Calcutta High Court (Appellete Side)
Rampurhat Psc Sleepers Limited vs Union Of India & Ors on 5 August, 2025
Author: Arijit Banerjee
Bench: Arijit Banerjee
2025:CHC-AS:1469-DB
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
COMMERCIAL APPELLATE DIVISION
APPELLATE SIDE
Before:
The Hon'ble Justice Arijit Banerjee
And
The Hon'ble Justice Om Narayan Rai
AO-COM 3 of 2025
With
CAN 1 of 2025
With
AO-COM 4 of 2025
Rampurhat PSC Sleepers Limited
-vs.-
Union of India & Ors.
For the Appellant : Mr. Surajit Nath Mitra, Sr. Adv.
Mr. S. Mukhopadhyay, Adv.
Mr. Supriyo Gole, Adv.
For the Respondent No. 41 : Mr. Ashok Kumar Chakraborty, ASG
Ms. Amrita Pandey, Adv.
Hearing Concluded on : 22.05.2025 Judgment on : 05.08.2025 Om Narayan Rai, J.:-
1. These two appeals arise from the same suit. AO-COM 3 of 2025 is
directed against an order dated April 7, 2025 passed by the learned
Commercial Court at Rajarhat, North 24-Parganas in T.S. (COM) 8 of
2025 whereby the prayer for ad interim ex-parte injunction made by the
appellant was refused. AO-COM 4 of 2025 on the other hand assails the
order dated April 11, 2025 whereby the hearing of the application for
injunction was postponed and the respondents’ prayer for adjournment
was allowed.
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2. Since we are at the ad interim stage, we are conscious that we have to
restrict ourselves to the pleadings made in the plaint and the application for
injunction.
3. The case run in the plaint as well as the application for injunction, in a nut
shell, is as follows:-
i. The plaintiff/appellant is in possession of a license in respect of a piece
of land admeasuring 4.31 acres by dint of a land license agreement
between the Hon’ble President of India through the Divisional Railway
Manager, Eastern Railway, Howrah and the appellant herein. Such
agreement was entered into by the said parties upon the appellant
emerging successful in a tender process initiated by the respondent
Railway Authorities. The plaintiff’s unit at the said land is engaged in
manufacturing of products which are used exclusively by the Railways.
In terms of the renewal clause in the said license agreement, the said
agreement has been renewed from time to time.
ii. It is the plaintiff’s case that despite the defendants having accepted the
a sum of Rs. 13,83,641/- (Rupees Thirteen Lakh Eighty Three
Thousand Six Hundred and Forty One Only) towards the land license
fees payable as per the Master Circular of 2005 (hereafter “the said
Policy of 2005”) for the period 2022-23, the defendants have raised a
demand for land license fee aggregating a sum of Rs. 47,32,812/-
(Rupees Forty Seven Lakh Thirty Two Thousand Eight Hundred and
Twelve Only) and a security deposit of Rs. 40,10,857.98/- (Rupees Forty
Lakh Ten Thousand Eight Hundred Fifty Seven and Ninety Eight Paise
Only) for the period of 2023-2024 under the provisions of the Master
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Circular on “Policy for Management of Railway Land” dated October 10,2022 (hereafter “the said Policy of 2022”).
iii. When despite the plaintiff’s objection to the said demand the Railways
persisted therewith, the plaintiff approached this Court in its writ
jurisdiction by filing a writ petition being WPA 17693 of 2024 which was
disposed of by an order dated July 30, 2024 thereby inter alia directing
the competent authority to decide the dispute raised by the plaintiff in
terms of clause 8 of the Policy.
iv. Thereafter a letter dated January 20, 2025 was issued to the plaintiff
informing thereby that in terms of a report of the Standing Committee
constituted under clause 8 of the said Policy of 2022 (which had been
approved by the defendant no. 2) land license fee for the year 2023-
2024 as charged was authentic and valid. The defendant no. 2 also gave
an option to the plaintiff to migrate to the “new policy regime on
transparent competitive bidding process”. It is the plaintiff’s case that
such a decision was taken by the defendant no. 2 without hearing the
plaintiff despite the aforesaid order dated July 30, 2024 being passed
by this Court in WPA 17693 of 2024.
v. A subsequent letter dated January 24, 2025 was also issued by the
defendant no. 2 seeking to clarify that “the land license of Rampurhat
PSC Sleeper Ltd. is a factory/godown for manufacturer of PSC Sleeper
connected with railway related work and is not a terminal/private
siding/private freight terminal (PFTs)” and that license would be
governed by serial no. 6 of Schedule-I of the said Policy of 2022 for the
purpose of determining land license fees.
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vi. The plaintiff thereafter made a detailed representation to the defendant
no. 3 with a copy thereof marked to the defendant nos. 1 and 2 on
February 14, 2005 but the said representation remained unconsidered.
It is the plaintiff’s case that the land that has been licensed to the
plaintiff for the purpose of operating a private siding and that the
license fees payable by the plaintiff in respect of the said land would be
governed by the said Policy of 2005 and not by the subsequent Policy of
2022. The plaintiff has further averred that the plaintiff is entitled to
continue with the license over the said land as per the provisions of the
said Policy of 2005 with an annual escalation of 7% from clause 7.5 of
the said Policy of 2022 without any fresh calculation of license fee
based on the current market value of the said land.
vii. The plaintiff has further averred that calculation of license fee for the
land licenced to the plaintiff, on the basis of the existing market value
would amount to treating the plaintiff as a fresh licensee for the
purpose of said Policy of 2022 and not as an existing license.
viii. It is the further case of the plaintiff that the plaintiff has developed the
land by setting up a plant for manufacturing of PSC Sleepers and the
value of the said land has thus increased only due to the build-out
executed by the plaintiff. It is the plaintiff’s case that the defendants
have refused to accept the license fees for the period April 01, 2023 to
March 31, 2025 on the ground of enhancement of license fees in terms
of the demand notices dated March 28, 2024 and June 20, 2024.
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ix. The plaintiff has pleaded that the plaintiff is ready and willing to pay
the license fees in respect of the said land for the period 2024-2025
upon enhancement thereof @ 7% in terms of the extant Policy of 2005.
x. The plaintiff has further pleaded that the defendants have sought to
impose license fees in terms of the said Policy of 2022 based on the
fresh market value of the land and the defendant nos. 1 and 2 are
threatening to terminate the License Agreement subsisting in favour of
the plaintiff. Feeling aggrieved by such action of the defendants, the
plaintiff instituted the suit being T.S (COM) No. 8 of 2025 praying inter
alia for the following reliefs:-
a) A declaration that the plaintiff‟s license in respect of the land
admeasuring 4.31 acres vide DRM/HWH Plan No. 139 of 2004 at Mouza
Ramrampur, J.L. No. 79, District – Birbhum, West Bengal, India, is
governed by the defendant no. 3‟s Master Circular/letter bearing no.
2005/LML/18/8 dated 10.02.2005, being Annexure „P4‟ hereto, and
license fee thereunder is to be calculated for that of a Private Siding;
b) A decree adjudging the said demand notices dated 28.03.2024 and
20.06.2024, being Annexures „P8‟ and „P9‟ hereto, as well as the letters
dated 20.01.2025 and 24.01.2025, forming part of Annexure „P15‟ and
„P16‟ hereto, all issued by the defendant no. 2 as void, and have the
same ordered to be delivered up and cancelled;
c) Decree for a sum of Rs. 13,36,331/- (Thirteen Lakh Thirty Six Thousand
Three Hundred and Thirty One Only) against the defendant nos. 1 and 2
as per paragraph 28 hereinabove;
d) A perpetual injunction restraining the defendant nos. 1 or 2, and each of
them, their men, servants, agents or assigns from terminating the License
Agreement dated 23.09.2004, being Annexure „P2‟ hereto, subsisting in
favour of the plaintiff;
e) A perpetual injunction restraining the defendant nos. 1 or 2, and each of
them, their men, servants, agents or assigns, from giving any effect
and/or further effect to the purported demand notices dated 28.03.2024
and 20.06.2024, being Annexures „P8‟ and „P9‟ hereto, and/or the
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purported letters dated 20.01.2025 and 24.01.2025, forming part of
Annexures „P15‟ and „P16‟ hereto;
f) A mandatory injunction, compelling the defendant nos. 1 and 2 to accept
the land license fees in respect of the said land being land admeasuring
4.31 acres vide DRM/HWH Plan No. 139 of 2004 at Mouza Ramrampur,
J.L. No. 79, District- Birbhum, West Bengal, India at the rate of Rs.
