Madras High Court
M/S.Northern Freight Carriers vs India on 10 December, 2021
WP Nos.7506 to 7511 of 2008
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 10-12-2021
CORAM
THE HONOURABLE MR. JUSTICE S.M.SUBRAMANIAM
WP Nos.7506 to 7511 of 2008
M/s.Northern Freight Carriers,
Partnership Firm, represented by its
Partner, B.K.Garg,
No.274, Linghi Chetty Street,
Chennai – 600 001. .. Petitioner in WP 7506/2008
G.S.Anand,
Proprietor of M/s.Karishma Express
Transport Co.,
No.280, Walltax Road,
Park Town,
Chennai – 600 003. .. Petitioner in WP 7507/2008
M/s.Bic Logistics Ltd.,
Represented by its General Manager,
New No.109 (Old No.53),
Linghi Chetty Street,
2nd Floor,
Chennai-600 001. .. Petitioner in WP 7508/2008
M/s.Green Express,
Represented by its Manager/Authorised
Signatory,
No.31, Stringer Street, Broad,
Chennai – 600 108. .. Petitioner in WP 7509./2008
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WP Nos.7506 to 7511 of 2008
M/s.Indo Arya Central Transport Ltd.,
Represented by its Dy. General Manager,
No.49, Broadway,
Chennai – 600 108. .. Petitioner in WP 7510/2008
M/s.Om Air Freight Ltd.,
Represented by its Manager/Authorised
Signatory,
No.97, Samy Pillai Street,
Choolai,
Chennai – 600 112. .. Petitioner in WP 7511/2008
vs.
Union of India,
Owning Southern Railway,
Represented by its General Manager,
Park Town,
Chennai – 600 003. .. R-1 in all WPs
The Chief Commercial Manager,
Southern Railway,
Chennai-3. .. R-2 in all WPs
The Chief Traffic Manager,
Southern Railway,
Chennai-3. .. R-3 in all WPs
The Chief Commercial Manager (FM),
Baroda House,
Northern Railway,
New Delhi. .. R-4 in all WPs
2/14
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WP Nos.7506 to 7511 of 2008
WP 7506 of 2008 is filed under Article 226 of the Constitution of
India, praying for the issuance of a Writ of Certiorari, calling for the records
relating to the impugned order of the third respondent herein dated
26.02.2008 in No.C.441/II/10/Misc./overloading and quash the same.
WP 7507 of 2008 is filed under Article 226 of the Constitution of
India, praying for the issuance of a Writ of Certiorari, calling for the records
relating to the impugned order of the third respondent herein dated
26.02.2008 in No.C.441/II/10/Misc./overloading and quash the same.
WP 7508 of 2008 is filed under Article 226 of the Constitution of
India, praying for the issuance of a Writ of Certiorari, calling for the records
relating to the impugned order of the third respondent herein dated
10.03.2008 in No.C.206/86/40/38/VPU/Leasing/Ten.27/BIC and quash the
same.
WP 7509 of 2008 is filed under Article 226 of the Constitution of
India, praying for the issuance of a Writ of Certiorari, calling for the records
relating to the impugned order of the third respondent herein dated
26.02.2008 in No.C.441/II/10/Misc./overloading and quash the same.
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WP Nos.7506 to 7511 of 2008
WP 7510 of 2008 is filed under Article 226 of the Constitution of
India, praying for the issuance of a Writ of Certiorari, calling for the records
relating to the impugned order of the third respondent herein dated
26.02.2008 in No.C.441/II/10/Misc./overloading and quash the same.
WP 7511 of 2008 is filed under Article 226 of the Constitution of
India, praying for the issuance of a Writ of Certiorari, calling for the records
relating to the impugned order of the third respondent herein dated
10.03.2008 in No.C.206/86/40/38/VPU/Leasing/Ten.34/2615/16 and quash
the same.
For Petitioner in WP 7506/2014 : Mr.R.Selvakumar
For Petitioner in WPs 7507to7511/2014: Mr.Guru Prasad for
Ms.Shanmugavalli
Sekar
For Respondents in all WPs : Mr.P.T.Ramkumar
COMMON ORDER
The order of termination of contract by the Railways, is under
challenge in all these writ petitions.
