Gujarat High Court
Jayantilal vs Union on 19 September, 2008
Author: Anant S. Dave
Bench: Anant S. Dave
Gujarat High Court Case Information System
Print
SCA/17112/2007 27/ 27 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 17112 of 2007
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CIVIL APPLICATION No. 6913 of 2007
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CIVIL APPLICATION No. 22061 of 2007
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CIVIL APPLICATION No. 6910 of 2007
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CIVIL APPLICATION No. 6898 of 2007
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CIVIL APPLICATION No. 4584 of 2007
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CIVIL APPLICATION No. 6902 of 2007
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CIVIL APPLICATION No. 6912 of 2007
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CIVIL APPLICATION No. 6901 of 2007
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CIVIL APPLICATION No. 6916 of 2007
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CIVIL APPLICATION No. 6915 of 2007
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CIVIL APPLICATION No. 6907 of 2007
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CIVIL APPLICATION No. 6906 of 2007
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CIVIL APPLICATION No. 2291 of 2007
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CIVIL APPLICATION No. 6905 of 2007
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CIVIL APPLICATION No. 6908 of 2007
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CIVIL APPLICATION No. 6904 of 2007
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CIVIL APPLICATION No. 6900 of 2007
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CIVIL APPLICATION No. 6909 of 2007
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CIVIL APPLICATION No. 6903 of 2007
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CIVIL APPLICATION No. 6914 of 2007
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CIVIL APPLICATION No. 6899 of 2007
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CIVIL APPLICATION No. 6911 of 2007
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CIVIL APPLICATION No. 2293 of 2007
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CIVIL APPLICATION No. 2302 of 2007
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CIVIL APPLICATION No. 8295 of 2007
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CIVIL APPLICATION No. 8301 of 2007
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JAYANTILAL
S GUPTA - Petitioner(s)
Versus
UNION
OF INDIA & 2 - Respondent(s)
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Appearance
:
MR SP
MAJMUDAR for Petitioner(s) : 1,
DS AFF.NOT
FILED (R) for Respondent(s) : 1 -
3.
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CORAM
:
HONOURABLE
MR.JUSTICE ANANT S. DAVE
Date
: 19/09/2008
COMMON
ORAL ORDER
All these writ petitions have identical subject matter and common grievance against the respondent authorities and all the petitioners claim to be licence holders of Indian Railways at various railway stations since number of years and they are aggrieved by price hike in the form of licence fee payable by them to the Indian Railways for operating their refreshment stalls. In all these petitions, inter alia, the petitioners have challenged the policy of the Railway Board and circulars pertaining to Catering Policy 2000 dated 20.10.2000 which came to be replaced by new Catering Policy of 2004, which was again reviewed by Railway Board by framing a new Catering Policy of 2005 in super-session of all existing policies, which came to be introduced by the Ministry of Railways vide Commercial Circular No.8 of 2005 dated 16.3.2005. As per the above policy, levy of licence fee will be @12% (or any other percentage commission on sales notified from time to time) of estimated annual sales turnover for both general and reserved categories was reiterated as per clause 15.4 of the Circular. At the same time, the Indian Railway Catering and Tourism Corporation Limited (for short IRCTC ), a public sector company registered under the provisions of Indian Companies Act, 1956 and fully owned by the Ministry of Railways, Government of India, started functioning for upgrading professionalism and managing catering and hospitality services at various stations and at other locations in the interest of passengers travelling by Indian Railways and to promote domestic as well as international tourism. That IRCTC also issued circular dated 9.12.2005, which provided minimum increase of 10% of licence fee over a prevailing licence fee, wherever the licence fee was not revised. The petitioner also challenges categorization of stations as per the Circular dated 18.9.1999, after a period of 9 years. According to them, the revised licence fee structure has no rational with the objects sought to be achieved and irrespective of the number of trains passing through the station or the passenger inflow and the annual sales turnover, the fee is being hiked and since the above licence fee hike is being exorbitant deserves to be quashed and set aside as being unjust, arbitrary, discriminatory and violative of Articles 14 and 19(1)(g) of the Constitution of India by exercising powers under Article 226 of the Constitution of India.
