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Telangana High Court
Mas Cargo Service vs Union Of India on 7 April, 2026
Author: Nagesh Bheemapaka
Bench: Nagesh Bheemapaka
IN THE HIGH COURT OF JUDICATURE FOR THE STATE OF
TELANGANA
HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA
WRIT PETITION No. 20820 OF 2021
07.04.2026
Between:
Mass Cargo Service,
Rep. by its Proprietor M.A. Salam
..... Petitioner
And
The Union of India,
Rep. by its General Manager,
South Central Railway,
Rail Nilayam, Secunderabad & others.
..... Respondents
O R D E R:
Petitioner is a proprietary concern engaged in the
business of mechanized parcel handling by plying five
contractor-owned battery-operated trucks at the parcel office of
Hyderabad Railway Station, having its office at H.No.
9-4-131/70, Akberbagh, Tolichowki, Hyderabad. They entered
into an Agreement dated 16.11.2018 with Respondents for
mechanized movement of parcels at Hyderabad Railway Station
for ensuring uninterrupted movement of outward and inward
consignments between the parcel office and various
trains/platforms and vice versa. The said contract was for two
years commencing from 17.11.2018 and ending on 16.10.2020.
Pursuant thereto, Petitioner furnished a Bank Guarantee of
Rs.3,29,081/- towards security deposit, valid up to 26.04.2021,
in favour of Respondents. It is further stated that Petitioner
engaged 14 labourers on daily wages for operating the trucks,
including provision of two staff as rest givers, paid their salaries,
maintained statutory registers, and complied with all applicable
labour laws including payment of PF and ESI, and submitted
proof of such compliance to the Respondents from time to time.
1.1. It is stated, petitioner, in terms of the Agreement,
has been regularly submitting monthly bills in triplicate, which
were duly counter-signed by the Chief Parcel Supervisor, and
thereafter submitted to the office of the Senior Divisional
Commercial Manager, Sanchalan Bhavan, Secunderabad
Division, in accordance with the procedure prescribed under the
agreement. As per Clause 18.1 of the Agreement, Respondents
had the right to verify and check the bills, and the same were
duly counter-signed by the Chief Parcel Supervisor before
submission and Petitioner strictly adhered to the said
procedure. Petitioner carried on the contractual work sincerely
and honestly without any complaint from any quarter, and all
bills submitted from the commencement of the contract till June
2020 were paid by the 3rd Respondent without any remark or
objection.
1.2. Petitioner, it is stated, submitted the final bill on
16.10.2020 for Rs.7,90,512.02, duly counter-signed by the
Chief Parcel Supervisor, but the 3rd Respondent paid only
Rs.2,31,921/-, leaving a balance amount of Rs.5,60,742/-
payable to them. The 3rd Respondent, by letter dated
15.02.2021, called upon Petitioner to submit documentary proof
for payment of wages and details of rest givers along with proof
of payment duly counter-signed by CPSR/HYD for the entire
contract period of 24 months. In response thereto, Petitioner
submitted replies dated 16.02.2021, 15.04.2021 and
28.04.2021 furnishing complete details regarding payment of
wages to staff and rest givers, along with proof of ESI and PF
contributions, attendance registers and wage registers, showing
engagement of 14 staff instead of 11 staff, duly counter-signed
by CPSR/HYD.
1.3. Petitioner also is stated to have submitted "No Due
Certificate" and "No Claim Certificate" along with the final bill to
the 3rd Respondent, yet Respondents failed to pay the final two
months' bill amount. At no point of time did Petitioner violate
any provision or condition of the contract Agreement. The 3rd
Respondent, being an instrumentality of the State, is bound to
act in accordance with the terms of the contract and in a fair
and reasonable manner, consistent with the constitutional
mandate under Articles 14, 21 and 311 of the Constitution. The
right to life under Article 21 includes the right to livelihood and
opportunity, and actions of Respondents in withholding
legitimate dues of Petitioner are violative of the fundamental
rights guaranteed under the Constitution. Despite submission
of representations dated 16.02.2021, 15.04.2021 and
28.04.2021, Respondents neither responded nor released the
pending amount of Rs.5,60,742, and such inaction is illegal,
arbitrary, unconstitutional and violative of Articles 14, 21 and
311 of the Constitution.
