Rajasthan High Court - Jaipur
Rajesh Bajargan vs Khurshid Ahmed And Ors on 22 March, 2012
Author: Arun Mishra
Bench: Arun Mishra
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR BENCH JAIPUR 1. D.B. Special Appeal (Writ) No.1510/2011 Union of India & anr. V/s Khurshid Ahmed & ors. 2. D.B. Special Appeal (Writ) No.1519/2011 Indian Railway Catering & V/s Khurshid Ahmed & anr. Tourism Corp. Ltd. & anr. 3. D.B. Civil Special Appeal (Writ) No.1603/2011 M/s Nanag Ram Prabh Das V/s Khurshid Ahmed & .ors. 4. D.B. Civil Special Appeal (Writ) No.2615/2011 Rajesh Bajargan V/s Khurshid Ahmed & ors. Date when the judgment was reserved :- 2.3.2012 Date of pronouncement of judgment :- 22.3.2012 PRESENT Hon'ble the Chief Justice Mr.Arun Mishra Hon'ble Mr.Justice Narendra Kumar Jain-I Mr.Gourab Banerji, Sr.Advocate, ) Addl.Solicitor General with ) Mr.Sahil Tagotra ) Mr.Alok Garg ) Ms.Sonal Singh ) Mr.Shailesh Prakash Sharma )-for the appellants. Mr.Manish Sharma ) Mr.Venkatesh Garg ) Mr.R.P.Singh, Sr.Advocate with ) Ms.Sheetal Mirdha & ) Mr.Shashikant Saini ) Mr.Azad Ahmed )-for the respondents. JUDGMENT BY THE COURT (Per Hon'ble Shri Arun Mishra, CJ)
Reportable Since all these intra-court appeals arise out of the selfsame order dated 20th July, 2011 passed by the Single Bench in S.B.Civil Writ Petition No.131/2010, they were heard together and are being decided by this common judgment. The Single Bench allowed the writ application filed by petitioner-respondent no.1-Khurshid Ahmed and directed the respondents-Railway & IRCTC to hand over possession of stalls, so allotted, to the petitioner forthwith, however, petitioner would be liable to pay amount on the agreed rate of the contract which was higher than the licence fee now paid by the erstwhile licence holders. It was further observed that the petitioner would not plead or take advantage of all the licence fee paid by the erstwhile license holders.
The facts in nutshell are that the Chief Regional Manager, Indian Railway Catering & Tourism Corporation Ltd. Jaipur (hereinafter referred to as the IRCTC) invited tenders for allotment of stalls at Jaipur Railway Station in accordance with the Catering Policy of the IRCTC in 2007 and in pursuance thereof, the petitioner-respondent no.1 submitted tenders for different stalls at different platforms and being the highest bidder, he was allotted six stalls. When the allotment of stalls was made in favour of the petitioner, a writ application was filed on behalf of those who were holding stalls being S.B.Civil Writ Petition No.4522/2007 M/s Ram Chanda Prabhudas & ors. V/s Union of India and ors. and in that writ application, interim order was passed by the Single Bench on 7.9.2007 taking note of the interim order passed by the Apex Court. Thereafter, the Apex Court modified the interim order on 16.9.2009 and consequently, the Single Bench vide order dated 30.11.2009 also modified the interim order dated 7.9.2007 so as to make it in consonance with the order passed by the Apex Court. After modification of the interim order, stay remained operational only in relation to the quota reserved for freedom fighters/women including war widows and widows of Railway employees/persons who have been dislocated or displaced due to their land having been taken over by the Railways. The stay was vacated qua all others. Thereafter, the Chief Regional Manager, IRCTC wrote letter to the Divisional Railway Manager, Northern Western Railway, Jaipur for handing over the possession of stalls to the petitioner-respondent no.1 and pursuant thereto, the Divisional Railway Manager wrote letter to the Chief Regional Manager, IRCTC stating that they are ready to assist them to hand over possession of stalls to Chief Regional Manager, IRCTC, but not to the petitioner-respondent no.1. It was submitted by the petitioner-respondent no.1 that even after allotment of stalls pursuant to the tender and modification of the stay orders passed by the Apex Court so also the High Court, possession of the stalls was not given to him despite deposition of Rs.30 lacs in view of order of allotment. The Railway Department and IRCTC are shifting burden on each other for denial or delay in handing over the possession of stalls to the petitioner. After modification of the interim order by the Apex Court, other allottees were given possession of stalls, but the petitioner's case remained as an exception and he has not been allotted the stalls so far. Hence, the writ application was filed for issuance of directions for allotment of six stalls to the petitioner.
