IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.BALAKRISHNAN NAIR THURSDAY, THE 18TH SEPTEMBER 2008 / 27TH BHADRA 1930 WP(C).No. 17837 of 2004(W) --------------------------------------- PETITIONER: ------------------ THE COMMONWEALTH (TRUST) INDIA LTD., SOUTH MANANCHIRA ROAD, CALICUT-673 001. REP. BY ITS EXECUTIVE DIRECTOR. BY ADV. SRI.U.K.RAMAKRISHNAN (SR.) SMT.P.VIJAYAMMA SMT.UMA GOPINATH SRI.SANDEEP.E. SMT.AMRITA JAYARAM RESPONDENTS: ---------------------- 1. THE GENERAL MANAGER, SOUTHERN RAILWAY, CHENNAI. 2. THE DIVISIONAL RAILWAY MANAGER/WORKS SOUTHERN RAILWAY, DIVISIONAL OFFICE, WORKS BRANCH, PALAKKAD DIVISION, PALAKKAD. 3. THE UNION OF INDIA, REP. BY THE GENERAL MANAGER, SOUTHERN RAILWAY, CHENNAI. ADV. SRI.K.V.SADANANDA PRABHU,SR.SC.RAILWAYS FOR R1 TO R3 SRI.M.C.CHERIAN,SR.SC.,RAILWAYS FOR R1 TO R3 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 18/09/2008,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Rs/ K. BALAKRISHNAN NAIR, J. ---------------------------------------- W.P.(C) No.17837 OF 2004 ---------------------------------------- Dated this the 18th day of September, 2008 J U D G M E N T ~~~~~~~~~~~ The petitioner is a public limited Company. It is running a tile factory at Feroke. Access to that factory is through a road laid in the property of the Railways. For laying that road, the railways have permitted the petitioner Company to use 159.5 sq.mts of their property on licence basis. Last of the licences granted in respect of that property on 15.5.1972 is remaining in force now. The petitioner was paying the licence fee promptly from time to time. While so, the railways enhanced the licence fee unilateraly in 1981. The petitioner challenged that demand before this Court. This Court by Ext.P1 judgment turned away the petitioner to invoke the remedy of arbitration available to it in terms of the licence agreement. The petitioner invoked that remedy by filing an arbitration petition before the 1st respondent who is the nominated arbitrator as per the agreement. The arbitrator passed an award reducing the demand for enhancement of licence fee. The petitioner submits it paid the entire amount payable as per the award and continue W.P.(C) No.17837/2004 2 to pay it. While so, again there was an attempt to enhance the licence fee unconscionably in 1994. The petitioner moved the Arbitrator raising a dispute regarding the rate of enhancement. Pending arbitration, the railways took steps to evict the petitioner on the ground that it has failed to pay the licence fee at the enhanced rate. So, the petitioner was constrained to move this Court and this Court by Ext.P3 judgment orderd that pending arbitration, petitioner need pay only the pre-revised licence fee. Once the arbitration award comes, the petitioner will be bound to pay the amount found payable as per the award. Otherwise, the railways can proceed against it in accordance with law to evict it. The petitioner submits the arbitration filed by it before the 1st respondent against the enhancement of licence fee in 1994 is pending even now. 2. While so, the petitioner has been served with Ext.P4 notice determining the licence agreement. According to the railways, they are in need of the licenced premises and therefore invoking Clause 10 of the licence agreement they have terminated it. Challenging that notice, the petitioner preferred W.P.(C) No.17837/2004 3 Ext.P5 arbitration petition before the 1st respondent. Pending arbitration, when further coercive steps were taken from the part of the railways, this writ petition was filed. Since the petitioner has no other access to the factory this court granted interim stay of Ext.P4. The petitioner submits Ext.P4 is highly arbitrary and unjust and in fact, the railways do not require the land. The present notice is a colourable exercise of power, it is submitted. 3. The railways have filed a counter affidavit supporting the impugned order. They would say the clause regarding the arbitration contained in the agreement dt.15.5.1972 does not take in the present dispute concerning the determination of the licence agreement. So, Ext.P5 filed by the petitioner is not maintainable. It is also submitted that railways bonafide require the land. The doubling of Shoranur-Mangalore line and the infrastructure necessary for the same have compelled the railways to evict the petitioner and take possession of the land. So, they prayed for dismissal of the writ petition. W.P.(C) No.17837/2004 4 4. Clause 10 of the licence agreement which enables either of the parties to determine the agreement reads as follows: “10. The privileges mentioned in Clause 1 hereof are granted on the express understanding that either party may be at liberty to determine and put an end to this licence by giving to the other of them at any time one calendar month's notice in writing, and such privileges may be so determined by the Government at any time without any claim for compensation whatsoever on the part of the Licensee and on the expiration of such notice the licensee shall discontinue to use and shall yield up to the Government the said land.” 5. The Clause regarding arbitration contained in the licence agreement reads as follows: “In case any doubt, difference or dispute shall arise between the licensee on the one hand and the Government on the other hand as to the true intent and meaning of these presents or of any article, clause or thing herein contained, then in every such case, the doubt, difference or dispute shall be referred to the General Manager of the Railway, and his decision thereon shall be final, binding and conclusive.” 6. If the railways act malafide and the clause 10 is invoked without any justifiable reason, the dispute regarding the same may amount to a matter which can be the subject matter of arbitration. But, if the power is exercised in good faith and for W.P.(C) No.17837/2004 5 the genuine requirement of the railways, the situation may be different. Since the petitioner has already invoked the remedy available to it under the licence agreement by filing Ext.P5, it is only appropriate that the 1st respondent hears the parties and passes the arbitration award, expeditiously. The contention of the railways that action taken under Clause 10 of the agreement is not a dispute, which can be the subject of arbitration is left open. If that point is urged, the arbitrator shall render his finding on that point also. 7. Pending decision on Ext.P5 by the 1st respondent, status quo as on today shall be maintained. The writ petition is disposed of as above. (K.BALAKRISHNAN NAIR, JUDGE) ps