Ambuj Hotel and Real Estate Pvt Ltd v. Ministry of Railways & Anr.

1. Allowed, subject to all just exceptions.

2. Application stands disposed of. O.M.P.(I) (COMM.) 283/2023 & I.A. 16875/2023 (stay)

3. Present petition has been filed by the Petitioner seeking the following reliefs:- “a. Restrain the Respondents from taking any coercive actions including termination of the License of the of the Petitioner with respect to the on-board catering services in Train No. 12723-24 HYB- NDLS Telangana Express till the disposal of Arbitral proceedings. b. Pass such other order/orders in favour of the petitioner and against the respondents in view of the facts and circumstances of the case.”

4. Petitioner is engaged in the business of onboard catering services in the Indian Railways providing newspapers, food and packaged drinking water to the passengers on premium trains like Rajdhani/Shatabdi, etc. Present petition concerns a license awarded to the Petitioner in 2014 for onboard catering services in Telangana Express (Train No.12723-24 HYB- NDLS) for a period of five years upto 26.05.2019 with further renewal of five years, subject to satisfactory performance by the Petitioner. Total license fee of Rs.14,01,94,000/- was paid by the Petitioner on 22.05.2014 along with taxes as per the tender terms. Security deposit was also made in the form of Performance Bank Guarantee, after which Master License Agreement was executed on 23.08.2014. On 22.08.2017, a Tripartite Agreement was executed since Zonal Railway delegated its power to IRCTC/Respondent No.2 herein.

5. According to the Petitioner, renewal letter was issued on 12.12.2019, upon the services of the Petitioner being found satisfactory, with revised license fee, renewing the contract for a period of five years. Due to sudden outbreak of COVID-19, onboard catering services were suspended in the trains and after resumption, license period was extended till 2026. Despite resumption, two meals were skipped during the train journey due to change of train timings, resulting in financial losses to the Petitioner. Accordingly, Petitioner ventilated its grievances to the Respondents bringing to light the financial loss being suffered and requested for reduction in the license fee by 30%, in terms of Clause 8.[4] of the Master License Agreement, but to no avail. Location:

6. Learned Senior Counsel for the Petitioner submits that instead of taking note of the special circumstances, arising on account of COVID-19 and reducing the license fee, IRCTC illegally sent a demand notice dated 24.05.2022 to remit license fee of Rs.1,87,19,440/-, to which the Petitioner sent a reply requesting correct calculation of the license fee in terms of the relief given to all licensees to deposit the license fee in instalments of three months. On 25.08.2022, Petitioner also requested to review the license fee on account of change in train timings, but there was no response and Petitioner made part payment of Rs.40,00,000/- towards license fee for the period 28.08.2022 to 27.11.2022.

7. It is further submitted that another show-cause notice was sent on 31.07.2023 asking the Petitioner to remit Rs.1,43,34,496/- failing which penalty will be imposed which was wholly arbitrary since the whole dispute of reduction in license fee was pending consideration. Adding to the woes of the Petitioner, another show-cause notice dated 11.08.2023 was sent with a wholly new stand that persistent complaints were received against the Petitioner pertaining to overcharging, quality of food, etc., which was never the case of the Respondents earlier thereto.

8. Learned Senior Counsel submits that Petitioner has requested for copies of the alleged complaints albeit interim reply has been filed to the show-cause notice and at this stage it would suffice if a direction is issued to the Respondents to take a decision on the showcause notice after giving an opportunity to the Petitioner to file a detailed response upon receipt of the copies of the complaints. Location:

9. Learned counsel appearing on behalf of Respondent No.2/IRCTC submits that Petitioner has already made a representation on 22.08.2023 raising grievances pertaining to the financial loss suffered due to change of timings, resulting in missing of two meals onboard i.e. breakfast and evening tea, although this fact has not been disclosed in the petition. He further submits that IRCTC will decide the representation within three weeks from today and communicate the decision to the Petitioner thereafter. It is also stated that steps are being taken for furnishing copies of the complaints to the Petitioner, premised on which the show-cause notice was issued.

10. Having heard learned Senior Counsel for the Petitioner and learned counsel for Respondent No.2, this petition is disposed of with the following directions:- (a) IRCTC shall furnish copies of the complaints which form the basis of the show-cause notice dated 11.08.2023 within one week from today; (b)It is open to the Petitioner to file a reply to the showcause notice upon receipt of the complaints and if so advised, the reply shall be filed within one week of receiving the complaints.

(c) IRCTC shall take a decision on the show-cause notice within two weeks from the date of receipt of the reply, if any. If no reply is received, a decision shall be taken within a maximum period of four weeks from today. (d)Representation dated 22.08.2023 made by the Petitioner shall be decided within four weeks from today by passing a reasoned and speaking order, which shall be Location: communicated to the Petitioner.

11. Needless to state, Petitioner will be at liberty to take recourse to legal remedies in case of any surviving grievance after the disposal of the show-cause notice and the representation. It is made clear that this Court has not expressed any opinion on the merits of the case.

12. Pending application stands disposed of.

JYOTI SINGH, J SEPTEMBER 05, 2023 Location: