Madras High Court
M/S.Green Express vs The Chief Traffic Manager on 12 November, 2010
Author: D.Hariparanthaman
Bench: D.Hariparanthaman
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 12 .11. 2010
CORAM
THE HONOURABLE MR.JUSTICE D.HARIPARANTHAMAN
W.P.NOS.9734, 10357, 10358, 10407, 10408, 10409, 10410
AND 12239 OF 2010
AND CONNECTED MISCELLANEOUS PETITIONS
W.P.NO.9734 OF 2010
M/s.Green Express
Division of Green Carriers and Contractors
(Delhi) Pvt. Ltd.,
Represented by its Area Manager R.Varadarajan ... Petitioner
Versus
1.The Chief Traffic Manager
Southern Railway
Headquarters Office
Commercial Branch, Freight Marketing
5th Floor, MMC, Chennai 600 003.
2.The Chief Commercial Manager
Southern Railway
Park Town, Chennai 600 003.
3.The Senior Commercial Manager
Southern Railway
Chennai 600 003. ... Respondents
PRAYER: Writ Petition filed under Article 226 of the Constitution of India praying for the issuance of Writ of Certiorarified Mandamus to call for the records pertaining to the Tender Notice No.1/2010-2011 dated 08.04.2010 of leasing of parcel space in parcel vans of the 1st respondent and quash the same pertaining to one parcel van of Train No.2641/2642 from Kanyakumari to Nizamudin, one parcel van of Train No.2643/2644 from Trivandrum to Nizamudin and one parcel van of Train No.2647/2648 from Coimbatore to Nizamudin consequently direct the respondents to extend the periods of lease agreements for Train No.2641/2642, Train No.2643/2644 and Train No.2647/2648 for a further period of 2 years as stipulated under Clause 18.1 of the Agreement dated 29.05.2007, 16.05.2007 and 16.05.2007 respectively by considering the representation of the petitioner dated 20.04.2010.
For Petitioner : Mr.K.M.Vijayan
Senior counsel for Mr.R.Selvakumar
For Respondents : Mr.R.Thiagarajan
Senior Counsel
for Mr.V.G.Suresh Kumar
W.P.NO.10357 OF 2010
M/s.Tamilnadu Super Service
Rep. by its Branch Manager
Mr.Budhraj Kankaria ... Petitioner
Versus
1.The Chief Traffic Manager
Southern Railway
Headquarters Office
Commercial Branch, Freight Marketing
5th Floor, MMC, Chennai 600 003.
2.The Chief Commercial Manager
Southern Railway
Park Town, Chennai 600 003.
3.The Deputy Chief Commercial Manager
Moore Market Complex, 4th Floor,
Southern Railway
Chennai 600 003. ... Respondents
PRAYER: Writ Petition filed under Article 226 of the Constitution of India praying for the issuance of Writ of Certiorarified Mandamus to call for the records pertaining to the letter of the 1st respondent in No.C. 206/86/40/38/VPH/T.34/2651/2652 dated 29.03.2010 and quash the same and consequently direct the respondents to extend the period of lease agreement for Train No.2651/2652 from Chennai Egmore to Nizamudin in a round trip for a further period of 2 years as stipulated under Clause 18.1 of the Agreement dated 10.05.2007.
For Petitioner : Mr.K.M.Vijayan
Senior Counsel
for M/s.K.M.Vijayan Associates
For Respondents : Mr.R.Thiagarajan
Senior Counsel
for Mr.V.G.Suresh Kumar
W.P.NO.10358 OF 2010
M/s.Tamilnadu Super Service
Rep. by its Branch Manager
Mr.Budhraj Kankaria ... Petitioner
Versus
1.The Chief Traffic Manager
Southern Railway
Headquarters Office
Commercial Branch, Freight Marketing
5th Floor, MMC, Chennai 600 003.
2.The Chief Commercial Manager
Southern Railway
Park Town, Chennai 600 003.
3.The Deputy Chief Commercial Manager
Moore Market Complex, 4th Floor,
Southern Railway
Chennai 600 003. ... Respondents
PRAYER: Writ Petition filed under Article 226 of the Constitution of India praying for the issuance of Writ of Certiorarified Mandamus to call for the records pertaining to the letter of the 1st respondent in No.C. 206/86/40/38/VPH/Ten.32 dated 23.10.2009 and the incidental Tender Notice No.1/2010-2011 dated 08.04.2010 of leasing of parcel space in parcel vans so far as tender notice pertaining to one parcel van of Train No.2664/2663 of the 1st respondent and quash the same consequently direct the respondents to extend the periods of lease agreement for Train No.2664/2663 for a further period of 2 years as stipulated under Clause 18.1 of the Agreement dated 25.10.2006 by considering the representation of the petitioner dated 11.02.2010.
For Petitioner : Mr.K.M.Vijayan
Senior Counsel
for M/s.K.M.Vijayan Associates
For Respondents : Mr.R.Thiagarajan
Senior Counsel
for Mr.V.G.Suresh Kumar
W.P.NO.10407 OF 2010
M/s.Northern Freight Carriers
Represented by its Partner
Mr.Brij Kishore Garg ... Petitioner
Versus
1.The Chief Traffic Manager
Southern Railway
Headquarters Office
Commercial Branch, Freight Marketing
5th Floor, MMC, Chennai 600 003.
2.The Chief Commercial Manager
Southern Railway
Park Town,
Chennai 600 003.
