Allahabad High Court
A.H. Wheeler And Co. Pvt. Limited An ... vs Union Of India (Uoi) Through The ... on 23 March, 2005
Equivalent citations: 2005(4)AWC3604, 2005(3)ESC1576
Bench: B.S. Chauhan, Dilip Gupta
JUDGMENT
B.S. Chauhan and Dilip Gupta, JJ.
1. The petitioners A.H. Wheelers & Company Pvt., United and its shareholder have sought the quashing of the Commercial Circular No. 38 of 2004 dated 12.10.2004 issued by the Executive Director (C&T) Railway Board containing the revised Book Stall Policy-2004 and a direction to the respondents to renew the licence of the petitioner No. 1 in accordance with the provisions of the Commercial Circular No. 19 of 2004 dated 1 1.6.2004.
2. A.H. Wheelers have been operating the Bookstalls on the Railway Stations since 1877 and undoubtedly are the oldest in this field. In 1938 a partnership was constituted to run this business but subsequently on 31.10.1953 the firm A.H. Wheeler was incorporated as a Joint Stock Company under the Companies Act, 1913. Initially permission had been granted to it for carrying on business of selling books on the Railway Stations but later on formal agreements were entered into between A.M. Wheelers and the Railways throughout the country. It, therefore, transpires that for the past more than 25 years A.H. Wheelers has been engaged in the business of setting up and maintaining bookstalls at various Railway stations of the country. Prior to 1960 it had a monopoly in operating the bookstalls in all the Railway Divisions except Southern Railway and part of the South Central Railway but the position was reviewed by the Ministry of Railways in the year 1961 and the sole selling rights of bookstalls was restricted to particular Railway stations. Subsequently the sole selling rights of M/s A.H. Wheelers & Co. was restricted to only those stations where it had bookstalls prior to 1.1.1976 meaning thereby that the number of bookstalls was frozen and allotments were to be made to other categories like un-employed graduates and philanthropic organisations. The tenure of the agreements was initially for five years, which was renewed from time to time, but from 1967 onwards the tenure was increased to nine years and the last agreement, which was executed in the year 1994, expired on 31.12.2002.
3. In accordance with the prevalent practice, under which the petitioner firm applied for renewal of the contract before its expiry, an application dated 5.9.2002 was submitted for renewal of the contract which was to expire on 31.12.2002 and as per the practice and procedure, the Railway Board sent a letter dated 8.11.2002 to the General Managers of the different Zonal Railways requiring them to submit reports on the performance of the petitioner. Favourable reports were submitted by the Zonal Railways to the Railway Board recommending for renewal of the contract and even though the period of the contract expired on 31.12.2002, the petitioner firm was permitted to operate the various bookstalls at all the 258 Railway stations upon payment of royalty for the years 2003 and 2004. This fact is evident from the communications dated 28.5.2003, 19.2.2004 and 26.2.2004 sent by the Railways in connection with the renewal of Bookstall contract wherein it has been mentioned that in consultation with the Finance Department of the Board, the matter was examined and the dues outstanding against the petitioner firm could be accepted. However, the payment to be received was to be provisional in nature and the final amount was to be determined after the Bookstall Policy was finalised. The petitioner deposited the royalty and was also informed that the formal contract would be executed only upon receipt of the necessary instructions from the Railway Board.
4. The petitioner firm has been operating on 258 Railway Stations, which amounts to about 3% of the total Railway Stations in the country since it is an admitted fact that there are in all 8055 Railway stations. However, the contribution towards the royalty paid by it to the Railways is to the extent of about 80% of the total royalty the Railways receive from the Bookstalls on all the Stations. By way of illustration it has been stated that in the year 2002 the petitioner contributed Rs. 1.38 Crores out of the total royalty of Rs. 1.66 Crores received by the Railways.
5. A Commercial Circular No. 19 of 2004 dated 11.6.2004 was issued by the Executive Director (C&T), Railway Board containing the Bookstall Policy-2004. The preamble to the said Policy reads as follows:-
1. PREAMBLE "The matter regarding review of policy on bookstalls has been, under consideration of the Ministry of Railways. At present, management of bookstalls on Railway stations is by two major bookstall chains, which are M/s. A.H. Wheeler & Co. and M/s. Higginbothams Limited, by philanthropic and social organizations like M/s. Gita Press, M/s. Sarva Seva Sangh Prakashan, M/s. Ramakrishna Mission and Other Categories which are unemployed graduates or their cooperatives etc. In the absence of a comprehensive policy on the subject, zonal railways have been approaching Railway Board on various issues from time to time. In addition, certain assurances had been given in Parliament, which have to be incorporated in the policy. It has been decided, therefore, to issue a comprehensive policy on the subject. The following policy guidelines are issued in supersession of all previous instructions issued in this regard."
6. The circular also provides for classification of bookstalls into five categories, namely, 'A, B, C, D and E'. Clause (5) of the Circular deals with management of bookstalls. Clause 5.1 relates to tenure and renewal and the same is quoted below:-
"5.1. TENURE AND RENEWAL 5.1.1. Tenure of the licence of the bookstall of all categories would be five years. However, the Railway administration reserves the right to renew the licence for five years at a time subject to the satisfactory performance of the licensee. The performance should be monitored continuously and the renewal committee consisting of officers of the same rank as for the selection committee will scrutinize the track record of the licensee, observations made by officials during inspections conducted from time to time, public complaints, fines imposed and timely payment of railway dues based on proper assessment of sales by railways. "
7. Clause 5.2 deals with licence fee. Under clause 5.2.1(a) the licence fee for major bookstall chains under single management has been provided which will be 5% of the sales turnover. Likewise, separate licence fee for 'A' class stations, for 'B' and below class stations and for philanthropic organizations has also been provided. Under clause 5.2.3 the licence fee has to be determined at the time of allotment or renewal of the contract while under clause 5.2.4, at the time of renewal a fresh assessment of sales has to be under taken and the licence fee can he revised accordingly.
8. Clause 5.4 deals with renewal of licence for existing bookstalls and clause 5.4.1 deals with M/s. A.H. Wheeler and Co. and they are as follows:-
5.4. RENEWAL OF LICENSE FOR EXISTING BOOKSTALLS "5.4.1. Bookstall chain under single management
(i) M/s. A.H. Wheeler & Co.
M/s. A.H. Wheeler & Co. are operating bookstalls on all zonal railways except Southern Railway and part of South Central Railway. Their licence, including revision of licence fee, is decided at the level of Railway Board. Northern Railway is the nodal agency, which coordinates with other railways and maintains record of sales and payment of licence fee in terms of agreement with this company.
