Telangana High Court: In a writ petition filed against the termination of the license of the petitioner’s Catering Stall at the Secunderabad Railway Station vide the impugned letter sent by the South-Central Railway (‘Railway Authorities’), the Single Judge Bench of Moushumi Bhattacharya, J., dismissed the petition, holding that there was an undisputed deficiency of service by the petitioner, which was not rectified despite several opportunities, and the Railway Authorities had followed the terms of the Special Conditions of Contract (‘SCC’) of the Bid Document in the procedure of termination.
Background
The Railway Authorities and the petitioner entered into a License Agreement in 2016 for Catering Services at the Secunderabad Railway Station. Subsequently, several complaints were made by the customers against the petitioner regarding the sub-standard quality of his food. Some complaints were also made by customers on the social media platform X (formerly Twitter). Accordingly, action was taken by the Indian Railway Catering and Tourism Corporation against the petitioner pursuant to such complaints. The Railway Authorities issued several warnings to the petitioner and imposed five penalties on him. The Railway Authorities had also issued a warning letter to the petitioner regarding the involvement of the petitioner’s vendors in a physical altercation.
Thus, vide the impugned letter, the petitioner’s contract was terminated with immediate effect, and the security deposit paid by him was forfeited. The petitioner was also debarred from participating in future similar contracts/licenses of the Indian Railway for one year. In the impugned letter, the Railway Authorities stated that despite multiple opportunities, the petitioner failed to comply with his contractual obligations which negatively impacted passengers’ interests.
Issue
Whether the Railway Authorities acted in violation of the SCC in failing to give the petitioner an opportunity to rectify his lapses before terminating the license?
Analysis
Upon perusal of the impugned letter, the Court said that prima facie, the Railway Authorities gave several opportunities to the petitioner to mend his ways before issuing the notice of termination.
The Court stated that the videos/ images of the petitioner’s vendors fighting inside a Railway coach added to the gravity of the allegations. Rejecting the petitioner’s contention that it was his ex-employee who was wearing his T-shirt/ uniform in the video, the Court stated that there was no explanation for permitting an ex-employee to wear the petitioner’s uniform/T-shirt.
The Court stated that it was evident that the Railway Authorities had complied with the sequential stages of actions provided in the Penalties section of the SCC by giving multiple warnings to the petitioner. The impugned action of termination was taken after the petitioner failed to stop his continuous deficiency in service.
The Court further stated that it was evident that the petitioner was given five opportunities to rectify the deficiencies in accordance with the Penalties section of the SCC. Thereafter, the Railway Authorities proceeded as per Clause 7 of Penalties, which provided that the Railway Authorities might serve a notice of termination of the License Agreement, in case of continued or further occurrence of deficiency even after giving five opportunities/ imposing penalties.
The Court held that the documents on record showed an undisputed deficiency of service on the part of the petitioner.
The Court stated that complaints on social media could not be viewed as less grave compared to formal written complaints. The Court added that “complaints/customer feedback on social media is an accepted mode of registering complaints against a service provider and the petitioner cannot adopt an ostrich policy in today’s time on the pretext that social media complaints do not deserve to be treated with seriousness.” Stating this, the Court held that the complaints were serious, since they were not only regarding poor food quality but also the sale of food items below the recommended weight and more than the prescribed rate.
The Court also noted that the petitioner was debarred from participating in future contracts/licenses for one year, which was different from being debarred forever.
Thus, the Court held that there was no reason to interfere with the impugned letter of termination. The Court further held that the opportunities given to the petitioner not only rectified the situation but also followed the principles of natural justice by giving notice of the impugned action. Holding the aforesaid, the Court dismissed the writ petition.
[Mathura Prasad v. Union of India, Writ Petition No. 34055 of 2024, decided on 30-12-2024]
Advocates who appeared in this case:
For the petitioner: Aadesh Varma
For the respondent: N.V.R. Rajya Lakshmi and Deputy Solicitor General of India Gadi Praveen Kumar
