Telangana High Court
M/S.Veddera Swatchanda Seva Samstha vs The State Of Telangana And 4 Others on 19 April, 2024
Author: Nagesh Bheemapaka
Bench: Nagesh Bheemapaka
HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA
WRIT PETITIONS No. 17769, 14651, 16821, 17690, 17746, 17749, 17750,
17753, 17779, 17780, 17786, 17921, 17946, 17978, 17992, 18037,
18094, 18110,18118, 18134, 18214, 18837, 19435, 20057, 20068 of 2020
178, 672, 16786, 18282, 18515, 19806, 19899, 19911, 19961, 20060,
20063, 20129, 20137, 20305, 20814, 20826, 20857, 21108, 21448,
21549, 21615, 22274, 24442, 29227, 30367 of 2021
AND
20058, 32944 of 2022
COMMON ORDER :
All these Writ Petitions are filed questioning the
notices issued by the Telangana State Road Transport
Corporation (TSRTC) directing petitioners to pay arrears of
licence fee / lease amount. Initially, interim orders were passed
wherein this Court directed the respondent Corporation not take
any coercive steps against petitioners herein.
2. Since the issue involved in the all these cases is one
and the same, the facts urged in Writ Petition No. 178 of 2021
are taken for convenience sake.
Conspectus of Petitioners' Case is as follows::
3. Petitioners state that they are the authorized
licensees of Telangana State Road Transport Corporation
(hereinafter be referred to as 'Corporation' for brevity) for
running catering stalls individually in Mahatma Gandhi Bus
Station (MGBS), Hyderabad, Jubilee Bus Station (JBS),
Secunderabad and Dilsukhnagar Bus Station, on payment of
license fee. It is stated, they are filing this Writ Petition,
challenging the most inexcusable abdication of imperative duty
on the part of the Corporation to review and revise the license
fee of petitioners commensurate with the drastic decline in the
volume of commuters in the buses of Corporation, throughout
the State of Telangana, particularly MGBS and JBS Bus
Stations, due to unprecedented pandemic COVID-19, as a
result, their business is totally collapsed, despite the most
warranting emergency situation and several representations to
the respondents, requesting them to revise their license fee to
meet the fall out of Pandemic COVID-19 and challenging the
most atrocious and unwarranted action of the respondents
pressurizing them to pay the full amount of their license fee and
threatening to terminate their licenses in a most irresponsible
manner without fulfilling its mandatory obligation to revise the
license fee to tide over the present financial crisis.
Petitioners further state that the question of law to
be decided in Writ Petitions is 'as to whether respondent -
Corporation is entitled to claim the previous license fee from
petitioners for the period affected by Force Magesure/Vis Major
i.e.,. unprecedented dangerous Pandemic COVID-19, due to
which the volume of commuters in all the bus stations of the
Corporation across the State of Telangana, particularly in MGBS
and JBS, has fallen down drastically to 10-20% of the normal
times, resulting in collapse of business of petitioners'.
Petitioners state that due to imposition of abrupt National Lock
Down on 22.03.2020, their stalls were shut down and remain
closed till the last week of October, 2020 and they could not
even remove their stocks from their stalls. Consequently, their
stocks were totally damaged and they suffered huge loss. As the
pandemic was prevalent even after lifting of lock down, the
Corporation did not start operation of its buses for few weeks.
Since the pandemic had been very much virulent in alarming
proportions in the country and physical distance from person to
person is very much inevitable, as a minimum caution to stop
transmission of disease, people became panic and confined to
their houses and totally avoided commute in buses to protect
themselves from the pandemic.
Petitioners further state that because of the very
poor turnout of passengers to MGBS and JBS, which is less
than 10% of the normal times, due to virulent Pandemic COVID-
19, Corporation has operated only 10% of its buses for a period
of 4 months till the end of September, 2020. The volume of
commuters started increasing slowly from the 2nd week of
October and the volume of commuters was 20% in October and
November, 2020 and was 30% in December, 2020. The
Corporation did not start operation of its inter-State Buses till
04.11.2020 and city buses till the beginning of October, 2020.
The Corporation started operation of city buses only in October,
2020 with 25% of the buses. As the transmission of pandemic is
taking place multi-fold with the contact of outside objects, even
the negligible number of commuters are very much scared /
reluctant to purchase anything from their stalls. The
Corporation had also restricted the foot-fall in MGBS in such a
manner that the commuters coming to MGBS shall wait in the
places earmarked for them and go straight away to board the
buses. Because of the abnormal situation, petitioners could not
open their stalls till the last week of October, 2020. When there
was a slight improvement just before Dassera, they opened their
stalls one by one on different dates and intimated the same to
the authorities concerned. Thereafter also, they are having only
20% of the business, when compared to their business of
previous years and they are unable to pay wages to their
workers and are suffering huge losses. Petitioners further state
that due to drastic fall in commuters, as stated above, revenue
of the Corporation had come down to less than 20% and the
Corporation had to get financial aid from the State Government
to tide over the crisis. When that being the position, how
miserable is the condition of petitioners as petty traders can be
imagined. Petitioners' financial position is much more worse
than the Corporation and they suffered huge loss and could not
afford to pay the previous license fee.
It is also stated that in view of the unforeseen and
unprecedented financial crisis, all the stall owners of MGBS
including petitioners made the representation dated 21.05.2020
to the respondent-Corporation bringing to their notice the
abnormal situation that they are not in a position to run the
stalls for the existing license fee, due to lack of commuters and
requesting them to revise their license fee reducing it to 20% of
the existing fee and that they cannot open their stalls till the
respondents revise their license fee reasonably to tide over the
present financial crisis. Petitioners had been making
representations dated 28.05.2020, 03.06.2020, 11.06.2020 and
24.06.2020 to the respondents one after the other in that
regard, but they did not bother to take any decision revising the
license fee.
The grievance of petitioners is that the Corporation
is threatening to take coercive steps to terminate their license in
a most irresponsible manner and in a colourable excise of
power, totally ignoring the hard reality and unprecedented
financial crisis created by the dangerous pandemic, as to
whether the licensees of stalls have any business or not and as
to whether they can afford to pay the existing license fee or not,
for corona crisis period. The 2nd respondent did not bother to
take into consideration the crucial fact that Corporation is
totally paralyzed due to very poor turnout of the commuters
because of the crisis. The respondent Corporation had collected
license fee from petitioners for the months of October, November
and December, 2020, high-handedly threatening them that they
would disconnect power supply to stalls and would terminate
their licenses and claimed whatever license fee paid by them is
subject to the orders of this Court in these Writ Petitions.
Petitioners also state that when transport activity of Corporation
had been fallen down drastically beyond anybody's imagination,
for a long period, due to natural calamity, Corporation is bound
to revise their license fee to meet the contingency proportionate
to the volume of its transport activity, in terms of its revenue.
The volume of commuters in MGBS and JBS in the normal
period is only the basis for the license fee offered by them by
way of filing tenders, for obtaining licenses of their stalls. When
the very basis is gone, petitioners are not liable to pay the
previous license fee and they are entitled to claim revision of
license fee, commensurate with the prevailing situation.
According to petitioners, licensees of TSRTC in all
the Bus Stations have offered the license fee with a legitimate
expectation that the number of buses being operated in the Bus
Stations, where their stalls are located and its occupancy ratio
and the magnitude of travelling public coming to Bus Station as
on date of tender notification of their stalls, would remain same,
during their license period, without there being any force
majeure, causing most extraordinary situation for a long period
like COVID-19, which drastically reduced travelling public.
When unforeseen and unprecedented extraordinary situation
arises for a long period, totally reversing the normal situation,
license fee, as agreed upon in the normal circumstances, cannot
be enforced against them in view of unprecedented
extraordinary situation. Petitioners urged that it would be more
appropriate to revise their license fee, proportionate to the
present revenue of the Corporation. The principle of quid pro quo
applies here for collecting the license fee from them. The
Corporation has granted license to them to do particular
business in the particular Bus Station, keeping in mind the
annual average of travelling public in that particular Bus
Station and the expected business of their stalls with the
expected magnitude of the travelling public, in that particular
Bus Station and the Corporation is not at all justified in
demanding them to pay the previous license fee till corona crisis
is over and normalcy is restored. Petitioners further state that
Corporation being the instrumentality of the State shall act in a
fair and reasonable manner without there being any element of
arbitrariness and shall rise to the occasion and act
appropriately to meet the emergency situation, without any
apathy. It is duty bound to take into consideration the existing
hard reality and act appropriately to revise the license fee to suit
the present financial crisis. The Corporation shall not act like a
private teacher and it is petitioners' fundamental right
guaranteed under Article 14 of the Constitution to demand the
Corporation to take into consideration the extraordinary
financial crisis. It is well-established principle of law that the
contracts entered into between the parties in the normal
circumstances shall not be enforced, during the period of Force
Majeure and Vis Major.
Finally, petitioners state that A.P. State Road
Transport Corporation took a decision and issued Circular No. 2
of 2020, dated 09.10.2020 waiving the license fee of the stalls
for the lock down period from 22.03.2020 to 07.06.2020 and
reducing the fee proportionate to the percentage of operation of
buses, subject to payment of minimum 20% of license fee and to
collect full amount of license fee only after attaining 80% level of
operations in terms of KMs. of the region concerned. The
Railway Department has also waived the license fee of the stalls
in all the Railway Stations for the lock down period and the
subsequent period up to October, 2020 and collecting only 10%
of the license fee from the stall owners' w.e.f. November, 2020.
On the same lines, TSRTC is expected to take a decision to
revise the license fee of petitioners proportionate to the existing
volume of commuters and the revenue of the Corporation, after
lock down and petitioners are willing to pay 20% of the license
fee tentatively till the Corporation revise their license fee.
Petitioners also state that the Corporation is not justified to
invoke the clause relating to termination of license for non-
payment of license fee for 3 months, in the context of force
majeure i.e., Pandemic COVID-19, as the said clause cannot be
applied to such situation. In support of their submissions, the
following judgments are relied:
i) MP Power Management Company Limited, Jabalpur vs. M/s.
Sky Power Southeast Soloar India Private Limited reported in
2022 Live Law (SC) 966;
ii) M/s. Koushik Group vs. The State of Telangana [W.A.No.571
of 2022 Dated 5.9.2022];
iii) Md. Nazeeb Pasha vs Telangana State Road Transport
[W.P.No.42128 of 2018 Dated 26.4.2019];
iv) Senior Divisional Commercial Manager, South Central
Railways & Ors vs. SCR Caterers, Dry Fruits, Fruit Juice
Stalls Welfare Association & Anr reported in (2016) 3 SCC
582;
v) ABL International Ltd & Anr vs. Export Credit Guarantee
reported in (2004) 3 SCC 553;
vi) Uttar Pradesh Power Transmission Corporation Ltd & Anr vs.
CG Power & Industrial Solutions Limited & Anr reported in
(2021) 6 SCC 15;
Counter-affidavit filed by the respondent - Corporation :
4. Respondents state that Writ Petition is not
maintainable as it is arising out of contractual obligations and if
petitioners are aggrieved by any clause or any damages suffered,
remedy available to them is to approach the competent Civil
Court. It is stated that Corporation started operating its District
buses from 19.05.2020; in June 2020, it started 71% of its
original operations, thus the contention of petitioners that the
Corporation operated only 10% of buses till September, 2020,
20% in October and November and 30% in December, 2020 is
not correct. The occupancy ratio was around 51% in October,
55% and 58% in November and December. It is stated that
considering the representations made by the Licensees of the
Stalls in the Bus Stations, the Corporation sought approval of
the Government for giving exemption from payment of monthly
licence fee for April and May, 2020 i.e., lockdown period and to
allow the licensees to pay licence fee for June, July, August and
September 2020 in instalments without any penal interest and
the decision of Government of Telangana is awaited. Therefore,
the Corporate Office issued instructions vide letter
No.C3/437(108)/2019-OPD(M&C) dated 31.10.2020 advising
officers not to insist the licensees for payment of license fee for
the period April - September 2020 and to collect the regular
license fee from October, 2020 onwards. The Licensees have
been informed accordingly by the Unit Officers concerned,
therefore, the contention of petitioners that their
representations have not been considered is not correct.
According to the Corporation, there is no legal right
for the petitioners to seek / claim any remission / reduction on
payment of license fee / compensation / reimbursement of
losses in view of Clause 44 of the Deed of License which clearly
spells the obligation of payment on petitioners as extracted
hereunder:
"44. In case business is not carried out by the licensee due to riots/
agitations/ bundhs/ fire/ floods/ natural calamities/ strikes/ either
by internal or external factors or for any other reasons, for a
particular period, or periods, the Licensee shall have no right to claim
any remission on license fee payment or compensation or
reimbursement of loss, etc,.
Therefore, there is no obligation on the Corporation as per the
terms and conditions of the Agreement to grant any remission
or reduction of license fee for any reason.
Respondents stated that petitioners' obligations
under Agreement are within the realm of private law and there
is no element of public law involved and they have to invoke the
remedy of approaching the civil court rather than filing the
present Writ Petition. Petitioners are not challenging the terms
or clauses of the Agreement and hey cannot compare and
impose the decision taken by other Corporations. The
Corporation has its own limitation and decisions taken by other
Corporations are not binding upon them. It was further stated
that the Corporation considered the representations of
petitioners and other license holders who were seeking relief of
reduction of license fee and the decision of the Corporation to
collect regular fee from October 2020 onwards has been
communicated to all the licensees, but some of the licensees
went on making representations. Therefore, the Managing
Director vide proceedings No.C3/437(23)/ 2020-OPD(M&C)
dated 10.02.2021 rejected the request for reduction of license
fee.
It is stated further that petitioners under the guise
of the interim order dated 08.01.2021 are not paying monthly
licence fee for their respective stalls, which is causing great
financial inconvenience to the Corporation. It is stated that
except the 1st petitioner, all others have to pay license fee for the
period prior to lock down. It is stated that since the decision of
the Government on collection of License fee for the period April
to September 2020 is awaited, the Corporation is not insisting
petitioners for payment of license fee for that period. Even if that
period is excluded, all the petitioners except the 1st petitioner,
are not paying licence fee regularly. Some petitioners have to
pay licence fee for three to six months. Though petitioners are
not paying license fee, the Corporation is restrained from taking
any steps for realization of license fee, in view of the interim
orders of this Court. Unless, this Court vacates the interim
order dated 08.01.2021, the Corporation will suffer grave and
irreparable loss and ultimately, sought for dismissal of the Writ
Petition.
5. Respondents have relied upon the following
decisions:
i) Joshi Technologies International Inc. Vs. Union of India
reported in (2015) 7 SCC 728;
ii) B. Prabhakar Rao & Ors vs. The V.C & M.D.A.P.S.R.T.C
[W.P.No.31454 of 2011 & Batch dated 9.4.2018]
iii) M/s. Koushik Group vs. State of Telangana [W.P.No.27097 of
2021 dated 19.5.2022]
iv) M/s. Koushik Group vs. The State of Telangana [W.A.No.571
of 2022 Dated 5.9.2022];
6. Reply/Rejoinder submitted by the petitioners:
Petitioners submits that respondents have
deliberately ignored the most crucial factual and legal aspect of
the case that their licenses have lost their efficacy by 80%, due
to unprecedented dangerous pandemic anybody's imagination
in the volume of commuters throughout the State of Telangana,
particularly in MGBS and JBS Bus Stations in Hyderabad and
consequently, their business is totally collapsed, defeating the
very object of their licenses, warranting review of their license
fee to meet the most un-precedented crisis arisen out of
Pandemic COVID-19 for a long period more than one year.
Corporation being instrumentality of the State come under the
definition of State and it is expected to act in a fair and
reasonable manner, unlike a private trader, in discharge of its
public duties. When the mighty Corporation itself is struggling
with its poor revenue, how miserable petitioners are being the
licensees of the Corporation, doing petty business for their
livelihood. Petitioners stated further that in the wake of un-
precented pandemic, a constitutional duty is cast on the
Corporation, being the State, to act in a fair and reasonable
manner, in dealing with them being its licensees, regarding the
payment of our license fee and shall review our license fee, in
tune with the current financial crisis, but unfortunately, the
Corporation is acting in a most arbitrary manner pressurizing
them to pay the stipulated license fee. The attitude of the
Corporation is like that of a private money lender and totally
acting in a most irresponsible manner as if the relationship
between them is like the one between private individuals. When
the scenario as regards volume of travelling public is at the
lowest ebb and far lesser than the volume of commuters, as on
the date of our tenders, fallen to less than 20% of the normal
size of commuters creating an un-precedented decline in the
volume of commuters, there is no justification whatsoever on
part of the Corporation in not reviewing their license fee and in
demanding them to pay the fee stipulated in the agreement. It is
also stated that if there is a drastic decrease in the volume of
commuters due to any other natural calamity for few days
unlike the present crisis, the Corporation is not responsible and
petitioners are also not entitled to claim any remission in the
license fee. But the present situation is totally different and
petitioners are deprived of even minimum business for long time
more than one year. The Corporation cannot escape from its
accountability to rise to the occasion and review the license fee,
keeping in view the pandemic and its resultant decline in the
volume of commuters.
It is further stated that the revenue of the
Corporation reflects actual volume of commuters, travelling in
its buses. In view of the drastic decline in the volume of
commuters, as reflected in the revenue of the Corporation, it is
mandatory on the part of the Corporation, under Article 14 of
the Constitution, to reduce their license fee proportionate to the
decrease in its revenue when compared with normal times.
Therefore, petitioners are claiming reduction of their license fee
as a matter of right. Petitioners stated that in fact, the revenue
of the Corporation had fallen down to 20% of its revenue of
normal times, before the Pandemic up to middle of October. The
Revenue has risen to 30% of its normal revenue from the middle
of October, 2020 and the same continued till the end of
December, 2020. Again the revenue had fallen down to 30% in
January, 2021 and the same continued till the end of March,
2021. From April, 2021 onwards, size of travelling public has
fallen down drastically to 20% and the corresponding revenue of
the Corporation has fallen down accordingly due to abrupt
surge of COVID-19 across the country and petitioners did not
have any business in April, 2021 and petitioners cannot afford
to pay license fee for April 2021. It is stated that in all fairness,
the Corporation is expected to collect license fee from the date of
opening of their stalls in October, 2020, by reducing license fee
proportionate to the decrease of its revenue, when compared
with the normal times before the Pandemic. All of them paid
license fee from the date of opening of the stalls in October,
2020, ranging from 40 to 50% of their respective licence fee,
voluntarily. But, unfortunately, the Corporation is pressurizing
them to pay the full amount and threatening to terminate their
license, in a most irresponsible manner, ignoring the realistic
situation. The Corporation may produce its records to show its
actual revenue, during the pandemic period, to avoid any
controversy. If the Corporation does not produce its record on
its own, this Court may be pleased to direct the Corporation to
produce its record. Petitioners submit that the allegation of the
Corporation that Writ Petition is not maintainable, as it is
arising out of contractual obligation, is untenable and
unsustainable as petitioners are only questioning the
arbitrariness of the respondents in not acting upon their
representations for reduction of license fee in view of the
unprecedented pandemic, which is continued for more than a
year. The allegation of the Corporation that it operated 71% of
buses and the occupancy ratio was around 51% in October,
2020 and 55% in November, 2020 is not true.
Petitioners also state that the Managing Director
considered their representation and rejected the same and
communicated vide proceedings dated 10.02.2021 is not true,
self-contradictory untenable and unsustainable. In fact, the
Board of Directors of the Corporation is competent authority to
take a policy decision regarding reduction of petitioners' license
fee. The Managing Director is not the competent authority to
take a decision in that regard. The administration of the
Corporation vests in the Board of Directors and any policy
decision shall be taken only by the Board but not the Managing
Director, who is only Executive Authority to carry out the
decisions of the Board. Therefore, the communication of the
Managing Director dated 10.02.2021 rejecting their
representations and directing them to pay full amount of license
fee from October, 2020, is not valid and unsustainable. In fact,
the said proceedings is totally bereft of any consideration of
petitioners representations, as such it cannot be considered.