The renewal of the license for the existing bookstalls would he done by Railway Board on performance, for five years at a time."
9. Clause 5.5 deals with allotment of new bookstalls. While clause 5.5.3 relates to eligibility criteria, clause 5.5.6 provides that there will be a 25% reservation in the allotment of new bookstalls at 'B, C and D' railway stations in favour of Scheduled Castes, Scheduled Tribes and five other categories to the extent indicated in the said clause.
10. The issuance of the aforesaid circular dated 11.6.2004 led to the sending of the communication dated 24.6.2004 by the Executive Director (C&T) to the General Managers of all Indian Railways pointing out that the contract of the petitioner firm, which had expired on 31.12.2002, could not be renewed since a Comprehensive Bookstall Policy was in the process of finalisation, but now that the Bookstall Policy-2004 had been finalised the concerned Zonal Railways should send their reports on the overall performance of the petitioner firm in order to examine the question of renewal of the contract, They were also requested to indicate in their reports whether the petitioner firm had paid all the dues up to 31.3.2004. Pursuant to the aforesaid letter, the Zonal Railways submitted performance reports in July, 2004 certifying that the performance of the petitioner firm had been satisfactory and that renewal could be considered in view of the experience it had in providing services to the travelling public. It was also stated that the petitioner firm was a corporate body and it was more convenient for them to deal with one party rather than with individual licensees. Upon submission of the performance reports and on a legitimate expectation as borne out from the conduct of the respondent, the petitioner firm went ahead and made investments running into several Crores in the form of placing orders and procuring stock of books, Magazines, Time Tables, National Rail Museum items, renewal of its contract with various publishers and maintenance and upkeep of its various bookstalls. However, the zonal Railways renewed the contracts of some of the parties but in the matter of the petitioner firm, the matter remained pending. A new Government had come into power at the Centre in the month of May, 2004 and upon the Railway Minister taking charge certain statements were made on the floor of the house regarding the status enjoyed by the petitioner firm for sale of books and periodicals at the Railway Stations.
11. Within a short period of four months, a new Revised Bookstall Policy was issued by the Railways through the Commercial Circular No. 38 of 2004 dated 12.10.2004 in supersession of the earlier Bookstall Policy dated 11.6.2004. Under the said revised Policy, the renewal of the existing licences or licence, which had already expired, was done away with and fresh tenders were required to be invited.
12. The preamble to the said Revised Bookstall Policy-2004 dated 12.10.2004 reads as under: -
"1. PREAMBLE In view of Hon'ble MR's Budget Speech in favour of transparency, competitiveness and doing away with sole selling rights in certain contracts, it is imperative to review the existing Bookstall Policy 2004 issued on 11.6.2004. Following policy guidelines are, therefore, issued in super-session of all previous instructions with regard to bookstalls in railway premises. While framing the policy suggestions from zonal railways, experience gained over the years, assurances given in Parliament, doing away with monopoly, fixed tenure, competitiveness in contracts etc. have been taken into consideration."
13. Clause 5 of the said revised Bookstall Policy deals with management of bookstalls. Clause 5.1 deals with tenure and is as follows:-
"5. MANAGEMENT OF BOOKSTALLS 5.1. TENURE Tenure of the license of bookstalls of all categories would be five years. There would be no renewal/ extension of licence and a fresh two packet open tender should be called well in advance and finalised before expiry of the existing contract at 'A', 'B' & 'C" category stations. Tenure of bookstall licences at 'D', 'E' and 'F' category, stations will be five years and there would be no renewal of licence. Fresh licences should be finalised by inviting applications through press notification in case of 'D', 'E' & 'F' category stations before expiry of the existing contract."
14. Clause 5.4 also provides that there shall be no renewal of licence for existing bookstalls and the relevant portion is quoted below:-
"5.4 NO RENEWAL OF LICENSE FOR EXISTING BOOKSTALLS 5.4.1. There would not be any renewal of existing licences which have already expired or are due to expire. Fresh tenders should be called against licences which have already expired at 'A', 'B' & 'C' category stations and also against such licences due to expire in future well in advance. Allotment of bookstalls against licences which have expired or are due to expire would be done according to procedure laid down for allotment of new bookstalls in Para 5.5. At 'D', 'E' and 'F' category stations fresh applications should be invited against licences which have already expired for new allotments and fresh applications should also be called well in advance against licences due to expire. There would not be any renewal of licence even at 'D', 'E' and 'F' category stations."
15. Clause 5.5 deals with allotment of new bookstalls and is as follows:-
"5.5 ALLOTMENT OF NEW BOOKSTALLS 5.5.1 New bookstalls against existing licences or at a new location will be allotted by zonal railways at 'A', 'B' and 'C' category stations based on eligibility criteria through a two-packet tender system, where the first packet will be meant for short-listing tenderers satisfying the minimum criteria. The second bid will be purely financial where the tenderers will quote the annual lumpsum license fee payable to Railway Administration subject to a minimum fee as laid down in para 5.2 above. The contract will be awarded to the tenderer who has quoted the highest annual license fee. The notification for inviting offers should also be. placed in national newspapers. Such allotments will be made for 5 years only. After the completion of 5 years there would be no renewal of the existing contract & a fresh tender should be floated and finalized before expiry of the existing contract."
16. The petitioners are aggrieved by the issuance of the said commercial circular dated 12.10.2004 containing the revised Policy and have, therefore, sought its quashing and have also sought a direction for renewal of the licence in terms of the earlier commercial circular dated 11.6.2004.
17. We have heard Sri Gopal Subramaniam, learned Senior counsel for the petitioners assisted by Sri Yashwant Varma, Advocate and Sri V.B. Singh, learned Senior counsel assisted by Sri Govind Saran; Advocate for the Railways and have perused the materials available on record.
18. Sri Gopal Subramaniam, learned Senior counsel for the petitioners submitted that under the agreement executed in the year 1993 the petitioner firm was entitled for renewal of the contract and the action of the respondents in permitting the petitioner firm to continue even after the expiry of the period of the contract on 31.12.2002 and the express terms contained in the circular dated 11.6.2004 regarding renewal gave rise to a legitimate expectation that the contract would be renewed and on this basis the petitioner altered its position by investing a huge amount running into Crores of Rupees; that there was no occasion for the respondent Railway Board to revise the Policy within four months and the Budget Speech of the Railway Minister made on 6th July, 2004 which was the only material relied upon by the Railways could not form the basis for revising the Bookstall Policy; that all the Zonal Railways had submitted reports in favour of the petitioner for renewal of the contract and, therefore, by providing a non renewal clause in the subsequent circular dated 12.10.2004, the Railway Board acted in a mala fide and arbitrary manner and that the new policy decision contained in the circular dated 12.10.2004 is arbitrary, unreasonable and unfair.