2. The petitioners are Transport Carriers undertaking transport
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WP Nos.7506 to 7511 of 2008
of commercial materials. The petitioners were awarded lease rights of
carrying various goods in Parcel Van of Trains. The periods mentioned in the
Agreement For Lease are on Round Trip basis.
3. It is not in dispute that the Memorandum of Agreement signed
between the parties provides terms and conditions of including for termination
of contract.
4. The learned counsel for the petitioners states that before
issuing the order impugned, no show cause notice or opportunity was
provided to the petitioners and therefore, the order impugned is in violation of
principles of natural justice.
5. The learned counsel for the petitioners is of an opinion that
the petitioners are not committed any such allegation of overloading and the
Railway is having the head of not weighing the materials properly. On several
occasions, refunds were made in favour of the petitioners and therefore, the
order of termination is untenable.
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WP Nos.7506 to 7511 of 2008
6. The learned counsel for the petitioners reiterated that in
respect of the contractual obligations these writ petitions are maintainable.
The petitioners relied on the judgment of the Hon'ble Supreme Court of India
and states that the opportunity to defend the case has not been provided and
therefore, these writ petitions are maintainable.
7. The learned counsel for the petitioners drew the attention of
this Court with reference to the terms and conditions of the contract and also
contended that the order of termination is cryptic and not containing any
reasons and thus, it is liable to be set aside.
8. The learned counsel for the respondent-Railways disputed the
abovesaid contentions of the petitioners by stating that the transactions
between the petitioner and the Southern Railways are on contract basis and
admittedly, the agreement had been signed between the parties.
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WP Nos.7506 to 7511 of 2008
9. As per Clause 10 of the terms and conditions of the
agreement, the contract is liable to be terminated unilaterally by the Railways
without giving any prior notice if overloading on re-weighment is detected on
three occasions. Relying on the said conditions in the contract, the learned
counsel for the respondents reiterated that no prior notice is contemplated
under the contract and the contract was admittedly signed by the petitioners.
10. Whenever overloading of re-weighment is detected and if it
exceeds the three times, then the Railways has got powers to terminate the
contract by invoking Clause 10 of the agreement. However, in the present
case, show cause notice was issued to the petitioners on 03.07.2007,
categorically stating that as per surprise checks conducted overloading has
been detected. The details of the overloading are also provided in the show
cause notice and the petitioner was provided with an opportunity to submit
their reply within ten days.
11. Pertinently, the petitioners have submitted their objections
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WP Nos.7506 to 7511 of 2008
on 24.11.2007, which is enclosed by the petitioners themselves in the typed
set of papers filed along with these writ petitions. They have raised certain
objections and the Railways have taken a decision to terminate the contract as
the overloading exceeds more than three occasions and accordingly issued the
impugned order of termination.
12. Earlier the learned counsel for the respondents brought to the
notice of this Court that on similar circumstances, rejected the relief in WP
No.5214 of 2010 dated 20.09.2010. Further, in the agreement between the
petitioners and the respondents, arbitration clause has been provided and the
petitioners also in the event of any such contractual disputes, have to invoke
the arbitration clause for the purpose of adjudication of the issues. Thus these
writ petitions are not maintainable and the arbitration clause provided in
clause 5 of he agreement and admittedly, these writ petitions are not invoking
the arbitration clause. In respect of arbitration clause, the Hon'ble Supreme
Curt of India in W.A.Nos.2470 and 2471 of 2010 passed an order on
06.12.2010, wherein the relevant paragraphs 10 to 13, the Hon'ble Supreme
Court held as under:-
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WP Nos.7506 to 7511 of 2008
"10. It is also useful to refer to Clause
24.3 of the Agreement, which reads as under: -
In the event of any difference of opinion
or dispute between the Railway Administration
and the Leaseholder as to the respective rights
and obligations of the parties hereunder of as to
the true intent and meaning of these presents or
any articles of conditions thereof. Such difference
of opinion shall be referred to the sole arbitrator,
who shall be a Gazetted Railway Officer
appointed by the General Manager, Southern
Railway, Chennai for the time being whose
decision shall be final, conclusive and binding on
the parties, the intention of the parties being that
every matter in respect of this agreement must be
decided by him a sole arbitrator and not taken to
a Civil Court. All disputes are subject to the
territorial jurisdiction of courts located in
Chennai only.
