K. Padmaja v. Union of India

Judgment

1. Union of lndia, Represented by its Principal Secretary, lvlinistry of lndian Railways, New Delhi.

2. Senior Divisional Commercial Manage Division, Divisional Office, Commercia r, South Western Railway, Bengaluru I Branch, Bengaluru ...RESPONDENTS Petition under Article 226 of lhe constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ, order or Direction more particularly one in nature of writ of Mandamus, declaring the action of the 2nd respondent vide his order dated 14.11.2025 terminating the licence of the petitioner and in calling for fresh tenders in respect of the licence of the petitioner vide his Tender Notification dated Nil exfacie unwarranted, unjust contrary to the order of this Honourable court dated 06.11.2025 in W.P.No.33477 of 2025 violatlve of principles of natural justice, illegal and unsustainable and violative of Articles 14 and 21 of the Constitution of lndia. :1OF Petition under section 151 cPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to suspend the operation of the order of the 2nd respondent daled 14.11.2025 terminating the licence of the petitioner and suspend the operation of the consequential tender notification dated Nil issued by the 2nd respondent relating to the contrac: operation and maintenance of pay and Use Toilets in KSR Bengaluru City Railway Station, pending disposal of the above Writ petition; Counsel for thr: Petitioner: SRI C. RAMACHANDRA RAJU Counsel for thtl Respondents: SRI N. BHUJANGA RAO, Deputy Solicitor General of lndia The Court made the following: ORDER IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD HON'BLE SRI JUSTICE NAGESH BHEEMAPAI(A WRIT PETITION No. 35842 OF 2O2S L8.L2.2o/2s Between: K. Padmaja And Union of India, Rep. by its Principal Secretary, Ministry of Indian Railways, New Delhi & another . Petitioner ORD ER: ..Respondents Petitioner challenges the order dated t4.rr.2o2s of the 2"'l respondent, whereby her licence was terminated and fresh tenders were called for through Notification dated -Nil- relating to the contract for operation and maintenance of pay and Use Toilets at KSR Bengaluru city Railway station. She asserts that the impugned termination order was issued without issuing any show cause notice and without complying with the

order dated 06.11 .2025 of this court in writ petition No.33477 of 2025. 2

2. The case of petitioner is that disputes arose between herself and the 2"d respondent with regard to excess collection of licence fee in earlier quarters and the consequent refundable amount payable to her. Despite repeated represerrtations requesting the 2nd respondent to calculate the refundable amount and adjust the same towards subsequent licence ::ee, the 2"d respondent insisted upon payment of the full licence fee for the next quarter. In this background, petitioner is statr:d to have filed Writ Petition No. 33477 of 2025 questio eing the inaction of the 2nd respondent on her representation dated 14.10.2025 seeking refund of excess licence fee collected in earlier quarters. This Court disposed of the sairi Writ Petition by order dated 06.1 1 .2025, directing the 2nd rer;pondent to consider petitioner's representation and pass appropriate orders in accordance with law within one week from the date of receipt of a copy of the said order.

2.1. Pursuant thereto, petitioner submitted the represr:ntation dated 07.11.2025 to the 2",r respondent reQuesting compliance with the directions, for which, the 2.'a respor.dent, by letter dated 07.1L.2O25, informed that her representation was under active consideration, however, directtjd petitioner to pay full licence fee for the next quarter, aJ notwithstanding the fact that refundable amount was yet to be determined and adjusted. It is stated, the due date for payment oflicencefeeforthequarterfrom0l.ll.2o2Sto3l.0|.2026 wasos.ll.2o2Sbywhichdate,asubstantialamountwas refundable to her, therefore, the question of payment of the full licence fee without adjustment did not arise. According to her, intheabsenceofsuchadjustment,therecouldbenodefault attributable to her. While the things stood thus' the 2nd respondent 2.2. passed the order dated 13.11.2025 determining that petitioner was entitled to a refund of Rs.8,84,5781- and communicated thesaidordertoherbypostonlT.l|.2o2S.Petitionercontends thatevenpriortocommunicationofthesaidorder,the2".l respondentpassedtheorderimpugnedterminatingherlicence on the ground of non-payment of licence fee by 08'11'2025' without taking into account the refundable amount determined onl3.ll.2o2S.Shefurtherassertsthat,accordingtoher calculation set out in the representation dated t4.1o.2025, she was entitled to a total refund of Rs'49'06'1841-' out of which' Rs.l1,04,6571-hadalreadybeenadjustedtowardsthelicence fee payable for the previous quarter' leaving a balance of Rs.38,oL,5271-.Petitionerdisputesthecorrectnessofthe 4 determir.ation made by the 2'd respondent on 13.11.2O25 and states that the said determination itself records that refundable amount is subject to further examination by the )rxt respond:nt. Petitioner reserves her right to challenge the said order dated 13.1 1 .2025.