3.The Deputy Chief Commercial Manager
Moore Market Complex, 4th Floor,
Southern Railway
Chennai 600 003. ... Respondents
PRAYER: Writ Petition filed under Article 226 of the Constitution of India praying for the issuance of Writ of Certiorarified Mandamus to call for the records pertaining to the letter of the 1st respondent in No. C. 206/86/40/38/VPH/T.34/6317/6318 dated 29.03.2010 and the incidental Tender Notice No.1/2010-2011 dated 08.04.2010 of leasing of parcel space in parcel vans so far as tender notice pertaining to one parcel van of Train No.6317/6318 of the 1st respondent and quash the same and consequently direct the respondents to extend the period of lease agreement for Train No.6317/6318 for a further period of 2 years as stipulated under Clause 18.1 of the Agreement dated 28.03.2007 by considering the representation of the petitioner dated 05.05.2010.
For Petitioner : Mr.K.M.Vijayan
Senior Counsel
for M/s.K.M.Vijayan Associates
For Respondents : Mr.R.Thiagarajan
Senior Counsel
for Mr.V.G.Suresh Kumar
W.P.NO.10408 OF 2010
M/s.Northern Freight Carriers
Represented by its Partner
Mr.Brij Kishore Garg ... Petitioner
Versus
1.The Chief Traffic Manager
Southern Railway
Headquarters Office
Commercial Branch, Freight Marketing
5th Floor, MMC, Chennai 600 003.
2.The Chief Commercial Manager
Southern Railway
Park Town, Chennai 600 003.
3.The Deputy Chief Commercial Manager
Moore Market Complex, 4th Floor,
Southern Railway, Chennai 600 003. ... Respondents
PRAYER: Writ Petition filed under Article 226 of the Constitution of India praying for the issuance of Writ of Certiorarified Mandamus to call for the records pertaining to the letter of the 1st respondent in No. C. 206/86/40/38/VPH/T.34/6317/6318 dated 29.03.2010 and the incidental Tender Notice No.1/2010-2011 dated 08.04.2010 of leasing of parcel space in parcel vans so far as tender notice pertaining to one parcel van of Train No.6317/6318 of the 1st respondent and quash the same and consequently direct the respondents to extend the period of lease agreement for Train No.6317/6318 for a further period of 2 years as stipulated under Clause 18.1 of the Agreement dated 28.03.2007 by considering the representation of the petitioner dated 05.05.2010.
For Petitioner : Mr.K.M.Vijayan
Senior Counsel
for M/s.K.M.Vijayan Associates
For Respondents : Mr.R.Thiagarajan
Senior Counsel
for Mr.V.G.Suresh Kumar
W.P.NO.10409 OF 2010
M/s.Northern Freight Carriers
Represented by its Partner
Mr.Brij Kishore Garg ... Petitioner
Versus
1.The Chief Traffic Manager
Southern Railway
Headquarters Office
Commercial Branch, Freight Marketing
5th Floor, MMC, Chennai 600 003.
2.The Chief Commercial Manager
Southern Railway
Park Town, Chennai 600 003.
3.The Deputy Chief Commercial Manager
Moore Market Complex, 4th Floor,
Southern Railway, Chennai 600 003. ... Respondents
PRAYER: Writ Petition filed under Article 226 of the Constitution of India praying for the issuance of Writ of Certiorarified Mandamus to call for the records pertaining to the letter of the 1st respondent in No. C. 206/86/40/38/VPH/T.34/6687/6688 dated 29.03.2010 and the incidental Tender Notice No.1/2010-2011 dated 08.04.2010 of leasing of parcel space in parcel vans so far as tender notice pertaining to one parcel van of Train No.6687/6688 of the 1st respondent and quash the same and consequently direct the respondents to extend the period of lease agreement for Train No.6687/6688 for a further period of 2 years as stipulated under Clause 18.1 of the Agreement dated 05.04.2007 by considering the representation of the petitioner dated 05.05.2010.
For Petitioner : Mr.K.M.Vijayan
Senior Counsel
for M/s.K.M.Vijayan Associates
For Respondents : Mr.R.Thiagarajan
Senior Counsel
for Mr.V.G.Suresh Kumar
W.P.NO.10410 OF 2010
M/s.Northern Freight Carriers
Represented by its Partner
Mr.Brij Kishore Garg ... Petitioner
Versus
1.The Chief Traffic Manager
Southern Railway
Headquarters Office
Commercial Branch, Freight Marketing
5th Floor, MMC, Chennai 600 003.
2.The Chief Commercial Manager
Southern Railway
Park Town, Chennai 600 003.
3.The Deputy Chief Commercial Manager
Moore Market Complex, 4th Floor,
Southern Railway, Chennai 600 003. ... Respondents
PRAYER: Writ Petition filed under Article 226 of the Constitution of India praying for the issuance of Writ of Certiorarified Mandamus to call for the records pertaining to the letter of the 1st respondent in No. C. 206/86/40/38/VPH/T.34/6687/6688 dated 29.03.2010 and the incidental Tender Notice No.1/2010-2011 dated 08.04.2010 of leasing of parcel space in parcel vans so far as tender notice pertaining to one parcel van of Train No.6687/6688 of the 1st respondent and quash the same and consequently direct the respondents to extend the period of lease agreement for Train No.6687/6688 for a further period of 2 years as stipulated under Clause 18.1 of the Agreement dated 28.03.2007 by considering the representation of the petitioner dated 05.05.2010.
