Parties Operating Under Interim Orders Must Pay Due License Fees Notwithstanding Expiry of Original Contracts

The Petitioner, Sunshine Caterers Pvt. Ltd., was awarded five-year license agreements for catering services in four trains by the Respondent-Railways

Upon expiry of the initial term on June 20, 2019, IRCTC (the Respondent) issued impugned letters on December 20, 2019, refusing renewal due to the Petitioner's failure to meet minimum guaranteed performance standards

The Petitioner challenged these letters in December 2019 and obtained interim orders on December 24, 2019, allowing them to continue operations during the pendency of the writ

Over the course of the litigation, IRCTC alleged that the Petitioner had defaulted on license fees amounting to approximately Rs. 5,30,00,000/-

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

It was discovered that the Petitioner had filed parallel proceedings in the City Civil Court, Calcutta, which they subsequently offered to withdraw after an apology for seeking "wrong legal advice"

1. Whether the Respondent is entitled to recover license fees for the period the Petitioner operated under the High Court’s interim protection

2. Whether the Petitioner can be permitted to continue operations under a court order without fulfilling contractual financial obligations

The Court applied the principle of contractual reciprocity and the equitable doctrine governing interim reliefs.

It held that interim orders allowing a party to perform a contract "in terms of the contract" fundamentally imply that the party must also fulfill its reciprocal financial obligations—specifically the payment of license fees—stipulated in that contract

The Court further recognized the Respondent’s statutory and contractual right to recover outstanding dues through legal recovery mechanisms

The Court reasoned that since the interim orders of December 24, 2019, mandated performance "in terms of the subject contracts," the Petitioner was legally bound to continue payments as if the contract were active

The Court rejected any implicit argument that the Petitioner could enjoy the benefits of catering operations under judicial protection without the corresponding burden of paying the license fees

Given that the Petitioner had already started withdrawing from the subject trains as the renewed terms expired and new third-party contracts were awarded, the only surviving legal necessity was to ensure the public exchequer was not deprived of its dues

The interim orders ceased to apply as the renewed terms had expired

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

All pending applications were dismissed