12,54,657/- (Rupees Twelve Lakh Fifty Four Thousand Six Hundred and
Fifty Seven Only) for 2023-24 and thereafter, an annual increment of 7%
as per the 2005 Policy;
4. Having instituted the suit as aforesaid, the plaintiff also moved an
application under Order 39 Rules 1 and 2 of the Code of Civil Procedure,
1908 (hereafter “the Code”) praying inter alia for the following orders:-
a. Temporary injunction(s) restraining the defendant nos. 1 and 2, and each of
them, their men, servants, agents or assigns from terminating the License
Agreement dated 23.09.2004, being Annexure „P2‟ hereto, subsisting in favour
of the plaintiff;
b. Temporary injunction(s) restraining the defendant nos. 1 and 2, and each of
them, their men, servants, agents or assigns, from giving any effect and/or
further effect to the purported demand notices dated 28.03.2024 and
20.06.2024, being Annexures „P8‟ and „P9‟ hereto, and/or the purported letters
dated 20.01.2025 and 24.01.2025, forming part of Anexures „P15‟ and „P16‟
hereto;
c. Temporary injunction(s) compelling the defendant nos. 1 and 2 to accept the
land license fees in respect of the said land being land admeasuring 4.31 acres
vide DRM/HWH Plan No. 139 of 2004 at Mouza Ramrampur, J.L. No. 79,
District – Birbhum, West Bengal, India at the rate of Rs. 12,54,657/- (Rupees
Twelve Lakh Fifty Four Thousand Six Hundred and Fifty Seven Only) for 2023-
24 and thereafter, an annual increment of 7% as per the 2005 Policy;
5. The plaintiff pressed for ex-parte ad interim order of injunction before the
learned Commercial Court at Rajarhat which was refused by an order dated
April 7, 2025 by observing as follows:-
“The plaintiff has filed the instant suit praying for leave under Section
80(2) of the CPC contending that due to urgency to move an ex-parte ad-
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interim injunction application it could not serve a pre-suit two months‟ notice
under Section 80 of the CPC.
In view of the urgency substantiated by the submissions of the learned
Advocate for the plaintiff, the leave under Section 80(2) of the CPC is granted.
Accordingly, the plaintiff is permitted to institute this suit without serving any
notice is required under Section 80(1) of the CPC.
Now the injunction application filed on behalf of the plaintiff/petitioner
is taken up for hearing and passing necessary order.
Heard the learned Advocate for the plaintiff/petitioner.
Perused the plaint, the injunction petition, the annexure thereto and
the materials on record.
Upon careful perusal of the plaint, the injunction petition, the
annexures attached thereto, and the materials on record, it is observed that
the plaintiff/petitioner seeks an ad-interim injunction to prevent the
respondents/defendants from proceeding with certain actions alleged to be
detrimental to the plaintiff‟s rights.
At this stage, the Court is not inclined to entertain the injunction
petition on the ground that the respondents/defendants are a Government
Body and as there is a clear embargo in Section 80(2) of the CPC which
provides that the Court shall not grant relief in the suit, without interim or
otherwise except after giving to the Government or Public Officer, as the case
may be, a reasonable opportunity of showing cause in respect of the relief
prayed for in the suit. As such, there is no scope of passing any ex-parte as-
interim injunction order at this stage.
In the light of the above, this Court is not inclined to pass an ad-interim
order without hearing the respondents. Consequently, the application for an
interim injunction under Order 39, Rules 1 and 2 of the Code of Civil
Procedure filed by the plaintiff/petitioner is hereby refused at this stage.
In view of the urgency of the relief sought, there should be immediate
issuance of notice and immediate service upon the defendants/respondents
by service through Court and e-mail. Accordingly, issue notice upon the
defendants/respondents directing them to show-cause by Friday
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(11.04.2025) subject to receipt of notice as to why temporary injunction order
as prayed for shall not be granted.
The defendant nos. 1 & 2 are required to be served by hard copy of
notice and e-mail and the defendant no. 3 should also be served similarly.
However, if the service upon the defendant no. 3 by hard copy is not complete
by the date fixed it would be sufficient for the time being if the defendant no.
3 is served by e-mail only.”
6. While rejecting the plaintiff’s prayer for ex-parte ad interim order of
injunction, the defendants were also issued notice with a direction to show
cause as to why temporary injunction as prayed for would not be granted.
April 11, 2025 was fixed as the next date. On April 11, 2025 the defendants
entered appearance and sought for time to file their written objection. The
plaintiff on the other hand pressed for hearing of the injunction application.
The defendants’ prayer for time was allowed and the injunction petition was
not heard.
7. Feeling aggrieved by the aforesaid two orders dated April 07, 2025 and April
11, 2025, the plaintiff has approached us by way of the instant appeals.
8. Since the parties are at the interim stage of the suit and all the papers
which were there before the learned Court below are here before us as well,
we decided to hear out the appeals themselves by consent of the parties.
9. Mr. Chakraborty learned Additional Solicitor General representing the
respondents at the very outset raised a point of maintainability of the
appeals. As a point of maintainability of the appeals was raised by the
learned Additional Solicitor General, we proposed to hear him first before
hearing Mr. Mitra, learned Senior Advocate appearing for the appellant.
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10. The learned Additional Solicitor General submitted that since the appeals
assailed orders passed by the learned Commercial Court on an application
under Order 39 Rules 1 and 2 of the Code therefore, the same required to be
admitted under the provisions of Order 41 Rule 11 of the Code. The learned
Additional Solicitor General invited our attention to Rule 17 of Chapter V of
the Appellate Side Rules, 1966 and submitted that any appeal against an
order other than those mentioned in the said Rule would require to be first
admitted under Order 41 Rule 11 of the Code and until such admission is
effected no order can be passed on the merits of the two appeals.
11. He then took us through Section 13 of the Commercial Courts Act, 2015
(hereafter the said Act of 2015) and submitted that in terms of the said
provision, appeals could be preferred only against such orders as had been
enumerated under Order 43 of the Code as amended by the said Act, 2015.
In support of his contention he relied on a judgment of this Court in Abu
Taher vs. Mossammat Margina Bibi1.
12. Mr. Chakraborty further submitted that there is no cause of action for the
subject suit inasmuch as neither any notice of termination of the contract
has been issued nor anything coercive has been done as yet. It was
submitted that a mere notice of demand cannot constitute a cause of action
for the suit.
13. The learned Additional Solicitor General then contended that the subject
suit in effect assails the Master Circular of 2022 (i.e. the said Policy of 2022)
issued by the Railways and that since the said Master Circular has been
issued in terms of the Railways Boards Act, 1905 therefore any challenge to
1 (2003) 3 CHN 326
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any act done under such Master Circular must be made before the
Constitutional Court i.e. this Court under Article 226 of the Constitution of
India in terms of the provision of Article 228 of the Constitution of India
read with Order 27A of the Code.
14. It was further submitted that the demand notices that have been impugned
were issued on March 28, 2024, June 20, 2024 and January 24, 2025 but
the suit has been instituted only in April 2025 which would reveal that the
matter is not so urgent that the Court should pass ex-parte ad interim order
of injunction.
15. The learned Additional Solicitor General then referred to Section 41 of the
Specific Relief Act and submitted that the conduct of the parties is a
relevant factor in granting or refusing to grant injunction. It was further
submitted that in the instant case it is evident that the plaintiff has made a
delayed approach to Court and as such on the ground of delay alone
injunction ought not to have been granted. In support of his submission the
learned Additional Solicitor General relied on the judgment of the Hon’ble
Supreme Court in the case of Mandali Ranganna & Ors. vs. T.
