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2007 Supreme(Del) 1164
149 (2008) DELHI LAW TIMES 55
DELHI HIGH COURT
G.S. Sistani, J.
RC. GOEL -Plaintiff
Versus
INDIAN RAILWAYS CATERING AND TOURISM CORPN. & ORS. -Defendants
IA Nos. 1701 and 2081 of 2007 in CS (OS) No. 275 of 2007 with IA No. 3006/ 2007 in CS(OS) No. 491 of 2007
Decided on : 28.5.2007
For the Plaintiff:Mr. Rajiv Shahkdar, Sr. Adv. with Mr. Madhup Singhal and Mr. J.S. Gupta, Advocates.
For the Defendant No.1:Mr. Gaurab Banerje, Sr. Adv. with Mr. Saurav Aggarwal Advocate.
For the Defendant Nos. 2, 3 and 5 :Mr. Ashwani Bhardwaj and Mr. Shishir Singh, Advocates.
The court's decision emphasized the importance of establishing a strong prima facie case and considering the balance of convenience when determining whether to grant an injunction. It also highlighted the discretion of the defendants in deciding whether to renew the licenses.
Headnote:
Order 39 Rules 1 and 2 - Code of Civil Procedure - [5, 14, 41(e)] - The court dismissed the applications under Order 39 Rules 1 and 2 and vacated the interim orders, finding that the plaintiffs failed to establish a strong prima facie case for the renewal of their licenses. The court held that the non-renewal of the licenses was not arbitrary, fanciful, or unreasonable, and that granting an injunction would amount to decreeing the suit at this stage.
Fact of the Case:
The plaintiffs sought permanent injunctions to restrain the termination of their catering services contracts with the defendants. The defendants decided not to renew the licenses based on poor performance and unsatisfactory services. The plaintiffs argued that the defendants' actions were illegal, arbitrary, and would cause irreparable harm.
Finding of the Court:
The court found that the plaintiffs did not establish a strong prima facie case for the renewal of their licenses. It held that the non-renewal of the licenses was not arbitrary, fanciful, or unreasonable. The court also determined that granting an injunction at this stage would amount to decreeing the suit.
Issues: The main issues were whether the plaintiffs had a strong prima facie case for the renewal of their licenses and whether the balance of convenience favored the plaintiffs.
Ratio Decidendi: The court's decision was based on the provisions of the agreements between the parties, relevant clauses of the agreements, and the documents placed on record. It found that the plaintiffs failed to establish a strong prima facie case and that the balance of convenience did not favor the plaintiffs.
Final Decision: The court dismissed the applications under Order 39 Rules 1 and 2 and vacated the interim orders. It allowed the defendants' application under Order 39 Rule 4, stating that any observations made in the order would have no bearing on the final adjudication of the cases.
GS (OS) No. 275/2007
2. The plaintiff has filed the present suit for permanent injunction restraining the plaintiff from terminating the contract of the plaintiff dated 9.2.2002, Together with the suit the plaintiff has filed the present application under Order 39 Rules 1 and 2 of the Code of Civil Procedure for interim relief.
3. The brief facts of the case are that the plaintiff is engaged in the business of catering services on the trains run by the Indian Railways. Vide letter dated 28.12.2001, the defendants decided to award the plaintiff a licence for the management of un-board catering services on Train No. 2925-2926, Paschim Express on a concession fee of Rs. 2.83 crores. In addition a licence fee of Rs. 32.5 lakh was required to be paid by the plaintiff. Vide letter dated 23.1.2002, the plaintiff conveyed its unconditional acceptance to the defendants of the terms and conditions for the management of on-board catering services on the train. Thereafter vide letter dated 24.1.2002, the defendants were called upon to deposit a sum of Rs. 94.341akh as the first instalment of concession fee and a licence fee of Rs. 16.25 lakh on or before 29.1.2002. An agreement dated 9.2.2002 was executed between the defendants and the plaintiff for licence to operate and provide catering on board services on Train No. 2925-2926, Paschim Express for a period of five years w.e.f 15.2.2002.
4. It is stated that the plaintiff has been satisfactorily running its services on the train between Bandra Station (Mumbai-Maharashtra State) to Amritsar (Punjab State) end he had received various appreciation letters by the passengers travelling in the train including VIPs. In view of the satisfactory service rendered by the plaintiff, the defendants vide letter dated 30.11.2006 decided to renew licence of the plaintiff for a further period of five years and called upon the plaintiff to give consent/willingness to operate and provide catering on-board services on Train No. 2925-2926, Paschim Express by 10.12.2006. The plaintiff conveyed its consent vide letter dated 6.12.2006 accepting the terms and conditions of the renewal of licence for a further period of five years w.e.f 15.2.2007 to 14.2.2012.
5. The plaintiff received a letter dated 12.1.2007 from the defendants terminating the licence of the plaintiff on the ground that during the inspection of the subject train on 13.10.2006 some irregularities were noticed and called upon the plaintiff to show cause as to why licence, for management of on-board services in the train, should not be terminated,
6. Vide letter dated 24.1.2007, the plaintiff submitted a detailed reply to the show-cause notice. It is submitted that, although, the inspection was carried out on 13.10.2006 on the basis of which the show-cause notice dated 12.1.2007 was issued, the defendants itself had decided to renew the contract of the plaintiff for a further period of five years vide letter dated 30.11.2006. It is further stated that while renewing the licence on 30.11.2006, the defendants had found no substance on the irregularities alleged to have 9 been found in the inspection held on 13.10.2006.
7. It is further submitted that the defendants vide letter date 13.2.2007 has conveyed its decision not to renew the plaintiffs licence for a further period of five years on the ground as mentioned in the show-cause notice dated 12.1.2007. As per the plaintiff, the action of the defendants terminating the contract is blatantly illegal. The show-cause notice was based on an inspection carried out by the defendants on 13.10.2006 whereas the defendants had itself decided to offer to the plaintiff renewal of lic