The mere observation of the Managing Director in his
proceedings that the Corporation suffered huge financial loss
due to lock down, because of which petitioners license fee
cannot be reduced, cannot be considered. When the Managing
Director is conscious of the fact that the Corporation suffered
huge financial loss due to lock down, Corporation shall also be
conscious of the fact that petitioners also suffered huge
financial loss. When the mighty Corporation has suffered huge
financial loss, what would be petitioners' plight. The very
observation of the Managing Director that Corporation suffered
huge financial loss due to lock down itself proves beyond any
doubt that petitioners too suffered huge financial loss.
Therefore, the communication of the Managing Director
rejecting their representations and directing them to pay full
amount of license fee from October, 2020, totally suffers from
non-application of mind and it cannot be considered as a
decision.
Petitioners also stated that Clause 44 of the License
Deed does not apply to an un-precedent natural disaster like
Pandemic COVID-19, which occurred for a long time for more
than one year totally affecting the normal situation to a large
extent. The said Clause applies only to common natural
calamities like floods, earthquake, etcetera, which would be only
for few days, not more than 10 days. But COVID-19 is very
abnormal in nature and unimaginable and unprecedented,
beyond anybody's imagination and continuing for more than
one year, creating an unprecedented economic crisis for the
entire country effecting financially the Governments and all the
citizens badly, without any chance of recovery in near future.
Even assuming that Clause 44 is applicable, it shall be declared
as highly inconsiderable, arbitrary, discriminatory, unilateral,
totally unwarranted and violative of Articles 14 and 21 of the
Constitution and opposed to principles of fair play and natural
justice.
7. Heard learned counsel for petitioners Sri C.
Ramachandra Raju, Sri Ramesh Chilla, Ms. Vladameer
Khatoon, Sri Hari Kishan Kudikala, Sri D. Durga Prasad, Sri K.
Tarun Chowdary, Sri M. Anil Kumar, Sri K. Ravinder Reddy, Sri
P. Venkateswara Rao, Sri M. Maddileti and Sri M. Srinivas and
learned Standing Counsel for the Corporation Sri Gaddam
Srinivas, Sri Thoom Srinivas, Sri B. Mayur Reddy, in all the
Writ Petitions and perused the entire record.
8. The point for consideration in these Writ Petitions is
whether the Corporation is entitled to claim license fee from
petitioners for the period effected by Force Majeure/Vis Major
i.e. unprecedented dangerous Pandemic COVID-19, due to
which volume of commuters in all the bus stations of the
Corporation across the State of Telangana, particularly MGBS
and JBS, has fallen down drastically to 10 to 20% of the normal
times, resulting in collapse of the business of the stalls of the
petitioners.
9. According to petitioners, this batch of Writ Petitions
is filed against the Corporation and its authorities challenging
the most arbitrary, highly unjust, highly irrational action of the
Corporation and its authorities in demanding petitioners, who
are the license holders of the Corporation for running various
stalls in the bus stations of TSRTC throughout the State of
Telangana, to pay the full amount of license fee without any
sense of responsibility, equity and justice, ignoring the hard
reality that due to the unprecedented Pandemic Covid-19, the
Corporation had operated less than 10% of the actual number
of buses being operated before the Pandemic and ignoring the
hard reality that even the occupancy ratio of negligible number
of buses is very poor being less than 10% of its occupancy for a
period of more than one year commencing from imposition of
National Lock Down on 22.03.2020 because of the very poor
turnout of passengers to all the bus stations throughout the
State of Telangana and due to alarming spreading of the
Pandemic -19. As a consequence of which the petitioners and all
the other stall owners in all the bus stations had no option
except to close their stalls up to October, 2020 for a period of 6
months, ever since the date of National Lock Down. Even the
negligible number of passengers are very much reluctant to
purchase anything from the stalls of petitioners and other stalls
because of fear that transmission of Pandemic was taking place
very fast, with the contact of outside objects. The action of the
Corporation and its authorities in demanding petitioners and
other stalls licence holders in all the bus stations throughout
the State to pay the full amount of licence fee in the back
ground as stated in the above para, is nothing but flagrant
violation of the fundamental right of the petitioners under
Article 14 of the Constitution "Equality before Law" which has
wide connotation that there shall not be any element of
arbitrariness in the action of the State and its instrumentalities.
10. It was contended that this Writ Petition and the
connected batch of Writ Petitions do not fall in the realm of
contract. Petitioners are neither seeking enforcement of any
contractual obligation nor annulment of any clause of the
licence deed. They are only questioning the arbitrariness of the
corporation in demanding them to pay the full amount of licence
fee in an unprecedented highly abnormal situation, which
cannot be visualized because of which licenses granted by the
Corporation to petitioners for running stalls in the bus stations
of TSRTC became non-operational and they did not have any
business during the period of pandemic. In view of the point for
consideration, it was contended that the decision of Hon'ble
Supreme Court in. Joshi Technologies International Inc.
case (supra) relied on by the Corporation has no relevance at all.
In the said case, petitioner therein sought to incorporate a new
clause in its agreement, which alleged to have been missed to be
included in the agreement by oversight. The Supreme Court
held that it is a contractual matter and the High Court cannot
grant such a relief under Article 226. The relief sought in the
present case is totally different and distinct and has nothing to
do with enforcement of the contractual obligations, being totally
outside the scope of contract, as the issue involved is a legal
issue pertaining to a situation which arose beyond anybody's
imagination and which is not governed by the licence deeds of
petitioners. Further, it was contended that pandemic was very
much prevalent for more than 1 ½ years ever since imposition of
National Lock Down in March, 2020. Merely because 1st Lock
Down was lifted after two months, it does not mean pandemic
ceased to exist. It continued for more than one and half year
even after lifting of Lock Down. The Government of Telangana
imposed 2nd Lock Down for April, May and June, 2021, with
slight relaxations. During the said period also, stalls of
petitioners remain closed.
11. It was specifically argued that Central Government
issued guidelines vide Memorandum dated 13.05.2020 as to
how to deal with the contracts during pandemic for granting
necessary relief to the parties of the contract, by treating the
contract period as Dies-Non during the period of pandemic. The
said Memorandum was also filed as one of the material papers.
In view of the said guidelines, licence period of petitioners
during the pandemic shall be treated as Dies-Non and no
licence fee shall be collected from them.
12. Further, it was contended that petitioners did not
open their stalls till the 1st week of October, 2020 ever since the
lock down and the Corporation is aware of the said fact.
Petitioners have specifically pleaded in this Writ Petition and the
Corporation having admitted that stalls of petitioners remain
closed till the 1st week of October, 2020, is not at all justified in
demanding licence fee for the closure period. The occupancy
ratio is less than 10% of even the skeleton buses operated by
the Corporation during the Covid period of 1 ½ years, is not
denied by the Corporation in its counter. Therefore, it is proved
beyond any doubt that occupancy ratio is less than 10%. The
reason given by the Managing Director vide proceedings dated
04.09.2021 for not granting remission of licence fee during
Covid period is that Corporation suffered huge financial loss. It
is not at all the case of the Corporation that petitioners had
sufficient business during the said period enabling them to pay
full amount of licence fee. Accordingly, the Corporation admitted
the crucial facts that the petitioners had no sufficient business
during Covid-19. The Corporation had forwarded the
representations of petitioners to government and they are still
pending consideration. The said fact is evident from the letter of
the Executive Director of the Corporation dated 31.10.2020
which was addressed to all the Regional Managers directing
them to collect licence fees from the stall owners only from
October, 2020. When the decision of the government is still
awaited, Corporation is not justified in demanding petitioners to
pay full amount of licence fee from June to October, 2020.
13. This Court, during the hearing, directed the
Corporation to produce the record relating to occupancy ratio of
the buses during Covid period and to consider the claim of
petitioners for revising licence fees proportionate to the
occupancy revenue of the Corporation during the Pandemic
period. But, unfortunately, the Corporation did not comply with
the said direction. As the Corporation failed to produce the
record relating to occupancy ratio of the buses and the revenue
of the corporation during the pandemic, this Court may be
pleased to draw adverse inference against the Corporation that
occupancy ratio of the buses and revenue of the Corporation is
poor and not exceeding even 10% the occupancy ratio and the
revenue of the corporation during the normal period.
14. It was also particularly argued that A.P. State Road
Transport Corporation took a decision, by issuing Circular
No.2/2020, dated 09.10.2020, waiving the license fee of the
stalls for the lock down period from 22.03.2020 to 07.06.2020
proportionate to the percentage of operation of its buses, subject
to payment of minimum 20% of license fee and to collect full
amount of license fee, only after attaining 80% level of
operations in terms of KMs. of the region concerned. The
Railway Department has also waived the license fee of the Stalls
in all the Railway Stations for the lock down period and
subsequent period up to October, 2020 and collecting only 10%
of the license fee from the stall owners w.e.f. November, 2020.
On the same lines, TSRTC is expected to take a decision to
revise the license fee of petitioners, proportionate to the existing
volume of commuters and the revenue of the Corporation, after
lock down, petitioners are willing to pay 20% of the license fee,
tentatively, till the Corporation revise the license fee. The
Corporation is not justified to invoke the clause of the
agreement of the license, relating to termination of license, for
non-payment of license fee for 3 months, in the context of
present force majeure i.e., Pandemic COVID-19, as the said
clause cannot be applied to the present abnormal situation.