Ramachandra & Ors.2. Mr. Chakraborty then relied on the judgment of
the Hon’ble Supreme Court in the case of Shiv Kumar Chadha vs.
Municipal Corporation of Delhi & Ors.3 and submitted that in all cases
where a prayer for ex-parte ad interim order of injunction is made a case of
urgency must be made and established. It was submitted that such case is
not made out here.
2 (2008) 11 SCC 1
3 (1993) 3 SCC 161
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16. The judgment in the case of Joshi Technologies International Inc. vs.
Union of India & Ors.4 was then relied on to show the scope of interference
in matters involving adjudication of contractual rights. It was then
submitted by Mr. Chakraborty that when the appellant had earlier
approached this Court in its writ jurisdiction under Article 226 of the
Constitution of India praying for similar relief as prayed for in the suit and
the matter was remitted to the authority for consideration, it should be
deemed that the Court had refused to interfere with the appellant’s case and
that the appellant’s case today is barred by the principles of res judicata.
17. Relying on the judgment of the Hon’ble Supreme Court in the case of
Southern Roadways Ltd., Madurai vs. S.M. Krishnan5, it was submitted
that even if the plaintiff’s contract is terminated the same would amount to
termination of the plaintiff’s agency and in such cases the plaintiff can only
seek damages. It was emphasised that in terms of Sections 182, 201 and
203 of the Contract Act, 1872, the plaintiff is nothing more than an agent
and mere termination of agency would not give rise to any cause of action
for the purpose of grant of ex-parte ad-interim order of injunction.
18. The learned Additional Solicitor General took the Court through clause 14 of
the land license agreement and submitted that in terms thereof, the
respondents were well entitled to enhance the license fees and that since the
said clause was there in the agreement itself which was binding between the
parties, the plaintiff was estopped from challenging the enhancement.
19. It was further submitted by Mr. Chakraborty that in the case at hand the
learned Commercial Court had not only dispensed notice under Section 80
4 (2015) 7 SCC 728
5 (1989) 4 SCC 603
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of the Code but also the pre-suit mediation under Section 12A of the said
Act of 2015. Relying on the provisions of Order 41 Rule 33 of the Code, Mr.
Chakraborty submitted that even without preferring any cross appeal the
respondents were entitled to invite the attention of the appellate Court to the
issues that had been wrongly decided and that the maintainability of the
suit could still be challenged by the respondents even before the appellate
Court by invoking its powers under Order 41 Rule 33 of the Code. In this
connection he relied on the judgment of the Hon’ble Supreme Court in the
case of Pralhad & Ors. vs. State of Maharashtra & Anr.6. Mr.
Chakraborty submitted that not only the appeal but also the suit should be
dismissed inasmuch as the suit was not maintainable.
20. Mr. Mitra, learned Senior Advocate appearing for the appellant submitted
that since an interim order had been passed in favour of the appellant on
the very first day when the appeal was pressed by the appellant, it should be
deemed that the appeal stood admitted on the same day and that being so
the point that the appeal was required to be admitted under Order 41 Rule
11 of the Code was no longer available to the respondents. He further
submitted that in any case not hearing the appeal expressly under order 41
Rule 11 of the Code was a mere irregularity which could be condoned and
could be regularised.
21. It was next submitted by Mr. Mitra that there was sufficient cause for the
plaintiff to bring the action in question and for such purpose, he relied on
the pleadings made in paragraphs 28 to 33 of the plaint where the plaintiff
has narrated the events pertaining to the defendants’ refusal to accept the
6 (2010) 10 SCC 458
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license fees and has averred that the plaintiff had been threatened with
coercive action including termination of the agreement. Mr. Mitra then took
the Court through the prayers made in the plaint and submitted that the
prayers would reveal that the same flowed from the causes pleaded in the
plaint. He further submitted that in any case no application under Order 7
Rule 11 had yet been filed by the defendants in the suit and as such it was
not open to the defendants/respondents to assail the maintainability of the
suit in the present appeal.
22. It was then submitted that the plaintiff has approached the Court with due
despatch and there is no delay that could disentitle the plaintiff from getting
an order of injunction, as submitted by the learned Additional Solicitor
General. He relied on the pleadings made in paragraphs 34 and 35 of the
injunction application for such purpose.
23. He then took the Court through the order dated July 30, 2024 passed in
WPA 17693 of 2024 and submitted that although the said order mandated a
hearing to be given, no hearing was given by the respondent Railway
Authorities and a unilateral decision has been taken to demand an
exorbitant sum.
24. Mr. Mitra thereafter took the Court through clauses 2.4, 3, 4.1, 4.2 of the
Railway Board’s Circular on “Review of Policy on commercial licensing of
Railway Land” dated August 29, 1995 and also placed clauses 3, 5, 5.1, 5.2
and 7.1 of the Policy of 2005 to show the scheme of licensing out of Railway
lands. He submitted that the plaintiff is governed by the Policy of 2005 and
has all along paid the land license fees in terms of the said Policy of 2005
and that the plaintiff was ready and willing to continue doing so. It was
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submitted that the defendant/respondents have unilaterally imposed the
terms and conditions of the Policy of 2022 although the plaintiff was not
governed by the said Policy of 2022. He placed clause 2 along with its
several sub-clauses in the said Policy of 2022 to buttress his contention that
the said Policy was not applicable to the plaintiff. He further submitted that
even in terms of the said Policy of 2022, the plaintiff being an existing
licensee in respect of a private siding could not be forced to migrate to the
new regime under the said Policy of 2022. Mr. Mitra cited clause 4 and
clause 7.5 and its sub-clauses from the said Policy of 2022 for propping his
aforesaid submission. It was submitted that even in terms of the said Policy
of 2022, there could be no increase of license fees in case of a private siding
dedicated to one customer. He also relied on a letter dated June 28, 2021
issued by the Assistant Engineer, Eastern Railway, Rampurhat to
demonstrate that the land under possession of the plaintiff by dint of the
aforesaid agreement was in fact a private siding.
25. It was further submitted by Mr. Mitra that since the Court was at the
interim stage the Court should not hold a mini trial and should grant an
interim order upon the plaintiff satisfying that the plaintiff has a prima facie
case.
26. Mr. Mitra placed clause 3 of the land license agreement executed on
September 23, 2004 and contended that the said clause would demonstrate
that there was no right of termination reserved for the respondents even in
the event of failure of the licensee to pay the advance license fees in terms of
the said agreement.
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27. As regards the contention of the learned Additional Solicitor General that
the plaintiff was nothing but a mere licensee, Mr. Mitra placed the first three
recitals of the land license agreement executed on September 23, 2004 and
contended that the expression “the licensor had agreed to grant, transfer and
demise upto the licensee a plot of land measuring approximately 4.31 acres
vide DRM/HWH‟s Plan No. 130 OF 2004 in the Railway premises of
Rampurhat Mouza at Rampurhat” clearly demonstrated that the plaintiff had
interest in the said land which it was using under the said agreement and it
was not a case of mere license as alleged.
28. As regards the contention of the respondents that the learned Commercial
Court erred in dispensing with the requirement of pre-suit mediation, Mr.
Mitra relied on paragraph 5 of the judgment in the case of Yamini Manohar
vs. T.K.D. Keerthi7 and submitted that the provisions of Section 12A of the
said Act of 2015 allow the Court to exercise discretion to discern as to
whether a given case contemplated urgent relief or not and that in the case
at hand such discretion had been rightly exercised by the Court. He prayed
for setting aside the orders impugned and pressed for interim orders, inter
alia, restraining the respondents from taking any coercive action.
29. We have heard the learned Senior Advocates appearing for the respective
parties and have considered the material on record. The following two issues
have arisen for our consideration:-
i. Whether this Court has the authority to hear commercial appeals
under Order 41 Rule 11 of the Code?
7 (2024) 5 SCC 815
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ii. Whether the order impugned deserves to be set aside since theplaintiff/appellant was/is entitled to an ex-parte order of injunction?
