informed the Petitioner that since there were four
defaults of overloading in Train No.12925/12926, as per
the provisions of the said agreement, the contracts in
Aswale 7/19
writ petitionL.2322.15.doc
relation to Train No.12925/12926 as well as Train No.
19019/19020 stood terminated alongwith forfeiture of
security deposit. The Petitioner was further informed
that his registration was cancelled and he was debarred
from applying for a fresh registration for a period of 5
years.
(c)
Being aggrieved by this termination letter, the Petitioner
then approached this Court by preferring Writ Petition
(L) No.808 of 2015. This Court, by its order dated 25th
June 2015, set aside the order of the Appellate Authority
and remanded the matter back for deciding the Appeal
afresh. This was done on the ground that no personal
hearing was given to the Petitioner. It was also ordered
that since the Chief Commercial Manager is the
Appellate Authority, who has terminated the contract,
any other officer of the same rank would decide the
Appeal after giving a personal hearing to the Petitioner.
Aswale 8/19
writ petitionL.2322.15.doc
(d) Pursuant thereto, the Appellate Authority, after giving a
hearing and examining the matter, gave a reasoned order
dated 28th July, 2015 dismissing the Appeal and
upholding the termination of the contracts of the
Petitioner. Being aggrieved by this order in Appeal, the
Petitioner is before us.
5.
In this factual background the only argument canvassed
before us by Ms Singhania, learned counsel appearing for the
Petitioner in Writ Petition (L) No.2322 of 2015 and Mr Cama,
learned counsel appearing for the Petitioner in Writ Petition (L)
No.2283 of 2015, was that under the respective contracts entered
into with their clients, the Respondents had no power to terminate all
their contracts, cancel their registration and debar them from
applying for fresh registration for a period of 5 years. According to
the counsel, on interpreting various clauses of their respective
contracts, in the facts of their respective cases, no such power could
have been exercised by the Respondents. We must mention here that
the clauses relied upon by Ms Singhania as well as Mr Cama were
Aswale 9/19
writ petitionL.2322.15.doc
one and the same though in their respective contracts the clauses
were numbered differently. Ms Singhania relied upon clauses 15.8
and 15.16 in her contract whereas Mr Cama relied upon clause 13.8
in the contract executed by his client. For the sake of convenience
and as there is no dispute that these clauses are pari-materia, we shall
refer to the clauses in the contract executed between the Petitioner
and the Respondent in Writ Petition (L) No.2322 of 2015.
6. Both learned counsel, by placing reliance on Clauses
15.8 and 15.16 argued that if all contracts of the Petitioners were to
be cancelled, and that too with the cancellation of their registration,
then this could be done only under clause 15.16 of the contract that
stipulates that before such action is taken there has to be a minimum
of 8 violations in all in two separate contracts. Ms Singhania
submitted that in her case there were totally seven violations in four
contracts, and therefore, all the contracts of the Petitioner as well as
their registration could not have been cancelled in view of the
express provisions of clause 15.16. As far as Mr Cama's client is
concerned, he submitted that in the facts of his case there were only
Aswale 10/19
writ petitionL.2322.15.doc
four violations in respect of a single contract, and therefore, relying
upon the very same clause, he submitted that the Respondents were
in grave error in terminating all the contracts of his client as well as
his registration. Both counsel submitted that in view thereof, the
Appellate Authority that heard the Petitioners and passed the
impugned order dated 28th July 2015, was in grave error in
confirming the decision of the Divisional Authority of terminating
all the contracts of the Petitioners, canceling their registration and
further debarring them from applying for a fresh registration for a
period of 5 years.
