IN THE HIGH COURT OF RAJASTHAN AT JAIPUR BENCH
Ganesh Ram Meena , J.
Abdul Vahid - Petitioner
Versus
Union Of India and Ors. - Respondents
S.B. Civil Writ Petition No. 14790 of 2019
Decided On : 07-02-2023
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| 1. (Para 1 , 2 , 3 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14) |
ORDER :
Ganesh Ram Meena, J.
By way of filing instant instant writ petition under Article 226 of the Constitution of India, the petitioner has prayed to issue direction to the respondents to refund the security amount with interest to him which he deposited.
2. Counsel for the petitioner submits that a tender notice dated 5.4.2016 was issued by the respondent for cycle, motor-cycle stand at Kota Junction and after due process, the tender of the petitioner was accepted and he started the work of cycle stand from 01.8.2016. Counsel submits that the licence agreement for the same was executed on 20.06.2017 on certain terms and conditions. After expiry of period of 12 months, the petitioner submitted an application on 21.07.2017 before the respondent No.2 for termination of the licence issued to him w.e.f. the Month of September 2017 on the ground that he is suffering a great loss due to imposition of GST. Counsel submits that the petitioner deposited Rs.41,51,804/- as a security amount which may be refunded to him along-with the interest.
3. In the reply to the writ petition it has been averred by the respondents that there is an Arbitration Clause in the agreement, therefore, the writ petition filed by the petitioner is not maintainable and the petitioner should have proceeded for arbitration proceedings. Counsel submits that the petitioner is under an obligation to pay the tax enforced by law, if any, as per Condition No.14 of the notice inviting tender.
4. Heard.
5. Counsel for the petitioner has submitted that the petitioner submitted an application for termination of the contract in view of Clause No.13 of the licence agreement executed between the parties on 20.06.2017 and the respondents are under an obligation to refund the security amount which is with them as a security. Clause No.13 of the licence agreement reads as under:-
6. As per the aforesaid Clause, three months prior notice in writing is essential for terminating the agreement. The petitioner submitted an application on 21.07.2017 for termination of the contract w.e.f. the Month of September 2017. Another application, the petitioner stated to have submitted on 4.8.2017 for termination of the contract, even without mentioning the specific date therein for termination of licence.
7. This Court does not find any application in the case file showing that three months prior notice has been given by the petitioner, which is basic and mandatory requirement under Clause 13 of the Licence Agreement for termination of the contract.
8. As per Condition No.27 of the licence agreement, all disputes, questions or differences arising out of or in any way touching or concerning this agreement (except those the decision whereof is otherwise here in force specifically provided for) shall be referred to the sole arbitration of any person appointed by the Chief Commercial Manager, West Central Railway at the time of such appointment. There will be no objection to any such appointment that the person appointed is a Government Servant, that he has to deal with the matters to which the agreement relates and that in the course of his duties as such Government Servant he had expressed the views oni all or any of the matters in dispute or difference. The award of such arbitrator shall be final and binding on the parties to the agreement. Condition No.26 of the licence agreement reads as under:-
The main legal point established in the judgment is that the arbitrator's decision must be in accordance with the terms of the agreement, and failure to do so can result in the decision being set asi....
The main legal point established is that a reference to a document containing an arbitration clause can make the arbitration clause part of the contract, as per Section 7(5) of the Arbitration and Co....
Premature termination of a contract does not grant right to forfeit the security deposit without proof of actual loss, as it constitutes a penalty under the contract law.
Termination of a license without a show cause notice or consideration of refundable fees violates natural justice and judicial directives.
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