2.3. The main grievance of petitioner is that the impugn,:d termination order was passed without issuing any show oause notice or affording her an opportunity of explanation. According to her, under Clause I3.2 of the Standard Conditions of Contract and in compliance with the principles of natural justice, issuance of a show cause notice before t.ermination of licence is mandatory, even if not expressly provided in the clause. It is alleged, termination was effected with a vindictive attitude on the part of the 2"d respondent as she harl approached this Court earlier.

2.4. Petitioner further states that she had earlier filed Writ Pr:tition No.13451 of 2025 questioning the inaction of the )rtct respondent on her representation seeking reduction of licence fee proportionate to the number of units of Pay and Use Toilets and Bathrooms on Platform No.1 of KSR Bengaluru City $ Railway Station which were not handed over to her till

22.O8.2025, non-collection of GST on licence fee, and 5 adjustment of refundable amounts towards future licence fee. She contends that part of the cause of action arose at Hyderabad as the Agreement was executed at Hyderabad and she is a permanent resident of Hyderabad, hence, contends that this Court has jurisdiction to deal with the case. Petitioner also refers to Writ Petition No.24438 of 2024 filed by her against the Senior Divisional Commercial Manager, Central Railway, Pune Division, wherein this court admitted the writ Petition, granted interim relief, and did not accept the objection regarding territorial jurisdiction. The said Writ Petition is stated to be pending.

2.5. Subsequent to termination of licence, the 2nd respondent issued Tender Notification dated Nil on line rnode calling for tenders for grant of temporary licence in respect of petitioner's contract, fixing O1.12.2025 as the date for submission of tenders. Petitioner contends that the said tender notification is a direct consequence of the termination order dated 14.1 1 .2025 and is therefore illegal, invalid and unsustainable.

3. tn the counter filed on behalf of respondents, at the outset, they raised objections regarding maintainability of Writ Petition on the ground of lack of territorial jurisdiction. It is 6 stated, no part of the cause of action has arisen vrrithin the territorizrl jurisdiction of this court. Respondent No.2 is situated at Beng.luru in the State of Karnataka and no substantive relief has been sought against respondent No.r, who is stated to be only a fc,rmal party. It is also stated, mere residence of petitioner at Hyderabad does not confer territorial jurisdiction upon this court. I:r support of the said objection, reliance is praced on the order dirted 23.03.2023 passed by this court in writ petition No- 5252 of 2023 filed by the very same petitioner against the Senior l)ivisional commercial Manager, pune Division, central Railway. Pune, which was dismissed as not maintainable on the ground that no cause of action had arisen within its territorial jurisdiction.

3. 1- Respondents state that the licence contract executerl with petitioner is governed by the standard conditions of cont'act and the e-aucti,n policy, os per clause 13.2, the contracl is liable to be terminated if the contractor fails to paSr the full due amount even after expiry of the grace period, and the Earnest Money/Security Deposit is riabre to be forfeited without any further notice. In the present case, petitioner was required to remit the licence fee for the ge quarter on or before 01'11'2025 without penalty and with penalty of o.5%o per day, 7 within a grace period of seven days, i.e. by 08.11 .2025. Automated SMS alerts regarding payment deadlines are generated and sent to the registered mobile number of petitioner through CRIS/IREPS as per extant policy and contract conditions.

3.2. According to the respondents, in view of such automated alerts, default in payment results in automatic termination of the contract without issuance of any further notice. It is further stated that the entire contract management system is largely automated with limited manual intervention. It is also stated, petitioner was specifically reminded uide letter dated O7.IL.2O25 to remit the Railway dues on line in order to keep the contract active. In the said letter, she was also informed that her representation dated 14.LO.2025 was under active consideration and would be disposed of at the earliest in accordance with the directions of this Court. Despite the said communication and the expiry of the grace period, petitioner faited to remit the dues, resulting in automatic termination of the contract.