For Petitioner : Mr.K.M.Vijayan
Senior Counsel
for M/s.K.M.Vijayan Associates
For Respondents : Mr.R.Thiagarajan
Senior Counsel
for Mr.V.G.Suresh Kumar
W.P.NO.12239 OF 2010
Anil Bareja
Proprietor
M/s.Xtra Freight Forwarder ... Petitioner
Versus
1.The Chief Traffic Manager
Southern Railway
Headquarters Office
Commercial Branch, Freight Marketing
5th Floor, Moore Market Complex,
Chennai 600 003.
2.The Deputy Chief Commercial Manager
Freight Marketing
Southern Railway
5th Floor, Moore Market Complex,
Chennai 600 003. ... Respondents
PRAYER: Writ Petition filed under Article 226 of the Constitution of India praying for the issuance of Writ of Certiorarified Mandamus to call for the records on the file of the 1st respondent relating to the impugned tender notification bearing ref: Tender Notice No.1/2010-2011, dated 08.04.2010 and quash the same and consequently direct the respondents to extend the leasing of Parcel Vans in Train Nos.6031/6032 for transporting parcels from Chennai Central to Jammu Tawi and from Jammu Tawi to Chennai Central to the petitioner for a period of two years.
For Petitioner : Mr.K.M.Vijayan
Senior Counsel for M/s.Sai Bharath & Ilan
For Respondents : Mr.R.Thiagarajan
Senior Counsel for Mr.V.G.Suresh Kumar
COMMON ORDER
The Southern Railway entered into agreements for three years with the petitioners, who were the successful tenderers, for leasing of Parcel Space in Parcel Vans in Trains. After the expiry of the period of agreements, the Southern Railway issued a letter dated 29.03.2010 extending the period of agreements for three more months or till the finalisation of tender, whichever is earlier. Thereafter, the first respondent issued the tender notice dated 08.04.2010 inviting tenders for leasing out Parcel Space in Parcel Vans in various Trains, including the Trains that are involved in these writ petitions.
2.The petitioners have questioned the tender notice dated 08.04.2010 and the letter dated 29.03.2010 insofar as extending the period of lease agreement for three more months only and for a consequential direction to the respondents to extend the period of lease agreement for a further period of two years as stipulated under Clause 18.1 of the agreement.
3.However, in W.P.No.9734 of 2010, the letter dated 29.03.2010 of the first respondent, extending the period of lease agreement for three more months, was not put to challenge.
4.Likewise, in W.P.No.10357 of 2010, the tender notice dated 08.04.2010 was not put to challenge, as the tender notice does not include the Train concerned in this writ petition.
5.The details relating to the date of agreement, the Train numbers and the agreement period for each writ petition are given hereunder:
W.P.Nos.
Date of Agreement Train No. Agreement Period 9734 / 2010 16.05.2007 2643 / 2644 17.04.2007 16.04.2010 16.05.2007 2647 / 2648 15.04.2007 14.04.2010 29.05.2007 2641 / 2642 04.04.2007 03.04.2010 10357 / 2010 10.05.2007 2651 / 2652 08.04.2007 07.04.2010 10358 / 2010 25.10.2006 2664 / 2663 25.10.2006 24.10.2009 10407 / 2010 28.03.2007 6317 / 6318 31.03.2007 30.03.2010 10408 / 2010 28.03.2007 6317 / 6318 31.03.2007 30.03.2010 10409 / 2010 05.04.2007 6687 / 6688 17.04.2007 16.04.2010 10410 / 2010 28.03.2007 6687 / 6688 03.04.2007 02.04.2010 12239 / 2010 18.05.2007 6031 / 6032 15.04.2007 14.04.2010
6.According to the petitioners, as per Clause E of the Freight Marketing Circular No.12 of 2006, dated 27.03.2006 and Clause 18.1 of the agreement, the lease period has to be extended for two more years, after the expiry of three years lease period, at 25% above the existing lease rate.
7.According to the petitioners that though the new policy was announced by the Railway Board, by way of Freight Marketing Circular No.3 of 2010 dated 09.02.2010, deleting Clause E of the earlier Freight Marketing Circular No.12 of 2006 dated 27.03.2006 providing for extension of lease period for two more years, another Freight Marketing Circular No.6 of 2010 dated 18.03.2010 makes it clear that the existing leases are not governed by the Policy Guidelines issued in the Freight Marketing Circular No.3 of 2010 dated 09.02.2010 and on the other hand, the existing leases are governed by the Freight Marketing Circular No.12 of 2006 dated 27.03.2006. In this regard, the petitioners relied on Clause 2.1 of the Freight Marketing Circular No.6 of 2010 dated 18.03.2010.
8.The respondents filed separate counter affidavits refuting the allegations made by the petitioners.
9.It is averred in the counter affidavits that the petitioners have an alternative and efficacious remedy under Clause 24.3 of the agreement and hence, the writ petitions are not maintainable. On merits, it is averred that the Southern Railway took a policy decision, not to extend the lease period for two more years, as such a course, would cause huge loss to the Exchequer. It is also stated that at the time of award of earlier contract, the reserve price was 1.25 times of "P" scale, whereas the present reserve price stipulated by the Ministry of Railways is 1.25 times of "R" Scale. According to them, there was an increase of 50% in the reserve price alone. On studying the market condition and the manifold increase in demand, the Railway administration decided to go for fresh tender. Further, it is stated that extension of lease period cannot be claimed as a matter of right and it is not automatic, especially when the same causes huge loss to the Exchequer.
10.The respondents provided the details of the projected loss, if the agreement is simply extended for two more years to the petitioners at 25% above the existing lease rate and the same are extracted hereunder:
Sl.No W.P.No Rate at which lease being operated by petitioner Rate at which lease being operated by petitioner + 25% Current Reserve price No. of offers recd.