15. Conversely, learned counsel for the Corporation
contended that it is well-settled legal proposition by the Hon'ble
Apex Court that mandamus cannot be issued unless there is a
legal right of petitioners and corresponding statutory obligation
on the part of Corporation. In the present case, admittedly,
there is no public duty or statutory obligation in the working of
commercial agreements and no ground on those lines is referred
to challenge the proceedings. There is no violation of
fundamental right of petitioners by the Corporation by issuing
termination proceedings. The 1st lockdown period
22.03.2020 to 18.05.2020 due to COVID-19 contract was not
operated .
16. It was contended that the Corporation allotted stalls
available at various Bus Stations to the successful bidders
through tender process; the Corporation entered into separate
agreements with specified terms and conditions. Petitioners and
several other license holders for the stalls at various bus
stations have filed Writ Petitions seeking a direction to waive the
license fee during Covid-19 period. Learned Standing Counsel
contended that TSRTC also suffered huge financial losses due to
pandemic and several licensees have submitted representations
seeking waiver of license fee during lockdown period;
Government imposed lock down for 58 days (22.03.2020 to
18.05.2020) in the 1st phase and for 39 days (12.05.2021 to
19.06.2021) with certain relaxations in the 2nd phase. Despite
restrictions and partial lockdown in the State, TSRTC arranged
to operate RTC and Hire bus services from all bus stations.
Considering the representations of licensees, the Vice Chairman
and Managing Director, TSRTC through proceedings dated
04.09.2021 allowed licensees to pay license fee for May to
August, 2021 in four equal installments in October to December
2021 and January 2022 without penal interest, though there
was delay in payment of license fee and the following clauses
are existing in the terms and conditions of the Contract :
" Clause 11(a) of agreement the license fee is Rs.
45,506/ - (Rupees Forty Five Thousand, Five Hundred and Six
Only) per month exclusive of electricity, water charges,
maintenance charges and GST and the same shall be paid on
or before 10th day of current month."
"Clause 11(d) of agreement, the licensee is liable to pay
penalty for each day of delay @ 36% per annum in case of
belated payment of monthly license fee, maintenance charges,
electricity and water charges, on the amount payable, in
addition to payment of license fee."
17. It was contended that the representations of
petitioners have been examined and it has been decided to
extend license period of the existing contractors by one year in
respect of all those licensees who seek such extension vide
proceedings dated 4.9.2021. The Vice Chairman and Managing
Director issued Circular No. 15/2023-OPD(MNC),
communicating that the Corporation Board has approved i) to
waive license fee for April and May, 2020 for all the stalls, Toilet
Maintenance Contracts and advertisement contractors of the
Corporation since there was total lock-down due to Covid
pandemic. ii) to allow the licensees who have not paid the
license fee for the months of June to September, 2020 to pay
license fee in four equal monthly installments i.e. April to July,
2023 without imposing any penal interest; iii) to collect license
fee from October-2020 onwards as per the terms and conditions
of the agreement. iv) to refund balance Security Deposit after
withholding license fee amount equivalent to June to
September, 2020 and the other dues, if any as on date in case of
those ex-licensees who have not paid license fee for these four
months; v) to adjust two months' license fee pertaining to April
and May, 2020 towards subsequent rental dues, in case of all
those licensees who have paid license fee for two months and to
refund two months license fee in case of ex-licensees.
18. Learned counsel also contended that petitioners are
bound to follow contractual obligations agreed upon, as such,
they cannot claim any rent exemptions, compensation or
reimbursement for any loss as per clause 45 of license deed.
Clause-45 of the license deed clearly specifies that :
" In case business is not carried out by the licensee due
to riots /agitations / bundhs /fire / floods / natural
calamities / strike /either by internal or external factors or for
any other reasons, for a particular period, or periods, the
Licensee shall have no right to claim any remission on license
fee payment or compensation or reimbursement of loss etc.,."
19. Clause 27 of license deed specifies that licence is
liable for termination with one month advance notice on the
following grounds:
i) If the licensee defaults in payment of license fee for three months
consecutively or three times in a calendar year.
ii)If the licensee fails to do the business (for which license is granted)
in the stall for a continuous period of Ninety (90) days.
Therefore, as per the clauses of agreement entered
by the licensees with the respondent Corporation, there is no
provision to waive license fee. Further, the Corporation also
sustained huge losses due to lock down, however, keeping in
view the difficulties experienced by the license holders, the
corporation extended some relaxation of conditions and relief to
licensees. Finally, it was argued that though the clauses of
agreement do not permit, the Corporation considering the
difficulties experienced by the license holders of the stalls in the
bus stations, taken all measures to protect their interests and
extended the same reliefs to the licensees. Therefore, the Writ
Petitions are liable to be dismissed.
ANALYSIS:
20. The extraordinary outbreak of Covid-19 pandemic
has had staggering effects on the economy, health and
commerce of about 110 nations across the globe. The same
conditions have continued for a period of one-and-a-half year. In
addition to the massive pressure on the health and medical
segments, several other unprecedented factors played crucial
part in the whole system, economy, commerce, or
business. Given the situation of disruption of
supply chain, disruption of assured manpower, uncertainty of
future planning, inadequacy of security as well as the forced
restraints in free commercial activities, numerous commercial
contracts have either been interrupted, delayed or cancelled.
The situation has thrown light on several important questions
with respect to jurisprudence of the force majeure clause in
various commercial contracts or frustration of contracts.
21. The term 'force majeure' which seems to have been
borrowed from the Code Napoleon had received interpretation in
several decisions of the English Courts in earlier years.
In Matsoukis v. Priestman and Co.[ (1915) 1 K.B. 681] ,
Justice Bailhache opined that 'force majeure' would include
strikes and break-down of machinery but not bad weather or
football matches, or a funeral. In Lebeeaupin v. Crispin[(1920)
2 K.B. 714], Justice Mc Cardie had observed: "A force
majeure clause should be construed in each case with a close
attention to the words which precede or follow it, and with due
regard to the nature and general terms of the contract. The effect
of the clause may vary with each instrument."
22. In the Indian context, the Supreme Court has
considered, interpreted and decided the events of 'force
majeure' in various judicial precedents, inter-
alia from Satyabrata Ghosh v. Mugneeram Bangur[[1954
SCR 310]] to Energy watchdog v. CERC [(2017)14 SCC 18] and
maintained a strict yet flexible approach towards the concept
of 'force majeure' and frustration of contracts. In Alopi Prashad
and Sons v. UOI [1960 (2) SCR 793], the Supreme Court had
observed that commercial hardship shall not be a just and
reasonable ground to support frustration of contract and excuse
performance.
23. There was a difference of opinion and questions
were raised over the fact that some contracts though having
a 'force majeure' clause, do not stress on the word 'pandemic',
'epidemic', 'disease', etcetera, while majority of the contracting
parties rely on the general phrase 'any other unforeseeable
event, not under the control of either of the parties.'
24. On par with the private sector, Government
contracts and Public Sector transactions also started suffering
on account of pandemic and declaration of lockdown
throughout the country. To address the situation fairly, Ministry
of Home Affairs came out with Notification No. F. 18/4/2020
PPD, dated 19.02.2020 with respect to Manual for Procurement
of Goods, 2017 declaring that interruptions in supply chain due
to Covid 19 from China or any other country shall be covered
under the ambit of 'force majeure' and that 'force majeure' shall
be invoked whenever considered appropriate following the due
process of law. While the power of the Ministry to bring certain
events within the ambit of 'force majeure' under Clause 9.7.7 by
a simple notification may be a different issue, but, as it appears,
by this notification, Corona Pandemic was brought within the
meaning of 'force majeure' as defined in the Manual and tacitly,
this event certainly becomes applicable in respect of all
government and / or public sector contracts irrespective of
application of the Manual for Procurement of Goods, 2017. It
may be noted that this Memorandum of 19th February 2020 was
issued prior to Covid-19 affecting operations in India,
recognizing the difficulty faced by the contracting parties
regarding import of materials from other countries which were
impacted by the pandemic.
25. Similarly, on account of various representations
and submissions made by various Renewable Energy (RE)
Developers and RE Associations, and considering the prevailing
situation, Ministry of New and Renewable Energy vide Office
Memorandum No. 283/18/2020-GRID SOLAR dated
20.03.2020 declared Covid-19 as a 'force majeure' event. The
Ministry vide said order granted time extensions in scheduled
commissioning date of RE projects, in light of disruption of
supply chain due to the pandemic.
26. The Ministry of Roads Transport and Highways also
in its Circular dated 18.05.2020 inter-alia classified the
pandemic as a 'force majeure' event. In addition, Ministry of
Home Affairs, by its Order No. 40-3/2020(D), dated 24.03.2020
expressed that the country was threatened with the spread of
Covid 19 virus and therefore, has considered to take effective
measures to prevent its spread across the country and in
exercise of powers under section 10(2)(I) of the Disasters
Management Act, 2005, issued various guidelines for immediate
implementation. Subsequently, by Office Memorandum, dated
13.05.2020, the Ministry of Finance, Department of Expenditure
referred to its earlier memorandum dated 19.02.2020 and also
referred to the Manual of Procurement and recognized inter-alia
that in view of the prevailing restrictions, it may not be possible
for the parties to the contract to fulfill contractual obligations.
Therefore, after fulfilling due procedure and wherever
applicable, parties to the contract could invoke 'force
majeure' clause for all construction / works contracts, goods
and services contracts, and PPP contracts with Government
Agencies up to a certain period and subject to certain
conditions. Therefore, officially, the Government of India
recognized Covid-19 Pandemic as an event of 'force
majeure' applicable in relation to contracts with Government
Agencies, in effect, resulting inclusion of Public Sector
Undertakings also.
27. While the specific acceptance of 'force majeure' in
relation to Government sector contracts may not have any
binding effect on the contracts outside the scope of the explicit
instances or in relation to purely private contracts between
private parties, they probably offered an explanatory value to
bring Covid 19 and the forced restraints imposed on account of
lockdowns, within the ambit of 'force majeure'.