7. With the help of the learned counsel, we have perused
the papers and proceedings in the Writ Petitions as well as the orders
impugned therein. To understand the controversy that is canvassed
before us, it would be appropriate to refer to some of the clauses of
the contract. Clause 7 deals with failure of the leaseholder in
fulfilling his obligations after having started loading. Paragraph 7.4
of the contract reads as under:-
"7.4.:If the registration of a leaseholder is cancelled as a
Aswale 11/19
writ petitionL.2322.15.doc
punitive measure, either for reasons of repeated overloading or
for repeated failure to start loading after award of contract, or
for attempt to deliberately defraud railways or for repeated
violation of any of the existing stipulations where cancellation of
registration has been legislated as the penalty, then the entire
registration fee would be forfeited. In addition to forfeiture of
registration fee, all his existing leasing contracts being operated
from that division would also be cancelled. However, contract
can be cancelled/terminated by the Railways with the approval of
tender accepting authority. In addition to cancellation, such a
leaseholder would be debarred from fresh registration for a
period of 5 years."
(emphasis supplied)
8.
Clause 7.4 stipulates that if the registration of a
leaseholder is cancelled as a punitive measure, either for reasons of
repeated overloading or for repeated failure to start loading after
award of contract or for attempt to deliberately defraud Railways etc,
then, the entire registration fee can be forfeited and all existing lease
contracts could also be cancelled. It further provides that in addition
to such cancellation, the leaseholder could also be debarred from
fresh registration for a period of five years.
9. Clause 15 of the contract deals with overloading and
penalty. Clause 15.1 provides that in case the overloading is
Aswale 12/19
writ petitionL.2322.15.doc
detected beyond the permissible carrying capacity, charges/penal
punitive charges would be recovered from the leaseholder, as more
particularly, set out in clauses 15.2 and 15.3 of the Contract.
Thereafter, clause 15.4 reads as under:-
"Clause 15.4:In addition to the above penalty Railway may
terminate the contract and cancel the registration of the
leaseholder in case of fourth default."
ig (emphasis supplied)
10. Therefore, in addition to the penalty contemplated in the
Clauses 15.1 to 15.3 that may be imposed on the leaseholder, the
Railway has the power to terminate the contract and cancel the
registration of the leaseholder in case of fourth default.
11. Clause 15.16, and on which heavy reliance was placed
by the learned counsel appearing for the Petitioners, reads as under:-
"Clause 15.16: In case of cancellation of lease on account of
overloading for two separate contracts (minimum of 8 violations
in all), registration of the leaseholder would also be cancelled as
mentioned in para 7.4"
12. Relying upon the aforesaid clause, a distinction was
Aswale 13/19
writ petitionL.2322.15.doc
sought to be made between clauses 15.4 and 15.16 respectively. It
was the argument of the Petitioners that a registration could be
cancelled only in cases where there was overloading in two separate
contracts (with a minimum of 8 violations and all) and not
otherwise. We find that this argument is contrary to the terms of the
contract and is stated only to be rejected. Clause 15.4 reproduced
above, clearly states that the Respondent may terminate the contract
and cancel the registration of the leaseholder in case of fourth
default. In the present case, admittedly, there are at least four
instances of overloading by both the Petitioners, and therefore, under
clause 15.4, the Respondent had the power to cancel the registration
of the Petitioners. It would necessarily follow that once the
registration is cancelled, all other subsisting contracts would have to
be cancelled because without registration, the other contracts cannot
be allowed to continue. This is for the simple reason that before any
contract can be awarded to any party, it has to be registered with the
Respondents. This position, very fairly, is also not disputed before
us. We, therefore, find no substance in this argument.
