Calcutta High Court (Appellete Side)
Sanjay Prasad Koiree vs Union Of India & Ors on 9 April, 2026
09-04-2026
ct no. 10
Sl. 3
RP
WPA 7544 of 2026
Sanjay Prasad Koiree
versus
Union of India & Ors.
Mr. Saptarshi Roy,
Ms. Kakali Das Chakraborty
...for the petitioner
Mr. Rajendra Banerjee,
Ms. Ranjana Chatterjee
...for the Union of India
1. Affidavit of service filed in Court is taken on
record.
2. Main grievance of the petitioner is with regard
to the termination of an existing operator through the
invitation of a new tender.
3. It is contended that the termination is arbitrary,
stemming solely from the conversion of IFC rake
model to new LBH rakes.
4. At the very outset learned counsel appearing for
the Railway Authorities submits that the instant writ
petition is not maintainable. In contractual matters
the court cannot exercise such a discretion in a writ
jurisdiction.
5. In this context learned counsel appearing for
the Railway Authorities relies upon a judgement
reported in (2015) 7 SCC 728 (Joshi Technologies
International Inc. Vs. Union of India & Ors.).
Paragraphs 69 to 69.2 are reproduced below:
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"69. The position thus summarized in the aforesaid
principles has to be understood in the context of discussion
that preceded which we have pointed out above. As per
this, no doubt, there is no absolute bar to the
maintainability of the writ petition even in contractual
matters or where there are disputed questions of fact or
even when monetary claim is raised. At the same time,
discretion lies with the High Court which under certain
circumstances, can refuse to exercise. It also follows that
under the following circumstances, 'normally', the Court
would not exercise such a discretion:
69.1. the Court may not examine the issue unless the
action has some public law character attached to it.
69.2. Whenever a particular mode of settlement of dispute
is provided in the contract, the High Court would refuse to
exercise its discretion under Article 226 of the Constitution
and relegate the party to the said made of settlement,
particularly when settlement of disputes is to be resorted
to through the means of arbitration."
6. He further draws the attention of this court to
paragraph 70 onwards of this judgement to
demonstrate that writ petition is not maintainable
relating to contracts entered into by the State/Public
Authority with private parties which are reproduced
below:
"70. Further legal position which emerges from various
judgments of this Court dealing with different
situations/aspects relating to the contracts entered into by
the State/public Authority with private parties, can be
summarized as under:
70.1. At the stage of entering into a contract, the State
acts purely in its executive capacity and is bound by the
obligations of fairness.
70.2. State in its executive capacity, even in the
contractual field, is under obligation to act fairly and
cannot practice some discriminations.
70.3. Even in cases where question is of choice or
consideration of competing claims before entering into the
field of contract, facts have to be investigated and found
before the question of a violation of Article 14 could arise.
If those facts are disputed and require assessment of
evidence the correctness of which can only be tested
satisfactorily by taking detailed evidence, Involving
examination and cross- examination of witnesses, the case
could not be conveniently or satisfactorily decided in
proceedings under Article 226 of the Constitution. In such
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cases court can direct the aggrieved party to resort to
alternate remedy of civil suit etc.
70.4. Writ jurisdiction of High Court under Article 226 was
not intended to facilitate avoidance of obligation
voluntarily incurred.
70.5. Writ petition was not maintainable to avoid
contractual obligation. Occurrence of commercial difficulty,
inconvenience or hardship in performance of the conditions
agreed to in the contract can provide no justification in not
complying with the terms of contract which the parties had
accepted with open eyes. It cannot ever be that a licensee
can work out the license if he finds it profitable to do so:
and he can challenge the conditions under which he
agreed to take the license, if he finds it commercially
inexpedient to conduct his business.
70.6. Ordinarily, where a breach of contract is complained
of, the party complaining of such breach may sue for
specific performance of the contract, if contract is capable
of being specifically performed. Otherwise, the party may
sue for damages.
70.7. Writ can be issued where there is executive action
unsupported by law or even in respect of a corporation
there is denial of equality before law or equal protection of
law or if can be shown that action of the public authorities
was without giving any hearing and violation of principles
of natural justice after holding that action could not have
been taken without observing principles of natural justice.