11. From the aforesaid two clauses, it is
evidently clear that the agreements were for a
period of three years, which can be extended for
a further period of two years, subject to
satisfactory performance by the appellant. The
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WP Nos.7506 to 7511 of 2008
learned single Judge found that the appellant
violated the terms and conditions of the contract,
for which penalty was imposed and the same was
deposited by the appellant.
12. In the facts and circumstances of the
case, we are of the definite view that a writ of
mandamus cannot be issued directing the
respondents to extend the lease for a further
period of two years. Admittedly, the contract in
question is not a statutory contract, rather a
commercial contract having an arbitration clause
also. Hence, the relief sought for by the appellant
is not only hit by the provisions of the Specific
Relief Act, 1963, but also the writ jurisdiction
cannot be invoked having regard to the
arbitration clause contained in the agreement.
13. For the reasons aforesaid, we do not
find any merit in these appeals, and accordingly,
they are dismissed. No costs. Consequently,
miscellaneous petitions are closed."
It is brought to the notice of this Court that WP No.7506 of 2008 is filed by
the very same petitioner, namely, M/s.Northern Freight Carriers.
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WP Nos.7506 to 7511 of 2008
13. This Court is of the considered opinion that contractual
obligations and violations of terms and conditions of contract cannot be
adjudicated in the writ proceedings. Only on exceptional circumstances, the
Court entertains the writ petitions filed against certain contractual obligations.
The factual disputes and the issues involved are to be decided by way of an
elaborate adjudication based on documents in original and evidences.
14. Contrarily, the High Court cannot enter into an adjudication
of this nature which involves scrutinisation of documents in original. Further
the arbitration clause has been agreed between the parties. Thus, the
petitioners have to invoke the arbitration clause for the purpose of resolving
the issues and contrarily, the petitioners have filed all these writ petitions by
merely stating that no show cause notice was issued to the petitioners before
passing the order of termination.
15. However, the respondents could able to establish that notice
was issued and the petitioners also filed their objections and thereafter
termination order was issued. Even in the absence of show cause notice,
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WP Nos.7506 to 7511 of 2008
clause 10 of the agreement stipulates that without prior notice termination can
be issued if the overloading exceeds for more than three occasions.
16. This Court is of the considered opinion that regarding the
weighment or re-weighment of overloading and the facts involved as well as
the measurements or otherwise, the Authorities are bound to invoke the
arbitration clause. Even in the absence of arbitration clause, they are bound to
approach the Competent Civil Court of Law for effective adjudication of the
issues. Contrarily, the High Court cannot adjudicate such issues in the writ
proceedings under Article 226 of the Constitution of India and as far as these
writ petitions are concerned, the period of contract expired long back and
further the learned counsel for the respondents brought to the notice of this
Court that the petitioners were re-engaged by the revoking the cancellation.
17. This being the facts and circumstances, if at all any
grievance exists with reference to the factual issues or otherwise, the
petitioners are at liberty to invoke the arbitration clause or to approach the
Competent Civil Court of Law, as the case may be, for the purpose of
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WP Nos.7506 to 7511 of 2008
redressal of such grievances. However, it is made clear that in the event of the
petitioners approaching the Arbitrator or the Civil Court, the issues are to be
decided independently uninfluenced by any of the observations made in these
writ petitions.
18. With the abovesaid observations, the writ petitions stand
dismissed. However, there shall be no order as to costs.
10-12-2021
Index : Yes/No.
Internet : Yes/No.
Speaking Order/Non-Speaking Order.
Svn
S.M.SUBRAMANIAM, J.
Svn
To
1.The General Manager,
Union of India,
Owning Southern Railway,
Park Town,
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WP Nos.7506 to 7511 of 2008
Chennai – 600 003.
2.The Chief Commercial Manager,
Southern Railway,
Chennai-3.
3.The Chief Traffic Manager,
Southern Railway,
Chennai-3.
4.The Chief Commercial Manager (FM),
Baroda House,
Northern Railway,
New Delhi. WPs 7506 to 7511 of 2008
10-12-2021
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