Whether this Court has the authority to hear commercial appeals
under Order 41 Rule 11 of the Code?
30. Since it has been urged at the threshold that we are not authorised to hear
the appeals till the time the same are admitted under Order 41 Rule 11 of
the Code, we need to deal with the said point first. Mr. Mitra sought to
annihilate the contention by submitting that since this Court had already
passed an interim order at the threshold therefore, the appeal must be
deemed to have been admitted.
31. Before proceeding further we are tempted to take note of certain
observations of a Division Bench of this Court in the case of Lalit Chandra
Dhar vs. Abdul Rauf & Ors.8:-
“6. But does Rule 11 of Order 41 provide for admission of appeal? Does the
Court, under Rule 11 decide as to whether an appeal is to be admitted or
not? It appears that an impression has gained ground that a Court really
admits an appeal, particularly a Second Appeal and also a First
Miscellaneous Appeal, only after hearing the same under Rule 11 of Order
But the impression is wholly erroneous. The appeal cannot but stand
admitted at a stage anterior to its hearing under Rule 11 and the Rule only
enables the Court to dismiss the appeal at an early stage without sending
notice to the Lower Court and without serving notice on the respondent. As
the Rule makes it irresistibly clear, what is determined in a hearing under
Rule 11 is not whether the appeal is to be admitted, but whether the appeal,
which cannot but already stand admitted, is to be dismissed. As the new
Rule 11a, inserted by the 1976 – Amendment now makes it further clear,
what is heard under Rule 11 is the appeal itself and not the question of its
admission. This position would emerge with greater clarity from the relevant8 AIR 1988 Cal 15
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provisions of the Appellate Side Rules of this Court – Part II, Chapter V, Rule
17 and Chapter IX, Rule 79. Rule 17 (a) and Rule 79 as aforesaid dispense
with any hearing under Order 41 Rule 11 of the Code in respect of appeals
from Original Decrees and appeals under Workmen’s Compensation Act,
appeals from Orders under Article 226 of the Constitution, appeals from the
decision of the Claim” Commissioner under the Indian Railway Act and
appeals, from the Award of Claims Tribunal under the Motor Vehicles Act
and it is provided that an respect of any such appeal the concerned
Department “shall admit it and cause it to be registered and to issue to the
respondent” and it is obvious that if an appeal is to be admitted only on a
hearing under Rule 11 of Order 41 of the Code, such a hearing could nest be
dispensed with and the appeal could not be admitted without such hearing.
Rule 17 (b) provides for hearing under Order 41, Rule 11 in respect of
appeals from Appellate Decrees and from Orders other than those
mentioned above, but clearly provides for admission of such appeal before
being placed for hearing under Order 41 Rule 11, the relevant words being
“shall 1 admit it, cause it to be registered, and posted to a Bench for hearing
under Order XLI Rule 11 of Civil Procedure Code”.
7. The very word may in Order 41 Rule 11 cannot but indicate that the Court
may or may not hear a matter under Rule 11, and the hearing under the
said Rule could not thus be made optional if the same was to be the only
channel through which an appeal can be routed in. We should, therefore,
have no doubt that Rule 11 does not provide for any hearing as to the
admission of the appeal and we accordingly repel the contention of Mr. Mitra
that if an appeal, for which leave has been granted under Section 75 (3) of
the Provincial Insolvency Act, is again placed for hearing under Order 41,
Rule 11, that would amount to another admission hearing and, therefore,
the application of Order 41 Rule 11 should be held to be impliedly barred
under Section 5 (2) of the Provincial Insolvency Act.”
(Emphasis supplied by us by underlining)
32. The aforesaid observations of in the case of Lalit Chandra Dhar (supra)
put at least two points relevant for the case at hand beyond the pale of
doubt. Firstly, a hearing under Order 41 Rule 11 is not for the purpose of
admission but for the purpose of ascertaining as to whether the appeal
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could be dismissed without hearing the respondent and without calling for
the records of the learned Trial Court and secondly, the hearing under Order
41 Rule 11 of the Code is not optional but mandatory both in terms of the
Code as well as the Appellate Side Rules.
33. The Full Bench judgment in the case of Abu Taher (supra) has considered
the judgment of Lalit Chandra Dhar (supra) along with others and agreed
with the conclusions reached therein as regards hearing of appeals under
Order 41 Rule 11 of the Code thereby ultimately settling the law on the point
that all appeals directed against orders that have not been excepted under
Rule 17 (b) of Chapter V of the Appellate Side Rules would be required to be
first posted for hearing under Order 41 Rule 11 of the Code of Civil
Procedure. The following paragraph of the said judgment deserves notice in
the present context:-
“5. Having regard to the provisions of Chapter V Rule 17 of the Appellate
Side Rules of this Court, we see no reason to differ with the views
expressed either in Lalit Chandra Dhar‘s case or in Nilmoni Majumder’s
case (supra). It is necessary to mention that Rule 17 of Chapter V of the
Appellate Side Rules provides for Admission of Appeals. Clause (a) of Rule
17 of the Appellate Side Rules indicates that in the case of Appeals from
certain orders and from decrees, the appeal is required to be admitted by
the officer to whom the Memorandum is presented, who shall cause the
same to be registered, and, thereafter, issue notice to the respondents.
However, in clause (b) of Rule 17, it has been indicated that in case of an
appeal from an appellate decree or an appeal from an order, other than an
appeal under the Workmen’s Compensation Act, an appeal from an order
under Article 226 of the Constitution, an appeal under the Indian Railways
Act (4 of 1890) and an appeal under the Motor Vehicles Act (4 of 1939), the
officer to whom the Memorandum is required to be presented shall admit it,
cause it to be registered, and, thereafter, post it to a Bench for hearingPage 18 of 40
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under Order 41 Rule 11 of the Code of Civil Procedure. In other words, an
appeal not specifically excluded by clause (b) of Rule 17 of the Appellate
Side Rules of this Court is required to be posted for hearing under Order 41
Rule 11 of the Code of Civil Procedure.”
(Emphasis supplied by us by underlining)
34. In the light of the above, we now have to decide as to whether we have the
authority to take up the subject appeals for hearing under Order 41 Rule 11
of the Code on the day the same are first heard or on any of the days the
same are heard by us because we may proceed to render our decision on the
other points raised by the parties only if we find an approbating answer to
the aforesaid question.
35. The instant two appeals have been filed before this Court invoking its
jurisdiction under the Commercial Appellate Division constituted in terms of
Section 5 of the said Act of 2015 and not by invoking the ordinary civil
appellate jurisdiction of this Court. At the time when the judgments in the
case of Lalit Chandra Dhar (supra) and the said Full Bench judgment were
rendered the said Act of 2015 was not in existence. While the case of Lalit
Chandra Dhar (supra) pertained to an appeal under Section 75(3) of the
Provincial Insolvency Act, 1920 and Abu Taher (supra) was an appeal under
Section 47 of the Guardians and Wards Act, 1890.
36. It needs to be clarified that for the purpose of effective and expeditious
adjudication and disposal of statutory appeals pertaining to the Guardians
and Wards Act, 1890 or even the Provincial Insolvency Act, 1920, the
Hon’ble the Chief Justice of the High Court may assign/allocate hearing of
such statutory appeals to a particular Bench or certain Benches. In case the
Bench having determination for hearing appeals pertaining to the Guardians
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and Wards Act, 1890 or Provincial Insolvency Act, 1920 does not have
determination for hearing matters under Order 41 Rule 11 of the Code, the
said appeals would first have to be placed before the Bench having
determination for hearing under Order 41 Rule 11 of the Code and it would
be only thereafter the other Bench which has determination over statutory
appeals pertaining to the Guardians and Wards Act, 1890 or Provincial
Insolvency Act, 1920 would be authorised to hear the same.
37. The same procedure, in our considered view, would not be applicable to the
appeals filed under the Commercial Appellate Division of this Court for the
reasons detailed in the following paragraphs.
