[Cites 1, Cited by 0]
Calcutta High Court
Cressanda Railway Solutions Ltd vs Eastern Railway And Others on 25 February, 2026
Author: Arijit Banerjee
Bench: Arijit Banerjee
OD-1
ORDER SHEET
APOT/31/2026
IA No.GA/1/2026
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
ORIGINAL SIDE
CRESSANDA RAILWAY SOLUTIONS LTD
VS
EASTERN RAILWAY AND OTHERS
BEFORE:
The Hon'ble JUSTICE ARIJIT BANERJEE
AND
The Hon'ble JUSTICE APURBA SINHA RAY
Date : 25th February, 2026.
Appearance:
Mr. Soumavo Mukherjee, Adv.
Mr. Indranil Munshi, Adv.
...for the appellants
Mr. Uday Shankar Bhattacharya, Adv.
Mr. Tapan Bhanja, Adv.
...for the respondent nos. 1, 2, 3 and 4
Dictated by Arijit Banerjee, J.
The Court: A judgment and order dated February 5, 2026, passed
by a Learned Judge of this Court dismissing the appellants' writ petition
being WPO NO. 861 of 2025, is under challenge in this appeal filed at the
instance of the writ petitioners.
The writ petitioners participated in a tender process initiated by the
Railway authorities inviting bids from eligible bidders for "Provision of
Advertisement in EMU Trains and provisions of concierge service together with
advertisement in Mail/Express and Premium Trains operated with rakes
whose primary maintenance is done by Eastern Railway, on license basis".
The petitioner was found eligible and was awarded a work order on May 17,
2023. The tenure of the work order/agreement was five years from July 17,
2023 till July 16, 2028.
It appears that on May 13, 2025, the Railway authorities raised a
demand on the writ petitioners for the sum of Rs.4.98 crores (approximately)
which included liquidated damages for certain periods and licence fee for
certain periods. The writ petitioners made a representation dated May 19,
2025, objecting to such demand notice. Alleging that such representation
was not being considered by the Railway authorities, the writ petitioners
approached this Court in its writ jurisdiction by filing WPA No. 11491 of
2025 challenging the demand notice. A Learned Judge of this Court
disposed of the writ petition by directing the respondent no.2 herein to take
a decision on the representation of the writ petitioners within ten days.
In terms of the said order, the writ petitioners were granted a
hearing. Overruling the contentions of the writ petitioners, the Railway
authorities passed an order dated August 26, 2025.
On September 3, 2025, the writ petitioners again received a
demand notice from the Railway authorities for a sum of Rs.9.70 crores
(approximately). In view of there being an arbitration clause in the contract
between the parties, the writ petitioners filed an arbitration petition under
Section 9 of the Arbitration and Conciliation Act, 1996, being AP No. 169 of
2025, praying for an interim order to restrain the Railway authorities from
taking any action for terminating the subject contract. The appellants say
that on receipt of a copy of the application, the respondents forthwith
terminated the contract by a letter dated September 17, 2025.
By an order dated September 18, 2025, the Arbitration Court
stayed the operation of the termination notice dated September 17, 2025, for
a period of three months, directing the writ petitioners to invoke the
arbitration clause within the said period for constitution of an arbitral
tribunal. The impugned notice dated September 17, 2025, was stayed
unconditionally till October 10, 2025, and the petitioners were directed to
secure the claim of Rs.9.70 crores (approximately) within that time period.
The writ petitioners were directed to deposit Rs.1 crore by way of demand
draft and to furnish an unconditional bank guarantee for the balance
amount. It was clarified in the order that in case of non-compliance of the
conditions of the order, the order shall stand automatically vacated without
any further reference to the Court and the Railway authorities shall proceed
in accordance with law.
The appellants say that in compliance with the order dated
September 18, 2025, they submitted a demand draft of Rs. 1 crore on
October 7, 2025, but were not able to provide unconditional bank guarantee
for the balance amount. They have taken out an application for extension of
time to submit bank guarantee being G.A. NO. 2 of 2025 which is still
pending before the Arbitration Court. However, the respondents again
terminated the contract by a communication dated October 29, 2025.
Challenging this communication, the appellants approached the Learned
Single Judge in the present round of litigation.
The main contention of the appellants is that going by Clauses 4.5
and 4.6 of the subject contract, the Railway authorities were required to give
thirty days' notice to the appellants before terminating the contract. If that
was done, the appellants would have had an opportunity of explaining why
the contract should not be terminated. Although the Learned Arbitration
Judge permitted the Railways to proceed in the matter of termination of
contract, the Railways were required to do so in accordance with law. This
the Railways have not done. Hence the termination notice dated October
29, 2025, needs to be set aside.
Learned advocate for the Railways says that in the notice dated
September 3, 2025, it was clearly stated on what ground the demand was
being raised and the action that would be taken by the Railways if the
demand was not paid. In fact, sufficient time was granted to the appellants
to pay the dues of the Railways. The appellants failed to do so. The Learned
Judge has found that the Railways have lawfully terminated the contract
relying on Clauses 2.2.5 - 2.2.7 of the subject contract. The Learned Judge
also held that Clauses 4.5 and 4.6 of the contract are not applicable in the
facts of this case. So, there is no infirmity in the order of the Learned
Judge. Any grievance that the appellants may have, can be ventilated before
the arbitral tribunal that could be constituted in view of there being an
arbitration clause in the subject contract.
Having considered the rival contentions of the parties, we are
inclined to agree with the submission made on behalf of the Railways. We
do not find any apparent infirmity in the judgment and order under appeal.
The appellants were called upon to pay certain sums to the
Railways in terms of the contract. The appellants failed to do so. Instead,
the appellants challenged such notice by way of an application under
Section 9 of the Arbitration and Conciliation Act, 1996. Interim relief was
granted to the appellants on certain terms and conditions. The appellants
failed to comply with such terms and conditions. Accordingly, the interim
protective order stood vacated automatically. Thereafter, the Railways
proceeded to issue the termination notice dated October 29, 2025. The
appellants had sufficient time to make payment of the amounts claimed by
the Railways or to comply with the conditions stipulated in the interim order
passed by the Arbitration Court. Having obtained an order of interim
protection on certain terms and having failed to comply with such terms, the
appellants cannot make any grievance today. They will be free to ventilate
their grievances before the arbitral tribunal.
Additionally we find that disputed questions of fact are involved in
this case and the Writ Court is not the appropriate or convenient forum for
resolution of such disputes. The agreed dispute resolution mechanism of
arbitration is much more suitable for that purpose.
We see no reason to interfere with the judgment and order under
appeal.
The appeal being APOT/31/2026 and the connected application
being IA No. GA/1/2026 stand dismissed.
We clarify that in the event an arbitral tribunal is constituted
whether at the instance of the appellants or at the instance of the Railways,
the tribunal shall decide the disputes between the parties independently and
in accordance with law without being influenced by any observation either
in this order or in the judgment and order of the Learned Single Judge
which is assailed in this appeal.
Since we have not called for affidavits, the allegations made in the
stay petition are deemed not to be admitted by the respondents.
(ARIJIT BANERJEE, J.)
(APURBA SINHA RAY, J.)
kc
