HARPAL SINGH Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner was having a lease contract with the respondent in respect of space in the parcel wagons in several trains. This leasing contract in respect the space was cancelled by the respondent vide letter dated 24th February, 2009. The relevant portion of the letter reads as under: "your existing leasing contracts in train no. 2015 (AGC), 2190 (FSLR II), 2304/82 (AGC), 2708 (FSLR), 2722 (AGC), 2461 (AGC) and 2461 (FSLR I) were terminated including cancellation of Registration, Forfeiture of Registration fee and debarred from fresh registration for 5 years vide this office termination notice no. CHD/agc/tn/2722/08. On appeal, you were allowed to continue for three months w. e. f. 15/02/2008 to 14/05/2008 and performance was kept under watch upto 14. 05. 2008. The following incidents have been come to notice during watch period. 1. Overloading detected in train no. 2304 by E. Rly. / Vig. on 31. 3. 2008 2. Detention due to non-stacking/ adjusting the packages in agc of train no. 2304 on 29. 03. 08. In view of above it has been decided by the competent authority to initiate action as under:-1. Termination of existing contracts operated by you. 2. Cancellation of registration. 3. Forfeiture of Registration fee. 4. Debarred from for 5 years. Accordingly your existing leasing contract of 01/04 tons space of AGC/fslr listed below have been terminated w. e. f. 25/03/2009 and security money forfeited listed below. <FRM>JUDGEMENT_324_ILRDLH19_2009Html1.htm</FRM>

(2.) THE contract contained an Arbitration Clause which has been re-produced by the petitioner in this application under Section 9. The petitioner by this application under Section 9 has made a prayer that the court should stay the operation of the order/ letter dated 24th February, 2009 till finalization of proceedings before the Arbitrator. The contention of the petitioner is that the cancelation of the contract by the respondent was on trivial grounds and the violations of the agreement as stated by the respondent were so minor that the contract should not have been cancelled and only a penalty could have been imposed. It is submitted by counsel for the petitioner that on the basis of lease of the parcel space under the contract, the petitioner had in turn further done bookings from different clients and the petitioner shall suffer irreparable loss due to this cancellation of the contract. The contract was illegally cancelled and the petitioner had a good prima facie case that the cancellation was not as per law. He prays that this Court should issue an injunction against cancellation of contract by order dated 24th February, 2009.

(3.) A perusal of the terms of lease agreement would show that the respondent had reserved a right of cancellation of lease in case of overloading where 4th default takes place. This cancellation of lease is in addition to the penalty which may be imposed by the respondent.