19. Sri V.B. Singh, learned Senior counsel appearing for the respondent Railways, however, submitted that it was permissible in law for the Railways to revise the Bookstall Policy; that the Budget Speech of the Railway Minister made on 6th July, 2004 regarding the Bookstall Policy was a valid basis to revise the Bookstall Policy; it cannot be said that the revised Policy was unreasonable or arbitrary; that overriding public interest demanded the revision of the Policy; that the Policy document should not be read and interpreted like a statutory provision and that the scope of judicial review of Policy is very limited.
20. We have carefully considered the submissions advanced by the learned counsel for the parties.
21. Before we proceed to examine the aforesaid legal contentions raised by the learned counsel for the parties, we consider it appropriate to refer to the relevant factual aspects, which were made the foundation for the legal contentions.
22. It is an admitted position that M/s. A.H. Wheelers & Co. has been running the Bookstalls on the Railway stations for the last 125 years and it is the oldest in this field. The last agreement with the Railways which was made for a period of nine years w.e.f. 1.1.1994 was to expire on 31.12.2002 but prior to the expiry of the aforesaid period, an application for renewal of the contract was submitted, as it had been done in the past, and in this connection a communication dated 8.11.2002 was sent by the Railway Board to the General Managers of All Indian Railways requiring them to send their reports on the overall performance of M/s. A.H. Wheelers & Co. so that the question of renewal of the contract could be examined. Pursuant to the aforesaid query, letters were sent by the various Railways and the same have been brought on record by the petitioners as Annexure '4' to the writ petition. In all these letters the recommendations in favour of the petitioner firm clearly suggest that the contract could be renewed for a further period since the performance had been satisfactory. This position is admitted to the Railways except with regard to the Eastern Railway as is clear from paragraph 29 of the counter affidavit, but in the rejoinder affidavit, the petitioner firm has annexed even the recommendations of the Eastern Railway which is to the effect that no complaints had been received against M/s. A.H. Wheelers & Co. and their renewal proposal could be considered. From the counter affidavit, it also transpires that the Ministry of Railways had started the exercise for formulating the comprehensive Bookstall Policy from the year 1999 and that is why the issue of renewal was kept pending. The Railways, however, took a positive decision in permitting M/s. A.H. Wheelers & Co. to continue its activities on payment of deposit of all the outstanding dues on provisional basis and the final payment was to be made after the Bookstall policy was finalised. It is in this manner that the petitioner firm continued to run the Bookstalls.
23. In this connection we may also refer to the communication dated 5.10.1999 sent by the Chief Commercial Manager, Northern Railway to the Railway Board conveying the suggestion for Bookstall contracts at new stations/platforms and at existing stations where the Bookstalls were needed. It was pointed out that the existing Policy for allotment of Bookstalls for new stations/platforms provided for preference in allotment to (a) Co-operative Societies of actual workers/vendors and Co-operative Societies of unemployed graduates, (b) partnerships and associations of un-employed graduates, (c) individual unemployed graduates who were sons/wards of Railway men and (d) individual unemployed graduates other than those mentioned at item (c) above and that for the last few years there had been a gradual erosion of the holdings of M/s A.H. Wheelers & Co. and Co-operatives and un-employed graduates were running the Bookstalls at various stations. A cursory look at the stock, display, accessibility and functioning of Bookstalls run by the petitioner firm and those run by others clearly demonstrated that the Bookstalls run by the petitioner firm were better equipped to deal with the travelling public than small stalls run by unemployed graduates. The main thing to see in a particular Bookstall is the quality of books and magazines on display, the knowledge of the salesmen and the proper display of books generally required by the travelling public. In this context, we reproduce the views expressed by the Chief Commercial Manager of the Northern Railway and they are as follows:-
"It is our experience that to cater to these three main groups of readers, it is only M/s. A.H. Wheeler & Co. Limited who have been able to maintain a semblance of order in the display and sale of proper books and magazines. This has certainly come through long experience of nearly 120 years with operating bookshops at railway stations. By and large, M/s. A.H. Wheeler & Co. Limited have catered to the travelling public by providing readable, standard and decent books and magazines and periodicals. Our experience with the bookstalls run by other than M/s. A.H. Wheeler & Co. Limited has not been very happy in the sense that they lack the finesse and adeptness of book trade. Not only such bookshops are cluttered but they also display some publications which are so cheap and undesirable that many good bookshops would not even handle them. Not only that, but even pirated editions of bestsellers manage to sneak into such bookshops and are shelled out to the gullible public. These bookshops operate at a very low standard in certain places and the serious browser does not relish the fare being offered.
Experience has also shown that independent agencies like cooperatives and partnerships do not usually have the expertise, experience, knowledge or adequate financial soundness to run bookstalls in the desired manner for providing a wide range of books, magazines and periodicals. Due to these realities and to avoid dealing with high standard books and magazines which are linked with strict forms and conditions of business, these independent agencies become obliged to stocking substandard literature at their bookstalls. In this regard, the bookstalls of M/s. A.H. Wheeler & Co. Limited have a distinct edge and advantage.
In the matter of payment of royalty and other dues like electricity, cess and ground rent etc. and the revenue earned by the railway, no comparison can be drawn between M/s. A.H. Wheeler & Co. Limited and other agencies. While the former have been generally prompt in depositing their dues including royalty, the same does not apply in the case of independent agencies. As such, the quality of services rendered by M/s. A.H. Wheeler & Co. Limited is notably different and the revenue earned by the railways from M/s. A.H. Wheeler & Co. Limited is also unmatched. Whereas for about 32 stations the royalty by M/s. A.H. Wheeler & Co. Limited in a year was Rs. 11.05 lakh, it was only Rs. 1.44 lakh for other bookstalls at about 90 stations on Northern Railway.
It is the considered view of Northern Railway that M/s. A.H. Wheeler & Co. Limited should be permitted to expand their activities so that better service is rendered to the traveling public but they may be asked to give preference to unemployed graduates in recruitment so as to be in line with the present policies of the Railway Board in respect of social commitment of the government."