28. The scrutiny of the Courts would be to rely on the
terms of 'force majeure' clause in the contracts or on principles
of frustration under section 56 of the Contract Act. This means,
unless there is compelling evidence for non-performance of
contract, the Courts do not favor parties resorting to frustration
or termination of contract. On account of enormous devastative
effects pandemic created on the commercial and economic
environment in the country, different Courts had to come
forward and grant relief to different contracting parties who
were severely affected by the Pandemic. The Delhi High Court
considered the matter in June 2020 in the case of MEP
Infrastructure Developers Ltd vs. South Delhi Municipal
Corporation [W.P.(C) 2241/2020]. The court essentially relied
on the Ministry of Roads Transport and Highways (MORTH)
circular and observed that:
" 27(i) The respondent Corporation itself referred to Circular
dated 19.02.2020 which notified that the COVID-19 pandemic
was a force majeure occurrence. In effect, the force majeure
clause under the agreement immediately becomes applicable and
the notice for the same would not be necessary. That being the
position, a strict timeline under the agreement would be put in
abeyance as the ground realities had substantially altered and
performance of the contract would not be feasible till restoration
of the pre-force majeure conditions."
The Court also expounded on the continuous
nature of 'force majeure' event and held that the
subsequent lockdown relaxations given by the Central
Government and the State Government shall not amount to
abatement of the 'force majeure' event, at least in respect
to major contracts such as road construction projects. The court
also identified the distinct effects of the lockdown, independent
of the effects of the pandemic and its implications on various
contracts which many be affected by
the 'force majeure' conditions.
29. In Halliburton Offshore Services Inc. v. Vedanta
Ltd. O.M.P (I) (COMM.) No. 88/2020 & I.As. 3696-3697/2020,
decided on 29.05.2020, the Delhi High Court was of an
unequivocal opinion that:
" 62. The question as to whether COVID-19 would justify
non-performance or breach of a contract has to be examined
on the facts and circumstances of each case. Every breach or
non-performance cannot be justified or excused merely on the
invocation of COVID-19 as a Force Majeure condition. The
Court would have to assess the conduct of the parties prior to
the outbreak, the deadlines that were imposed in the contract,
the steps that were to be taken, the various compliances that
were required to be made and only then assess as to whether,
genuinely, a party was prevented or is able to justify its non-
performance due to the epidemic/pandemic".
Further, while discussing the scope of the force
majeure clause in contracts it was observed by the court that:
" Para 63. It is the settled position in law that a Force
Majeure clause is to be interpreted narrowly and not broadly.
Parties ought to be compelled to adhere to contractual terms
and conditions and excusing non-performance would be only
in exceptional situations. As observed in Energy Watchdog it
is not in the domain of Courts to absolve parties from
performing their part of the contract. It is also not the duty of
Courts to provide a shelter for justifying non- performance.
There has to be a 'real reason' and a 'real justification' which
the Court would consider in order to invoke a Force Majeure
clause".
30. The Madras High Court in Tuticorin Stevedores'
Association v. The Government of India [WP(MD)No.6818 of
2020 and WMP(MD)No.6217 of 2020], dated 14.09.2020,
observed that the question as to whether on account of the
pandemic outbreak of Covid-19, the parties can invoke the
principle of 'force majeure' need not detain us. The calamitous
impact and disruption caused by Covid-19 on the economic
front has been recognized by the Government itself.
In Confederation for Concessionaire Welfare vs Airports
Authority of India [W.P(C). 2204/2021 & CM APPL.6421-
22/202], the Hon'ble Delhi High Court observed on
17.02.2021 inter-alia that the Court has perused the clauses
relating to 'Force Majeure'. There can be no doubt that
pandemic is a 'force majeure' event. Since petitioners wish to
terminate/exit from their respective agreements, while directing
completion of pleadings and while the issues are under
examination by this Court, there is a need to reduce the risk to
both parties as simply postponing the exit by the petitioners
would also make it impossible for AAI to re-allot the spaces to
willing concessionaires and the outstanding against petitioners
would continue to mount. Accordingly, as an interim measure,
Hon'ble Court directed certain processes to be followed. In
Ramanand vs. Dr. Girish Soni RC.
[REV447/2017], an application came under consideration of the
Delhi High Court which raised various issues relating to
suspension of payment of rent by tenants owing to COVID-19
lockdown crisis and the legal questions surrounding the same.
By order dated 21.05.2020, the Delhi High Court while
determining whether lease agreements are covered under the
ambit of Sections 32 and 56 of the Act and even though it was
held that suspension of rent on the grounds of force majeure is
not permissible under the circumstances, the Court allowed
relaxation in the schedule of payment of the outstanding rent
owing to the lockdown.
31. The Hon'ble Supreme Court in Parvasi Legal Cell.
Vs Union of India observed that the pandemic was an
'unusual' situation that had impacted the economy globally.
This case revolved around the liability of the airlines to
compensate passengers who faced cancellation of flights due to
government-imposed lockdowns and restrictions on inter-state
and international travels. The court relied on the office
memorandum issued by the Ministry of Civil Aviation dated
16th April 2020 to dispose of the petition.
32. In Transcon Iconia Pvt. Ltd v ICICI Bank [2020
SCC OnLine Bom 626], the Bombay High Court while
determining whether moratorium period would be excluded for
NPA classification observed inter alia as under:
" 38... the period of the moratorium during which there is a
lockdown will not be reckoned by ICICI Bank for the purposes of
computation of the 90-day NPA declaration period. As currently
advised, therefore, the period of 1st March 2020 until 31st May
2020 during which there is a lockdown will stand excluded from
the 90-day NPA declaration computation until -- and this is the
condition -- the lockdown is lifted'.
33. In yet another judgment in R. Narayan v. State of
Tamil Nadu. [Case No.19596 of 2020 and
W.M.P.(MD)Nos.16318 & 16320 of 2020], the Madras High
Court directed the Municipal Corporation to waive the license
fee for running a shop at a bus stand, and observed that:
"...this Court would be justified in treating the "lock down" as
a force majeure event which will relieve the licensee from performing
his obligation to the corresponding extent." The Court also observed
that ... "The respondents (The Government of Tamil Nadu & Ors.)
themselves have chosen to treat the lock down restrictions as a force
majeure event. But they have relieved the licensees from the
obligation to pay the fees only for two months. The reason for
granting waiver for the months of April and May would equally hold
good for the entire "total lockdown" period."
34. Therefore, as it appears, most of the High Courts
relied on the government orders that classified pandemic
as 'force majeure', although the relief granted in each case has
been subjected to restraint based on the accompanying facts
and circumstances. The common observation, however,
remained that Covid-19 pandemic is a 'force majeure' event.
35. To establish pandemic as a 'force
majeure' occurrence de hors the contract, the parties must
demonstrate how the pandemic has disturbed the fundamental
basis on which the obligations and agreements of the parties
rested [Naihati Jute Mills Ltd. Vs Khayaliram Jagannath;
AIR 1968 SC 552].
36. In the instant case, petitioners have categorically
established as to how they sustained losses due to pandemic.
As stated supra, they relied on the following judgments:
In MP Power Management Company Limited,
Jabalpur vs. M/s. Sky Power Southeast Soloar India Private
Limited, the Hon'ble Apex Court held as under;
" 31. In Mahabir Auto Stores and others v. Indian Oil
Corporation and others , the appellant complained that the
respondent, which was a company incorporated under the Companies
Act was denying or discontinuing to deal with the appellant, which
had been dealing with the respondent for nearly eighteen years. We
listen to the following words spoken by this Court: "12. It is well
settled that every action of the State or an instrumentality of the
State in exercise of its executive power, must be informed by reason.
In appropriate cases, actions uninformed by reason may be
questioned as arbitrary in proceedings under Article 226 or Article 32
of the Constitution. Reliance in this connection may be placed on the
observations of this Court in Radha Krishna Agarwal v. State of Bihar
[(1977) 3 SCC 457]. It appears to us, at the outset, that in the facts
and circumstances of the case, the respondent company IOC is an
organ of the State or an instrumentality of the State as contemplated
under Article 12 of the Constitution. The State acts in its executive
power under Article 298 of the Constitution in entering or not
entering in contracts with individual parties. Article 14 of the
Constitution would be applicable to those exercises of power.
Therefore, the action of State organ under Article 14 can be checked.
See Radha Krishna Agarwal v. State of Bihar [(1977) 3 SCC 457] at p.
462, but Article 14 of the Constitution cannot and has not been
construed as a charter for judicial review of State action after the
contract has been entered into, to call upon the State to account for
its actions in its manifold activities by stating reasons for such
actions. In a situation of this nature certain activities of the
respondent company which constituted State under Article 12 of the
Constitution may be in certain circumstances subject to Article 14 of
the Constitution in entering or not entering into contracts and must
be reasonable and taken only upon lawful and relevant consideration;
it depends upon facts and circumstances of a particular transaction
whether hearing is necessary and reasons have to be stated. In case
any right conferred on the citizens which is sought to be interfered,
such action is subject to Article 14 of the Constitution, and must be
reasonable and can be taken only upon lawful and relevant grounds
of public interest. Where there is arbitrariness in State action of this
type of entering or not entering into contracts, Article 14 springs up
and judicial review strikes such an action down. Every action of the
State executive authority must be subject to rule of law and must be
informed by reason. So, whatever be the activity of the public
authority, in such monopoly or semimonopoly dealings, it should
meet the test of Article 14 of the Constitution. If a governmental
action even in the matters of entering or not entering into contracts,
fails to satisfy the test of reasonableness, the same would be
unreasonable. In this connection reference may be made to E.P.
Royappa v. State of Tamil Nadu [(1974) 4 SCC 3 : 1974 SCC (L&S)
165] , Maneka Gandhi v. Union of India [(1978) 1 SCC 248] , Ajay
Hasia v. Khalid Mujib Sehravardi [(1981) 1 SCC 722 : 1981 SCC
(L&S) 258] , R.D. Shetty v. International Airport Authority of India
[(1979) 3 SCC 489] and also Dwarkadas Marfatia and Sons v. Board
of Trustees of the Port of Bombay [(1989) 3 SCC 293] . It appears to
us that rule of reason and rule against arbitrariness and
discrimination, rules of fair play and natural justice are part of the
rule of law applicable in situation or action by State instrumentality
in dealing with citizens in a situation like the present one. Even
though the rights of the citizens are in the nature of contractual
rights, the manner, the method and motive of a decision of entering
or not entering into a contract, are subject to judicial review on the
touchstone of relevance and reasonableness, fair play, natural justice,
equality and nondiscrimination in the type of the transactions and
nature of the dealing as in the present case.