A reply to the writ application was filed by the Divisional Railway Manager wherein burden has been put mainly on IRCTC for all inactions in the matter. However, it was admitted that possession of stalls has to be handed over by IRCTC for which they can only provide assistance.
A separate reply was filed by IRCTC in which it was stated that despite their best efforts, possession of stalls could not be given to the petitioner as previous license holders started litigation and in view of the interim order passed by this Court on 7.9.2007 though the same was subsequently vacated on 30.11.2009. It has been admitted by IRCTC that they were interested in giving possession to the allottees. They have also admitted that earlier licence holders are in unauthorized possession of the stalls, rather they are in occupation of stalls as trespassers.
After hearing the parties, the Single Bench allowed the writ application and directed the respondents-Railway and IRCTC to hand over possession of stalls, so allotted, to the petitioner forthwith. Relying upon the judgments of the Apex Court in Union of India & ors. V/s Asian Food Industries ((2006) 13 SCC 542 and Sime Darby Engineering Sdn. Bhd. V/s Engineering India Limited ((2009) 7 SCC 545), the Single Bench came to the conclusion that even if the Catering Policy 2010 is taken into consideration, it cannot take effect retrospectively and that too, for the contract already entered into between the parties. Since allotment of stalls was made in favour of the petitioner in 2007 and new Catering Policy came in 2010 and respondents admittedly received Rs.30 lacs from the petitioner towards contract and there was concluded contract between the parties, the accrued right of the petitioner could not be taken away by giving erroneous interpretation to the new Catering Policy, that too, making it retrospective. Even para 26.1.2 of the new Catering Policy cannot nullify the contracts already entered between the parties in view of the aforesaid judgments of the Apex Court. The Single Bench further observed that once it is held by the Apex Court that a policy decision cannot affect the earlier contract, the plea of the intervenors to continue with stalls pursuant to new Catering Policy, 2010 was of no consequence, especially when intervenors were paying much lesser amount of licence fee than agreed to be paid by the petitioner being successful bidder pursuant to the tender and it is only on account of inaction on the part of the Railway that even after modification of the interim order by the Apex Court as well as by this Court, possession of the stalls has not been given to the petitioner and now the same cannot be to the benefit of the intervenors as it was entirely due to default and inaction on the part of the respondents-Railway and IRCTC.
Aggrieved by the order passed by the Single Bench, the intra-court appeals have been preferred by Union of India through General Manager, Northern Western Railway, IRCTC, intervenor M/s Nanag Ram Prabh Das and intervenor-Rajesh Bajargan.
It is an admitted position that IRCTC, Jaipur invited tenders for allotment of stalls at Jaipur Railway Station in 2007 and pursuant thereto, the petitioner-respondent no.1 applied for different stalls on different platforms and he was allotted six stalls at the different platforms. Thereafter, S.B.Civil Writ Petition No.4522/2007 M/s Ram Chanda Prabhudas & ors. V/s Union of India and ors. was filed in which on 7.9.2007, considering that the Apex Court has extended the interim protection given by Bombay High Court on 4.10.2006 that the allotment orders are not to be acted upon, the Single Bench passed interim order to the effect that the allotment orders to the others of the stalls possessed by the petitioners shall not be acted upon. Thereafter, on 16.9.2009, the Apex Court modified the interim orders passed in the Petition(s) for Special Leave to Appeal (c) Nos.10742-10743/2007 in the following manner:-
We hereby modify interim orders, referred to above, passed by this Court, to this extent that the same shall apply only in relation to quotas of percentage reserved for freedom fighters/women including war widows and widows of railways employees/persons who have been dislocated or displaced due to their land having been taken over by the railway for its own use and also for minority and stand vacated qua all others. It is clarified that all allotments made after filing of the writ petitions before the High Court till this date and which may be made hereinafter shall be subject to the result of these special leave petitions. It shall be enumerated specifically in the orders of allotment that the allotment would be subject to the result of these special leave petitions.
In the facts and circumstances of the case, we are of the view that this order shall be given effect to from 1st November, 2009.
It is directed that in case in any litigation pending before any court in the country, an interim order is operating which is at variance with this order, it would be open to the Union of India and/or I.R.C.T.C. to file appropriate application before that court for suitably modifying the same or this Court in these cases for appropriate orders. It is further directed that no court in the country other than this Court, shall pass any order which may be at variance with this order.