38. As stated earlier, neither the Guardians and Wards Act, 1890 nor the
Provincial Insolvency Act, 1920 mandates constitution of a separate division
in the High Court for hearing of statutory appeals against orders passed
thereunder but the said Act of 2015 clearly ordains constitution of
Commercial Appellate Division in the High Court. Assignment/allocation of
hearing of statutory appeals in terms of the Guardians and Wards Act, 1890
or such other Acts to a particular Bench is done by the Hon’ble the Chief
Justice by dint of convention and tradition in exercise of his authority on
the administrative side, since the Chief Justice is primus inter pares i.e.
“first among the equals”. For the sake of clarity on this point, we may notice
the observations of the Hon’ble Supreme Court in the case of Asok Pande
vs. Supreme Court of India9:-
“14. The Chartered High Courts of Allahabad, Bombay, Calcutta and
Madras have a long history of over a hundred and fifty years. Each of them
has marked its sesquicentennial. Many High Courts are not far behind in9 (2018) 5 SCC 341
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vintage. Some are of a recent origin. Over the course of their judicial history,
High Courts have evolved conventions in matters governing practice and
procedure. These conventions provide guidance to the Chief Justice in the
allocation of work, including in the constitution of Benches. The High Courts
periodically publish a roster of work under the authority of the Chief Justice.
The roster indicates the constitution of Benches, Division and Single. The
roster will indicate the subject-matter of the cases assigned to each Bench.
Different High Courts have their own traditions in regard to the period for
which the published roster will continue, until a fresh roster is notified.
Individual Judges have their own strengths in terms of specialisation. The
Chief Justice of the High Court has to bear in mind the area of specialisation
of each Judge, while deciding upon the allocation of work. However,
specialisation is one of several aspects which weigh with the Chief Justice. A
newly appointed Judge may be rotated in a variety of assignments to enable
the Judge to acquire expertise in diverse branches of law. Together with the
need for specialisation, there is a need for Judges to have a broadbased
understanding of diverse areas of law. In deciding upon the allocation of
work and the constitution of Benches, Chief Justices have to determine the
number of Benches which need to be assigned to a particular subject-matter
keeping in view the inflow of work and arrears. The Chief Justice of the High
Court will have regard to factors such as the pendency of cases in a given
area, the need to dispose of the oldest cases, prioritising criminal cases
where the liberty of the subject is involved and the overall strength, in terms
of numbers, of the Court. Different High Courts have assigned priorities to
certain categories of cases such as those involving senior citizens, convicts
who are in jail and women litigants. These priorities are considered while
preparing the roster. Impending retirements have to be borne in mind since
the assignment given to a Judge who is due to demit office would have to be
entrusted to another Bench when the vacancy arises. These are some of the
considerations which are borne in mind. The Chief Justice is guided by the
need to ensure the orderly functioning of the Court and the expeditious
disposal of cases. The publication of the roster on the websites of the High
Courts provides notice to litigants and lawyers about the distribution of
judicial work under the authority of the Chief Justice. This Court was
constituted in 1950. In the preparation of the roster and in the distribution of
judicial work, some of the conventions which are adopted in the High CourtsPage 21 of 40
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are also relevant, subject to modifications having regard to institutional
requirements.”
39. Insofar as appeals under the said Act of 2015 are concerned, those have to
be filed before the Commercial Appellate Court under the Commercial
Appellate Division that has been constituted by this Court in accordance
with the legislative mandate of Section 5 of the said Act of 2015. This Court
in exercise of its powers under Section 18 of the said Act of 2015 has also
framed the “High Court at Calcutta Commercial Courts Practice Directions,
2021” (hereafter “the said Practice Directions”) for regulating the procedure
for hearing commercial matters. The same were notified in the Kolkata
Gazette on November 23, 2023 and came into immediate effect from the date
of such notification. Part- I thereof contains provisions inter alia pertaining
to the application of the said Practice Directions. Certain provisions thereof
are relevant to the context and merit attention:-
“4). Save as otherwise provided in the Act; in the Code of Civil Procedure,
l908 (5 of 1908), as amended by the Act and in these Directions, The Rules
of the High Court at Calcutta (Original Side), The Appellate Side Rules of
the High Court at Calcutta, The West Bengal Civil Rules and Orders and all
other Rules made by the High Court at Calcutta from time to time for
regulating the procedure for the hearing of different categories of
commercial disputes shall apply mutatis mutandis to the Commercial
Courts, Commercial Appellate Courts, Commercial Division and Commercial
Appellate Division respectively in regard to the hearing of commercial
disputes of or above the Specified Value as notified by the state
Government from time to time in exercise of powers conferred by Sub
Section (IA) of Section 3 of the Act.
5) In case of any conflict, inconsistency or repugnancy between these
Directions and The Rules of the High Court at Calcutta (Original Side) or
The Appellate Side Rules of the High Court at Calcutta or The West Bengal
Civil Rules and Orders or any other Rules made by the High Court atPage 22 of 40
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Calcutta from time to time for regulating the procedure for the hearing of
different categories of commercial disputes, the Directions herein contained
shall prevail in relation to the procedure for the hearing of different
categories of commercial disputes of or above the Specified Value.
6) These Directions shall, unless expressly provided otherwise, apply to all
commercial disputes before the Commercial Courts and Commercial
Appellate Courts respectively in the State of West Bengal as well as the
Commercial Division and Commercial Appellate Division respectively in the
High Court in regard to the hearing of commercial disputes of or above the
Specified Value as notified by the State Government.”
40. A cumulative reading of the aforesaid provisions would make it clear that
the Appellate Side Rules would apply mutatis mutandis to the Commercial
Appellate Courts and the Commercial Appellate Division in regard to hearing
of commercial matters and that in case of any conflict or inconsistency or
repugnancy between the said Practice Directions and the Rules framed by
this Court, the said Practice Directions shall prevail.
41. While on this, the relevant provisions of the said Practice Directions in
respect of hearing of appeals may also be noticed. Part VII of the said
Practice Directions contains provisions for appeals to the Commercial
Appellate Courts and Commercial Appellate Division. The same provide
thus:-
PART-VII
Appeals to the Commercial Appellate Courts and Commercial
Appellate Division in the High Court-
29. Procedure to be followed in regard to Appeals before the Commercial
Appellate Courts and Commercial Appellate Division
1) All appeals before the Commercial Appellate Court from the decree or order
of a Commercial Court below the Level of a District Judge shall follow the
procedure laid down in Order XLI of the Code of Civil Procedure read with
the West Bengal Civil Rules and Orders.
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2) All appeals before the Commercial Appellate Division of the High Court
from the decree or order of a Commercial Court at the Level of a District
Judge shall follow the procedure laid down in The Appellate Side Rules of
the High Court at Calcutta read with Order XLI of the Code of Civil
Procedure.
3) All appeals before the Commercial Appellate Division of the High Court
from the decree or order of the Commercial Division shall follow the
procedure laid down in The Rules of the High Court at Calcutta (Original
Side) read with Order XLI of the Code of Civil Procedure.
42. Thus the appeals before the Commercial Appellate Division of this Court
from a decree or order of a Commercial Court at the level of a District Judge
would be regulated by the provisions of the Appellate Side Rules of the High
Court at Calcutta read with Order 41 of the Code with the only exception
that if there is any procedure already provided in the said Practice Directions
regulating a particular aspect, the said provision would prevail over the
relevant Appellate Side Rule. Since on the aspect of hearing under Order 41
Rule 11 there is nothing contrary provided in the said Practice Directions the
provisions of Rule 17 of Chapter V of the Appellate Side Rules would apply to
the hearing of appeals filed before this Court under the Commercial
Appellate Division as well.
43. Now the question would be as to whether the appeals at hand that have been
filed under the Commercial Appellate Division of this Court can be heard
under Order 41 Rule 11 of the Code by a Bench different than the Bench
having determination for hearing appeals from orders passed by the
Commercial Courts. The answer, in the considered view of this Court, would
be a resounding “NO”.