17. We are of the opinion that in all such cases
whether public law or private law rights are involved, depends upon
the facts and circumstances of the case. The dichotomy between
rights and remedies cannot be obliterated by any strait-jacket
formula. It has to be examined in each particular case. Mr Salve
sought to urge that there are certain cases under Article 14 of
arbitrary exercise of such "power" and not cases of exercise of a
"right" arising either under a contract or under a statute. We are of
the opinion that that would depend upon the factual matrix.
18. Having considered the facts and circumstances of the case and
the nature of the contentions and the dealing between the parties and
in view of the present state of law, we are of the opinion that decision
of the State/public authority under Article 298 of the Constitution, is
an administrative decision and can be impeached on the ground that
the decision is arbitrary or violative of Article 14 of the Constitution of
India on any of the grounds available in public law field. It is true that
there is discrimination between power and right but whether the
State or the instrumentality of a State has the right to function in
public field or private field is a matter which, in our opinion, depends
upon the facts and circumstances of the situation, but such exercise
of power cannot be dealt with by the State or the instrumentality of
the State without informing and taking into confidence, the party
whose rights and powers are affected or sought to be affected, into
confidence. In such situations most often people feel aggrieved by
exclusion of knowledge if not taken into confidence."
54. We may cull out our conclusions in regard to the
points, which we have framed:
i. It is, undoubtedly, true that the writ jurisdiction is a
public law remedy. A matter, which lies entirely within a private
realm of affairs of public body, may not lend itself for being dealt with
under the writ jurisdiction of the Court.
ii. The principle laid down in Bareilly Development
Authority (supra) that in the case of a nonstatutory contract the
rights are governed only by the terms of the contract and the
decisions, which are purported to be followed, including
Radhakrishna Agarwal (supra), may not continue to hold good, in the
light of what has been laid down in ABL (supra) and as followed in the
recent judgment in Sudhir Kumar Singh (supra).
iii. The mere fact that relief is sought under a contract
which is not statutory, will not entitle the respondent-State in a case
by itself to ward-off scrutiny of its action or inaction under the
contract, if the complaining party is able to establish that the action/
inaction is, per se, arbitrary.
iv. An action will lie, undoubtedly, when the State
purports to award any largesse and, undoubtedly, this relates to the
stage prior to the contract being entered into [See R.D. Shetty
(supra)]. This scrutiny, no doubt, would be undertaken within the
nature of the judicial review, which has been declared in the decision
in Tata Cellular vs. Union of India.
v. After the contract is entered into, there can be a
variety of circumstances, which may provide a cause of action to a
party to the contract with the State, to seek relief by filing a Writ
Petition.
vi. Without intending to be exhaustive, it may include
the relief of seeking payment of amounts due to the aggrieved party
from the State. The State can, indeed, be called upon to honour its
obligations of making payment, unless it be that there is a serious
and genuine dispute raised relating to the liability of the State to
make the payment. Such dispute, ordinarily, would include the
contention that the aggrieved party has not fulfilled its obligations
and the Court finds that such a contention by the State is not a mere
ruse or a pretence.
vii. The existence of an alternate remedy, is,
undoubtedly, a matter to be borne in mind in declining relief in a Writ
Petition in a contractual matter. Again, the question as to whether the
Writ Petitioner must be told off the gates, would depend upon the
nature of the claim and relief sought by the petitioner, the questions,
which would have to be decided, and, most importantly, whether
there are disputed questions of fact, resolution of which is necessary,
as an indispensable prelude to the grant of the relief sought.
Undoubtedly, while there is no prohibition, in the Writ Court even
deciding disputed questions of fact, particularly when the dispute
surrounds demystifying of documents only, the Court may relegate
the party to the remedy by way of a civil suit.
viii. The existence of a provision for arbitration, which
is a forum intended to quicken the pace of dispute resolution, is
viewed as a near bar to the entertainment of a Writ Petition (See in
this regard, the view of this Court even in ABL (supra) explaining how
it distinguished the decision of this Court in State of U.P. and others
v. Bridge & Roof Co. , by its observations in paragraph-14 in ABL
(supra)].
ix. The need to deal with disputed questions of fact,
cannot be made a smokescreen to guillotine a genuine claim raised in
a Writ Petition, when actually the resolution of a disputed question of
fact is unnecessary to grant relief to a writ applicant.
x. The reach of Article 14 enables a Writ Court to deal
with arbitrary State action even after a contract is entered into by the
State. A wide variety of circumstances can generate causes of action
for invoking Article 14. The Court's approach in dealing with the
same, would be guided by, undoubtedly, the overwhelming need to
obviate arbitrary State action, in cases where the Writ remedy
provides an effective and fair means of preventing miscarriage of
justice arising from palpably unreasonable action by the State.
xi. Termination of contract can again arise in a wide
variety of situations. If for instance, a contract is terminated, by a
person, who is demonstrated, without any need for any argument, to
be the person, who is completely unauthorised to cancel the contract,
there may not be any necessity to drive the party to the unnecessary
ordeal of a prolix and avoidable round of litigation. The intervention
by the High Court, in such a case, where there is no dispute to be
resolved, would also be conducive in public interest, apart from
ensuring the Fundamental Right of the petitioner under Article 14 of
the Constitution of India. When it comes to a challenge to the
termination of a contract by the State, which is a non-statutory body,
which is acting in purported exercise of the powers/rights under such
a contract, it would be over simplifying a complex issue to lay down
any inflexible Rule in favour of the Court turning away the petitioner
to alternate Fora. Ordinarily, the cases of termination of contract by
the State, acting within its contractual domain, may not lend itself for
appropriate redress by the Writ Court. This is, undoubtedly, so if the
Court is dutybound to arrive at findings, which involve untying knots,
which are presented by disputed questions of facts. Undoubtedly, in
view of ABL Limited (supra), if resolving the dispute, in a case of
repudiation of a contract, involves only appreciating the true scope of
documentary material in the light of pleadings, the Court may still
grant relief to an applicant. We must enter a caveat. The Courts are
today reeling under the weight of a docket explosion, which is truly
alarming. If a case involves a large body of documents and the Court
is called upon to enter upon findings of facts and involves merely the
construction of the document, it may not be an unsound discretion to
relegate the party to the alternate remedy. This is not to deprive the
Court of its constitutional power as laid down in ABL (supra). It all
depends upon the facts of each case as to whether, having regard to
the scope of the dispute to be resolved, whether the Court will still
entertain the petition.
xii. In a case the State is a party to the contract and a
breach of a contract is alleged against the State, a civil action in the
appropriate Forum is, undoubtedly, maintainable. But this is not the
end of the matter. Having regard to the position of the State and its
duty to act fairly and to eschew arbitrariness in all its actions, resort
to the constitutional remedy on the cause of action, that the action is
arbitrary, is permissible (See in this regard Kumari Shrilekha
Vidyarthi and others v. State of U.P. and others). However, it must be
made clear that every case involving breach of contract by the State,
cannot be dressed up and disguised as a case of arbitrary State
action. While the concept of an arbitrary action or inaction cannot be
cribbed or confined to any immutable mantra, and must be laid bare,
with reference to the facts of each case, it cannot be a mere allegation
of breach of contract that would suffice. What must be involved in the
case must be action/inaction, which must be palpably unreasonable
or absolutely irrational and bereft of any principle. An action, which
is completely malafide, can hardly be described as a fair action and
may, depending on the facts, amount to arbitrary action. The
question must be posed and answered by the Court and all we intend
to lay down is that there is a discretion available to the Court to grant
relief in appropriate cases.
xiii. A lodestar, which may illumine the path of the
Court, would be the dimension of public interest subserved by the
Court interfering in the matter, rather than relegating the matter to
the alternate Forum. xiv. Another relevant criteria is, if the Court has
entertained the matter, then, while it is not tabooed that the Court
should not relegate the party at a later stage, ordinarily, it would be a
germane consideration, which may persuade the Court to complete
what it had started, provided it is otherwise a sound exercise of
jurisdiction to decide the matter on merits in the Writ Petition itself.
xv. Violation of natural justice has been recognised as
a ground signifying the presence of a public law element and can
found a cause of action premised on breach of Article 14. [See Sudhir
Kumar Singh and Others]"
In M/s. Koushik Group vs. The State of
Telangana [W.A.No.571 of 2022 Dated 5.9.2022], the Division
Bench of this Court though negated the relief claimed by the
petitioners therein, had categorically held at Para 3 as under:
"................However, respondent No.2 vide letter dated
23.09.2021 had informed the appellant that its request for waiver of
licence fee for the strike period from 05.10.2019 to 25.11.2019 was
rejected. Insofar the dues for COVID-19 period, it was mentioned that
Government was seized of the matter; once the Government takes a
decision regarding licence fee payable during the COVID-19 period,
the same would be implemented; if any exemption/concession is
given by the Government, the licence fee so paid would be adjusted
against future payable amount. Appellant's request to respondent
No.2 to await decision of the Government was not considered.
Instead, impugned proceedings were issued."
In yet another case of this Hon'ble Court i.e. Md.