In the above context, following prayers are made by the petitioner and one of such prayers are taken from Special Civil Application No.2291 of 2007 and common other identical petitions read as under :-
(A) Your Lordships may be pleased issue a writ of mandamus or writ in the nature of mandamus or any other appropriate writ, order or direction quashing and setting aside the impugned notice dated 15.01.2007 (Annexure-G hereto) issued by respondent authorities herein and further be pleased to declare that the criteria laid down for classification of station as Class A to F Categories vide Circular dated 13.09.1999 (at Annexure-A hereto) and the policies issued by the respondents subsequent thereto, are illegal and arbitrary and the categorization of the Palanpur Railway Station as A Class station and consequently, the taking over the catering unit of the petitioner by the IRCTC may also be declared illegal;
(B) Your Lordships may be pleased issue a writ of mandamus or writ in the nature of mandamus or any other appropriate writ, order or direction declaring the revision of the licensee fee by the IRCTC w.e.f.
01.11.2005 as illegal and also directed to refund the excess amount already deposited by the petitioner with interest @12% and also further be pleased to direct the respondents to renew the license of the petitioner for next five years forthwith;
(C) During the pendency and final disposal of the present petition Your Lordships may be pleased to restrain the respondent authorities their officers, servants and agents from taking any coercive action against the petitioner for removal of his Stall/Trolleys at Palanpur Railway Station.
(D) During the pendency and final disposal of the present petition Your Lordships may be pleased to stay the effect and operation of the impugned demand notice dated 15.01.2007 (at Annexure-G hereto) and further be pleased to restrain the respondents, from realizing the lump sum enhanced licence fee from the petitioner till the disposal of the present petitioner and they may be directed to allow the petitioner to operate his unit without insisting upon to deposit the license fee revised by issuing impugned notice.
Thus, the main challenge is the show cause notice issued by the respondent authorities and further to declare the criteria laid down for classification of stations by the circular 13.9.1999 as illegal and further to declare revision of licence fee by IRCTC w.e.f. 1.11.2005 also as bad and illegal.
In the backdrop of the above facts, when all these matters taken up for hearing, the following three queries were raised by this Court :-
For enforcing legal right of the petitioners, if any, as licencees, whether the the petitioners have annexed licences, which contain terms and conditions of the licence issued by the respondent authorities, learned counsel for the petitioners replied that though licenses are there, but the same are not produced on record.
Second query was about tenure of the licence as to for what period the licence was issued and whether it was subsequently renewed or not.
No such factual data is produced.
Thirdly whether any reply is given to the impugned show cause notice dated 15.1.2007 to the petitioners, it is submitted by learned counsel for the petitioners that it is not the show cause notice but a coercive order by which enhanced revised licence fee is sough to be recovered, which is challenged along with policy of catering as stated in the prayer clauses of the petition.
The above queries were raised by this Court so as to ascertain legal right of the petitioners since a writ of or in the nature of mandamus is ordinarily issued where the petitioner establishes his legal right and a corresponding legal duty of the public authorities to consider such right when demand is raised and denied by the authorities. In the instant cases, except the submissions to the extent that the challenge in these petitions is against the policy decision framed by the respondent authorities as per the circulars issued by them from time to time, no other submissions are made or any authority on the subject matter is relied on by the learned counsel appearing for the petitioners.