24. As stated above, even though the exercise for formulating the Bookstall Policy was undertaken from the year 1999 but after a period of five years, during which the Railways had the occasion to consider all the relevant matters, the Railways came out with the Bookstall Policy-2004, which is contained, in the Circular dated 11.6.2004. This Policy, inter alia, provides that M/s. A.H. Wheeler & Co. shall not have any sole selling rights and that the licence of the Bookstalls should be for five years and the Railways reserve their rights to renew the licence subject to the satisfactory performance of the licensee. Clause 5.5 deals with allotment of new Bookstalls but clause 5.4 deals with renewal of licence for existing Bookstalls. Thus though the new Bookstalls could be allotted by Zonal Railways for "A" Class stations based on eligibility criteria through a Two-Packet system where the contract can be awarded to the tenderer quoting the highest annual licence fee, the renewal of licence of M/s. A.H. Wheeler & Co., M/s. Higginbothams Limited, Philanthropic and Social Institutions and other categories was also permissible. Immediately after the framing of the aforesaid Bookstall Policy-2004 on 11.6.2004, the Railway Board sent communications to the various General Managers of All Indian Railways on 24.6.2004 requesting them to send their reports on the overall performance of the petitioner firm in order to examine the question of renewal of the contract. All the Zonal Railways submitted favourable reports in favour of the petitioner Company recommending renewal of the contract. This fact has been clearly admitted by the Railways in the counter affidavit filed by them. The petitioners have also brought on record the Question and Answer to the Unstarred Question No. 2666 to be answered on 22.8.2004 in the Rajya Sabha relating to the allotment of Bookstalls at Railway stations. To the specific question whether the entire Bookstall contract of M/s. A.H. Wheelers & Co. which expired on 31.12.2002 has been renewed on the same lines and, if so, the details thereof, the Answer given by the Minister of State in the Ministry of Railways was that the contract of Bookstalls of M/s. A.H. Wheelers & Co. expired on 31.12.2002 and the renewal is under examination as per the new Bookstall Policy. It may be stated that as on 22.8.2004 there was only one existing Bookstall Policy, namely, the Bookstall Policy contained in the Circular dated 11.6.2004 and, therefore, the aforesaid Answer relates to the said Policy only. This fact is also clear from another Answer to Question No. 3160 wherein it has been clearly stated that the new Bookstall Policy came into effect on 11.6.2004.
25. It has also been stated in the petition that after promulgation of the Bookstall Policy on 11.6.2004 and upon the submission of the satisfactory performance report, the petitioner firm made huge investments to the extent of crores of Rupees to which the only reply given in the counter affidavit is that pending review of the Policy, the licence was neither renewed nor was any such intention communicated to the party.
26. It is on the basis of the aforesaid facts that Sri Gopal Subramaniam, learned Senior counsel for the petitioners submitted that legitimate expectation can provide a sufficient interest to apply for judicial review and when the right of renewal was curtailed by the subsequent Bookstall Policy dated 12.10.2004, it became imperative upon the respondents to justify the denial of such expectation. He further submitted that the justification submitted by the respondents by referring to the Budget Speech of the Railway Minister on 6.7.2004 is against the record as there is nothing in the Budget Speech of the Railway Minister, which could have given a cause to the Railways to revise the Bookstall Policy. Elaborating his arguments, he referred to the various provisions of the Circular dated 11.6.2004 and particularly the preamble to the said Circular, which clearly shows that the Bookstall Policy contained in the said Circular had been formulated after an in-depth consideration by the Ministry of Railways. Various assurances given in the Parliament and the issues raised by the various Zonal Railways had been taken note of while formulating the said Policy but within a period of four months, the aforesaid Circular was superseded by the Circular dated 12.10.2004 containing the revised Bookstall Policy-2004. In this context he submitted that the only reason that was indicated in the preamble to the Circular dated 12.10.2004 for revising the Bookstall Policy was the Budget Speech of the Railway Minister in favour of transparency, competitiveness and doing away with sole selling rights in certain contracts but this was not borne out from the Budget Speech contained in paragraph 44 of the Budget Speech dated 6.7.2004.
27. Sri V.B. Singh, learned Senior counsel for the respondents admitted that the sole reason for revising the Bookstall Policy was the statement of the Railway Minister contained in the Budget Speech and this is also clear from Paragraphs 14 and 58 of the counter affidavit wherein it has been stated that the Bookstall Policy issued on 11.6.2004 was revised by the Circular dated 12.10.2004 in the "wake of the Hon'ble Minister of Railway's Budget Speech-2004-2005 to bring transparency, competitiveness and doing away with sole selling rights in certain contracts". Thus according to him the reason for revising the Bookstall Policy is to be found in the Budget Speech of the Railway Minister made on 6.7.2004 and in this connection he placed reliance on paragraphs 39 and 44 of the Budget Speech. We, therefore, reproduce the said paragraphs which are as follows:-
"39. Railways are making all out efforts to improve the catering services by serving cleaner, healthier and tastier food to the passengers both at stations and on trains. Railways will also endeavour to make available wholesome milk and milk products at all catering outlets towards which a beginning has been made by serving "mattha" and "lassi". With a view to provide pure and wholesome products to the passengers and to give employment opportunities to dairy producers, as far as possible, these will be purchased from dairy units of co-operative sector. As far as other eatables are concerned, with a view to increase the earnings from the catering contracts, complete transparency and competitiveness will be ensured in the award of contracts.
.......................................
44. A new Bookstall Policy for Indian Railways has been formulated. In this policy a 25% reservation for allotment of bookstalls for SC/ST/OBC, minorities, war widows, those below the poverty line, physically challenged individuals, Railway employees' widows has been introduced on 'B', 'C' and 'D' class stations. At 'A' class-stations, a two packet tender system has been introduced. The new policy does away with the system of the sole selling rights and provides for a uniform tenure of five years."
28. While justifying the revision of the Bookstall Policy, Sri V.B. Singh, learned Senior counsel appearing for the Railways contended that the scope of judicial review in matters of Policy or change in Policy is very limited and the Court can interfere only on the grounds of arbitrariness or unreasonableness and since in the present case the change in Policy is not unreasonable or arbitrary and can be justified on "Wednesbury reasonableness", there is no occasion for this Court to interfere in the matter and in support of his contentions he placed reliance upon various decisions of the Supreme Court to which we shall refer later. He further submitted that a Policy document should not be read and interpreted like a statutory provision and in support of his contention he relied upon the decision of the Supreme Court in Secretary, Ministry of Chemicals & Fertilizers, Government of India v. Cipla Ltd. and Ors. (2003) 7 SCC 1.
