Partly allowed

M/S Mariha Communication v. Union of India

Karnataka HC22 Apr 2024WP/101095/2024

Case brief

AI extract

What is this about?

Licensee challenged railway's termination of its Rail Coach Restaurant contract for allegedly furnishing a false experience certificate, and imposition of penalty for occupying excess area, both without prior notice or hearing. Court held the grave charges required a hearing; impugned actions were unjustified for breach of natural justice.

What did the court decide?

Impugned actions set aside as violating natural justice; respondents permitted to proceed afresh after notice, reply and hearing, with all contentions open.

M/S Mariha Communication Vs Union of India — Contract and Commercial Disputes | Karnataka HC (2024)

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NC: 2024:KHC-D:6600 WP No. 105319 of 2023 C/W WP No. 101095 of 2024

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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH

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DATED THIS THE 22^ND DAY OF APRIL, 2024 BEFORE

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THE HON'BLE MR JUSTICE RAVI V.HOSMANI WRIT PETITION NO. 105319 OF 2023 (GM-RES)

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C/W

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WRIT PETITION NO. 101095 OF 2024

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IN W.P.NO.105319/2023

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BETWEEN:

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M/S. MARIHA COMMUNICATION, THROUGH ITS SOLE PROPRIETOR/MANAGER, MOHAMMED SHERAZ MOHAMMED IMTIYAZ MEMON, AGE: 41 YEARS, AT: PLOT NO.52, 5^TH CROSS, BEHIND DIXIT GAS GODWN LANE, MRUTHUNJAYA NAGARA, HAVARI-581115.

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…PETITIONER

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(BY SRI VIJAYENDRA BHIMAKKANAVAR, SRI VIJAY S. CHINIWAR & SRI ROSHAN SINGH, ADVOCATES)

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AND:

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Digitally signed by CHANDRASHEKAR LAXMAN KATTIMANI Location: HIGH COURT OF KARNATAKA DHARWAD BENCH

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UNION OF INDIA, MINISTRY OF RAILWAY, RAIL MANTARALAYA, RAISINA ROAD, RAILWAY BOARD, NEW DELHI.

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SENIOR DIVISIONAL COMMERCIAL MANAGER, SOUTH WESTERN RAILWAY, HUBBALLI, DIVISIONAL OFFICE COMMERCIAL BRANCH, HUBBALLI-580020.

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THE CHIEF COMMERCIAL MANAGER, CATERING AND PASSENGER SERVICE, SOUTH WESTERN BRANCH, IIND FLOOR, ZONAL OFFICE BUILDING, GADAG ROAD, HUBBALLI-580020.

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NC: 2024:KHC-D:6600 WP No. 105319 of 2023 C/W WP No. 101095 of 2024

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THE DIVISIONAL RAILWAY MANAGER, SOUTH WESTERN RAILWAY ROAD, HUBBALLI DIVISION, DIVISIONAL OFFICE, KESHWAPURA, HUBBALLI.

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…RESPONDENTS

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(BY SRI VENKATESH M. KHARVI, CGSC)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE WRIT IN THE NATURE OF CERTIORARI OR ANY OTHER APPROPRIATE WRIT QUASHING THE IMPUGNED TERMINATION NOTICE DATED 14/08/2023 BEARING NO.HC-152-UBL-RCR-RESTAURANT-2022 PASSED BY THE RESPONDENT NO.2 VIDE ANNEXURE-E; ISSUE WRIT IN THE NATURE OF MANDAMUS BY ISSUING APPROPRIATE DIRECTIONS TO THE RESPONDENTS TO PERMIT THE PETITIONER TO RUN RAIL COACH RESTAURANT (BOGIE-BOGIE) AT HUBBALLI STATION OF HUBBALLI DIVISION OF SOUTH WESTERN RAILWAY TILL THE EXPIRY OF THE LICENSE PERIOD i.e., 17/02/2028 PURSUANT TO THE CONTRACT AGREEMENT DTD. 05-12-2022 VIDE ANNEXURE-B.