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44. It needs to be remembered that the said Act of 2015 was enacted for a
particular purpose. It was felt necessary by the Legislature that commercial
matters should be dealt with separately by dedicated Courts upon
constitution of a separate division therefor and as such a full-fledged
mechanism was provided in the said Act of 2015 itself to facilitate sifting and
sieving of commercial matters from the common pool of civil matters. In this
context the observations made by the Hon’ble Supreme Court in the case of
Ambalal Sarabhai Enterprises Ltd. vs. K.S. Infraspace LLP & Anr.10
must be noticed:-
“36. A perusal of the Statement of Objects and Reasons of the Commercial
Courts Act, 2015 and the various amendments to the Civil Procedure Code and
insertion of new rules to the Code applicable to suits of commercial disputes
show that it has been enacted for the purpose of providing an early disposal of
high value commercial disputes. A purposive interpretation of the Statement of
Objects and Reasons and various amendments to the Civil Procedure Code
leaves no room for doubt that the provisions of the Act require to be strictly
construed. If the provisions are given a liberal interpretation, the object behind
constitution of Commercial Division of Courts viz. putting the matter on fast
track and speedy resolution of commercial disputes, will be defeated. If we take
a closer look at the Statement of Objects and Reasons, words such as “early”
and “speedy” have been incorporated and reiterated. The object shall be
fulfilled only if the provisions of the Act are interpreted in a narrow sense and
not hampered by the usual procedural delays plaguing our traditional legal
system.”
(Emphasis supplied by us by underlining)
45. In such view of the matter the provisions of the said Practice Directions
would have to be interpreted in a manner such that the object of enactment
of the said Act of 2015 does not get stultified in the name of following the
Appellate Side Rules of this Court. If a commercial appeal is to be set down
10 (2020) 15 SCC 585
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for hearing under Order 41 Rule 11 of the Code by the Bench having
determination for hearing of appeals under Order 41 Rule 11 of the Code
although such Bench is not a Bench under the Commercial Appellate
Division, then, that would amount to doing exactly that which has been
mandated to be eschewed by the said Act of 2015 by providing for
constitution of a separate Commercial Appellate Division in the High Court.
The commercial appeals would then be a part of the collective puddle of civil
appeals heard by the said Bench under Order 41 Rule 11 of the Code which
would be an antithesis to the scheme of the said Act of 2015. Having due
regard to the avowed objective of the said Act of 2015, it cannot be said that
a Bench which is not one under the Commercial Appellate Division of this
Court would have determination for hearing of commercial appeals under
Order 41 Rule 11 of the Code.
46. What is the way out then? The impasse can be easily resolved by a
meaningful reading of the said Practice Directions framed by this Court. The
said Practice Directions clearly provide that the Appellate Side Rules will
apply mutatis mutandis to the Commercial Appellate Division of this Court.
47. The determination that the Bench under the Commercial Appellate Division
of this Court has apropos commercial appeals is as follows:-
“ALL APPEALS AND APPLICATIONS CONNECTED THERETO UNDER
COMMERCIAL COURTS, COMMERCIAL DIVISION AND COMMERCIAL
APPELLATE DIVISION OF THE HIGH COURT’S ACT, 2015.”
48. There is no specific allocation/assignment of authority to hear commercial
appeals under Order 41 Rule 11 of the Code to any Bench under the
Commercial Appellate Division of this Court by the determination roster
framed by the Hon’ble the Chief Justice. That being so the total authority to
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hear commercial matters under Order 41 Rule 11 of the Code would lie with
the Bench having determination for hearing appeals under the Commercial
Appellate Division. This would then include the authority to hear commercial
appeals under Order 41 Rule 11 of the Code as well. We can say so on the
strength of the well-known maxim “omne majus continent in se minus” – the
greater contains the lesser i.e. the greater/fuller power to hear any
commercial appeal and dispose of the same would include the lesser power
to hear only the Appellant under Order 41 Rule 11 of the Code and dismiss
the commercial appeal without issuing notice to the respondent and without
calling for the records of the learned Trial Court.
49. Therefore, we may safely infer that the Bench under the Commercial
Appellate Division of this Court having determination for hearing
Commercial Appeals would have determination to hear such appeals under
Order 41 Rule 11 of the Code as well in the absence of a roster allocating
such determination for hearing commercial appeals under Order 41 Rule 11
of the Code to a Bench under the Commercial Appellate Division of this
Court. The first issue is answered accordingly.
Whether the order impugned deserves to be set aside since the
plaintiff/appellant was/is entitled to an ex-parte order of injunction?
50. Having answered the first issue as above, we now move on to decide the
other points raised by the parties. When the matter was first moved by the
appellant, we had granted a limited protection since on hearing the appellant
we were prima facie satisfied that there was no basis for the inflated demand
for license fee by the Railways and that the balance of convenience appeared
to be in favour of the plaintiff for passing a limited protective order. However,
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now that we have considered the matter in some detail and parties have
taken us through the documents on record it is required to be seen whether
the limited interim order granted earlier can be confirmed and the learned
Commercial Court’s order of refusal to pass ex-parte ad interim order of
injunction can be interfered with.
51. The plaintiff/appellant seeks an order of injunction restraining the
respondents from terminating the contract and from taking steps in
furtherance of the letters of demand impugned in the suit.
52. At the ex-parte ad interim stage the question that really needs to be
answered is not merely as to whether injunction should be granted in favour
of the plaintiff or not but as to whether injunction should be granted in
favour of the plaintiff in the absence of the defendant or not. It is precisely
for this reason that while in contested cases of temporary injunction only the
salutary triad (of prima facie case, balance of convenience and inconvenience
and irreparable loss and injury) is required to be established by the
injunction seeker, at the ex-parte ad interim stage a quadrad i.e. the
aforesaid triad with an additional fourth limb of “urgency” is required to be
established by the plaintiff. The question as to whether there is such an
urgency that an injunction should be granted ex parte has to be answered in
the light of the conduct of the plaintiff. In cases where ex-parte ad interim
orders are prayed for it becomes imperative for the Court to consider the
time at which the plaintiff first had notice of the act complained of so that
the making of improper order against a party in his absence is prevented
and also as to whether the plaintiff had acquiesced for some time and in
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such circumstances it will not grant ex-parte injunction; (See: k Stanley
Mutual Fund vs. Kartick Das11)
53. We therefore need to test whether the plaintiff has established the aforesaid
four essentials in the case at hand.
54. We begin with the ground of urgency first. The plaintiff seeks an order of
injunction restraining the defendants from terminating the land license
agreement. Pleadings in support of urgency are there in paragraphs 34 to 36
of the application of injunction. While paragraphs 34 and 35 contain
somewhat generalised pleadings as regards threats given to the plaintiff by
the defendants, paragraph 36 contains a specific pleading to the following
effect: –
“36. The plaintiff has learnt from reliable sources that the defendant nos. 1
and 2 are intending to act on the letters dated 20th January 2025 and 24th
January 2025 and are seeking to terminate the license existing in favour of
the plaintiff with the close of the present financial year 2024-25. Such
termination is being threatened in furtherance of the defendants‟ illegal non
adhereance to the terms of the 2005 circular which governs the plaintiff‟s
license”
55. We have noticed that the plaint and the application for injunction were
affirmed on April 01, 2025 i.e. almost three months after issuance of the
impugned notices dated January 20, 2025 and January 24, 2025 and that
too after the close of the financial year 2024-25. In fact if the matter was so
urgent that the plaintiff required an ex-parte ad interim order of injunction
then we fail to understand as to why did the plaintiff wait for about three
months to approach the Court. Furthermore, when according to the
plaintiff’s own averments in the plaint, the close of the Financial Year 2024-
11 (1994) 4 SCC 225
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2025 was to spell doom for the plaintiff then the plaintiff ought to have
approached the Court at least before that time. Financial Year 2024-2025
ended on March 31, 2025 and the suit has been filed a day thereafter. The
urgency pleaded at least does not support a case for an ex-parte ad interim
order of injunction. We reiterate that at this stage we are not merely
considering as to whether the plaintiff is entitled to an ad interim order of
injunction or not but as to whether the plaintiff is entitled to an ex-parte ad
interim order of injunction or not. Shiv Kumar Chadha (supra) cited by Mr.