2. Respondents filed a counter affidavit contending
that petitioner entered into a contract for mechanized movement
of parcels by plying five contractor-owned battery-operated
trucks for operations and maintenance at Hyderabad Railway
Station (Parcel Office) for carrying outward and inward
consignments between the parcel office and different
trains/platforms and vice versa, and such operations were
required to be carried out to the satisfaction of the Railway
Administration. It is stated, the total value of the contract for a
period of two years from 17.10.2018 to 16.10.2020 was
Rs.65,81,616.12/- including 18% GST, and the contract was
awarded in favour of M/s M.A.S Cargo Services subject to
specific terms and conditions stipulated in the Agreement.
2.1. It is also stated, as per the terms of the Agreement,
a minimum of five vehicles were required to be deployed daily
and 11 persons (manpower/truck drivers) were required to be
deployed daily for round-the-clock operation of trucks, and the
contractor was also required to furnish a bank guarantee of
Rs.3,29,081/-. As per para III(1) of the Agreement, the
contractor was required to deploy 11 persons per day for round-
the-clock operation covering 84 hours of service per day in
different shifts, namely from 06:00 hrs to 13:00 hrs (7 hours, 4
trucks, total 28 hours), from 13:00 hrs to 18:00 hrs (5 hours, 4
trucks, total 20 hours), and from 18:00 hrs to 06:00 hrs (12
hours, 3 trucks, total 36 hours), aggregating to 84 hours per
day. Petitioner claimed to have engaged 14 persons including
rest givers, however, as per the agreement, only 11 persons were
required to be deployed per day and payment would be made
only for such prescribed manpower, and merely engaging
additional persons does not entitle the contractor to claim
additional wages.
2.2. From the records and lists submitted by Petitioner,
it is evident that they had not deployed the prescribed 11
persons per day and had not provided the required 84 hours of
service per day, thereby violating the terms and conditions of
the contract. As per the muster particulars submitted by
Petitioner, only 12 employees were shown as engaged on a daily
basis, out of which the attendance of one employee as per
contractual requirement was not met, thereby evidencing
shortage of manpower. Petitioner submitted the bill for the last
three months of the contract period from 17.07.2020 to
16.10.2020 for a total amount of Rs.8,22,702.01/- (at the rate
of Rs.2,74,234/- per month), along with ESI and EPF payment
details and labour particulars.
2.2.1. It is stated, out of the said amount, proportionate
wages amounting to Rs.5,60,742/- were deducted on account of
shortage of manpower, calculated based on man-days actually
worked vis-à-vis man-days required, considering the number of
days rest provided and the applicable wage rate per person.
After further deductions towards Income Tax @ 2% and
Conservancy cess amounting to Rs.30,039/-, the total
deductions aggregated to Rs.5,90,781/-, and the net payable
amount of Rs.2,31,921/- was released to Petitioner. The
amount of Rs.5,60,742/- was retained under deposit due to
deployment of lesser manpower than required under the
contract and in accordance with the contractual terms. As per
the Agreement, if the contractor engages less than the
prescribed number of labour i.e. 11 persons, proportionate
payment is liable to be deducted as per clause II(12) of the
Agreement, and the contractor cannot claim wages merely on
the basis of engaging any number of persons. As per clause
III(1) and clause XX1.2(d) of the Agreement, the contractor was
required to provide weekly rest on a staggered basis and ensure
compliance with labour laws, including provision of rest givers,
however, Petitioner failed to provide rest givers and instead
provided rest to one or two staff daily without engaging
additional personnel.