29. In order to examine the aforesaid contentions of the learned counsel for the parties, it has become necessary for us to examine the scope of judicial review in such matters.
30. In the present case a substantive legitimate expectation did arise in favour of the petitioner firm, as the undisputed facts would clearly reveal. On the aforesaid basis, one can conclude with confidence that the Railways clearly intended to create contractual relations of an enduring nature. The burden of proof lay on the Railways to negate the same which they have failed to do. The test to be applied should be an objective one. The policy of 11th June, 2004 justifies the earlier intention of 08.11.2002 to renew the contract. The state of mind of the Railways was clearly indicative of the intention to renew the contract. The petitioner firm relying on the objective appearance of consent, altered its position by making investments which stands prejudiced by the introduction of the new policy. The correspondence from 08.11.2002 to June, 2004 was not an un-communicated belief but it was a specific move towards renewal of the contract. The words "unless renewed" appearing in the agreement and the subsequent correspondence dated 08.11.2002 coupled with the appraisal performance reports in favour of the petitioner firm culminating in the policy decision dated 11th June, 2004, were not mere general statements or mere simple representations on behalf of the Railways. They were intended to ripen into a definite contractual relationship and was not a mere inducement. The decisive approach of the Railways without any indication of discontinuing the existing relationship undoubtedly gave rise to a genuine legitimate expectation in favour of the petitioners. The correspondence and the consequential framing of the policy was an assured step towards the continuance of the contractual relationship between the petitioners and the Railways.
31. The question, therefore, that arises for our consideration is whether this would straight away entitle the petitioners to claim the relief from the administrative authorities or whether such a claim could be defeated by the change of Policy and whether the Courts can judicially review such Policy. To find out the answer, we shall examine the scope of legitimate expectation and judicial review and the various decisions of the Courts in this regard.
32. In Halsbury's Laws of England, Fourth Edition, Volume 1(1) 151, a passage explaining the scope of "legitimate expectations" runs thus:
"81. Legitimate expectations. A person may have a legitimate expectation of being treated in a certain way by an administrative authority even though he has no legal right in private law to receive such treatment. The expectation may arise either from a representation or promise made by the authority, including an implied representation, or from consistent past practice.
The existence of a legitimate expectation may have a number of different consequences; it may give locus standi to seek leave to apply for judicial review; it may mean that the authority ought not to act so as to defeat the expectation without some overriding reason of public policy to justify its doing so; or it may mean that, if the authority proposes to defeat a person's legitimate expectation, it must afford him an opportunity to make representations on the matter. The courts also distinguish, for example in licensing cases, between original applications, applications to renew and revocations; a party who has been granted a licence may have a legitimate expectation that it will be renewed unless there is some good reason not to do so, and may therefore be entitled to greater procedural protection than a mere applicant for a grant."
33. In Union of India and Ors. v. Hindustan Development Corporation and Ors. AIR 1994 SC 988 the Supreme Court held as follows:-
"33-34. On examination of some of these important decisions it is generally agreed that legitimate expectation gives the applicant sufficient locus standi for judicial review and that the doctrine of legitimate expectation is to be confined mostly to right of a fair hearing before a decision which results in negativing a promise or withdrawing of an undertaking is taken. The doctrine does not give scope to claim relief straightway from the administrative authorities as no crystallized right as such is involved. The protection of such legitimate expectation does not require the fulfillment of the expectation where an overriding public interest requires otherwise. In other words where a person's legitimate expectation is not fulfilled by taking a particular decision then decision-maker should justify the denial of such expectation by showing some overriding public interest."
34. In Punjab Communications Ltd v. Union of India and Ors., (1999) 4 SCC 727 the Supreme Court held as follows:-
"37. The above survey of cases shows that the doctrine of legitimate expectation in the substantive sense has been accepted as part of our law and that the decision-maker can normally be compelled to give effect to his representation in regard to the expectation based on previous practice or past conduct unless some overriding public interest comes in the way. The judgment in Raghunathan case requires that reliance must have been placed on the said representation and the representee must have thereby suffered detriment.
38. The more important aspect, in our opinion, is whether the decision-maker can sustain the change in policy by resort to Wednesbury principles of rationality or whether the court can go into the question whether the decision-maker has properly balanced the legitimate expectation as against the need for a change. In the latter case the court would obviously be able to go into the proportionality of the change in the policy.
42. Thus both in ex p Hargreaves (in which the challenge failed) and ex p Unilever (in which the challenge succeeded), the protection for substantive legitimate expectation was based on Wednesbury unreasonableness. In sum, this means that the judgment whether public interest overrides the substantive legitimate expectation of individuals will be far the decision-maker who has made the change in the policy and the courts will intervene in that decision only if they are satisfied that the decision is irrational or perverse (see 1997 Public Law, p. 375 "Wednesbury Protection of Substantive Legitimate Expectation" by Christopher Forsyth). The observations of this Court in Hindustan Development Corpn. Case; in M.P. Oil Extraction case and in S. Raghunathan case are more or less to a similar effect, though no specific reference was made to the Wednesbury rule."
35. The famous "Wednesbury Case" Associated Provincial Picture Houses Ltd. Us. Wednesbury Corp. (1947) 2 All ER 680 (CA) is considered to be the landmark in so far as the basic principles relating to judicial review of administrative or statutory direction are concerned. We quote a passage from the judgment of Lord Greene which is as follows:-
"It is true that discretion must be exercised reasonably. Now what does that mean? Lawyers familiar with the phraseology used in relation to exercise of statutory discretions often use the word 'unreasonable' in a rather comprehensive sense. It has frequently been used and is frequently used as a general description of the things that must not be done. For instance, a person entrusted with a discretion must, so to speak, direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting 'unreasonably'. Similarly, there may be something so absurd that no sensible person could even dream that it lay within the powers of the authority...... . In another, it is taking into consideration extraneous matters. It is unreasonable that it might almost be described as being done in bad faith; and in fact, all these things run into one another."
36. In Union of India and Anr. v. International Trading Company and Anr. (2003) 5 SCC 437, the Supreme Court pointed out that the Policy of the Government, even in contractual matters, must satisfy the test of reasonableness and every State action must be informed by reason. In this connection paragraphs 14,15 and 16 of the judgment are reproduced below:-
"14. It is trite laws that Article 14 of the Constitution applies also to matters of governmental policy and if the policy or any action of the Government, even in contractual matters, fails to satisfy the test of reasonableness, it would be unconstitutional.