Thereafter, on 30.11.2009, the Single Bench modified the interim order dated 7.9.2007 passed in S.B.Civil Writ Petition No.4522/2007 and observed that the order of the Hon'ble Supreme Court dated 16.9.2009 will apply to this litigation also.
It is not in dispute that the petitioner-respondent no.1 has deposited Rs.30 lacs towards contract.
It is also not in dispute that during pendency of the writ application, new Catering Policy, 2010 was issued by the Railway Board vide Circular dated 21.7.2010 and in light of the new Catering Policy, 2010, the Single Bench vide order dated 5.10.2010 dismissed the writ application filed by the petitioner-respondent no.1 and other writ applications as having become infructuous. Against the said order, the petitioner-respondent no.1 preferred D.B.Civil Special Appeal(Writ) No.632/2010 and the Division Bench of this Court vide judgment dated 22.11.2010 set aside the order of Single Bench dated 5.10.2010 and requested the Single Bench to take up the matter of petitioner respondent no.1 separately and decide it in accordance with law. Thereafter, the Single Bench heard the matter afresh and during the pendency of the writ application, the Single Bench found that it was a case of creating hindrance in dispensation of justice and thus, notices for contempt of court were issued to Mr.RK Sondh, Group General Manager, North Zone, IRCTC, Jaipur and contempt petition was registered being S.B.Civil Contempt Petition No.392/2011. In that contempt petition, Mr.Suresh Pareek, Senior Advocate put in appearance on behalf of the contemnor and pursuant to the order dated 2.5.2011 passed by the Single Bench in the contempt petition, detailed opinion was furnished by Mr.Pareek after going through the entire record on 13.5.2011 which shows that on account of continuance of possession of stalls by the erstwhile license holders, Railway has put itself in loss of lacs of rupees. Ultimately, the Single Bench allowed the writ application vide order dated 20.7.2011 which is under challenge in the intra-court appeals.
The learned counsel appearing on behalf of the appellants have submitted that denial of possession of the stalls to the petitioner-respondent no.1 was due to change of policy; the matter was sub judice as conflicting writ applications were pending; Railway Board had intervened by letter dated 30.4.2010 to withhold the tendering till the policy was formulated; in December, 2009, White Paper was placed before the Parliament which highlighted the issue of monopoly which ultimately resulted in the new Catering Policy, 2010; auction/allotment made by IRCTC had not been proceeded by segregation of GMUs/SMUs, which resulted in cartelisation.; allotment made by IRCTC did not give any vested right to the petitioner as the allotment letter itself shows that it required entering into an agreement as per terms and conditions, which did not happen; the petitioner failed to implead the existing licensees; though existing licensees were unauthorized, it was not possible to remove them without invoking the provisions of Public Premises Act and the Commercial Circular No.37 of 2010 dated 9.8.2010 issued by Railway Board permitted regularization; the petitioner was seeking specific performance and at the most he would be entitled to damages; the Railway was always willing to refund the amount; application for refund was made by the petitioner at the time when no litigation was pending and thus, he was estopped from resiling the same; the petitioner was already holding three stalls and if he was given possession of six more stalls pursuant to impugned order of Single Bench, he would thus hold nine stalls as against two allowed as per the new Catering Policy, 2010 to prevent cartelisation; there was no discrimination between the two categories i.e. where allotments have been operationalized and those that have not been operationalized and merely by granting some benefits to those allotments which had been operationalized even though the allotment was not in accordance with the Board's policy, cannot mean that the same benefit has to be extended even to those allotments which have not been operationalized. Placing reliance on the judgment of the Apex Court in APM Terminals BV V/s Union of India ((2011) 6 SCC 756), it was submitted that the said judgment permits a change in policy by the Government so as to have an overriding effect over private treaties between the Government and a private party, if the same was in the general public interest; the vires of clause 26 of the Catering Policy, 2010 has not been challanged in the writ application and it has been upheld by the Allahabad High Court vide judgment dated 31.3.2011 passed in Writ C.No.9844/2011 M/s Durga Parasad V/s Union of India.