2.2.2. The wage records submitted by Petitioner indicate
that wages were paid only for 26 days in a month and that
payments for the remaining days, including those relating to
rest givers, were not made as per records. As per the calculation
based on the entire contract period, the required number of
man-days was 7205 (655 days 11 persons), excluding 76
lockdown days, whereas the Petitioner provided only 6191 man-
days, resulting in a shortage of 1014 man-days, and at the
minimum wage rate of Rs.553/- per day per person, the
proportionate deduction of Rs. 5,60,742/- was arrived at.
2.2.3. As per clause XXII(23), the Railway authorities are
empowered to verify attendance registers maintained by the
contractor on a daily basis, and such records revealed non-
compliance with deployment requirements. The unpaid wages
reflected in the muster and wage sheets are the rightful claims
of the outsourced labourers and the 3rd Respondent, being the
principal employer, is under statutory obligation to ensure
payment of such wages, and therefore the corresponding
amounts were withheld.
2.2.4. Petitioner was informed vide letter dated
15.02.2021 to furnish documentary proof of payment of wages
to all staff for full working days or details of rest givers duly
counter-signed by CPSR/HYB for the entire contract period.
The revised muster rolls and wage sheets submitted by
Petitioner vide letter dated 16.02.2021 were contradictory and
not reliable, as (i) initially, Petitioner showed engagement of
11-12 staff for 26 days without details of rest givers, whereas
subsequently claimed engagement of 14 staff, (ii) the revised
muster did not conform to the requirement of providing proof for
shortage of manpower, (iii) the muster periods differed, such as
from 17th of a month to 16th of the next month instead of
calendar months, (iv) the order of workers differed between
documents, and (v) attendance and absence entries were
inconsistent.
2.2.5. Such discrepancies clearly establish that the
records maintained during execution of the contract and those
submitted subsequently for bill clearance are inconsistent and
not tenable. Petitioner himself vide letter dated 28.04.2021,
admitted that the earlier claim regarding non-payment of two
months' bills made in his letter dated 08.04.2021 was due to a
communication mistake between himself and his typist and
tendered an apology for the same, and therefore the present
claim is contradictory and misleading. The deductions made
were strictly in accordance with contractual provisions,
including clauses II(12), II(14), XIII(2) and XV, which permit
proportionate deduction for shortfall in service, deduction of
penal charges, and payment only for actual manpower deployed.
2.2.6. The bills were processed in accordance with clause
XVIII of the agreement, and after scrutiny by the office of the
Senior Divisional Commercial Manager and vetting by the
Senior Divisional Finance Manager, deductions were made upon
finding that the Petitioner had not fulfilled the contractual
obligations. Respondents acted strictly in accordance with the
terms and conditions of the agreement and there is no illegality
in the deductions made or the amount released.
2.2.7. Petitioner vide letters dated 15.04.2021 and
28.04.2021, requested for release of price variation and security
deposit, and accordingly the price variation was paid in July
2021 and the security deposit was released in August 2021
upon submission of no claim/no due certificates on 09.08.2021
and 23.08.2021. The present dispute involves disputed
questions of fact relating to compliance with contractual
obligations, deployment of manpower, and correctness of
records, which cannot be adjudicated in writ jurisdiction. That
the agreement provides for an arbitration mechanism under
clause XI, whereby any dispute arising out of the contract is to
be referred to arbitration to a sole Arbitrator or Arbitral Tribunal
appointed by the General Manager, South Central Railway.
3. Petitioner filed a reply denying the allegations made
in the counter that he failed to mention details of staff engaged
or that he deployed less staff than prescribed, and specifically
denies the allegation that he did not provide 84 hours of service
per day or that there was any non-compliance with the terms
and conditions of the contract. It is denied, he deployed less
manpower and further denies the justification for deduction of
proportionate wages from the final bill by Respondents. As per
the bill for the last three months of the contract period from
17.07.2020 to 16.10.2020, the total bill amount was
Rs.8,22,702.02/-, from which total deductions of Rs.32,190/-
were made, resulting in a net payable amount of
Rs.7,90,512.02/-, out of which only Rs.2,31,921/- was paid,
leaving a balance amount of Rs.5,60,742/-payable to them.