Aswale 14/19
writ petitionL.2322.15.doc
13. In the alternative, it was submitted by Mr Cama that
even assuming that registration could be cancelled under clause 15.4
of the contract, the Petitioners could not have been debarred from
fresh registration for a period of five years. That power, according
to the Petitioners, is found only in Clause 7.4. He sought to make
this distinction by referring to the difference in the words used under
Clause 15.4. and 15.16 respectively. He submitted that clause 15.16
specifically refers to cancellation "as mentioned in Clause 7.4"
whereas no such words appear in Clause 15.4. We are unable to
agree with the aforesaid submission. A contract cannot be read as a
statute and has to be read as a whole to understand the purport and
import of the said contract as well as the rights and obligations
mentioned therein. Clause 15.4 admittedly gives powers to the
Respondents to cancel the registration of the leaseholder in case of
fourth default. Clause 7.4 stipulates that in addition to cancellation
of registration, such a leaseholder could be debarred from fresh
registration for a period of five years. Merely because the words "as
mentioned in para 7.4" appearing in clause 15.16 are missing in
clause 15.4, would not make any difference. Clause 7.4 gives a
Aswale 15/19
writ petitionL.2322.15.doc
specific power to the Railway Authorities to debar a leaseholder for
applying for fresh registration for a period of five years when he is
guilty of repeated overloading and his registration, for that very
reason, has been cancelled under the provisions of the contract. We,
therefore, find no substance even in this argument. In any event, we
do not find that in the present case, any fundamental right of the
Petitioners have been infringed. It is now settled law that although a
citizen has a fundamental right to carry on a trade or business, he has
no fundamental right to insist upon the Government or any other
individual for doing business with him. Any Government or an
individual has got a right to enter into a contract with a particular
person or to determine a person or persons with whom he or it will
deal. [See (1997) 9 SCC 495, Paragraph 32]
14. On perusing the impugned orders, we find that a proper
hearing was given to the Petitioners and after considering their
objections, a detailed reasoned order has been passed by the
Appellate Authority upholding the termination orders. We do not
find that the orders of the Appellate Authority suffer from any
Aswale 16/19
writ petitionL.2322.15.doc
perversity or patent illegality that would persuade us to exercise our
extraordinary, equitable and discretionary jurisdiction under Article
226 of the Constitution of India and strike down the impugned
orders. We must add here that it is now well settled that it is not
sufficient that a party should come to this Court and make out a case
that a particular order is invalid. In order to get relief from the Court
in its equitable jurisdiction under Article 226 of the Constitution of
India, not only must the party come with clean hands, not suppress
any material facts and show utmost good faith, but he must also
satisfy the Court that passing an order in his favour would do justice
and that justice lies on his side. In this regard, it would be
appropriate to refer to the observations of this Court in the case of
The State of Bombay v/s Morarji Cooverji,1 wherein (at page 332),
it is stated thus:-
"But it is not sufficient that a party should come to this Court and
make out a case that a particular requisition order is not valid.
In order to get that relief from the Court on a writ petition, not
only must he come with clean hands, not only must he not
suppress any material facts, not only must he show the utmost
good faith, but he must also satisfy the Court that the making of
the order will do justice and that justice lies on his side."
1 1958 (LXI) BLR 318
Aswale 17/19
writ petitionL.2322.15.doc
15. In the present case, admittedly, there have been
violations of overloading by both the Petitioners. This fact is very
fairly not disputed before us. It also cannot be seriously disputed that
overloading weakens the strength of the springs of the Coach, due to
which the Coach may break down and the Train may get derailed
endangering the lives of the passengers. It is for this very reason
that limits are put on the amount of cargo that can be loaded by the
leaseholder. By overloading, the leaseholder, apart from breaching
the terms of its contract, seriously puts at risk public safety and the
safety of the operation of Trains and its passengers. In these peculiar
circumstances, we do not think that justice lies on the side of the
Petitioners for us to exercise our equitable jurisdiction and strike
down the impugned orders passed by the Appellate Authority, and
who, after hearing the Petitioners, has given a detailed reasoned
order. We, therefore, decline to exercise our extraordinary equitable
jurisdiction under Article 226 of the Constitution of India in favour
of the Petitioners.
16. In view of the discussions earlier in this judgment, we
Aswale 18/19
writ petitionL.2322.15.doc
find no merit in these Writ Petitions. They are accordingly
dismissed. However, in the facts and circumstances of the case, we
leave the parties to bear their own costs.
( B. P. COLABAWALLA, J.) (S. C. DHARMADHIKARI, J.)
Aswale 19/19