Highest offer received Loss per service if extension is given to petitioner No. of service for 2 years Loss for 2 years if extension is given to petitioner Rs.
Rs.
Rs.
Rs.
Rs.
RS.1
12239/2010 1,44,580 1,80,725 2,11,970 13 2,51,251 70,526 312 22004112 2 9734/2010 1,14,080 1,42,600 1,67,930 2 3 9734/2010 1,15,000 1,43,750 1,71,530 1 4 9734/2010 1,10,124 1,37,655 1,59,140 3 Not opened as per the orders of Hon'ble High Court of Madras 25,330 104 2634320 27,780 104 2889120 21,485 104 2234440 5 10408/2010 1,31,242 1,64,053 1,96,450 6 10407/2010 1,31,242 1,64,053 1,96,450 6 2,37,555 73,502 104 7644208 2,37,555 73,502 104 7644208 7 10409/2010 1,30,192 1,62,740 1,92,830 8 10410/2010 1,30,192 1,62,740 1,92,830 5 2,31,555 68,815 104 7156760 2,31,555 68,815 104 7156760 9 10358/2010 96,600 1,20,750 1,31,540 12 1,71,200 50,450 208 21372416 10 10357/2010 1,28,800 1,61,000 Tender not called for
-
-
-
-
-
11.The respondents also stated in the counter affidavits that the petitioners in W.P.Nos.10357, 10358, 10408, 10409 and 12239 of 2010 violated the provisions of the agreement and paid penalty. Thus, they are not eligible for consideration, for extension of lease period, even as per Clause 18.1 of the agreement.
12.In reply, the petitioners stated that existence of alternative remedy is not a bar for exercise of writ jurisdiction under Article 226 of the Constitution of India. It is also stated that as per Clause 3.2 of the agreement, no budgetary increase would be applicable during the currency of the contractual period and that therefore, the change in the classification and reserve price, could not be cited for denying extension of lease period for two years. The petitioners also cited various extension orders issued by other Railways. It was further stated that the penalties were imposed without affording any opportunity to the petitioners and without following the Rules and Regulations. Hence, those penalties should not be taken into account for deciding the eligibility as to the extension of lease agreement.
13.Heard the submissions made on either side and perused the materials available on record.
14.The learned senior counsel for the petitioners submitted that the Arbitration Clause in the agreement could not be relied on by the respondents as providing an alternative remedy disentitling the petitioners to seek redressal under Article 226 of the Constitution of India, when the respondents acted arbitrarily and in violation of the fundamental rights guaranteed under the Constitution. The learned senior counsel further submitted that as per the Policy Guidelines and Clause 18.1 of the agreement, the petitioners are entitled to extension of lease period for two more years. Hence, the writ petitions are maintainable.
15.The learned senior counsel for the petitioners relied on the following judgments in support of his contention that the writ petitions are maintainable despite the existence of alternative remedy:
1) Judgment of the Honourable Apex Court in Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai reported in 1998 (8) SCC 1
2) Judgment of the Honourable Apex Court in ABL International Ltd., Vs. Export Credit Guarantee Corporation of India Limited reported in CDJ 2004 SC 208
3) Judgment of the Honourable Apex Court in Food Corporation of India Vs. M/s.SEIL Ltd. reported in CDJ 2008 SC 1355
4) Judgment of this Court in E.Mohan Vs. Madras Fertilizers Limited reported in CDJ 2010 MHC 2538
16.The learned senior counsel for the petitioners relied on the following judgments in support of his contention that the respondents are bound to extend the lease period for two more years in accordance with Clause 18.1 of the agreement and the Policy Guidelines issued in Freight Marketing Circular No.12 of 2006 dated 27.03.2006.
1) Judgment of the Calcutta High Court in W.P.Nos.23926, 23927 and 23928 of 2007 (decided on 11.05.2010)
2) Judgment of the Andhra Pradesh High Court in W.P.Nos.141 and 1378 of 2010 (decided on 23.02.2010)
17.The learned senior counsel for the petitioners submitted that since the petitioners were not heard before imposing penalties, those penalties should not be taken note of for deciding the eligibility for extension of lease period. In this regard, the learned senior counsel relied on the Division Bench judgment of the Calcutta High Court in M.A.T.No.409 of 2007 (decided on 19.12.2007) and the judgment of the Assam High Court in Nirmal Traders Vs. Union of India reported in AIR 2003 GAUHATI 122.
18.On the other hand, the learned senior counsel for the Southern Railway contended that in similar circumstances, this Court rejected the writ petition in W.P.No.23326 of 2008, seeking extension of lease period, on 20.01.2009 and the same was confirmed by a Division Bench of this Court in W.A.No.158 of 2009 (decided on 24.04.2009). He further submitted that the petitioners could not claim as a matter of right for extension of lease period and it was at the discretion of the Southern Railway. The Southern Railway exercised its discretion and decided not to extend the lease period to any of the agreement holders, taking into account the market conditions and the huge loss that could be caused, if the lease period is extended, without going for fresh tender. The learned senior counsel has taken me through Clause 18.1 of the agreement and laid more emphasis on the word "CAN" suggesting that it was only a discretion to the Railway administration. Thus, if other Railways exercised discretion in some matters to grant extension of lease period for two years, that could not be cited in favour of the petitioners.
19.The learned senior counsel for the respondents distinguished the judgments of Calcutta High Court and Andhra Pradesh High Court saying that those judgments do not lay down a law that the extension of lease period is automatic. On the other hand, as stated above, the learned senior counsel relied on the judgment of this Court referred to above. The learned senior counsel has taken me to the tabular statement enclosed in the typed set relating to the projection of loss, if the lease is extended for two more years to the petitioners at 25% of the existing lease rate.