15. While the discretion to change the policy in exercise of the executive power, when not trammelled by any statute or rule is wide enough, what is imperative and implicit in terms of Article 14 is that a change in policy must be made fairly and should not give the impression that it was so done arbitrarily or by any ulterior criteria. The wide sweep of Article 14 and the requirement of every State action qualifying for its validity on this touchstone irrespective of the field of activity of the State is an accepted tenet. The basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. Actions are amenable, in the panorama of judicial review only to the extent that the State must act validly for a discernible reason, not whimsically for any ulterior purpose. The meaning and true import and concept of arbitrariness is more easily visualized than precisely defined. A question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case. A basic and obvious test to apply in such cases is to see whether there is any discernible principle emerging from the impugned action and if so, does it really satisfy the test of reasonableness.
16. Where a particular mode is prescribed for doing an act and there is no impediment in adopting the procedure, the deviation to act in a different manner which does not disclose any discernible principle which is reasonable itself shall be labeled as arbitrary. Every State action must be informed by reason and it follows that an act uninformed by reason is per se arbitrary."
37. In Bannari Amman Sugars Ltd. v. Commercial Tax Officer and Ors., (2005) 1 SCC 625 the Supreme Court considered the scope of judicial review and also explained the doctrine of legitimate expectation observing that the doctrine does not give scope to claim a relief straight away from the administrative authorities as no crystallised right as such is involved. The protection of such legitimate expectation does not require the fulfilment of the expectation where an overriding public interest requires otherwise, and in such eventuality, it becomes the duty of the decision maker to satisfy the Court that such a denial was justified by showing some overriding public interest. The Court held that change in policy can defeat a substantive legitimate expectation if it can be justified on "Wednsebury Reasonableness". Before interfering with such a changed policy, the Court must reach the conclusion that the policy, which has defeated the substantive expectation, is irrational or perverse or one, which no reasonable person could have made. If the denial of legitimate expectation in a given case amounts to denial of the right guaranteed or is arbitrary, discriminatory, unfair or biased, gross abuse of power, or in violation of the principles of natural justice, the same can be questioned on the well known grounds attracting Article 14 of the Constitution. But a claim based on mere legitimate expectation without anything more cannot ipso facto give a right to invoke these principles. The Court further held as under:
"Reasonableness of restriction is to be determined in an objective manner and from the standpoint of interests of the general public and not from the standpoint of the interests of persons upon whom the restrictions have been imposed or upon abstract consideration. A restriction cannot be said to be unreasonable merely because in a given case, it operates harshly. In determining whether there is any unfairness involved, the nature of the right alleged to have been infringed, the underlying purpose of the restriction imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing condition at the relevant time enter into the judicial verdict, the reasonableness of the legitimate expectation has to be determined with respect to the circumstances relating to the trade or business in question. Canalisation of a particular business in favour of even a specified individual is reasonable where the interests of the country are concerned or where the business affects the economy of the country. (See Parbhani Transport Coop. Society Ltd. v. RTA, AIR I960 SC 801; Hari Chand Sarda v. Mizo Distt Council, AIR 1967 SC 829; Shree Meenakshi Mills Ltd. v. Union of India, AIR 1974 SC 366; Krishnan Kakkanth v. Govt. of Kerala, AIR 1997 SC 128; and Union of India v. International Trading Co., (2003) 5 SCC 437."
38. In Union of India v. Dinesh Engineering Corporation and Anr. (2001) 8 SCC 491 the Supreme Court observed as follows:-
"There is no doubt that this Court has held in more than one case that where the decision of the authority is in regard to a policy matter, this Court will not ordinarily interfere since these policy matters are taken based on expert knowledge of the persons concerned and courts are normally not equipped to question the correctness of a policy decision. But then this does not mean that the courts have to abdicate their right to scrutinise whether the policy in question is formulated keeping in mind all the relevant facts and the said policy can be held to be beyond the pale of discrimination or unreasonableness, bearing in mind the material on record.......... . Any decision, be it a simple administrative decision or a policy decision, if taken without considering the relevant facts, can only be termed as an arbitrary decision. If it is so, then be it a policy decision or otherwise, it will be violative of the mandate of Article 14 of the Constitution."
39. In Indian Railway Construction Co. Ltd. v. Ajay Kumar (2003) 4 SCC 579 the Supreme Court held as follows-
"It is trite law that exercise of power, whether legislative or administrative, will be set aside if there is manifest error in the exercise of such power or the exercise of the power is manifestly arbitrary. ............If a power (whether legislative or administrative) is exercised on the basis of facts which do not exist and which, are patently erroneous, such exercise of power will stand vitiated."
40. In Ugar Sugar Works Ltd. v. Delhi Administration and Ors., AIR 2001 SC 1447, it has been held that in exercise of their power of judicial review, the Courts do not ordinarily interfere with the policy decisions of the executive unless the policy can be faulted on the ground of mala fide, unreasonableness, arbitrariness or unfairness etc. Indeed arbitrariness, irrationality, perversity and mala fide, render the policy unconstitutional. However, if the policy cannot be touched on any of these grounds, the mere fact that it may affect business interests of a party does not justify invalidating the policy.
41. In State of Himachal Pradesh and Anr. v. Padam Dev and Ors., (2002) 4 SCC 510; and State of Rajasthan and Ors. v. Lata Arun AIR 2002 SC 2642, the Supreme Court held that unless a policy decision is demonstrably capricious or arbitrary and not informed by any reason or discriminatory or infringing any Statute or the Constitution, it cannot be a subject of judicial interference under Articles 32, 226 or 136 of the Constitution. In Balco Employees' Union (Regd) v. Union of India and Ors., AIR 2002 SC 350; and Federation of Railway Officers Association v. Union of India, (2003) 4 SCC 289, a similar view has been reiterated.
42. The Supreme Court in Kailash Chandra Sharma v. State of Rajasthan & Ors., AIR 2002 SC 2877 upheld the Full Bench judgment of the Rajasthan High Court in Deepak Kumar Suthar v. State and Ors., 2000 Lab IC 1 wherein the Court had struck down the policy decision of the Government granting bonus marks on the ground of residence in public employment being ultra vires the provisions of Article 14 and 16 of the Constitution. The Supreme Court held that policy decision giving weightage to the candidates in public employment on the ground of residence was impermissible in view of the Constitutional provisions. The policy decision was, therefore, bad and in such a case judicial review was found to be warranted.