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IN W.P.NO.101095/2024

BETWEEN:

…PETITIONER

(BY SRI VIJAYENDRA BHIMAKKANAVAR & SRI ROSHAN SINGH, ADVOCATES)

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3 - NC: 2024:KHC-D:6600 WP No. 105319 of 2023 C/W WP No. 101095 of 2024

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AND:

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UNION OF INDIA, MINISTRY OF RAILWAY, RAIL MANTARALAYA, RAISINA ROAD, RAILWAY BOARD, NEW DELHI-01.

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SENIOR DIVISIONAL COMMERCIAL MANAGER, SOUTH WESTERN RAILWAY, HUBBALLI, DIVISIONAL OFFICE, COMMERCIAL BRANCH, HUBBALLI-580020, DIST: DHARWAD.

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THE CHIEF COMMERCIAL MANAGER, CATERING AND PASSENGER SERVICE, SOUTH WESTERN BRANCH, IIND FLOOR, ZONAL OFFICE BUILDING, GADAG ROAD, HUBBALLI-580020, DIST: DHARWAD.

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THE DIVISIONAL RAILWAY MANAGER, SOUTH WESTERN RAILWAY ROAD, HUBBALLI DIVISION, DIVISIONAL OFFICE, KESHWAPURA, HUBBALLI-580020, DIST: DHARWAD.

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…RESPONDENTS

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(BY SRI VENKATESH M. KHARVI, CGSC)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE WRIT IN THE NATURE OF CERTIORARI OR ANY OTHER APPROPRIATE WRIT QUASHING THE IMPUGNED JOINT REPORT DATED: 11-11-2023 ISSUED BY THE RESPONDENT NO.5 VIDE ANNXURE-K; ISSUE WRIT IN THE NATURE OF CERTIORARI OR ANY OTHER APPROPRIATE WRIT QUASHING THE IMPUGNED COMMUNICATION IMPOSING PENALTY DATED: 24-11-2023 BEARING NO. HC-152-UBL-RCR-RESTAURANT2022 ISSUED BY THE RESPONDENT NO.2 VIDE ANNEXURE-L; ISSUE WRIT IN THE NATURE OF CERTIORARI OR ANY OTHER APPROPRIATE

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- 4 -

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NC: 2024:KHC-D:6600 WP No. 105319 of 2023 C/W WP No. 101095 of 2024

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WRIT QUASHING THE IMPUGNED COMMUNICATION FOR FENCING DATED: 23-01-2024 BEARING NO. HC-152-UBL-RCR-RESTAURANT2022 ISSUED BY RESPONDENT NO.2 VIDE ANNEXURE-P; ISSUE WRIT IN THE NATURE OF CERTIORARI OR ANY OTHER APPROPRIATE WRIT QUASHING THE IMPUGNED REMINDER DATED: 30-01-2024 BEARING NO.HC-152-UBL-RCR-RESTAURANT-2022 VIDE ANNEXUREQ ISSUED BY THE RESPONDENT NO.2; ALTERNATIVELY, DECLARE THAT THE CLAUSE XIV PENALTY (c) OF SPECIAL CONDITIONS OF CONTRACT FOR RAIL COACH RESTAURANT THROUGH E-AUCTION ISSUED BY SOUTH WESTERN RAILWAY VIDE ANNEXURE-A IS CONTRARY TO CLAUSE 19.1 OF THE STANDARD CONDITIONS OF CONTRACT FOR CONTRACTS AWARDED THROUGH E-AUCTION AND SO ALSO DECLARE THAT CLAUSE XIV PENALTY (c) OF SPECIAL CONDITIONS OF CONTRACT FOR RAIL COACH RESTAURANT THROUGH E-AUCTION ISSUED BY SOUTH WESTERN RAILWAY VIDE ANNEXURE-A AND THE IMPUGNED COMMUNICATION IMPOSING PENALTY DATED: 24-11-2023 BEARING NO. HC-152-UBL-RCRRESTAURANT-2022 ISSUED BY THE RESPONDENT NO.2 VIDE ANNEXURE-L IS TOTALLY OPPOSED TO FAIR TRADE PRACTICE, PUBLIC POLICY AND PRINCIPLES OF NATURAL JUSTICE AND THEREBY VIOLATES RIGHTS OF THE PETITIONER UNDER ARTICLE 14 AND 19(1)(g) OF THE CONSTITUTION OF INDIA; ISSUE WRIT IN THE NATURE OF MANDAMUS BY ISSUING APPROPRIATE DIRECTIONS TO THE RESPONDENTS TO RE-CONSIDER THE REPRESENTATION OF THE PETITIONER DATED: 05-12-2023 VIDE ANNEXURE-M AND PASS APPROPRIATE ORDERS ON THE PENALTY IMPOSED.