3.3. It is also stated, petitioner filed Writ Petition No.33477 of 2025 which was disposed of by order dated

06.11 .2025 directing the Railway administration to dispose of 8 petitioner's representation dated 14.ro.2a25 rvithin one week. During the hearing of the said writ petition, petitioner, through her courser, admitted liabirity to pay the crues by 07.rr.2025 and had prayed that no coercive action be taken. It is the contenticn of respondents that the automated sMS alerts and letter dared oz.rr.2o2s advising the petitioner to remit dues constitute sufficient notice under the contract conditions and can be treated as shou,-cause notices. The ailegation of the petitione. that the contract was terminated rvithout notice and without comprying with the order dated 06.l r .2o2s in wp No.33477' of 2O2S is denied. 3'4' Respondents further state, through the impugned order, pe.:itioner was informed of the appelate remedy available under clause 16-1 of the Standard conditio,s of contract before the Divisionar Rairway Manager, Bengaruru, to be filed within 3c days from the date of termination and to be disposed of within 14 days- However, petitioner has not avaired the said alternative remedy. 3'5' It is stated, under the contract and the e-auction policy, pe:titioner was liable to pay licence fee on a quarterry basis' Reliance iq*placed on para 19 of the e-auction policy, including paras 19.1 and 1g.2, ,,r,hich provide for on rine 9 payment of licence fee through IREPS and stipulate termination of contract upon failure to pay the dues even after expiry of the grace period with penalty of O.5o/o per day. The same provisions are reflected in Paras 13, 13.1 and 13.2 of the Standard Conditions of Contract, and that the payment schedule and applicable GST rate were clearly mentioned in the Agreement.

3.6. Respondents state that due to renovation work of Pay and Use Toilets on Platforrn No.l and installation of an escalator on Platform No. 1, Pay and Use Toilets on Platform No.1 were non-operational from 16.02.2024 and were handed over to petitioner on 23.08.2025. Pay and Use Toilets located on the second entry side of the station building and Platform No.6 were taken over from the petitioner for renovation work. They deny the allegation that Railway administration pressurised petitioner to pay the full licence fee without adjusting refundable amounts. In view of multiple representations, including the one dated 25.07.2025, a reconciliation meeting was held on 05.O8.2025 with the son/representative of petitioner. Petitioner was advised to attend the meeting with supporting documents to substantiate her claim for refund or rebate of 35% to 4Oo/o, but no such documents were produced. t0

3.7. It is stated, during the reconciliat.ion meeting, petitioner was inlormed that refund or rebate can be considered only on rnerits and upon subrnission of documentary proof as per extant policy and contract conditions. Letters dated

15.07.2025 and 28.07.2025 were issued advising petitioner to submit supporting documents. According to them, despite these communications, the petitioner failed to submit documentary proof. Pe titioner remained silent until 14.1O.2O25 despite being aware that licence fee for the $th quarter \ /aS due on O1.11 .2025. Respondents contend that claims made by petition(:r in the representation dated 11.1O.2025 were unsupprtrted by documentary evidence. While the represetrtation was under consideration, petitioner filed Writ Petition No.35460 of 2025 on O3.1L.2C25 alleging inaction.

3.8. Respondents also state that in compliance with the order dated 06.11 .2025 in Writ Petition No. 33477 of 2025, the representation clated 14.10.2025 was disposed of uide letter dated 13.11 .2025 based on available data and records; computation of refund or rebate requires documentary proof, which petitioner did not submit. Reliance is placed on Para 23 of the e-auction policy, including Paras 23.1, 23.2,23.3 and

23.4,:r-nd the corresponding Paras 15, 15.1, i5.2 and 15.3 of the Standard conditions of contract. Respondents allege that petitioner was inconsistent in her claims regarding refund or rebate, at various times claiming 3oo/o, 35%o or 4oo/o, without submitting supporting documents. with regard to GST, para 26 of the e-auction policy, including Paras 26.L and 26.2, and para 6 of the Special conditions of contract stipulate that GST liability lies with the licensee and that Railways bear no tax liability.

3.9. It is stated, petitioner was granted licence for a period of three years and the annual licence fee payable is Rs.84,00,OO21- plus GST at l8o/o. Respondents deny that Agreement was executed at Hyderabad, stating that digital execution through IREPS can be done from any location and that petitioner is attempting to invoke territorial jurisdiction on that basis. It is admitted that petitioner filed writ petition No. 13451 of 2025, which was disposed of by order dated

29.o4.2025 directing consideration of representations and that the same were disposed of uide letter dated or.oz.2o2s. It is stated, Pay and Use Toilets are essential public facilities and that uninterrupted operation is necessary to avoid inconvenience to passengers at KSR Bengaluru Railway Station. After termination of petitioner's contract, limited units are being t2 managed departmentally, which is not the core function of the Railway :ldministration. Therefore, a fresh e-auction has been schedulel to ensure uninterrupted services.