Chakraborty, the learned Additional Solicitor General is quite apposite to the
context. Paragraph 35 of the said report may be noticed:
35. As such whenever a court considers it necessary in the facts and circumstances
of a particular case to pass an order of injunction without notice to other side, it
must record the reasons for doing so and should take into consideration, while
passing an order of injunction, all relevant factors, including as to how the object
of granting injunction itself shall be defeated if an ex parte order is not passed.
But any such ex parte order should be in force up to a particular date before
which the plaintiff should be required to serve the notice on the defendant
concerned. In the Supreme Court Practice 1993, Vol. 1, at page 514, reference has
been made to the views of the English Courts saying:
“Ex parte injunctions are for cases of real urgency where there has been a true
impossibility of giving notice of motion….
An ex parte injunction should generally be until a certain day, usually the next
motion day….”
56. Similarly in the case of Mandali Ranganna & Ors. (supra) the Hon’ble
Supreme Court had observed as follows:
21. While considering an application for grant of injunction, the court will not only
take into consideration the basic elements in relation thereto viz. existence of a
prima facie case, balance of convenience and irreparable injury, it must also take
into consideration the conduct of the parties.
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57. We have also noticed that there is document or letter on record whereby a
threat of termination of the land license agreement has been issued to the
plaintiff. We have seen that the impugned letters of demand too do not
speak of any consequence of non-payment. That being so the urgency cited
by the plaintiff appears more to be a ruse than reality.
58. Furthermore, the notice dated January 20, 2025, which is one of the two
latest notices that have been impugned in the suit, has fixed a time frame of
fifteen (15) days for making payment in terms thereof or to inform the
Railways whether the plaintiff was willing to migrate “to the new policy
regime on transparent bidding process through commercial department”. The
said letter ends with a request to the plaintiff to “take necessary action as
early as possible because Higher Authority is pressing hard.” If at all the
plaintiff had urgency of the nature it now projects, it ought to have
approached the Court within the said period of 15 days mentioned in the
said letter or at least within a reasonably proximate time frame thereafter.
The plaintiff has approached the Court more than two months thereafter. No
case of urgency is therefore made out by the plaintiff.
59. We now move on to the next limb i.e. prima facie case. We have also perused
the land license agreement executed on September 23, 2004. It was initially
for a period upto 31.03.2005 as would be evident from the third recital of the
said agreement at page 36 of the application for injunction filed before us.
The agreement contains a renewal clause. It is the plaintiff’s case in
paragraph 7 of the plaint that the said agreement was renewed from time to
time and the last of such renewal was on June 28, 2021. A letter dated June
28, 2021, whereby license fees for the period “01.04.2021 to 31.03.2022”
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have been demanded by the respondents, has been relied on by the plaintiffto demonstrate renewal. The plaintiff has further asserted in paragraph 9 of
the plaint that the defendants had unconditionally accepted payment of land
license fees for the year 2022-2023. It has been contended in paragraph 28
of the plaint that the defendants have refused to accept payment of license
fees for the period April 01, 2023 onwards. The plaintiff has then proceeded
to demonstrate that such refusal is bad as the same is based on a forcible
application of the non-applicable Policy of 2022 to the plaintiff, thereby
unilaterally revising the licence fees upon increasing the market value of
subject land.
60. Simply put, the plaintiff’s contention is that the land license fees have been
exorbitantly increased by relying on a Circular/ Policy that is not applicable
to it. At this juncture the provision pertaining to revision of license fees in
the land license agreement needs to be noticed first. clause 14 of the said
agreement makes provisions therefor in the following words:-
“14. The license fee now fixed is provisional and may be revised upward at
any time at the option of the Railway which licensee hereby agrees to accept.
License fee will be revised time to time as per Railway Board‟s instruction.”
61. The above-quoted clause makes it evident that it was an unconditionally
agreed term of the contract that upward revision of license fee could be done
at any time at the option of the Railways and further that such revision
would be effected from time to time in terms of the Railway Board’s
instruction.
62. The said Policy of 2022, as would be evident from the covering page thereof
(at page 111 of the injunction application before us), has been issued “with
the approval of the Board” i.e. the Railway Board. It therefore satisfies the
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test of a “Railway Board‟s instruction” mentioned in the afore-quoted clause
of the land license agreement between the parties, at least prima facie. If that
be the case, an upward revision or enhancement of license fees by the
Railways in terms of the said Policy of 2022, again prima facie, does not
appear to be per se illegal and may not, therefore, be susceptible to a
challenge of the nature thrown to it by the plaintiff. In view of the language
employed in clause 14 of the land license agreement that governs the
parties, prima facie, we don’t find any reason to concur with the plaintiff.
63. It was argued by Mr. Mitra that the even if the said Policy of 2022 was
applicable to the plaintiff; the plaintiff could not be saddled with increased
license fee in terms thereof inasmuch as the plaintiff was in possession of a
private siding. Mr. Mitra had relied on clause 7.5 of the Policy of 2022 to
argue that there would be no increase of license fees in case of private
sidings dedicated to one customer. The said clause reads as follows:-
“7.5 Migration of existing lease/license/way leave permissions:
7.5.1 Existing lease/license holders of Terminals/Private Sidings/Private
Freight Terminals (PFTs): All entities currently using railway land for
cargo activities will continue to be governed by railway‟s extant policies,
i.e. annual lease/license charges @ 6% of MVL with annual escalation of
7% for the remaining lease/license period or 35 years or period as
mutually decided whichever is earlier. The existing entities shall be given
option to migrate to the new policy regime on transparent competitive
bidding process as applicable for new cargo terminals provided there are
no outstanding dues. In such cases, the right of first refusal shall be with
the existing licensee/lessee. For Terminals/Private Sidings/PFTs
dedicated to one customer and where competition is not possible or
existing entities who do not want to avail the option as above, the annual
lease charges shall remain unchanged i.e. annual lease/license charges
@6% of MVL with annual escalation of 7%.
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7.5.2 Existing users of way leave: All existing way leave facility users
shall be able to migrate to this policy regime only after expiry of period of
existing way leave agreement and payment of all dues.”
64. For the purpose of buttressing the point that the plaintiff was possessing a
private siding he cited the following portion of the letter dated June 28,
2021:-
“Sub: Diposition of License Fee of Railway Land for temporary
Licensing of PSC sleeper Pvt. Siding at Rampurhat under AEN/RPH
for the period 01.04.2021 to 31.03.2022”
65. We have gone through the plaint and have found that the plaintiff has
sought to run a case that since the plaintiff has developed the land licensed
out to it on the strength of the said land license agreement, therefore the
same is actually a private siding, however, that is not a position admitted by
the Railways as would be evident from a series of letters issued to the
plaintiff from time to time excepting the single letter dated June 28, 2021
cited by Mr. Mitra.
66. We have seen all the earlier letters written by the Railways pertaining to the
said land licensed out to the plaintiff and we have found that none of them
have used the expression “Pvt. Siding”. We have serious doubts as to
whether expression “Pvt. Siding” has been used consciously or is the result
of unconscious omission of the expression “Ltd.” that must follow the
expression “Pvt.” in the name of a private limited company which the plaintiff
is. In fact in the letter immediately preceding the letter dated June 28, 2021
the plaintiff has been described as “PSC Sleepers Pvt. Ltd., Rampurhat”.
67. Moreover, we find that the defendants have by a letter dated January 24,
2025 (Annexure P-16 at page 182 of the injunction application) clarified that
“land license of Rampurhat PSC Sleeper Ltd. is a factory/Godown for
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manufacture of PSC Sleeper connected with railway work it is not a
Terminal/Private Siding/Private Freight Terminal.”