20.In reply, the learned senior counsel for the petitioners submitted that the word "CAN" in the agreement has to be read as "SHALL / MUST" in the context of agreement and he relied on the following judgments of the Honourable Apex Court, in this regard.
1) State of U.P Vs. Jogendra Singh reported in AIR 1963 SC 1618
2) Rangaswami, The Textile Commissioner Vs. Sugar Textile Mills Private Limited reported in CDJ 1977 SC 056
3) State (Delhi Admn.) Vs. I.K.Nangia reported in 1980 (1) SCC 258
4) Orissa Textile and Steel Ltd., Vs. State of Orissa reported in 2002 (2) SCC 578
21.I have considered the submissions made on either side.
22.The following issues arise for consideration in all these writ petitions.
(1) Whether the writ petitions are maintainable in spite of existence of alternative remedy ?
(2) Whether the petitioners are entitled for automatic extension of lease period as per Clause 18.1 of the agreement and Clause E of the Freight Marketing Circular No.12 of 2006 ?
Issue No.1:-
23.The learned senior counsel for the respondents relied on Clause 24 of the agreement which provides for arbitration, whenever there is a dispute arises between the petitioners and the respondents. The learned senior counsel further submitted that there is a remedy provided under the aforesaid clause and that therefore, the writ petitions are not maintainable.
24.On the other hand, the learned senior counsel for the petitioners submitted that the existence of alternative remedy is not a bar for this Court to entertain writ petition, if there are allegations to the effect that the respondents State under Article 12 of the Constitution, acted arbitrarily in not extending the lease period and in violation of the fundamental rights guaranteed under the Constitution. In this regard, the learned senior counsel for the petitioners relied on the judgments of the Honourable Apex Court and this Court referred to in para 15 of this judgment.
25.According to the petitioners, other Railways, in similar circumstances, extended the lease period and also the Calcutta High Court as well as the Andhra Pradesh High Court directed the respective Railways to extend the lease period. The learned senior counsel for the petitioners also relied on the following judgments in this regard.
1) Judgment of the Calcutta High Court in W.P.Nos.23926, 23927 and 23928 of 2007 (decided on 11.05.2010)
2) Judgment of the Andhra Pradesh High Court in W.P.Nos.141 and 1378 of 2010 (decided on 23.02.2010)
26.I am of the view that the decisions relied on by the learned senior counsel for the petitioners relating to the maintainability of the writ petitions despite the existence of alternative remedy squarely apply to the present writ petitions also and the writ petitions could not be dismissed on the technical plea of maintainability. These writ petitions cannot be rejected at the threshold on the ground of existence of alternative remedy. This Court has to examine the aforesaid serious allegations made by the petitioners. In this regard, para 15 of the judgment of the Honourable Apex Court reported in 1998 (8) SCC 1 is extracted hereunder:
"15. Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a bar in at least three contingencies, namely, where the writ petition has been filed for the enforcement of any of the Fundamental Rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged. There is a plethora of case-law on this point but to cut down this circle of forensic whirlpool, we would rely on some old decisions of the evolutionary era of the constitutional law as they still hold the field."
Hence, I am inclined to hold that the writ petitions are maintainable. Accordingly, issue No.1 is answered.
Issue No.2:-
27.The petitioners entered into agreements for three years for leasing out Parcel Space in Parcel Vans in various Trains. Clause 18.1 of the agreement as well as Clause E of the Freight Marketing Circular No.12 of 2006 make it very clear that the petitioners should have satisfactory performance, without any penalty for overloading or violation of any provision of the Contract, even if there is an extension of lease. In this regard, Clause 18.1 of the agreement is extracted hereunder:
" 18.0 Extension to lease contract:
18.1 Extension of lease is permissible only in case of long term lease of 3 years wherein the same can be extended only once, by 2 more years at a lease rate of 25% more than the lumpsum leased freight rate subject to satisfactory performance by the leaseholder, without any penalty for overloading or violation of any provision of the contract."
Clause E of Freight Marketing Circular No.12 of 2006 dated 27.03.2006 is also extracted hereunder:
"(E) Extension of Lease:
1. Extension of lease is permissible only in case of long term lease of 3 years.
2. In case of Long Term Lease, on expiry of the contract period, the same can be extended only once, by 2 more years at a lease rate of 25% more than the lumpsum leased freight rate.
3. Such extension will be subject to satisfactory performance by the lease holder, without any penalty for overloading or violation of any provision of the contract.
4. In case of expiry of contract period and nonfinalization of new contract due to administrative delays, temporary extension can be permitted by the CCM only once, for a period of 3 months. "
28.As per the aforesaid Clauses, the first respondent could extend the lease period for two more years at 25% above the existing lease rate. It is also stated that the extension of lease period, if any, is subject to satisfactory performance by the lease holder, without any penalty for overloading or violation of any provision of the contract.
29.According to the learned senior counsel for the petitioners, Clause E of the Freight Marketing Circular No.12 of 2006 and Clause 18.1 of the agreement provides for automatic extension of lease period for two more years. The word "can" used in both the Circular and the lease agreement is interpreted by the learned senior counsel to mean "shall / must".
30.On the other hand, as stated above, the learned senior counsel for the Railways, has relied on the judgment of this Court in W.P.No.23326 of 2008 (decided on 20.01.2009) and submitted that the extension of lease period was not automatic and it was only at the discretion of Railways.