43. In People's Union for Civil Liberties and Anr. v. Union of India and Ors., 2004 AIR SCW 379 while dealing with the same issue, the Hon'ble Supreme Court observed as under:-
"The jurisdiction of this Court in such matter is very limited. The Court will not normally exercise its power of judicial review in such matters unless it is found that formation of belief by the statutory authority suffers from mala fide, dishonesty or corrupt practice. The order can be set aside if it is held to be beyond the limits for which the power has been conferred upon the authorities by the Legislature or is based on the grounds extraneous to the legislation and if there are no grounds, at all for passing it or if the grounds are such that no one can reasonably arrive at the opinion or satisfaction required thereunder."
44. The Supreme Court in Cholan Roadways Ltd. v. G. Thirugnanasambandam, 2005 AIR SCW, 84, has gone a step further by bringing "errors of facts" within the scope of judicial review. While deciding the said case, reliance was placed upon the judgment in E. v. Secretary of State for the Home Department, (2004) 2 Weekly Law Report, 1351, wherein it has been held that a review of the merits of the decision making process is fundamental to the Court's jurisdiction. The power of review may even extend to a decision on a question of fact. The error sought to be corrected must be undeniably a significant factor in the decision making process.
45. It is in the light of the aforesaid principles of law that we shall examine this case. As seen above, the only material that has been produced before us to justify the revision of the Bookstall Policy is the Budget Speech of the Hon'ble Railway Minister made on 6.7.2004 and, therefore, we shall examine paragraph 44 of the said Budget Speech to find out whether the statements could have occasioned the revision.
46. Sri Gopal Subramaniam, learned Senior counsel for the petitioners submitted that at the time when the Budget Speech was made on 6th July, 2004 the comprehensive Bookstall Policy of the Railways contained in the Circular dated 11.6.2004 had been formulated and what the Hon'ble Railway Minister had stated in paragraph 44 were merely the salient features of the said Policy.
47. Sri V.B. Singh, learned Senior counsel for the respondents, however, submitted that this was not the position and, in fact, to maintain complete transparency and competitiveness it had become necessary to revise the Policy as would also be clear from the Preamble to the revised Policy contained in the Circular dated 12.10.2004.
48. We have carefully read paragraphs 39 and 44 of the Budget Speech of the Hon'ble Railway Minister made on 6th July, 2004. The Budget Speech was made after the issuance of the Circular dated 11.6.2004 containing the Bookstall Policy. Paragraph 44 begins by stating "A new Bookstall Policy for Indian Railways has been formulated." (Emphasis supplied)" By using the word "has" the Hon'ble Railway Minister clearly referred to the Bookstall Policy, which had already been formulated and not to some other Policy which was under contemplation. Obviously the reference is to the Bookstall Policy contained in the Circular dated 11.6.2004. The subsequent statements of the Railway Minister in paragraph 44 clearly refer to the various provisions of the aforesaid Bookstall Policy. We have, therefore, no manner of doubt whatsoever, that the statements contained in paragraph 44 of the Budget Speech of the Railway Minister made on 6th July, 2004 merely refer to some of the salient features of the Policy contained in the Circular dated 11.6.2004. The statements regarding complete transparency and competitiveness are contained in paragraph 39 of the aforesaid Budget Speech, which relates to catering contracts. It is while dealing with catering contracts that the Hon'ble Railway Minister expressed his views that the Railways will endeavor to make available wholesome milk and milk products at all catering outlets and for the other eatable items "with a view to increase the earning from the contracts, complete transparency and competitiveness" would be ensured in the award of the contracts (Emphasis supplied). Thus transparency and competitiveness was required to be ensured in the matter of award of contracts for vending eatables. On the other hand, the comprehensive Bookstall Policy contained in the Circular dated 11.6.2004 had been formulated after taking into consideration the various issues raised by the Zonal Railways and the assurances given in Parliament. A bare perusal of the aforesaid Policy clearly indicates that it maintains complete transparency and competitiveness. There is nothing in the Budget Speech of the Hon'ble Railway Minister regarding the Bookstall Policy which may even remotely hint at reviewing the same and to achieve transparency and competitiveness. Thus the very foundation for revising the Bookstall Policy is factually incorrect. In fact, even "errors of fact" have now been brought within the scope of judicial review. The question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case. Thus, if the power is exercised on the basis of facts which do not exist, such exercise of power will stand vitiated. We make it clear that the respondents have not brought before us any other material to support the revision of the Bookstall Policy and the only material which is said to have prompted the revision is the Budget Speech of the Hon'ble Railway Minister made on 6th July, 2004 and this having been found to be factually incorrect the revised Bookstall Policy dated 12.10.2004 cannot be sustained.
49. We are conscious of the fact that the Policy of the Government is not to be read as a piece of Statute as contended by Sri V.B. Singh, learned Senior counsel for the Railways, in view of the decision of the Supreme Court in Cipla Ltd. (supra), but no matter how we read paragraph 44 of the Budget Speech, we are unable to persuade ourselves to hold that the Hon'ble Railway Minister was referring to a Bookstall Policy which was under contemplation and not to the one which had already been formulated.
50. Sri V.B. Singh further contended that the absence of any statement in paragraph 44 of the Budget Speech about the renewal of the licence of the petitioner firm would necessarily mean that the Hon'ble Railway Minister was not referring to the Bookstall Policy of June, 2004 because such a clause did exist in the said Policy. This contention being preposterous is liable to be rejected. Each of the statements contained in the Budget Speech is clearly referable to the June, 2004 Policy and mere absence of some of the features of the said Policy in the Budget Policy cannot by any stretch of imagination lead to the inference that the Hon'ble Minister was not referring to this Policy. As pointed out above, even the answers given by the Hon'ble State Minister for Railways on 22.8.2004 to the specific questions regarding the petitioner firm clearly refer to the Bookstall Policy of June, 2004. It is in the light of those principles that we have examined the facts of this case and our irresistible conclusion is that the very foundation for revising the Bookstall Policy was factually incorrect inasmuch as the Budget Speech of the Hon'ble Railway Minister made on 6th July, 2004 did not even remotely hint at revising the said Policy.
