Facts of the Case

This is a railway contract/licence dispute and has nothing to do with GST law beyond the fee figure being GST-inclusive. The petitioner, Furkan Ahmed Salim Ahmed, operated a Rail Coach Restaurant under a licence from Central Railway (Bhusawal division), granted for a five-year tenure. A dispute arose over payment of the next quarterly licence fee (approximately Rs. 15 lakh, inclusive of GST). The Railways contended the petitioner defaulted in paying the fee within the due date (17.08.2023), even after accounting for the graduated grace-period-with-penalty policy (7+7+7 days with escalating penalty of 0.5%, 0.75% and 1% per day), and treated the licence as automatically terminated by the system for non-payment. The petitioner argued he had complied with the Court's earlier interim order (06.09.2023) directing him to deposit the fee within five days, but that the Railways' online portal was not open on the relevant days, preventing timely payment. A connected writ petition (W.P. No. 11148 of 2023) concerned a separate dispute about shifting of the canteen premises.

Issues Involved

  1. Whether the licence fee (with penalty) had been paid within the permissible period under Railway policy, and whether the licence was validly terminated for default.
  2. Whether the Railways' failure to keep its payment portal open on certain days excused any delay by the petitioner.
  3. Whether the connected writ petition regarding shifting of the canteen survived.

Petitioner's Arguments

  • The petitioner had complied with the Court's earlier order dated 06.09.2023 by attempting to deposit the licence fee, offering payment online, by demand draft, cheque or cash.
  • The Railways did not open their payment portal on 06.09.2023 and 07.09.2023 — the very days the petitioner needed to pay before the permissible delayed-payment period expired — through no fault of the petitioner.
  • As a goodwill gesture, the petitioner was willing to deposit the demand draft along with an additional 1% per day penalty for the period from 8 to 15 September 2023, despite the Railways' own portal being unavailable on the earlier days.

Respondent's Arguments

  • Central Railway (through its Standing Counsel) informed the Court, via a communication dated 14.09.2023, that the licence had already been terminated automatically by the system for default in payment of the licence fee.
  • Applying the Railway Board's graduated grace-period policy, the final window for payment (with 1% per day penalty) expired on 07.09.2023, and the contract was not cancelled by any departmental decision but automatically by the system upon expiry of that window.

Court Order / Findings

  • The Court computed the grace periods under the Railways' own policy and found that, going by the Railways' letter dated 11.09.2023, the last permissible window (with 1% per day penalty) expired only on 07.09.2023 — the same date as the Court's earlier order — and concluded the licence had in fact been terminated prematurely.
  • The Court found the Railways' portal was not open on 06.09.2023 and 07.09.2023, when it should have been kept open to allow compliance with the Court's order.
  • By consent, the Court directed the Railways to allow the petitioner to deposit a demand draft along with the applicable penalty on or before 16.09.2023, and disposed of W.P. No. 11060 of 2023 and the connected civil application on that basis.
  • The connected W.P. No. 11148 of 2023 (canteen-shifting dispute) was disposed of on the petitioner's statement that it would not survive, with liberty to file a fresh petition if the Railways later insisted on shifting the canteen or passed other adverse orders.

Important Clarification

This order has no bearing on GST law — GST features only because the licence fee figure was quoted as GST-inclusive. It is a straightforward railway-licence contract dispute resolved by consent on the specific facts of portal downtime and the Railways' own grace-period policy.

Sections Involved

  • Article 226 of the Constitution of India — writ jurisdiction invoked to challenge the licence termination.
  • Railway Board licence-fee policy circulars governing grace periods and penalty for delayed payment (departmental policy, not a statute).

Decision – In Favour of

Disposed of by consent, substantially in the petitioner's favour — the Railways were directed to accept the delayed licence-fee payment with penalty rather than treat the licence as terminated, and the connected canteen-shifting petition was closed with liberty to re-file.

Case Details

Court: High Court of Judicature at Bombay, Bench at Aurangabad
Case No.: Writ Petition No. 11060 of 2023 with Civil Application (ST) No. 29420 of 2023 and Writ Petition No. 11148 of 2023
Coram: Hon'ble Justices Ravindra V. Ghuge and Y.G. Khobragade
Date of Order: 14 September 2023

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