4. Heard Sri C. Ramachandra Raju, learned counsel for petiti,rner and Sri N. Bhujanga Rao, learned Deputy Solicitor General lor respondents.

5. From a perusal of the material on record, it is clear that order dated 06.11 .2025 in Writ Petition No. 33477 of 2025 directed the 2nd respondent to consider peti[ioner's represerrtation dated 14.10.2025 and pass appropriate orders within ,fne week. Admittedly, the representation was under conside :ation till 13. 1 1 .2025, when an order determining refund was pzrssed and the said order was communicated on

17.11.2025. While the said determination itself records that the refunda.ble amount is subject to further examination, the terminettion order dated 14.1 1 .2025 was passed even before effectiv': communication of the determination dated 13.1 I .2025 to petitioner. When the representation for refund was under 6. active consideration, pursuant to a judicial direction, respondents were not justified in treating petitioner as a defauh-er for non-payment of full licence fee without first l3 Iinalising the refundable amount and effecting adjustment. The respondents'contention that thc system is automated and that termination is automatic cannot override compliance with a specilic judicial order passed by this court. The plea of respondents that automated SMS alerts and the letter dated

07.11.2025 constitute sufficient notice cannot be accepted for, the letter dated 07.Lr.2o2s itself acknowledges that representation for refund was under consideration pursuant to the order dated 06.11 .2025. Termination of licence involving civil consequences, during the pendency of such consideration, without issuing a specific show cause notice and without affording an opportunity of explanation, amounts to violation of the principles of natural justice. 7- Reliance placed on clause r3.2 of the Standard conditions of contract does not dispense with the requirement of adherence to natural justice, particularll, ,*1r.r, termination is based on alleged default that is connected to a pending dispute regarding refundable amounts. Respondents' action in passing the impugned termination order, without awaiting completion of the exercise directed by this court and without hearing the petitioner, renders the action arbitrary. l4

8. Further, as regards the submission on availability of alternative remedy, as the Writ Petition raises issues of violation of principles of natural justice and non-compliance u,ith a jtrdicial order, existence of an alternative rcmedy is not an absolJte bar.

9. the question of territorial jurisdiction, this Court is of the, view that the objection raised by respondents cannot be acceptecl in view of petitioner's plea that Agreement 'ffas execute<l at Hyderabad and having regard to the earlier proceedLngs in Writ Petition No.24438 of 2024, wherein this Court entertained the Writ Petition on similar grounds.

10. tt is also to be noted, the Tender Notification dated - Nil- calling for fresh tenders is admittedly a consequence of the termine.tion order dated 14.11 .2025. Once the termination order is fou:rd to be unsustainable, the consequential tender notilication cannot survive. For all the aforesaid reasons, this Court holds that termination order dated i4.1 1 .2025 and the consequential Tender Notification dated Nil are issued in violation of the principles of natural justice and non-compliance rvith the order dated 06.1 I .2025 passed by this Court in W.P.No.33477 of 2025. l5 1 1. The Writ Petition is therefore, allowed. The order dated L4.11.2O25 passed by the 2"d respondent and the consequential Tender Notification dated -Nil- are set aside. The 2",1 respondent is directed to pass appropriate orders on petitioner's representation dated L4.LO.2025, which is said to be under consideration, after affording petitioner an opportunity of hearing, in accordance with law, within a period of lwo weeks from today. No costs.

12. Consequently, the miscellaneous Applications, if any shall stand closed. SD/- /TRUE COPY/ OFFICER to'.,. Union of lndia, The Principal Secretary' Ministry of 11q :l'.9:::L g:'"t;lt,Ti "*"i z. 33 lXir. D ivi s io n a l co mm e rci a l I\n9 Division, Divisifra]-offii",-.CqT.p;Al;i'Branch' Benoaluru' 3. one cc to sniil'iliiffibH4NQilx'HAlri, Aoio.ut6 ropucl 4. one cc to sRr il. briiJ:i\ncA'-Rdci,'oJp-rtv S.ricitor Generar of lndia [OPUC] 5. Two CD CoPies ian RailwaYs, New B e n s a r u ru BN GJP HIGH COURT DATED:1811212025 .:, , r-l s Btt5II ?026 * ( * 3 E WP.No.35842 of 2025 -,q ALLOWING THE WRIT PETITION WITHOI.'T COSTS L