Per contra, learned counsel appearing on behalf of the petitioner-respondent no.1 has supported the impugned order. It was submitted that the allotment of stalls was made in favour of the petitioner-respondent no.1 in 2007 and he has deposited Rs.30 lacs towards contract and new Catering Policy came into existence in 2010 i.e. after three years of allotment and thus, the case of petitioner respondent no.1 would be governed by the Catering Policy prevailing in 2007 and new Category Policy, 2010 has no application to the case of petitioner; Catering Policy, 2010 cannot take away the rights accrued in favour of the petitioner as there was already concluded contract between the parties and the Catering Policy, 2010 cannot be made applicable retrospectively; Relying upon the decisions of the Apex Court in the cases of Union of India & ors. Asian Food Industries (supra) and Sime Darby Engineering Sdn. Bhd. V/s Engineering India Ltd. (supra), it was submitted that even if Catering Policy, 2010 is taken into account, that cannot take effect retrospectively, especially where the contract already entered into between the parties; even para 26.1.2 of the new Catering Policy, 2010 cannot nullify the contract already entered between the parties in view of the aforesaid decisions of the Apex Court; there was no justification to deny possession of the stalls allotted to the petitioner in 2007, especially when Railway has admitted that possession of stalls has to be handed over by IRCTC and IRCTC also admitted that they were interested in giving possession to the allottees and they have further admitted that earlier licence holders are in unauthorized possession of the stalls, rather they are in occupation of stalls as trespassers. Hence, action of the Railways and IRCTC in not handing over the possession of the stalls to the petitioner was not justified and the Single Bench has rightly held so. The impugned order of the Single Bench is perfectly just & proper and within the framework of law; it does not suffer from any infirmity or illegality or perversity; and thus, no interference is called for with the same in the intra- court appeals.
The question that arises for consideration is whether in the facts and circumstances of the case, the new Catering Policy, 2010 especially Clause 26.1.2 can be made applicable to the case of the petitioner-respondent no.1, who was allotted stalls in the year 2007 after acceptance of bid amount, license fee etc. to the tune of Rs.30 lacs. In other words, whether new Catering Policy, 2010 can be given effect to retrospectively to the case of petitioner and whether the action of the Railway and IRCTC was justified in not handing over the possession of the stalls to the petitioner-respondent no.1 after vacation of the stay order by the Apex Court and the High Court and even after dismissal of SLP by the Apex Court and various writ applications by the High Court.
It is pertinent to mention here that admittedly, the petitioner-respondent no.1 was the highest bidder and allotment orders for six stalls were issued in his favour and he has deposited the requisite amount. Persons, who were running the said stalls, filed S.B.Civil Writ Petition No.4522/2007 M/s Ram Chandra Prabhudas & Ors. V/s Union of India and ors. in which interim order was passed on 7.9.2007, however, the Supreme Court on 16.9.2009 modified and vacated the stay order earlier passed in the petition(s) for Special Leave to Appeal (C) Nos.10742-10743/2007. Hence, application was moved in Writ Petition No.4522/2007 before the Single Bench and the High Court vide order dated 30.11.2009 modified the interim order dated 7.9.2007 and passed the order so as to bring it in consonance with the order passed by the Apex Court. Ultimately, the SLP was dismissed by the Apex Court on 4.8.2010 and writ application no.4522/2007 and other writ applications were also dismissed by the Single Bench on 5.10.2010. After vacation of the interim order, the appellants-Railway and IRCTC were expected to hand over the possession of the stalls to the petitioner-respondent no.1, but the same was not given to him. It has been submitted by the petitioner-respondent no.1 that after vacation of interim order by the Apex Court, possession of the stalls was handed over by the Railway to the highest bidders, however, Jaipur junction remained only exception where possession of the stalls was not handed over to the highest bidder and the possession remained with the incumbents, who filed writ petition no.4522/2007 and inspite of vacation of the interim order earlier passed in that writ petition, they were enjoying the possession of the stalls and they continued with the possession under the extensions granted from time to time by the appellants-Railway & IRCTC. When the Apex Court has vacated the interim order and the High Court has also vacated the interim order passed in Writ Petition No.4522/2007 and that Writ Petition was ultimately dismissed, it was expected of the appellants-Railway and IRCTC to hand over the possession of the stalls to the petitioner-respondent no.1, but they have not given the possession of the stalls to him, inspite of the fact that in the return filed by IRCTC, stand was taken that earlier license holders are in occupation of the stalls as trespassers or encroachers. It is surprising that inspite of vacation of interim order, possession of the stalls was not handed over to the petitioner-respondent no.1 and trespassers were allowed to enjoy the stalls under the guise of extension granted from time to time by the appellants-Railway and IRCTC. The letter dated 13.5.2010 addressed by IRCTC to Sr.Divisional Commercial Manager has been placed on record in which reference has been made to the Railway Board's letter dated 4.2.2010 in which it has been stated that the Hon'ble Supreme Court has also directed that this order shall be given effect from 1.10.2009. Allotment orders in favour of the successful bidders, if not already given effect to, should immediately be acted upon/given effect to and they should be handed over the possession of the stalls tendered to avoid any further legal complications. Inspite of that, it appears that the order was not given effect to for the reasons best known to the appellants-Railway authorities and IRCTC.