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THESE, PETITIONS, COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:

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NC: 2024:KHC-D:6600 WP No. 105319 of 2023 C/W WP No. 101095 of 2024

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ORDER

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These writ petitions are filed for following releifs:

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In W.P.no.105319/2023:

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A. Issue writ in the nature of certiorari or any other appropriate writ quashing the impugned termination notice dated 14/08/2023 bearing no.hc-152-UBL-RCRRestaurant-2022 passed by the respondent no.2 vide Annexure-E.

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B. Issue Writ in the nature of Mandamus by issuing appropriate directions to the Respondents to permit the Petitioner to run Rail Coach Restaurant (Bogie-Bogie) at Hubballi Station of Hubballi Division of South Western Railway till the expiry of the license period i.e., 17/02/2028 pursuant to the contract Agreement dtd. 0512-2022 vide Annexure-B.

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In W.P.no.101095/2023:

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A. Issue Writ in the nature of Certiorari or any other appropriate writ quashing the impugned termination notice dated 14/08/2023 bearing no.HC-152-UBL-RCRRESTAURANT-2022 passed by the respondent no.2 vide ANNEXURE-E.

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B. Issue Writ in the nature of Certiorari or any other appropriate writ quashing the impugned communication imposing penalty dated: 24-11-2023 bearing no. HC-152UBL-RCR-RESTAURANT-2022 issued by the Respondent no.2 vide ANNEXURE-L.

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C. Issue Writ in the nature of Certiorari or any other appropriate Writ quashing the impugned communication for fencing dated: 23-01-2024 bearing no. HC-152-UBLRCR-RESTAURANT- 2022 issued by respondent no.2 vide ANNEXURE-P.

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D. Issue writ in the nature of Certiorari or any other appropriate Writ quashing the impugned reminder dated: 30-01-2024 bearing no.HC-152-UBL-RCR-RESTAURANT2022 vide ANNEXURE-Q issued by the Respondent no.2. E. Alternatively, Declare that the Clause XIV Penalty (c) of Special Conditions of Contract for Rail Coach

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NC: 2024:KHC-D:6600 WP No. 105319 of 2023 C/W WP No. 101095 of 2024

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Restaurant through e-Auction issued by south Western Railway vide ANNEXURE-A is contrary to clause 19.1 of the Standard Conditions of Contract for contracts awarded through e-auction and so also declare that Clause XIV Penalty (c) of Special Conditions of Contract for Rail Coach Restaurant through e-auction issued by South Western Railway vide ANNEXURE-A and the impugned communication imposing penalty dated: 24-11-2023 bearing no. HC-152-UBL-RCR- RESTAURANT-2022 issued by the Respondent no.2 vide ANNEXURE-L is totally opposed to fair trade practice, public policy and principles of natural justice and thereby violates rights of the Petitioner under Article 14 and 19(1)(g) of the Constitution of India.

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F. Issue Writ in the nature of Mandamus by issuing appropriate directions to the Respondents to re-consider the representation of the Petitioner dated: 05-12-2023 vide ANNEXURE-M and pass appropriate orders on the penalty imposed.