51. There is yet another aspect of the matter. The overriding public purpose for the award of contract for bookstalls is the need to provide the best reading material to the railway passenger in particular and the public at large. Standard reading material and a variety of publications with their latest editions would be the required input for such stalls. It is this paramount consideration which should form the basis of award of contracts. Every other factor would be secondary. Free and fair distribution of contract with a view to have more competition has to be observed but not at the sacrifice of the real objective of catering to the passengers with the best reading material. The main public purpose is not to generate employment and ensure fair distribution of wealth but to provide the best facilities at the bookstalls with the best stock of reading material. The mode of settlement of contracts is only a step in the aid of achieving the aforesaid laudable object. The policy, therefore, which subserves the said purpose best has to be adopted. The respondents, in their correspondence, have themselves recognized the long standing satisfactory contribution of the petitioners. The same ought to have been at least considered before totally repudiating the right of consideration of renewal of contract of the petitioners. There is no material to demonstrate that the earlier policy of 11th June, 2004 was in any way against the aforesaid public purpose or was in any way deficient so as to warrant a change within four months. Judged from the point of view of public interest, the contract can be awarded even to a single individual if the exigencies so demand and a justifiable reason exists for the same. The Court does not find any thing in the policy dated 1 1.06.2004 which may be termed as being against public purpose, non transparent and uncompetitive. On the other hand, the present policy is replete with contradictions as pointed Out herein, making it vulnerable to Article 14 of the Constitution.
52. We may also remind ourselves that the Railways have not made any adverse comment on the functioning of the petitioner firm on the Railway stations and on the contrary the records clearly reveal that the performance has been more than satisfactory. All the Zonal Railways had made recommendations in favour of renewal of licence of the petitioner firm. No statement/document has been brought to our notice by the learned Senior counsel for the Railways which may indicate that the Railways had suffered financial loss because of the petitioner firm. On the other hand, the Railways have admitted that even though the petitioner firm is operating at only 258 of the total 8055 Railway stations which is approximately 3%, it is contributing at least 80% of the total royalty which the Railways receive from the Bookstalls at the stations. The sole settling rights of the petitioner firm have been taken away under the Bookstall Policy of June, 2004 and there is no prohibition in giving licence to other new Bookstalls through the two-packet system as contemplated under clause 5.5 of the said Policy.
53. The various decisions of the Supreme Court referred to above clearly hold that the change in Policy must be made fairly and should not give the impression that it was so done arbitrarily or by any ulterior motive. In other words, the decision maker should be able to sustain the change in Policy by resort to 'Wednesbury' principles of rationality. Every State action must be informed by reason which means that an act uniformed by reason is per se arbitrary.
54. We may mention that Sri Gopal Subramaniam, learned Senior counsel for the petitioners also took us through the various provisions of the revised Bookstall Policy contained in the Circular dated 1.2.10.2004 to show that it was wholly arbitrary and unreasonable. In particular, he placed before us the eligibility criteria relating to allotment of new Bookstalls in respect of "A" Class stations, which requires the firm to have at least 10 persons on its rolls of which 50% should be graduates and the firm should have at least one similar Bookstall/bookshop in the same city. He submitted that the requirement of having at least one Bookstall/bookshop in the same city had no rational basis with the object sought to be achieved. Likewise, he submitted that even in respect of "B" and "C" category stations where the licence could be given to "other categories", the firm/Company/individual unemployed graduate should have had an annual turnover from Bookstalls elsewhere equal to at least 150% of the anticipated annual turnover from the tender Bookstall in any one of the last five years. The qualification of having at least one book stall in the same city does not appeal to reason. Restricting the zone of consideration by allowing a person having a bookstall in the same city, to make an offer, clearly prohibits the participation of other bookstall owners from outside the city. This, in the opinion of the Court, amounts to prohibiting the practice of free trade and profession as guaranteed under Article 19(1)(g) of the Constitution. The prohibition is unreasonable and has no rational nexus with the object sought to be achieved. A reasonable restriction cannot be extended to the extent of complete prohibition. This directly restricts the Railways as well from exercising a wider choice. Consideration of generating more revenue and providing better facilities stand diminished which is definitely against public interest and the interest of Railways itself. The counter affidavit fails to justify the said decision which is palpably unreasonable.
55. On the contrary, the respondents have taken a stand that the policy is intended to remove disparity by eliminating the process of renewal in favour of contractors like the petitioner firm. The contention of the respondents is bereft of reasoning. It overlooks the facts brought out on record which admit that the petitioner firm has only 3% of the book stalls whereas it generates 80% of the revenue. It is not understood as to what disparity existed so as to reasonably justify the promulgation of a new policy presently under challenge. There is neither any monopoly in favour of the petitioner firm nor does its functioning prevent the award of contract in favour of other firms. The operation of the petitioner firm has been gradually diluted and restricted to a limited area. On an objective analysis by the Railways itself, the petitioners contract was continued and recommended with full force to be renewed. The continuance of the petitioner firm ought to have been considered objectively. The new policy under challenge is conspicuously silent as to what prompted its formulation and elimination of the renewal clause. No cogent reason is available on the record to sustain the same. The stand set up in the counter affidavit throughout merely states that the Railways are free to choose any policy for themselves. The freedom to choose a policy is not unfettered and is restricted by the standards of reasonableness or to put it conversely free from unreasonableness.
56. The other condition for category 'B and C' stations of having an annual turnover of at least 150% of the anticipated turnover, that too from the category of unemployed youth is simply preposterous and absolutely irrational. It is not understood as to how an unemployed youth can ever fulfil such a condition. This clearly reflects an unsustainable approach. The counter affidavit does not afford any plausible explanation and to our mind fails to justify the enunciation of the new policy on that score. The impugned policy therefore fails to satisfy the test of Article 14 of the Constitution and does not stand the scrutiny of "Wednesbury" reasonableness.
57. In the end, Sri V.B. Singh, learned Senior counsel contended that the petitioner firm being a licensee cannot claim any right and in support of his contention he placed reliance upon the decision of the Supreme Court in Special Leave Petition No. 23488-23489 of 2002 (Siraj Nasir and Ors. v. Union of India and Ors. Decided on 10.12.2002) which arose out of Writ Petition No. 50484 of 2000 (Smt. Siraj Nasir and Ors. v. Union of India and Ors. Decided on 31.10.2002). In the present case the petitioner firm is claiming consideration for renewal under the Bookstall Policy of 11.6.2004 and, therefore, the aforesaid decisions do not help the Railways.
58. The writ petition, therefore, succeeds and is allowed. The Circular dated 12.10.2004 is hereby quashed. A direction is issued to the respondents to consider the claim of the petitioner firm for renewal of the licence under the provisions of the Circular dated 11.6.2004. There shall be no order as to costs.