The appellants have placed reliance on the Catering Policy, 2010 which was introduced on 21.7.2010. Reliance has been placed on Clause 26, which reads as follows:-
26. APPLICABILITY OF THE NEW POLICY 26.1. The revised catering policy will be applicable with immediate effect i.e. from the date of issue. This policy supersedes all prior policy circulars issued from time to time unless specifically referred to in this policy document.
26.1.1 All existing operational catering licenses awarded by IRCTC and transferred to Zonal Railways will be governed by the existing Catering Policy 2005 upto the validity of their contractual period.
26.1.2 The tenders for which the letters of allotment have been issued, but the contracts have not operationalized or the services have never commenced upto the date of issue of this policy, will have no force in law.
26.1.3 All existing operational licenses awarded and managed by IRCTC would henceforth be transferred to Zonal Railways within a period of three (3) months in a phased manner, for their management and monitoring.
26.1.4 This policy will also apply in case of award of fresh licences and licences awarded in the event of termination, non-renewal, vacation etc. of the existing licenses.
26.1.5 Zonal Railways will ensure recovery of all due licence fees from the transferred contracts. In case of contracts under litigation, IRCTC will continue to represent on behalf of Zonal Railways for the Court cases where IRCTC has been named as Respondent in consultation with zonal railways for further disposal.
26.1.6 Zonal Railways will initiate the process of taking over by departmental management or award of fresh licences under this policy for the existing operational contracts for which the tenure has been completed or the performance is unsatisfactory.
Clause 26.1 provides that the revised catering policy will be applicable with immediate effect i.e. from the date of issue. Clause 26.1.1 provides that all existing operational catering licenses awarded by IRCTC and transferred to Zonal Railways will be governed by the existing Catering Policy 2005 upto the validity of their contractual period. Clause 26.1.2 provides that the tenders for which the letters of allotment have been issued, but the contracts have not operationalized or the services have never commenced upto the date of issue of this policy, will have no force in law. The said Clause 26.1.2 has been pressed into service by the appellants so as to nullify the letter of intents issued after acceptance of highest bid amount of the petitioner respondent no.1.
In Sime Darby Engineering Sdn. Bhd. V/s Engineering India Limited (supra), the Apex Court held that new policy cannot change the terms of contract between the parties. The Apex Court laid down thus-
The learned counsel for the respondent has referred to its policy decision which has been quoted hereinabove. Such policy decision cannot change the contractual clause. In any event the contract between the parties was entered into in 2004. The said policy decision came into effect in 2005. Therefore, the said policy decision cannot in any way override contract between the parties. The parties autonomy in the arbitration agreement must be given due importance in construing the intention of the parties.
The Single Bench has also relied upon the decision of the Apex Court in Union of India V/s Asian Food Industries (supra) wherein it was held that vested or accrued right cannot be taken away by reason of policy/amendment in the policy. The Apex Court laid down thus:-
The Delhi High Court, however, in our view correctly opined that the notification dated 4.07.2006 could not have been taken into consideration on the basis of the purported publicity made in the proposed change in the export policy in electronic or print media. Prohibition promulgated by a statutory order in terms of Section 5 read with the relevant provisions of the policy decision in the light of sub section (2) of section 3 of the 1992 Act can only have a prospective effect. By reason of a policy, a vested or accrued right cannot be taken away. Such a right, therefore, cannot a fortiori be taken away by an amendment thereof.