70.8. If the contract between private party and the
State/instrumentality and/or agency of State is under the
realm of a private law and there is no element of public
law, the normal course for the aggrieved party, is to invoke
the remedies provided under ordinary civil law rather than
approaching the High Court under Article 226 of the
Constitutional of India and invoking its extraordinary
jurisdiction.
70.9. The distinction between public law and private law
element in the contract with State is getting blurred.
However, it has not been totally obliterated and where the
matter falls purely in private field of contract. This Court
has maintained the position that writ petition is not
maintainable. Dichotomy between public law and private
law, rights and remedies would depend on the factual
matrix of each case and the distinction between public law
remedies and private law, field cannot be demarcated
with precision. In fact, each case has to be examined, on
its facts whether the contractual relations between the
parties bear insignia of public element. Once on the facts
of a particular case it is found that nature of the activity or
controversy involves public law element, then the matter
can be examined by the High Court in writ petitions under
Article 226 of the Constitution of India to see whether
action of the State and/or instrumentality or agency of the
State is fair, just and equitable or that relevant factors are
taken into consideration and irrelevant factors have not
gone into the decision making process or that the decision
is not arbitrary.
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70.10. Mere reasonable or legitimate expectation of a
citizen, in such a situation, may not by itself be a distinct
enforceable right, but failure to consider and give due
weight to it may render the decision arbitrary, and this is
how the requirements of due consideration of a legitimate
expectation forms part of the principle of non-arbitrariness.
70.11. The scope of judicial review in respect of disputes
falling within the domain of contractual obligations may be
more limited and in doubtful cases the parties may be
relegated to adjudication of their rights by resort to
remedies provided for adjudication of purely contractual
disputes."
7. In this context the petitioner places reliance
upon a judgment reported in (2021) 16 SCC 35
(Unitech Limited & Ors. Vs. Telangana State
Industrial Infrastructure Corporation & Ors.). The
petitioner draws the attention to paragraph 38 of this
judgement with regard to the maintainability of the
writ petition under Article 226 of the Constitution of
India and submits that as it has been held in case of
ABL International Ltd. Vs. Export Credit Guarantee
Corporation of India Ltd. (2004) 3 SCC 553, the
plenary power under Article 226 of the Constitution of
India must be used with circumspection when other
remedies have been provided by the contract. But as
a statement of principle, the jurisdiction under Article
226 of the Constitution of India is not excluded in
contractual matters.
8. Since the issue involved herein is maintainable
in view of the cases relied upon, the matter is taken
up for consideration on merits.
9. The petitioner in the instant case is engaged in
the business of transportation of goods through the
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Railways. An agreement has been executed between
the petitioner and the Railway Administration for
leasing 4 tonnes parcel space in the 1st compartment
of the Front one. Brake Van (SLR) of Train No. 13023
UPEX HOWRAH to GAYA effective from 24.02.2025
for a period of two years, ending on 11.03.2027.
Subsequent thereto, the petitioner has been informed
by the Railways by a letter dated 9.3.2026 that the
ICF rakes have been converted to LHB rakes w.e.f.
20.02.2026 in terms of HQ/ER Letter No. C.
375/Parcel Policy/FM/25/dated 20.02.2025. In light
of such conversion the Railway Authorities decided to
allot the operation of the Rear SLR of the new LBH
rake instead of FSLR -1 of ICF rake of same train to
the petitioner being the second highest rate lease-
holder, subject to submission of a declaration.
Pursuant to such condition, the petitioner submitted
a representation on 16.02.2026 before the respondent
no. 4. On 18.02.2026 the respondent no.4 issued an order of termination by quashing the letter of allotment and terminating the existing contract of FSLR-1 lease contract in train no. 13023 UP Ex.HWH-Gaya due to conversion of ICF rake into LBH. After receiving the said order of termination the petitioner made a representation before the respondent no. 4 on 24.02.2026. however, the same remains pending for consideration. 6
10. It is submitted by the Railways Authorities that due to the conversion of the ICF rakes to LHB rakes, the leasehold compartments have been reduced from 3 to 2. Prior to conversion there has been two FSLR, namely, FSLR- I and FSLR-II and there were also two RSLR, namely, RSLR-I and RSLR-II. After conversion of the rakes 2 FSLR has been reduced to IFSLR and 2 RSLR reduced to 1 RSLR. It is further submitted that due to such conversion of the rakes and reduction hence in the number of coaches the railway authority have terminated the existing operators contract.