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Sri Vijayendra Bhimakkanawar, learned counsel for petitioner in above petitions submitted, petitioner was successful bidder in e-auction for running Rail Coach Restaurant, for a period of five years from 18.02.2023 to 17.02.2028 at Hubballi Railway Station. It was submitted contract was also signed on 05.12.2022. It was submitted that prior to auction, petitioner was working as caterer in Cell Kitchen run by one Sri P.K.Shefi, a registered catering licencee of Railways/IRCTI. Thus petitioner had experience in that field and invested Rs.25 Crores for setting up restaurant by name Bogie-Bogie.

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7 - NC: 2024:KHC-D:6600 WP No. 105319 of 2023 C/W WP No. 101095 of 2024

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It was submitted petitioner had employed around 70 persons. Such being case, on 14.08.2023 termination notice at Annexure-E was issued to petitioner through e-mail alleging breach of standard conditions of contract on ground that he had produced false experience certificate. Immediately after receipt of said notice, petitioner filed W.P.no.105319/2023 and this Court granted interim order. But, during its pendency, respondent initiated separate proceedings by issuing notice dated 10.11.2023 alleging that petitioner had occupied excess area for running Rail Coach Restaurant. In pursuance of same, joint inspection was conducted and report submitted as per Annexure-K.

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Based on said report, respondent no.2 issued communication dated 24.11.2023 invoking Clause 15 of Special Conditions of Contract and levying penalty of Rs.33,47,506/and further penalty of 16,015/- including GST for use of excess area for putting up advertisement boards. Even petitioner’s representation against said action did not yield consideration. Subsequently, respondents took action for removing alleged encroachment. Challenging said action, petitioner filed W.P.no.101095/2024.

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8 - NC: 2024:KHC-D:6600 WP No. 105319 of 2023 C/W WP No. 101095 of 2024

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Principal ground urged was that prior to taking

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action, respondents did not issue notice and provide opportunity of hearing when allegations of furnishing fake experience certificate was grave charge having severe ramifications. On said ground learned counsel sought allowing writ petition.

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Even insofar as action for imposing penalty for occupation of excess area also, similar contentions were urged.

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On other hand, Sri Venkatesh M Kharvi, learned counsel for respondents sought to justify action taken by respondents. It was submitted that for obtaining tender to establish Rail Coach Restaurant, one of material condition was one year’s experience. To satisfy said condition, petitioner had relied upon experience certificate issued by one Sri P.K. Shefi, IRCTI certified caterer. But on verification, said P.K. Shefi had stated in his letter dated 28.06.2023 as per Annexure-R.2, that he had not issued experience certificate and had never employed petitioner. In view of above, respondent-Railways had taken action as provided under Standard Conditions of

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Contract as per Annesure-R4 and therefore no interference was

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called for.

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Heard learned counsel and perused writ petition

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records.

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From above, it is seen that petitioner is challenging action by respondents for termination/cancellation of contract on ground of furnishing false experience certificate as per Annexure-C issued by one Sri P.K.Shefi. Respondents allege that said certificates at Annexures - R2 and R.3 were fake.

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Indisputably charges against petitioner are grave in nature, which would require opportunity of hearing. Since same is not afforded to petitioner, impugned action calls for interference. Even insofar as occupying excess area, respondents appear to have straight away taken action for its determination and recovery on basis of inspection report without affording opportunity of hearing to petitioner. On said ground alone interference would be warranted.

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Consequently, writ petitions are allowed in part. Impugned action taken by respondent against petitioner are

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10 - NC: 2024:KHC-D:6600 WP No. 105319 of 2023 C/W WP No. 101095 of 2024

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held unjustified for non-compliance with principles of natural justice.

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Respondents are directed to issue notice to petitioner incase they intend to take any action for violation, provide opportunity to submit reply and after hearing, pass appropriate

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orders in accordance with law.

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It is clarified that for said purposes, all contentions of

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both parties are kept open.

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Sd/JUDGE

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Psg* List No.: 1 Sl No.: 22

M/S Mariha Communication v. Union of India

Case brief

What is this about?

What did the court decide?

M/S Mariha Communication v. Union of India

Case brief

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What did the court decide?

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