Apart from that, we find that when letter of intents had been issued; bid had been accepted; amount of Rs.30 lacs had been received; interim order had been vacated by the Apex Court; High Court has also vacated the interim order; even Railway Board has issued communication to hand over the possession to successful bidders so as to avoid legal complications, Clause 26.1.2 of the Catering Policy, 2010 cannot come in the way to hand over the possession of the stalls to the petitioner-respondent no.1, highest bidder as there was no fault on his part in completing the contract and in-fact, initially he was deprived of possession of stalls due to the Court's order and once it has been vacated, possession of stalls ought to have been given to him. It is shocking that some incumbents whose licenses stood expired before the bids were invited, are still enjoying possession of stalls at Jaipur Junction, whereas the person, who has made the highest bid, has been kept out and deprived of possession inspite of the fact that his offer has been accepted and letter of intents has been issued. We find no rational behind Catering Policy, 2010, which has been pressed into service by the appellants so as to get rid of the contract entered between the parties under the Catering Policy of 2005. When Clause 26.1.1 saves those contracts which have been operationalized, there was no rhyme or reason so as to differentiate the contracts entered between the parties, which have not been operationlized because of no fault on the part of the incumbent, whose bid has been accepted. The classification, which has been made in the Catering Policy, 2010, cannot be said to be reasonable one and in fact, it is intended to defeat the rights which had accrued in favour of the petitioner-respondent no.1, highest bidder to operate contracts, which could not have been dealt with arbitrarily and as a result of operation of new Catering Policy, 2010, it is surprising that without any fresh bid having been invited, incumbents whose licenses stood expired before bids were invited, are continuing to operate uninterruptedly. This is nothing but arbitrary action on the part of the appellants-Railway and IRCTC.
In Ramana Dayaram Shetty V/s The International Airport Authority of India and ors. (AIR 1979 SC 1628), the Apex Court laid down that where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largess, the Government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norms which is not arbitrary, irrational or irrelevant. The power or discretion of the Government in the matter of grant of largess including award of jobs, contracts, quotas, licences etc., must be confined and structured by rational, relevant and non-discriminatory standard or norm and if the Government departs from such standard or norm in any particular case or cases, the action of the Government would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory. The Apex Court further laid down that where a Corporation is an instrumentality or agency of Government, it would, in the exercise of its power or discretion, be subject to the same constitutional or public law limitations as Government. The rule inhibiting arbitrary action by Government must apply equally where such Corporation is dealing with the public, whether by way of giving jobs or entering into contracts or otherwise, and it cannot act arbitrarily and enter into relationship with any person it likes at its sweetwill, but its action must be in conformity with some principle which meets the test of reason and relevance. The Apex Court thus laid down:-
21. This rule also flows directly from the doctrine of equality embodied in Article 14. It is now well settled as a result of the decisions of this Court in E. P. Rayappa v. State of Tamil Nadu (1974) 2 SCR 348: (AIR 1974 SC 555) and Maneka Gandhi v. Union of India : [1978] 1 SCC 248: (AIR 1978 SC 597) that Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment. It requires that State action must not be arbitrary but must be based on some rational and relevant principle which is non-discriminatory : it must not be guided by any extraneous or irrelevant considerations, because that would be denial of equality. The principle of reasonableness and rationality which is legally as well as philosophically an essential element of equality or non-arbitrariness is protected by Article 14 and it must characterise every State action, whether it be under authority of law or in exercise of executive power without making of law. The State cannot, therefore act arbitrarily in entering into relationship, contractual or otherwise with a third party, but its action must conform to some standard or norm which is rational and non-discriminatory. This principle was recognised and applied by a Bench of this Court presided over by Ray, C.J., in Erusian Equipment and Chemicals Ltd. v. State of West Bengal (AIR 1975 SC 266) (supra) where the learned Chief Justice pointed out that "the State can carry on executive function by making a law or without making a law. The exercise of such powers and functions in trade, by the State is subject to Part III of the Constitution. Article 14 speaks of equality before the law and equal protection of the laws. Equality of opportunity should apply to matters of public contracts. The State has the right to trade. The State has there the duty to observe equality. An ordinary individual can choose not to deal with any person. The Government cannot choose to exclude persons by discrimination. The order of black-listing has the effect of depriving a person of equality of opportunity in the matter of public contract. A person who is on the approved list is unable to enter into advantageous relations with the Government because of the order of blacklisting-- A citizen has a right to claim equal treatment to enter into a contract which may be proper, necessary and essential to his lawful calling-- It is true that neither the petitioner nor the respondent has any right to enter into a contract but they are entitled to equal treatment with others who offer tender or quotations for the purchase of the goods." It must, therefore follow as a necessary corollary from the principle of equality enshrined in Article 14 that though the State is entitled to refuse to enter into relationship with any one, yet if it does so, it cannot arbitrarily choose any person it likes for entering into such relationship and discriminate between persons similarly circumstanced, but it must act in conformity with some standard or principle which meets the test of reasonableness and non-discrimination and any departure from such standard or principle would be invalid unless it can be supported or justified on some rational and non-discriminatory ground.
