Licensees Continuing Operations Under Interim Orders Are Mandatorily Liable for Contractual License Fees and Outstanding Dues

The petitioners were awarded contracts to provide catering services in four trains for five years, featuring a renewal clause contingent on satisfactory performance.

Upon the expiration of the original term on June 20, 2019, the respondent (IRCTC) issued "impugned letters" refusing renewal, citing the petitioners' failure to meet minimum guaranteed performance standards.

The petitioners challenged these letters in December 2019 and obtained interim orders allowing them to continue operations pending litigation.

Over the course of the proceedings, it was alleged that the petitioners failed to pay license fees during the interim period, amounting to approximately ₹5,30,00,000.

By early 2026, the hypothetical "renewed" terms of the contracts also expired.

the court noted that the petitioners had sought similar relief from the City Civil Court, Calcutta, under "wrong legal advice".

By the final hearing, petitioners had withdrawn from operations.

1. Whether the respondents are entitled to recover outstanding license fees for the period the petitioners operated under the court's interim protection.

2. Whether the writ petitions survive for adjudication after the expiry of the renewed contract periods and the withdrawal of the petitioners from catering services.

The court applied the principle of equity and contractual obligation inherent in interim judicial protection, holding that a party cannot enjoy the benefits of a contract under the aegis of a court's interim stay without fulfilling the reciprocal financial obligations (license fees) stipulated in the subject contracts.

The court relied on the terms of the original License Agreements and the specific conditions of the interim order dated December 24, 2019, which mandated performance "in terms of the contract".

The Court reasoned that because the interim orders allowed the petitioners to continue catering services specifically "in terms of the contract," such performance necessarily included the obligation to pay license fees to IRCTC.

The court rejected any implicit argument that operations under a judicial stay exempted the petitioners from contractual dues.

Given that the petitioners had already ceased operations and the hypothetical renewal periods had lapsed by April 2026, the substantive challenge to the non-renewal letters became moot.

The court focused its final analysis on the "only surviving issue": the recovery of arrears accrued during the multi-year litigation period.

It determined that since the petitioners operated and generated revenue during this time, the respondent's right to recover the license fee remained intact.

The court clarified that the petitioners could not retain benefits without payment.

The court granted IRCTC the liberty to take steps in accordance with the law to recover the specific amounts due.

All interim orders were vacated/ceased, and pending applications were disposed of.