3.1. It is stated, in terms of the contract for the period
from 17.10.2018 to 16.10.2020, Petitioner engaged 14 persons
per day, including two persons per day as rest givers, and
though more persons were engaged, petitioner claimed wages
only for 11 persons per day as per the Agreement. Petitioner
had engaged labour and paid wages to all the members in
accordance with applicable labour laws and statutory
requirements. As per clause II(12) of the Agreement, Petitioner
engaged the required manpower daily and provided 84 hours of
service per day, and the claim for wages was restricted only to
11 persons per day as contemplated under clause III(1) of the
Agreement.
3.2. Petitioner states that they have not violated any
terms and conditions of the Agreement, and in accordance with
the contractual requirement, ensured that manpower/truck
drivers were deployed for round-the-clock operation of trucks
and that all staff, including rest givers, were maintained
properly. Petitioner engaged additional personnel to act as rest
givers and paid wages to them on a daily basis in compliance
with labour laws, while continuing to claim payment only for the
prescribed number of persons under the contract. They had
provided uninterrupted service of 84 hours per day throughout
the contract period from 17.10.2018 to 16.10.2020, and the
same is evidenced by summary records duly endorsed by the
Chief Parcel Supervisor of the Respondent authorities.
3.3. The summary copies submitted to Respondents
clearly demonstrate that 84 hours of service per day was
consistently provided by Petitioner during the entire period of
the contract. The manual attendance registers submitted to
Respondents clearly show that 11 labourers were deployed on
each day during the entire contract period of two years. It is
stated, the discrepancies pointed out by Respondents in the
computerized attendance register for the last three months, i.e.,
from 17.07.2020 to 16.10.2020, occurred due to typographical
mistakes committed by the typist, and the same were brought to
the notice of the Respondents by way of an apology letter dated
28.04.2021.
3.4. Apart from such typographical errors, there is no
actual shortfall in manpower or deficiency in service provided by
the Petitioner. It is stated finally that deductions made by
Respondents towards alleged shortage of manpower are
unjustified, arbitrary and contrary to the actual performance of
the Petitioner under the contract.
4. Heard Sri Nambi Krishna, learned counsel for
petitioner, Sri B. Jithender, learned Central Government
Standing Counsel for Respondent No.1 and Sri T.S.
Venkataramana, learned Standing Counsel for Respondent
No.2.
5. At the outset, the foundational facts are not in
dispute. It is an admitted position that Petitioner entered into a
contract with Respondents for mechanized movement of parcels
at Hyderabad Railway Station by plying five contractor-owned
battery-operated trucks for two years commencing from
17.10.2018 and ending on 16.10.2020. It is also not in dispute
that the said contract specifically stipulated the number of
vehicles to be deployed, the manpower required to be engaged,
the number of hours of service to be rendered on a daily basis,
and the manner in which payments were to be processed and
released.
6. The controversy in the present Writ Petition centers
around the deduction of Rs.5,60,742/- from the final bill
submitted by Petitioner for the period from 17.07.2020 to
16.10.2020, and whether such deduction is arbitrary or
contrary to the terms of the contract so as to warrant
interference under Article 226 of the Constitution. Respondents
have placed before this Court detailed calculations
demonstrating that as against the contractual requirement of
7205 man-days (calculated at 11 persons per day over 655
days, excluding 76 lockdown days), Petitioner had provided only
6191 man-days, resulting in a shortfall of 1014 man-days.
Respondents have further shown that deduction of
Rs.5,60,742/- was computed based on the minimum wage rate
of Rs.553/- per day per person, applied proportionately to the
said shortfall.