In F.C.I. v. Kamdhenu Cattle Feed Industries (AIR1993 SC 1601), the Apex Court observed that in contractual sphere as in all other State actions, the State and all its instrumentalities have to conform to Article14 of the Constitution of which non-arbitrariness is a significant facet. There is no unfettered discretion in public law. A public authority possesses powers only to use them for public good. This imposes the duty to act fairly and to adopt a procedure which is 'fairplay in action'.
In Tata Cellular V/s Union of India (AIR 1996 SC 11), the Apex Court laid down that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, there are inherent limitations in exercise of that power of judicial review. The Government is the guardian of the finances of the State and it is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the government, but, while accepting or refusing tender, the principles laid down in Article14of the Constitution have to be kept in view. The Government must have freedom of contract. In other words, a fairplay in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness but must be free from arbitrariness not affected by bias or actuated by mala fides.
In the instant case, though the petitioner-respondent no.1 was highest bidder and he has deposited the requisite amount and allotment orders were issued in his favour in the year 2007 when the Catering Policy, 2005 was in force, the possession of the stalls has not been handed over to the petitioner respondent no.1 and the incumbents, who are in occupation of stalls as trespassers or encroachers, are being allowed to enjoy the possession of the stalls and the petitioner-respondent no.1 was deprived to enjoy the fruits flowing from allotment. There was no justification whatsoever for denial of possession of stalls to the petitioner-respondent no.1. The appellants-Railway authorities and IRCTC have acted in an illegal and arbitrary manner and their action of denying possession of stalls to the petitioner respondent no.1 suffers from the vice of arbitrariness. It would be travesty of justice in case successful bidder, who was kept out of possession due to interim order of the Court, is not handed over the possession of the stalls despite vacation of interim order by the Apex Court and High Court and Railway Board's directives to hand over possession of the stalls to the successful bidders. Thus, the Single Bench was right in issuing directions to hand over the possession of the stalls to the petitioner-respondent no.1.
The Single Bench has also found that the Railway was acting against their own interest knowing that notional difference of license fee is of Rs.18 lacs and more by 28.2.2011 and aforesaid amount was only in regard to six stalls in dispute and if recurring loss is taken for all stalls, the amount comes in crore. The Railway have pleaded vehemently against their own financial interest and at the cost of public exchequer. Such findings have not been questioned by the appellants nor shown to be incorrect. Hence, we find the action of the appellants-Railway derogative to its financial interest.
The settled principle of law is that the actus curiae neminem gravabit, 'the act of the court shall not harm anybody'. Relying upon the said maxim, it was the duty of the appellants-Railway and IRCTC to place the highest bidder into possession and particularly when letter of intents has been issued to him and by not handing over the possession to the petitioner- respondent no.1 despite vacation of interim order by the Apex Court and the High Court and directives of Railway Board, the appellants-Railway authorities and IRCTC have acted in an illegal and arbitrary manner. Thus, in our considered opinion, direction has been rightly issued by the Single Bench to hand over the possession of the stalls to the petitioner. Other requisite directions have also been rightly issued.
Reliance was placed by the learned Senior Counsel & Additional Solicitor General Shri Gourab Banerji on the decision of the Apex Court in the case of APM Terminals B.V. (supra) where there was change with respect to eligibility criteria for participating in future tenders. With a view to promote healthy competition for benefit of shipping industry as well as Indian ports, Central Government took policy decision not to permit licensee of a container terminal to participate in immediately subsequent bid process for developing another container terminal subsequent to terminal being operated by such licensee. Notwithstanding said contractual right of licensee, such policy decision was upheld by the Apex Court. The Apex Court further held that provision in contract conferring said right could not be read in isolation from other provisions therein and moreover, the doctrine of legitimate expectation could not be raised on the basis of said provision. The Apex Court further held that in the absence of any arbitrariness in effecting such change in policy and keeping in mind the larger public interest, the Central Government was within its power to strike a balance with regard to the control of the port facilities so that the same did not come to be concentrated in the hands of one private group or consortium, which would be in a dominant position to control not only the rights of tariff, but also the entry of ships. The Apex Court also laid down that the Courts should not interfere with the policy decisions of the Government unless they are arbitrary or offend any of the provisions of the Constitution. The Apex Court further laid down that a change in policy by the Government can have an overriding effect over private treaties between the Government and a private party, if the same was in the general public interest and provided such change in policy was guided by reason. The Apex Court further held that it is not as if the right of a licensee to bid for a further container terminal berth has been excluded for the entire period of the license agreement, but in order to ensure proper competition and participation by all intending tenderers, the said policy has also been altered to enable such licensees to bid for the next but one tender as and when invited.