31.It is not disputed that though a new policy came into existence by way of Freight Marketing Circular No.3 of 2010 dated 09.02.2010, it was clarified in the another Freight Marketing Circular No.6 of 2010 dated 18.03.2010 that the existing leases are governed by the aforesaid Freight Marketing Circular No.12 of 2006. Thus, it has to be seen as to whether Clause E of Freight Marketing Circular No.12 of 2006 and Clause 18.1 of the agreement provides for automatic extension of lease period for two more years to the petitioners.
32.If there is no ambiguity in the words used in the Freight Marketing Circular and in the agreement, then one should go only with the literal interpretation. In fact, sub-clause (2) read with sub-clause (4) of Clause - E of the Freight Marketing Circular No.12 of 2006 makes it clear that the extension of lease period is only at the discretion of the Railway Administration. Taking into account the various factors, the Railway Administration has to decide about the granting of extension of lease period or opting to go for fresh tender.
33.In all these cases, it is stated that the Southern Railway has decided uniformly, not to extend any of the lease period and to go for fresh tender, taking into account the market conditions and high demand for Parcel Space in Parcel Vans in Trains.
34.The judgments relied on by the learned senior counsel for the petitioners are not applicable to the facts of these cases, while the judgment of this Court in W.P.No.23326 of 2008 (decided on 20.01.2009) relied on by the learned senior counsel for the Southern Railway squarely applies to the facts of these cases. In the said judgment, this Court has held that the extension of lease period is not automatic. Para 10 of the said judgment is extracted here-under in this regard.
"10. That apart, yet another factor to be noted is that admittedly, by order dated 07.08.2008, the petitioner's request for extension of contract has been turned down bringing to the knowledge of the petitioner that there is a re-classification or re-categorisation of the particular train and this order is not under challenge. If this argument of the learned senior counsel appearing for the petitioner has to be accepted, as per the averment in paragraph No.7(b) of the counter affidavit, the respondents will be put to a loss of Rs.8,729/- per trip and for no fault of the respondents, the respondents cannot be forced to face loss to such an extent per trip."
35.The judgments relied on by the learned senior counsel for the petitioners do not lay down a law that the Railways are bound to extend the lease period. In fact, in the judgment of the Calcutta High Court in W.P.Nos.23926, 23927 and 23928 of 2007 referred to above, it was noted that the point as to whether the Railways are bound to extend the lease period under the Freight Marketing Circular was not seriously argued. In this regard, the relevant passage from the said judgment is extracted hereunder:
"..... This point has also not been seriously argued at the time of hearing and I do not find much substance in this plea having regard to the fact the policy instrument has been created by the highest authority in the railway administration, being the Railway Board and even under ordinary circumstances, a statutory authority is required to adhere to a policy instrument unless compelling circumstances justify rational departure therefrom."
36.The judgment of the Andhra Pradesh High Court in W.P.Nos.141 and 1378 of 2010 directed the concerned Railway to consider the representation submitted by the lease holders, for extension of lease period. Hence, that could not be of much use for seeking extension as a matter of right.
37.Therefore, when the Railways took a policy decision, taking into account the market conditions; the high demand for Parcel Space in Parcel Vans in Trains and the projected loss as stated above and thought of going for fresh tender, after the expiry of lease period, that could not be found fault with and the same could not be described as an "arbitrary exercise of power" by the respondent Railways.
38.As stated above, the petitioners in W.P.Nos.10357, 10358, 10408, 10409 and 12239 of 2010 violated the provisions of the agreement and allowed overloading, for which, they have also paid penalties. After paying penalties, they could not contend that those penalties were imposed on them, without affording any opportunity of hearing them and hence, those penalties are not put to challenge.
39.In the judgments relied on by the learned senior counsel for the petitioners referred to above in para 17 of this judgment, the penalties imposed were put to challenge. Therefore, those judgments are not helpful to the petitioners. Hence, I am in entire agreement with the submissions made by the learned senior counsel for the Southern Railway that in view of the penalties paid by the petitioners and also the non-satisfactory performance by the petitioners, they are not eligible for consideration.
40.It was contended by the learned senior counsel for the petitioners that though "can" is used in both Clause 18.1 of the agreement and in Clause E of the Freight Marketing Circular No.12 of 2006, it should be read as "Shall" or "Must". In this regard, he relied on the following judgments of the Hon'ble Apex Court:
1) State of U.P Vs. Jogendra Singh reported in AIR 1963 SC 1618
2) Rangaswami, The Textile Commissioner Vs. Sugar Textile Mills Private Limited reported in CDJ 1977 SC 056
3) State (Delhi Admn.) Vs. I.K.Nangia reported in 1980 (1) SCC 258
4) Orissa Textile and Steel Ltd., Vs. State of Orissa reported in 2002 (2) SCC 578
41.In the judgment relied on by the learned senior counsel for the petitioners reported in AIR 1963 SC 1618, the Honourable Apex Court considered Rule 4(2) of the U.P. Disciplinary Proceedings (Administrative Tribunal) Rules 1947. In the said case, the respondent was a Gazetted Officer. The appellant issued a charge sheet and referred the matter for enquiry by the Administrative Tribunal, under Rule 4(1) of the U.P. Disciplinary Proceedings (Administrative Tribunal) Rules 1947. Later, additional charges were framed. The respondent therein requested the appellant to refer the same also for enquiry by the Administrative Tribunal. The said request was made under Rule 4(2) of the U.P. Disciplinary Proceedings (Administrative Tribunal) Rules 1947. But the appellant refused to refer the same for enquiry by Administrative Tribunal and appointed a different authority to enquire into the matter. The appellant took a plea that it was his discretion as "may" is used in Rule 4(2) of the U.P. Disciplinary Proceedings (Administrative Tribunal) Rules 1947. In the said context, the learned single Judge of the High Court as well as the Division Bench held against the appellant and the same was confirmed by the Honourable Apex Court. It is held by the Honourable Apex Court that if the word "may" is not meant as "shall", Rule 4(2) of the U.P. Disciplinary Proceedings (Administrative Tribunal) Rules 1947 would be wholly redundant. In this regard, the relevant passage from the said judgment is extracted hereunder:
"It is because in regard to gazetted government servants the discretion had already been given to the Governor to refer their cases to the Tribunal that the rule making authority wanted to make a special provision in respect of them as distinguished from other government servants falling under Rule 4(1) and Rule 4(2) has been prescribed, otherwise Rule 4(2) would be wholly redundant......"