11. Learned counsel relied upon an order passed by this Court dated 12.02.2026 in WPA 2028 of 2026. Wherein the main notification dated 20.02.2025 has been stayed till the end of March, 2026 or until further order, whichever is earlier.
12. In compliance with interim order in a separate matter the railway authority have resolved to terminate the existing operator.
13. In conspectus of the above as adumbrated herein, I find that there is a serious element of arbitrariness and unreasonableness in the stand taken to terminate an existing operator by floating a new tender due to policy decision of converting IFC rakes into new LBH rakes, particularly when an earlier order states the policy in a different matter in respect of the new LHB rakes.
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14. After hearing the parties at length and upon perusing the materials available on record, I find that this court is prima facie satisfied and an interference is warranted at this stage. Since the petitioner is an existing operator and has been terminated only on the basis of an order dated 12.02.2026 passed in WPA 2028 of 2026, the earlier letter of allotment has been quashed by terminating the existing contract of FSLR- 1 in Train No. 13023/03023 Up Howrah-Gaya w.e.f. 20.02.2026.. Prejudicing rights and interest of the petitioner, the doctrine of the promissory estopple comes into play.
15. It is well settled proposition of law as held by the Apex Court in the case of Kaniska Trading vs Union of India on 18 October, 1994 which is reproduced below:
"11. The doctrine of promissory estoppel or equitable estoppel is well established in the administrative law of the country. To put it simply, the doctrine represents a principle evolved by equity to avoid injustice. The basis of the doctrine is that where any party has by his word or conduct made to the other party an unequivocal promise or representation by word or conduct, which is intended to create legal relations or effect a legal relationship to arise in the future, knowing as well as intending that the representation, assurance or the promise would be acted upon by the other party to whom it has been made and has in fact been so acted upon by the other party, the promise, assurance or representation should be binding on the party making it and that party should not be permitted to go back upon it, if it would be inequitable to allow him to do so, having regard to the dealings, which have taken place or are intended to take place between the parties.
12. It has been settled by this Court that the doctrine of promissory estoppel is applicable against the Government also particularly where it is necessary to prevent fraud or manifest injustice. The doctrine, however, cannot be 8 pressed into aid to compel the Government or the public authority "to carry out a representation or promise which is contrary to law or which was outside the authority or power of the officer of the Government or of the public authority to make". There is preponderance of judicial opinion that to invoke the doctrine of promissory estoppel clear, sound and positive foundation must be laid in the petition itself by the party invoking the doctrine and that bald expressions, without any supporting material, to the effect that the doctrine is attracted because the party invoking the doctrine has altered its position relying on the assurance of the Government would not be sufficient to press into aid the doctrine. In our opinion, the doctrine of promissory estoppel cannot be invoked in the abstract and the courts are bound to consider all aspects including the results sought to be achieved and the public good at large, because while considering the applicability of the doctrine, the courts have to do equity and the fundamental principles of equity must for ever be present to the mind of the court, while considering the applicability of the doctrine. The doctrine must yield when the equity so demands if it can be shown having regard to the facts and circumstances of the case that it would be inequitable to hold the Government or the public authority to its promise, assurance or representation."
16. The decision taken by the Railway Authorities to terminate the petitioner contract is highly arbitrary and unreasonable. The authority acted in a very unfair manner by terminating the contract of the petitioner being an existing operator whose contract sets to expire on 11.03.2027.
17. However, it is made clear that the interim order passed in WPA 2028 of 2026 will not be a bar to the Railway Authorities for taking any decision with regard to the FSLR as the matter under reference pertains to RSLR.
18. The Railway Authorities are directed to allow the second highest bidder as per the existing agreement to operate untill the date of expiry of their 9 term. The said order shall not create any precedent for others.
19. It is made clear that the allotment letter dated 10.02.2026 shall remain valid and in force so long as the decision in WPA 2028 of 2026 does not attain any finality.
20. Since no affidavit has been called for, the allegations made in the writ petition are deemed not to have been admitted by the respondents.
21. The writ petition being WPA 7544 of 2026 stands disposed of.
(Smita Das De, J.)