Nazeeb Pasha vs Telangana State Road Transport
[W.P.No.42128 of 2018 Dated 26.4.2019], this Court at Para 8 held
as under:
" 8. The scope of judicial review in contractual matters is
limited. The precedent decisions guided this court on exercise of
judicial review in these matters:
9. In Asia Foundation & Construction Ltd. Vs.
Trafalgar House Construction (I) Ltd.2, while referring to guidelines
laid down in Tata Cellular v. Union of India [(1994) 6 SCC 651],
Supreme Court held as under:
(1997) 1 SCC 738 PNR,J WP No.42128 of 2018 10 "9. ....... The High
Court in construing certain clauses of the bid documents has come to
the conclusion that such a correction was permissible and, therefore,
the Bank could not have insisted upon granting the contract in favour
of the appellant. We are of the considered opinion that it was not
within the permissible limits of interference for a court of law,
particularly when there has been no allegation of malice or ulterior
motive and particularly when the court has not found any mala fides
or favouritism in the grant of contract in favour of the appellant. In
Tata Cellular v. Union of India [(1994) 6 SCC 651] this Court has held
that:
"The duty of the court is to confine itself to the question of legality. Its
concern should be:
1. Whether a decision-making authority exceeded its powers,
2. committed an error of law,
3. committed a breach of the rules of natural justice,
4. reached a decision which no reasonable tribunal would have
reached or,
5. abused its powers.
Therefore, it is not for the Court to determine whether a particular
policy or particular decision taken in the fulfilment of that policy is
fair. It is only concerned with the manner in which those decisions
have been taken. The extent of the duty to act fairly will vary from
case to case. Shortly put, the grounds upon which an administrative
action is subject to control by judicial review can be classified as
under:
(i) Illegality: This means the decision-maker must understand
correctly the law that regulates his decision-making power
and must give effect to it;
(ii) Irrationality, namely, Wednesbury unreasonableness.
(iii) Procedural impropriety.
The above are only the broad grounds but it does not rule out
addition of further grounds in course of time." (emphasis supplied)
The wisdom and admissibility of decision is not amenable to judicial
review unless the same is declared as arbitrary or irrational or in
abuse of power."
In Senior Divisional Commercial Manager,
South Central Railways vs. SCR Caterers, Dry Fruits, Fruit
Juice Stalls Welfare Association; it has been held as under:
" 26. India is a welfare State. Article 38 of the
Constitution of India, which is a Directive Principle of State Policy,
reads as under:
"38. State to secure a social order for the promotion of welfare of the
people.-- (1) The State shall strive to promote the welfare of the
people by securing and protecting as effectively as it may a social
order in which justice, social, economic and political, shall inform all
the institutions of the national life.
(2) The State shall, in particular, strive to minimise the inequalities in
income, and endeavour to eliminate inequalities in status, facilities
and opportunities, not only amongst individuals but also amongst
groups of people residing in different areas or engaged in different
vocations."
27. It is the duty of every welfare state to generate employment.
Presently, millions of youth of the country are unemployed. The right
to livelihood is a part of right to life, as has been held in the case of
Olga Tellis (supra). A vast majority of the unemployed population of
the country then, is susceptible to being exploited by the rich and the
capitalists. It is the duty of the state, acting through its
instrumentalities to ensure that no person in a vulnerable position is
exploited. In the case of People's Union for Democratic Rights & Ors.
v. Union of India9, Bhagwati,J. lamenting on the exploitation of the
weak and the powerless held as under:
".........The Rule of Law does not mean that the protection of the law
must be available only to a fortunate few or that the law should be
allowed to be prostituted by the vested interests for protecting and
upholding the status quo under the guise of enforcement of their civil
and political rights. The poor too have civil and political rights and
the Rule of Law is meant for them also, though today it exists only on
paper and not in reality. If the sugar barons and the alcohol kings
have the Fundamental Right to carry on their business and to fatten
their purses by exploiting the consuming public, have the 'chamars'
belonging to the lowest strata of society no Fundamental Right to
earn an honest living through their sweat and toil? .........civil and
political rights, priceless and invaluable as they are for freedom and
democracy, simply do not exist for the vast masses of our people.
Large numbers of men, women and children who constitute the bulk
of our population are today living a sub-human existence in
conditions of abject poverty: utter grinding poverty has broken their
back and sapped their moral fibre. They have no faith in the existing
social and economic system. What civil and political rights are these
poor and deprived sections of humanity going to enforce?"
28. This Court, being entrusted with the task of being the
countermajoritarian institution, is duty bound to ensure that the
rights of the downtrodden minorities and the members of the weaker
sections of the society are not trampled upon.
29. One more important aspect to be taken note of by this Court is
the non governance of railway property in the past 67 years since
independence. Though, it is a recognized principle of law that the
property of the railways is public property, yet in reality, it is the
private players and industries that are allowed to carry on their
business for transport of raw materials from one place to another.
After the enactment of the Railways Act, 1989, the Rail Land
Development Authority has been established under Chapter IIA of the
Act to manage the railway property by framing policy or rules for
allotment of the same in favour of the licensees, including fixing
license fee or occupation charges in respect of the vast extent of
vacant property from which huge revenue can be collected, which is a
laudable object to cater to the need of the public at large. The
periodical revision of license fee in respect of such big operators has
not been done by the railways. Also, the Policy of not renewing the
licenses of those persons who are members of the respondents are
completely dependent on self-earning from these small units and
making them participate in a public competition is absolutely unfair,
unreasonable and arbitrary. The chances of such persons being
deprived of their right to livelihood is also an important factor which
has to be taken into consideration by this Court to interpret the
policy framed by the appellants. The callous attitude as far as the
inaction on the part of the State in tackling the problem of rising
unemployment is appalling. The situation is made worse by the
handing over of public functions to private entrepreneurs, which then
exploit the policies of the government against the poor and
downtrodden people of the country. If the appellants under the guise
of the policy are permitted to deny renewal of licenses in favour of the
licensees, it would amount to deprivation of their right to freedom of
occupation guaranteed under Article 19(1)(g) of the Constitution as
well as the right to livelihood, which action of the appellants would be
diametrically opposed to their constitutional duty towards social
justice as well as uplifting the weaker sections of the society and the
unemployed youth of the country.
30. In the case of Consumer Education & Research Center v. Union of
India a three Judge Bench of this Court observed as under:
"18....Social justice, equality and dignity of person are cornerstones
of social democracy. The concept 'social justice' which the
Constitution of India engrafted, consists of diverse principles
essential for the orderly growth and development of personality of
every citizen.......Social justice is a dynamic device to mitigate the
sufferings of the poor, weak, Dalits, Tribals and deprived sections of
the society and to elevate them to the level of equality to live a life
with dignity of person. Social justice is not a simple or single idea of a
society but is an essential part of complex social change to relieve the
poor etc. from handicaps, penury to ward off distress, and to make
their life livable, for greater good of the society at large. In other
words, the aim of social justice is to attain substantial degree of
social, economic and political equality, which is the legitimate
expectation. Social security, just and humane conditions of work and
leisure to workman are part of his meaningful right to life and to
achieve self- expression of his personality and to enjoy the life with
dignity, the State should provide facilities and opportunities to enable
them to reach at least minimum standard of health, economic
security and civilised living while sharing according to the capacity,
social and cultural heritage."
31.Further, in the case of Sadhuram Bansal v. Pulin Sarkar11 this
Court held as under:
"29......There is no ritualistic formula or any magical charm in the
concept of social justice. All that it means is that as between two
parties if a deal is made with one party without serious detriment to
the other, then the Court would lean in favour of the weaker section
of the society, Social justice is the recognition of greater good to larger
number without deprivation of accrued legal rights of anybody. If
such a thing can be done then indeed social justice must prevail over
any technical rule. It is in response to the felt necessities of time and
situation in order to do greater good to a larger number even though
it might detract from some technical rule in favour of a party."
32. Keeping in view the evolving concept of social justice, we allow the
members of respondents who are the licensees to continue their petty
business, especially in the absence of employment potentiality in the
country on account of non-governance and non- implementation of
the constitutional philosophy of an egalitarian society, which provides
the opportunity to all individuals to lead a life of dignity. The right to
life with dignity has been interpreted to be a part of right to life by
this Court in the case of Francis Coralie Mullin v. Administrator,
Union Territory of Delhi & Ors as under:
"8........We think that the right to life includes the right to live with
human dignity and all that goes along with it, namely, the bare
necessaries of life such as adequate nutrition, clothing and shelter
and facilities for reading, writing and expressing one-self in diverse
forms, freely moving about and mixing and commingling with fellow
human beings. Of course, the magnitude and content of the
components of this right would depend upon the extent of the
economic 12 (1981) 1 SCC 608 Page 34 34 development of the
country, but it must, in any view of the matter, include the right to
the basic necessities of life and also the right to carry on such
functions and activities as constitute the bare minimum expression of
the human-self."
37. Petitioners also relied upon ABL International Ltd
vs. Export Credit Guarantee, wherein the Hon'ble Apex Court
held that where the State behaves arbitrarily, even in the realm
of contract, the High Court can interfere under Article 226 of
the Constitution.
" Recently, judiciary has been of the opinion that even where
there is an arbitration clause between a State instrumentality and a
private party, such clause does not act as an absolute bar to the
remedies under Article 226. Hence, where the State instrumentality
violates the constitutional mandate to act fairly and reasonably under
Article 14, relief under Article 226 can be sought. Therefore, recourse to
jurisdiction under Article 226 is not excluded altogether in contractual
matters.
The above rationale was upheld in the recent case
of Uttar Pradesh Power Transmission Corporation Ltd. v.