7. It is to be seen, such calculation is not a bald
assertion, but is supported by muster rolls, wage records, and
other documents which, according to Respondents, were
themselves submitted by Petitioner during the course of
execution of the contract. Respondents have also pointed out
that Petitioner, instead of deploying the requisite number of
personnel on a daily basis, had provided rest to one or two
employees without engaging additional rest givers, thereby
resulting in effective shortage of manpower in terms of the
contract.
8. Petitioner had sought to controvert the said position
by contending that he had engaged 14 persons including rest
givers and provided 84 hours of service per day, and that the
discrepancies in the records are attributable to typographical
errors in the computerized attendance registers for the last
three months of the contract period. However, the explanation
offered by Petitioner does not satisfactorily reconcile the
material inconsistencies highlighted by Respondents. The
contradictions between the initial muster rolls and the revised
muster rolls, the mismatch in attendance records, and the
variation in the period and details of workers, as pointed out in
the counter affidavit, cannot be brushed aside as mere
typographical errors. Such inconsistencies go to the root of the
matter and directly impact the determination of whether the
contractual obligations relating to deployment of manpower
were fulfilled.
9. Further, it is pertinent to note that the contractual
provisions governing the relationship between the parties
expressly provide for proportionate deduction in the event of
shortfall in manpower or non-compliance with contractual
obligations. Clauses 11(12), II(14), XIII(2) and XV of the
agreement clearly stipulate that payment shall be made only for
the actual manpower deployed, that proportionate deductions
shall be effected for any shortfall in the minimum number of
hours of service rendered, and that penal deductions may be
imposed for failure to comply with the terms of the contract.
10. In the present case, Respondents have
demonstrated that deductions made from the final bill were
effected in accordance with the said contractual provisions.
upon scrutiny and verification of the records by the competent
authorities, including the office of the Senior Divisional
Commercial Manager and the Senior Divisional Finance
Manager. There is nothing on record to indicate that such
deductions were made de hors the contract or in an arbitrary
manner.
11. This Court is also of the considered view that the
dispute raised by Petitioner involves seriously contested
questions of fact, including the actual number of personnel
deployed, the correctness and authenticity of muster rolls and
wage records, and the extent of compliance with the contractual
conditions. Such issues require detailed examination of
evidence and cannot be adjudicated in proceedings under
Article 226 of the Constitution, which are essentially summary
in nature. It is further relevant to note that the Agreement
between the parties provides for an alternative dispute
resolution mechanism by way of arbitration under clause XI. In
the presence of such an efficacious contractual remedy, and
particularly when the dispute pertains to interpretation and
enforcement of contractual terms coupled with disputed
questions of fact, this Court would be slow to exercise its writ
jurisdiction.
12. Insofar as the allegation of violation of Articles 14,
21 and 311 of the Constitution is concerned, this Court finds
that the dispute is essentially rooted in the terms of a
commercial contract entered into between the parties. The
action of Respondents in making deductions strictly in
accordance with the contractual stipulations, based on the
material available on record, cannot be characterized as
arbitrary, unreasonable, or violative of constitutional
guarantees. Mere non-payment of a portion of the claimed
amount, when justified under the terms of the contract, does
not give rise to a constitutional cause of action.
13. In view of the foregoing discussion and for the
reasons stated hereinabove, this Court is of the considered
opinion that Petitioner failed to establish any illegality,
arbitrariness, or violation of statutory or constitutional
provisions warranting interference under Article 226 of the
Constitution. The dispute raised is purely contractual in nature,
involves disputed questions of fact and Respondents have acted
within the four corners of the Agreement.
14. The writ petition is therefore, dismissed. No costs.
15. Consequently, the miscellaneous Applications, if
any shall stand closed.
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NAGESH BHEEMAPAKA, J
07th April 2026
ksld