Hence, I am of the view that the said judgment cannot be pressed into service by the petitioners.
42.In the judgment relied on by the learned senior counsel for the petitioners reported in CDJ 1977 SC 056, the Honourable Apex Court considered Clause 20 of the Cotton Textiles (Control) Order, 1948, issued by the Government of India, under Section 3 of the Essential Supplies (Temporary Powers) Act, 1946. In the said case, the impugned notification prohibited printing of any border or heading on sarees etc., for an indefinite period. It was argued that such a prohibition for an indefinite period ultra vires Clause 20 of the Cotton Textiles (Control) Order, 1948. That was found acceptance by the Honourable Apex Court. The Honourable Apex Court held that Clause 20 casts an obligation or a duty upon the Textile Commissioner to specify the period during which the prohibition shall remain in force. Clause 20 (1) of the Cotton Textiles (Control) Order, 1948, as amended, is extracted hereunder:
20. (1) The Textile Commissioner may from time to time issue directions in writing to any manufacturer or class of manufacturers or the manufacturers generally regarding the classes or specifications of cloth or yarn, and the maximum or the minimum quantities thereof, which they shall or shall not produce during such periods as may be specified in the directions, and they shall comply with such directions."
In fact, the judgment was more on the word "directions" used in Clause 20(1) of the Cotton Textiles (Control) Order and though the said Clause nowhere states that the directions should be for a specified period, the Honourable Apex Court held that the legislative purpose could not be served, if the directions under the provision is for an indefinite period. The relevant passage from the said judgment is extracted hereunder:
"Directions of the kind envisaged by clause 20 are influenced and justified by exigencies which render it imperative that the directions be reviewed from time to time. That becomes feasible only if the directions are limited expressly to a determinate period of time at the end of which a fresh review of facts and circumstances becomes obligatory. There is a fear that a direction not limited in point of time may continue to operate even after it has outlived its utility for the reason merely that the need to review it is not clearly perceived. Besides, the manufacturers must know, in order that they may organise their business in their own interest as well as in the interest of the community at large, as to how long any particular embargo is going to be operative."
Thus, in my considered view, the said judgment also could not render any assistance to the petitioners.
43.In the judgment relied on by the learned senior counsel for the petitioners reported in 1980 (1) SCC 258, the Honourable Apex Court considered the explanation appended to Section 17(2) of the Prevention of Food Adulteration Act, 1954. In the said case, the Manufacturers at Bombay and the Sales Managers of Delhi Branch were prosecuted. The learned Magistrate refused to issue process to the Sales Managers at Delhi. The learned Magistrate held that the Sales Managers at Delhi, shall not be subjected to prosecution. The same was also upheld by the High Court. But the Honourable Apex Court held that the Sales Managers of the Branches should also face the prosecution. They could not be relieved of at the very initial stage itself. In the case of a company that manufactures food items, as per Section 17 of the Prevention of Food Adulteration Act, the person nominated as responsible for the conduct of the business of the company, would be subjected to prosecution. The explanation appended to Section 17(2) of the Prevention of Food Adulteration Act, 1954 states that when the company has different establishments or branches or different units, different persons may be nominated in relation to different establishment or branches or units as also persons responsible in respect of those establishment or branches or units. The word "may" appeared in the explanation appended to Section 17(2) of the Prevention of Food Adulteration Act, 1954 was considered by the Honourable Apex Court. The Honourable Apex Court held that unless the word "may" in the explanation to Section 17(2) is read as "shall", the scheme underlying the Section would be unworkable. In this regard, the explanation appended to Section 17(2) of the Prevention of Food Adulteration Act, 1954 is extracted hereunder:
"17 (2) .....
Explanation . Where a company has different establishments, or branches or different units in any establishment or branch, different persons may be nominated under this sub-section in relation to different establishments or branches or units and the person nominated in relation to any establishment, branch or unit shall be deemed to be the person responsible in respect of such establishment, branch or unit.