CG Power and Industrial Solutions Ltd.8. In this case,
Respondents 1 & UPPTCL (Petitioner) entered into a
Framework Agreement on 05.03.2010 for construction of
765/400 KV sub-station at Unnao. The agreement was
further divided into 4 sub-agreements. First agreement was
for supply-delivery of equipment. Second agreement was for
handling-erecting-testing of equipment. First & second
agreement were non-civil in nature. The Petitioner vide its
letter dated 02.09.2016 informed the Respondent No. 1 that
Rs. 2,60,68,814 was due on account of labour cess with
respect to the First agreement (supply agreement). The
Respondent objected imposition of the labour cess on the
note that the first agreement on which the labour cess is
imposed is a "supply contract", and the respondent's
company was not covered under the definition of contractor
under the Cess Act. The Petitioner without considering the
representation made by the respondent tried to recover the
cess amount from pending bills of the Respondent. Pursuant
to this action of petitioner, Respondent No. 1 filed a writ
petition under Article 226 of the Constitution before the High
Court of Judicature at Allahabad (Lucknow Bench). High
Court accepted the petition and by its order set aside the
letter dated 02.09.2016 and 29.12.2018 issued by the
petitioner directing Respondent No. 1 to discharge the due
labour cess. Petitioner challenged the impugned order of the
High Court dated 24.02.2020 by way of the present petition
under Article 136 of the Constitution. Petitioner challenged
the jurisdiction/ power of the High Court to adjudicate a
contractual dispute where the contract contains an
arbitration clause and when there is an alternative remedy
available. The Supreme Court rejected the plea of the
Petitioner and upheld the decision of the High Court and
decidedly held that the existence of arbitration clause does
not debar the High Court from entertaining a writ petition
under Article 226 of the Constitution.
38. Learned Standing Counsel for the
Corporation relied upon the decision in Joshi Technologies
International Inc, vs. Union of India, wherein it was held
at Para 69 as under:
" 69(v)Writ petition was not maintainable to avoid
contractual obligation. Occurrence of commercial difficulty,
inconvenience or hardship in performance of the conditions
agreed to in the contract can provide no justification in not
complying with the terms of contract which the parties had
accepted with open eyes. ...
(viii) If the contract between private party and the
State/instrumentality and/or agency of State is under the
realm of a private law and there is no element of public law,
the normal course for the aggrieved party, is to invoke the
remedies provided under ordinary civil law rather than
approaching the High Court Under Article 226 of the
Constitutional of India and invoking its extraordinary
jurisdiction...
(ix)The distinction between public law and private law
element in the contract with State is getting blurred. However,
it has not been totally obliterated and where the matter falls
purely in private field of contract. This Court has maintained
the position that writ petition is not maintainable. Dichotomy
between public law and private law, rights and remedies
would depend on the factual matrix of each case and the
distinction between public law remedies and private law, field
cannot be demarcated with precision. In fact, each case has to
be examined, on its facts whether the contractual relations
between the parties bear insignia of public element. Once on
the facts of a particular case it is found that nature of the
activity or controversy involves public law element, then the
matter can be examined by the High Court in writ petitions
Under Article 226 of the Constitution of India to see whether
action of the State and/or instrumentality or agency of the
State is fair, just and equitable or that relevant factors are
taken into consideration and irrelevant factors have not gone
into the decision making process or that the decision is not
arbitrary....
(xi) The scope of judicial review in respect of disputes
falling within the domain of contractual obligations may be
more limited and in doubtful cases the parties may be
relegated to adjudication of their rights by resort to remedies
provided for adjudication of purely contractual disputes... ...."
39. Article 226 of the Constitution empowers the High
Courts to issue any person or authority, including any
government, directions, orders or writs "for the enforcement of
any of the rights conferred by Part III and for any other
purpose". Though "any other purpose" as provided for in Article
226 alludes that High Courts have a wide discretion in the
exercise of writ jurisdiction, judicial precedents hold otherwise.
Writs under Article 226 are intended to enable the High Court to
issue them in grave cases where subordinate tribunals or bodies
act wholly without or in excess of jurisdiction, or in violation of
principle of natural justice, or refuse to exercise jurisdiction
vested in them, or there is an error apparent on face of record
and that such act, omission, error or excess has resulted in
manifested injustice.
40. In relation to application of writ jurisdiction in
private matters, the Apex Court has elucidated that writ petition
is a remedy in public law and can be filed against Government
or State or their instrumentalities and private individuals
cannot be equated with State or its instrumentalities. Even
where there is an arbitration clause between a State
instrumentality and a private party, such clause does not act as
an absolute bar to the remedies under Article 226 [Unitech Ltd.
V. Telangana State Industrial Infrastructure Corporation
2021 SCC OnLine SC 99]. Hence, where the State
instrumentality violates the constitutional mandate to act fairly
and reasonably under Article 14, relief under Article 226 can be
sought. Therefore, recourse to jurisdiction under Article 226 is
not excluded altogether in contractual matters.
41. Petitioners are neither seeking enforcement of
contractual obligation nor seeking annulment of any clause of
their licence deeds. They are only questioning the arbitrariness
of the Corporation in demanding them to pay full amount of
licence fee in an unprecedented highly abnormal situation i.e.,
Pandemic Covid-19, which cannot be visualized, because of
which the licenses granted by the Corporation to petitioners for
running stalls in the bus stations of TSRTC became non-
operational and they did not have any business during the said
period. In view of the above decision of the Hon'ble Supreme
Court in Joshi Technologies International Inc. Vs. Union of
India (supra) relied on by the Corporation has no relevance at
all to the present case. In the said case, petitioners therein
sought to incorporate a new clause in its agreement, which
alleged to have been missed to be included in the agreement by
oversight. It has been held that it is a contractual matter and
that the High Court cannot grant such a relief under Article 226
of the Constitution. The relief sought by petitioners from this
Court in the present Writ Petitions are totally different and
distinct and has nothing to do with the enforcement of
contractual obligations, being totally outside the scope of
contract, as the issue involved in the present batch of cases is a
legal issue pertaining to a situation arose under unprecedented
visualized by anyone by any stretch of imagination and which is
not governed by the licence deeds. Pandemic was very much
prevalent for a period of more than 1 ½ years ever since
imposition of National Lock Down in March, 2020. Merely
because 1st Lock Down was lifted after two months, it does not
mean the pandemic ceased to exist and it continued for more
than one and half year even after lifting of Lock Down. The
Government of Telangana imposed 2nd lock down for a period of
3 months from April to June, 2021, with slight relaxations.
During the second lock down period also, stalls of petitioners
remain closed.
42. Central Government issued guidelines by way of
Memorandum dated 13.05.2020 as to how to deal with the
contracts, during pandemic period, for granting necessary relief
to the parties of the contract, by treating the said period as
Dies-Non. In view of the said guidelines, licence period of
petitioners in pandemic during which licenses of petitioners
became non-operational, shall be treated as Dies-Non and no
licence fee shall be collected from petitioners for Dies-Non
period i.e. non-operational licence period of petitioners, as a
result of Covid-19.
43. Admittedly, A.P. State Road Transport Corporation
took a decision and issued Circular No.2/2020 dated
09.10.2020, waiving license fee of stalls for the lock down period
from 22.03.2020 to 07.06.2020 proportionate to the percentage
of operation of its buses, subject to payment of minimum 20%
of license fee and to collect full amount of license fee, only after
attaining 80% level of operations in terms of KMs. of the region
concerned. The Railway Department has also waived the license
fee of all the Stalls in all the Railway Stations for the lock down
period and the subsequent period upto October, 2020 and
collecting only 10% of the license fee from the stall owners w.e.f.
November, 2020.
44. In the light of predicament situation, there is every
possibility to believe that petitioners did not open their stalls till
the 1st week of October, 2020 ever since lock down and the
Corporation is aware of the said fact. Petitioners have
specifically pleaded in the Writ Petitions the said fact which was
not denied by the Corporation in its counter. Hence, it is not at
all justified to demand licence fee for the closure period. The
occupancy ratio is less than 10% of even the buses operated by
the Corporation during Covid period of 1 ½ years, is not denied
by the Corporation. Therefore it is proved beyond any doubt that
the occupancy ratio is less than 10%. The reason given by the
Managing Director of Corporation vide proceedings dated
04.09.2021 for not granting remission of licence fee during
Covid period is that the Corporation suffered huge financial loss
due to the pandemic. It is not at all the case of the Corporation
that petitioners had sufficient business during the said period
enabling them to pay full amount of licence fee. Accordingly, the
Corporation admitted the crucial facts that petitioners had no
sufficient business during Covid-19 and it forwarded the
representations of petitioners for reduction of licence fees
proportionate to the occupancy ratio of the buses and the
revenue of the Corporation during the Pandemic period, for its
consideration and they are still pending with the Government.
The said fact is evident from the letter of the Executive Director
of the Corporation dated 31.10.2020 which was addressed to all
the Regional Managers, directing them to collect licence fees
from the stall owners only from the month of October, 2020.
Representations which were forwarded to Government by the
Corporation are still pending and no orders are passed in that
regard till date.
45. As held by various Courts in the Country that due
to the extraordinary outbreak of Covid-19 pandemic, there was
disruption of supply chain, assured manpower, uncertainty of
future planning, inadequacy of security as well as the forced
restraints in free commercial activities, numerous commercial
contracts have either been interrupted, delayed or cancelled.
The corporation ought to have considered extraordinary
financial crisis and ought to have acted appropriately, revising
their license fee for the period affected by the Pandemic COVID-
19. The relevant Covid-19 period under Lease Deeds can be put
in abeyance till the normalcy was restored in view of the
unprecedented and unforeseen pandemic, which unsettled
everything and created an unimaginable and miserable
extraordinary situation.
46. Since, admittedly the representations of petitioners
are still pending with the Government and no orders are passed
in that regard till date , in the light of the above, this Court
opines that interest of justice would be met if Government takes
a policy decision in the light of the decisions taken by A.P.
Government and Railway Department in regard to waiver of
license fee. This Court is conscious of the fact that it cannot
direct the Government to take particular policy decision, but in
the peculiar circumstances, with respect to the unprecedented
Covid-19 pandemic and its aftermath affects, this Court can
only suggest the Government to take benevolent view on par
with that of Andhra Pradesh Government and Railway
Department in the peculiar facts of the cases and dispose of the
representations of petitioners within a period of two months
from the date of receipt of a copy of this order. Needless to state
that till the disposal of representations, the interim orders
granted earlier will continue.
47. With the above observations these Writ Petitions are
disposed of. No order as to costs.
48. Consequently, the miscellaneous Applications, if
any shall stand closed.
--------------------------------------
NAGESH BHEEMAPAKA, J
19th April 2024
ksld