In the instant case, the position is just converse. The highest bidders under the Catering Policy, 2005 are kept at bay and the incumbents whose licenses stood expired are allowed to continue to enjoy possession of the stalls under the guise of new Catering Policy, 2010. The action of the Railway authorities and IRCTC cannot be said to be free from arbitrariness and what public interest is going to be served by such action is not understandable. Thus, the aforesaid decision rather counters the case of the appellants. Though change in the policy can be made, but it should be free from arbitrariness and it has to be in the general public interest and in order to ensure proper competition and participation by all intending tenders, as laid down by the Apex Court in the case of APM Terminals (supra), which is not intended to be achieved by operation of clause 26.1.2 of Catering Policy, 2010. Hence, Clause 26.1.2 is arbitrary and cannot be effectively pressed into service in the instant case.
So far as the decision of Allahabad High Court relied upon by the appellants in the case of M/s Durga Prasad (supra) is concerned, various points gone into by the Single Bench have not been considered by the Allahabad High Court. The decision has been rendered only on the basis of new Catering Policy, 2010. How the Catering Policy, 2005 could not have advanced the said purposes of good quality food, drinking water and toilet facilities etc., is not even submitted by the appellants for making distinction between clauses 26.1 and 26.1.2. Rationality has not been pointed out. Thus, various submissions, which have been raised, were not before the Allahabad High Court. Hence, we are unable to subscribe to the view of the Allahabad High Court.
It was also submitted on behalf of the appellants that the Catering Policy, 2010 imposes a ceiling limit and Catering Policy, 2005 was changed with a view to put ceiling limit. The question is of right which had accrued in favour of the petitioner-respondent no.1 to operate the contract under the letter of intents after invitation of bids. Merely by the fact that certain limit on contracts has been imposed in the new Catering Policy 2010, it could not come in the way of the holder of the letter of intents and particularly when those contracts, which were made operational are still continuing and thus, it would be unfair treatment to others whose contracts were not made operational for no fault on their part and to deprive them to make contract operational due to ceiling limit imposed in the new Catering Policy of 2010.
It was also submitted by Shri Gourab Banerji, learned Senior Counsel & Additional Solicitor General that an application was filed by the petitioner-respondent no.1 Khurshid Ahmed for withdrawal of the amount. In fact, withdrawal was not unconditional. The application was filed by the petitioner on 3.11.2010 after his petition was dismissed as infructuous wrongly by the Single Bench on 5.10.2010 and the matter was remitted to the Single Bench on 22.11.2010 to decide it afresh and thereafter, the writ application has been allowed by the Single Bench on 20.7.2011. In the intervening period before decision by Division Bench, the petitioner-respondent no.1 has filed application for handing over possession of the stalls within 7 days otherwise to make refund of the license fee and earnest money. It was not unconditional prayer for withdrawal of the amount. Basically, the prayer was made to hand over the possession of the stalls. We find that there was no justification for the appellants-Railway authorities and IRCTC not to hand over the possession of the stalls to the petitioner. No estopple is created against petitioner-Khurshid Ahmed so as to maintain petition due to filing of the aforesaid application dated 3.11.2010.
So far as the appellants-intervenors are concerned, they are encroachers & trespassers as admitted by IRCTC in their return and such persons cannot claim any right taking benefit of the delay, default and inaction on the part of the Railway authorities and IRCTC in handing over the possession of stalls to the petitioner-respondent no.1 and the Single Bench has rightly held so.
For the reasons mentioned above, no interference is called for with the impugned order of the Single Bench in the intra-court appeal. The appeals filed by the appellants-Railway, IRCTC and intervenors being bereft of merits are dismissed. The stay applications are also dismissed.
(NARENDRA KUMAR JAIN-I), J. (ARUN MISHRA), C.J. Parmar
All corrections made in the judgment/order have been incorporated in the judgment/order being emailed. Mohit Tak, Jr. P.A./N.K. Parmar, P.S.