The relevant passage from the said judgment is also extracted hereunder:
"15. We are clear that the Explanation to Section 17(2), although in terms permissive, imposes a duty upon such a company to nominate a person in relation to different establishments or branches or units. There can be no doubt that this implies the performance of a public duty, as otherwise, the scheme underlying the section would be unworkable. The case, in our opinion, comes within the dictum of Lord Cairns in Julius v. Lord Bishop of Oxford:
There may be something in the nature of the thing empowered to be done, something in the object for which it is to be done, something in the conditions under which it is to be done, something in the title of the person or persons for whose benefit the power is to be exercised, which may couple the power with a duty, and make it the duty of the person in whom the power is reposed to exercise that power when called upon to do so. The Explanation lays down the mode in which the requirements of Section 17(2) should be complied with. Normally, the word may implies what is optional, but for the reasons stated, it should in the context in which it appears, mean must. There is an element of compulsion. It is a power coupled with a duty. In Maxwell on Interpretation of Statutes, llth Edn. at p.231, the principle is stated thus:
Statutes which authorise persons to do acts for the benefit of others or, as it is sometimes said, for the public good or the advancement of justice, have often given rise to controversy when conferring the authority in terms simply enabling and not mandatory. In enacting that they may or shall, if they think fit, or, shall have power, or that it shall be lawful for them to do such acts, a statute appears to use the language of mere permission, but it has been so often decided as to have become an axiom that in such cases such expressions may have to say the least a compulsory force, and so would seem to be modified by judicial exposition. (emphasis supplied) In the above judgment, the Honourable Apex Court held that the word "may" implies what is optional, but for the reasons stated, it should be in the context in which it appears, mean "must". It is also held that there should be an element of compulsion. The Honourable Apex Court has also referred to Maxwell on Interpretation of Statutes and the Maxwell was approved. As per the Maxwell, whenever statutes authorise persons, to do acts for the benefit of others or for the public good, even when the statutes use the word "may", it should be read as "shall" for the purpose of giving effect to the statutory intendment. Here, I am not able to understand as to how this judgment is applicable to this case. Hence, the said judgment is also of no use to the petitioners.
44.In the other judgment relied on by the learned senior counsel for the petitioners reported in 2002 (2) SCC 578, the Honourable Apex Court considered the constitutional validity of Section 25-O of Industrial Disputes Act. Section 25-O of the Industrial Disputes Act relates to seeking prior permission from the appropriate Government for closing down an industrial establishment. One of the issues raised by the employers was that Section 25-O left discretion to the appropriate Government to review the order or to refer the matter to the Tribunal for adjudication. That is, if an order is passed by the appropriate Government, either granting or refusing permission to close the undertaking, the aggrieved party could seek review or reference to the Tribunal for adjudication, as per Section 25-O(5) of the Industrial Disputes Act. It was sought to be argued by the employers that the word "may" is used in Section 25-O(5) and that therefore, the appropriate Government has discretion either to review or to refer the matter for adjudication and there was no compulsion on the part of the appropriate Government to review its order, even when an application was filed to review the order. Likewise, when an application was made to the Government seeking a reference, even then it was not mandatory for the Government to refer the matter. But the same was negatived by the Honourable Apex Court in para 16 of the judgment holding that the appropriate Government is exercising quasi judicial power, while exercising power under Section 25-O of the Industrial Disputes Act, by refusing or granting permission to close an industrial establishment. In such an event, the appropriate Government should entertain a review application, if a review application is filed by an aggrieved party. Likewise, when there is a demand for reference, the Government should refer the matter for adjudication. Para 16 of the said judgment is extracted hereunder in this regard.
"16. In our view, the learned Attorney-General is right. A proper reading of sub-section (5) of the amended Section 25-O shows that, in the context in which it is used, the word may necessarily means shall. Thus the appropriate government shall review the order if an application in that behalf is made by the employer or the workmen. Similarly, if so required by the employer or the workman, it shall refer the matter to a tribunal for adjudication. As submitted by the learned Attorney-General, in a review the appropriate government would have to make an enquiry into all necessary facts, particularly into the genuineness and adequacy of the reasons stated by the employer. An opportunity of being heard would have to be given to the employer, workmen and all interested persons. The order on review would have to be in writing giving reasons. Thus, in exercising powers of review, the appropriate government would be performing quasi-judicial functions. Sub-section (5) of the amended Section 25-O provides that the award should be passed within a period of 30 days from the date of reference. Even though it does not provide any time-frame within which the review is to be disposed of, it is settled law that the same would have to be disposed of within a reasonable period of time. In our view, a period of 30 days would be a reasonable period for disposing of a review also. This review and/or reference under the amended Section 25-O would be in addition to a judicial review under Article 226 or Article 32. In Meenakshi Mills case it has been held that the exercise of power being quasi-judicial the remedy of judicial review under Article 226 or Article 32 was an adequate protection against the arbitrary action in the matter of exercising of power by the appropriate government. We are in full agreement with those observations."
Hence, this judgment is also of no use to the petitioners.
45.In these writ petitions, as already stated above, there is no public good or benefit of others are involved. It is purely a matter of contract and commercial transaction. Therefore, one should look into the actual words used in the contract / agreement. Hence, there is no warrant for reading "can" as "shall" or "must". Thus the petitioners are not entitled to automatic extension of lease period. Issue No.2 is answered accordingly.
46.For all the aforesaid reasons, the writ petitions are dismissed. No costs. Consequently, connected miscellaneous petitions are closed.
12 .11. 2010 Index : Yes Internet : Yes TK To 1.The Chief Traffic Manager Southern Railway Headquarters Office Commercial Branch, Freight Marketing 5th Floor, MMC, Chennai 600 003. 2.The Chief Commercial Manager Southern Railway, Park Town, Chennai 600 003. 3.The Senior Commercial Manager Southern Railway, Chennai 600 003. 4.The Deputy Chief Commercial Manager Moore Market Complex, 4th Floor, Southern Railway Chennai 600 003. D.HARIPARANTHAMAN, J. TK PRE-DELIVER COMMON ORDER MADE IN W.P.NOS.9734, 10357, 10358 10407, 10408, 10409, 10410 AND 12239 OF 2010 12 .11. 2010