68. Mr. Mitra had further relied on clause 4 of the said Policy of 2022 to argue
that market value of land would only be that which was prevalent at the time
of execution of the agreement, if the same was available. Indeed the said
clause says so but we are afraid the same may not apply to the plaintiff
inasmuch as the said clause refers to “lease agreement” and the agreement
that governs the parties before us is a “Land License Agreement”. For a
proper appreciation of the said clause, the same is extracted herein below:-
“4 Market Value of land
4.1 Market Value of railway land (MVL) shall be the prevalent circle
rate/ready reckoner rate/guidance value of the railway land at the time
of execution of the lease agreement, if available, otherwise prevalent
circle rate/ready reckoner rate/guidance value of surrounding land for
similar classifications/activities shall be considered. For example, if
surrounding land is classified as industrial use, then industrial rate shall
be used.
Note: In case the notified circle rates of the current year is not available
then last available circle rates/ready reckoner rate/guidance value as
notified by revenue authority or as decided by District Revenue
Authorities shall be considered.
4.2 For cargo terminals, industrial rates, if specified in that State shall be
considered. If not specified, then any other rate depending upon use of
surrounding land as specified by State/Revenue office shall only be
considered.
4.3 In case of cargo terminals, if logistics industry is given a special
status and discount is given in a state, then railways shall also give
same discount in that state.”
Further, we have also noticed Clause 7.4 of the said Policy of 2022 which
provides that in case of renewal of “license/lease/way leave”, the market
value prevalent at the time of renewal shall be considered for deciding the
charges. This is prima facie against the plaintiff.
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69. We are conscious that Mr. Mitra had taken us through the said agreement
and had shown us the portion where it has been written that the “the
licensor has AGREED TO grant, transfer and demise unto the licensee a plot of
land” to contend that the grant was in effect a lease and not a license. Law is
very well settled on this score that mere use of the words appropriate to the
creation of a lease will not preclude the agreement operating as a licence and
that the crucial test in each case is whether the instrument is intended to
create or not to create an interest in the property which is the subject-matter
of the agreement. (See: Sohan Lal Naraindas vs. Laxmidas Raghunath
Gadit12).
70. We have noticed that the agreement is neither registered nor sufficiently
stamped (the agreement bears two Special Adhesive Stamps of Rs.5 each
aggregating to Rs.10/-). The agreement indicated payment of yearly license
fees. Even if the plaintiff’s assertion of the grant being in the nature of lease
is accepted at face value and the license fees is treated as lease rent for the
time being, then also the agreement between the parties (i.e. the land license
agreement) being unregistered and insufficiently stamped, prima facie lacks
the basic credential for it to be termed as one that has effected any kind of
transfer of interest in terms of the relevant provisions of the Transfer of
Property Act, 1882 which makes it mandatory for any transfer of a property
in the nature of a lease either from year to year or for a term exceeding one
year or that which reserves an yearly rent to be made only by a registered
instrument. We, however, cannot decide that issue now inasmuch as the
12 (1971) 1 SCC 276
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same can only be done after a full-fledged trial on evidence and as submitted
by Mr. Mitra, we cannot, at this stage, hold a mini trial.
71. Be that as it may, at least prima facie we do not find any reason to hold that
the plaintiff is entitled to any ex-parte ad interim order of injunction as
prayed for on the case run by it.
72. Turning to the other contention of the learned Additional Solicitor General as
regards the maintainability of the suit on the ground that notice under
Section 80 of the Code and pre-suit mediation under Section 12 A of the said
Act of 2015 ought not to have been dispensed with, we do not deem it fit to
finally decide the same in this appeal although, we are prima facie of the
view that in the wake of the fact that the notice dated January 20, 2025
(which is one of the two latest notices that have been impugned in the suit),
had fixed a time frame of fifteen (15) days for making payment in terms
thereof and the plaintiff has approached the Court more than two months
thereafter, there was no good reason to dispense with the mandatory
requirements of the provisions of section 80 of the Code and section 12 A of
the said act of 2015. We however at this stage cannot dismiss the suit itself
holding the same to be not maintainable notwithstanding the provisions of
Order 41 Rule 33 of the Code being pressed by the learned Additional
Solicitor General for such purpose because, the provisions of Order 41 Rule
33 of the Code, in our considered view, cannot be pressed into service to
claim a relief greater than the expanse of the interim application before the
learned Commercial Court.
73. The judgment of the Hon’ble Supreme Court in the case of Pralhad & Ors.
(supra) cited by the learned Additional Solicitor General in fact supports our
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view that we can only do that what the learned Trial Court (learned
Commercial Court) could have done while dealing with an application for
injunction, if the case so required. In this regard paragraph 18 of the said
judgment may be noticed:
18. The provision of Order 41 Rule 33 CPC is clearly an enabling provision,
whereby the appellate court is empowered to pass any decree or make any order
which ought to have been passed or made, and to pass or make such further or
other decree or order as the case may require. Therefore, the power is very wide
and in this enabling provision, the crucial words are that the appellate court is
empowered to pass any order which ought to have been made as the case may
require. The expression “order ought to have been made” would obviously mean
an order which justice of the case requires to be made. This is made clear from
the expression used in the said Rule by saying “the court may pass such further
or other order as the case may require”. This expression “case” would mean the
justice of the case. Of course, this power cannot be exercised ignoring a legal
interdict or a prohibition clamped by law.
74. At the interim stage or while considering an application for grant of interim
order, the Commercial Court could not have dismissed the suit itself, even if
the suit was not maintainable, although it would well be entitled to reject the
prayer for injunction citing the non-maintainability of the suit as a ground
therefor. (See: Asma Lateef & Anr. vs. Shabbir Ahmad & Ors.13 and
Mahendra Magruram Gupta & Anr. vs. Rajdai Shaw & Ors.14)
75. It is settled law that the scope of an appeal against an ex-parte ad interim
order of injunction is limited only to the examination as to whether the order
under appeal is correct or not. While examining an appeal from an ex-parte
ad interim order of injunction, the appellate Court would in fact be an
appellate Court at the interim stage only and as such the appellate Court
13 (2024) 4 SCC 696
14 2025 SCC OnLine SC 1068
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would also not be entitled to dismiss the suit itself, although it will very well
be entitled to reject the prayer for injunction or vacate an order of injunction
citing the non-maintainability of the suit as a ground therefor.
76. As regards the point raised on behalf of the Respondents that the suit is not
maintainable since the same in effect lays challenge to the said Policy of
2022 we, prima facie, do not find such submission to be meritorious. It is
apparent from the prayers made in the plaint as well as the averments made
therein that the said Policy of 2022 has not been challenged. In such view of
the matter the arguments based on Article 228 of the Constitution of India
are not being dealt with. The decision in the case of Joshi Technologies
International Inc. (supra) does not, in our considered view, apply to the
facts of the present case, inasmuch as the same pertains to the scope of
judicial review under Article 226 of the Constitution of India. The case of
Southern Roadways Ltd., Madurai (supra) is an authority for the
proposition that an agent who receives property or money from or for his
principal obtains no interest for himself in the property and that under law
revocation of agency by the principal immediately terminates the agent’s
actual authority to act for the principal unless the agent’s authority is
coupled with an interest as envisaged under Section 202 of the Indian
Contract Act, 1872 in which case the agent could claim compensation if his
case falls under Section 205 of the said Act of 1872.
77. The case of Yamini Manohar (supra) had been cited by the appellant to
argue that no application was required to be filed to seek dispensation of
pre-suit mediation under section 12A of the Act of 2015 and that the Court
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had discretion to grant the same. We are bound by such observation but
the same does not in any manner further the plaintiff’s case.
78. We, therefore, find no reason to differ with the conclusion reached in the
order impugned. AO-COM 3 along with CAN 1 of 2025 and AO-COM 4 of
2025 stand dismissed. We, however, make it clear that since our findings in
this order are all prima facie and tentative and since the same have been
reached only for the purpose of deciding the appeal against the refusal to
pass ex-parte ad interim order of injunction therefore the same shall not be
binding on the learned Commercial Court while deciding the injunction
application and/or the suit. In other words, the learned Commercial Court
will be free to decide the pending injunction application as well as the suit
on their own merits without being influenced in any manner by the
observations made hereinabove.
79. Urgent photostat certified copy of this judgment, if applied for, be supplied
to the parties upon compliance of all formalities.
I agree.
]
(Arijit Banerjee, J.) (Om Narayan Rai, J.)
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