Administrative orders issued in disregard of pending judicial proceedings and prior court orders are arbitrary and unconstitutional.

The Petitioner, a catering firm, challenged a communication dated 30.03.2026 issued by Respondent No. 7 (Divisional Railway Manager Commercial, Bhopal), which ordered the immediate cessation of operations of its two catering stalls at Itarsi Station (Platforms 4/5 and 6/7).

These stalls were allotted to the Petitioner pursuant to the execution of an arbitration award and were valid until July 2027.

The Respondents suspended the license citing directives from the Railway Board and the pendency of Arbitration Appeal No. 161/2025 before the High Court.

The Petitioner contended that this action was arbitrary, ignored previous orders passed in Writ Petitions (WP 22304/2021, WP 8327/2022) and Commercial Court proceedings (MJC 46/2024), and overreached the process of law.

1. Whether the impugned communication dated 30.03.2026, suspending the Petitioner’s operations during the pendency of an Arbitration Appeal, was arbitrary and violative of Article 14 of the Constitution of India.

2. Whether the respondent authority failed to consider the judicial history and previous court orders, thereby violating the principle of legitimate expectations.

Article 226 of the Constitution of India regarding the High Court's power to issue writs for the enforcement of fundamental and legal rights.

Wednesbury principle of reasonableness and Article 14 of the Constitution to assess whether the administrative action was arbitrary.

Doctrine of Legitimate Expectations, asserting that the Petitioner had a right to be treated fairly and in accordance with the guarantees of the Constitution.

The Court observed that the Petitioner was occupying the stalls through an execution proceeding of an arbitration award, with a tenure lasting until July 2027.

It noted that while the Railways cited the pendency of Arbitration Appeal No. 161/2025 as a ground for suspension, the interim relief sought by the Railways in that specific appeal had already been rendered infructuous.

The Court found that the Divisional Railway Manager acted without considering the "chain of litigation" and multiple prior orders passed by the High Court in favour of the Petitioner.

The Court reasoned that the authority’s attempt to overlook these judicial proceedings constituted an arbitrary exercise of power.

It held that the action lacked bona fides and failed to meet the standards of constitutional validity, as it bypassed established legal processes and ignored the Petitioner's legitimate expectations.

The Court held that the authority failed to act in a bona fide manner and exercised its powers under Article 226 to set aside the suspension.

The Court granted the Respondent authority the liberty to take appropriate action in the future, provided it follows the necessary legal procedure, grants a fair hearing to the parties, and seeks clarification from the concerned Court if required.