In reply to the above submissions, learned counsel for the respondents appearing for IRCTC heavily relied on the affidavit in reply filed by the Area Manager and submitted that IRCTC is a company incorporated under the Companies Act, 1956 which was formed as an extended arm of Indian Railways to upgrade, professionalize and manage the catering and hospitality services at stations, on Trials and other locations and to promote domestic and International Tourism through development of hotels, information and commercial publicity and global reservation systems. Learned counsel for the respondents further submitted that with a view to augmenting earnings for Indian Railways, Catering Policy 2000 was formulated for providing catering facilities to Indian Railways according to the class of stations and volume of passenger traffic by classifying various stations in the category of A, B, C, D and E. On 12.4.2001 MoU came to be signed between the Indian Railways and IRCTC and it was agreed that IRCTC would primarily serve the rail users and passengers through value added services. Later on Catering Policy was revised and reviewed from time to time and thereafter the Ministry of Railways issued Catering Policy 2004 on 5.10.2004. In view of the same problems faced and representations were received, the above catering policy was changed and new Catering Policy, 2005 was formulated, which is in existence. The Ministry of Railways, Railway Board vide Commercial Circular No.56 of 2006 dated 6.7.2006 delegated fixation of minimum fees to different static units at A, B & C category stations to IRCTC and later on Circular No.15 of 2006 dated 5.9.2006 was issued by IRCTC giving methodology to be adopted for fixation of minimum licence fee after taking into consideration the rational factors mentioned in the said circular. Consequently, IRCTC issued another circular dated 7.11.2006 in view of representation submitted by the GGM's of various IRCTC Zones. Accordingly, salient points of the policy are as under :-
License fee must not be less than what has already been tendered in adjacent sites or being given by the current Licensee of the particular site.
License Fee calculated should not be less than 12% of the total sales turnover, if assessed.
In specific cases, wherein the maximum license fee thus arrived is abnormally higher, GGMs are empowered to relax the same through a speaking order.
The maximum license for trolleys and Khomchas for existing licensees is fixed at 40% less than calculated license fee of stalls.
Thus, keeping the above factors in mind the object of the policy for issuing licence was earning good revenue from the catering units.
Learned counsel for the respondents further submits that even classification of stations in various category into A, B, C, D, E & F categories was also on the basis of passenger earning of station as prescribed in the affidavit in reply in a tabular form in para 9, which is reproduced as under :-
Category Criteria A Non-suburban station with annual passenger earnings of more than Rs.6 Crores B Stations with passenger earnings between Rs.3 Crore and up to Rs.6 Crores C All suburban stations except Class A & B Stations.
D Stations with passenger earnings between Rs.1 Crore to Rs.3 Crores.
E All stations other than Class A, B, C & D. F All Flag/half stations Thus, it was necessary to categorize stations into various categories for deciding level of providing passenger amenities, catering facilities etc. The classification was based on the basis of tickets issued, which is the most reliable criteria and the data can easily be verified. Thus, according to learned counsel for the respondents the licence fee fixed by the IRCTC and Ministry of Railways was on the basis of sound rational factors in furtherance of its catering policy. It is further submitted that some of the petitioners have entered into agreement with the Railway Administration before the Catering Policy of 2000 came into existence where the licensee had agreed to pay licence fee as revised by the Railway Administration in future. The above fact remains according to respondent as undisputed. It is also submitted that the petitioners being licensees have no right for hearing in formation of policy as agreed on by the Indian Railways and IRCTC. It is further submitted that the petitioners are permitted to compete with the other bidders and thus, no right of the petitioners is violated.
Therefore, according to the learned counsel for the respondents, the petitioners do not have any legal right to continue beyond the terms and conditions of their licence as caterers of the respondents.
By an additional affidavit on behalf of respondents Nos.1 and 2 it is further submitted that the respondents have received bids from various parties and if the total increase in licence fee of all the 18 stalls is taken into consideration, the successful bidders would be paying Rs.34 lacs as licence ass as against the existing Rs.5.50 lacs. It is further submitted that no illegality or irregularity is committed by the IRCTC in either framing the policy or inviting tenders. Thus, according to learned counsel for the respondents, all these petitions deserve to be dismissed and interim relief granted earlier deserves to be vacated forthwith.
It is profitable to refer to the decisions of the Apex Court in reference to the subject matter of the petitions, before dealing with the specific submissions of the learned counsel for the parties.
It is trite that in the realm of contractual and statutory transactions, judicial review is permissible, when an administrative decision is impeached on the ground that the decision is arbitrary or violative of Article 14 of the Constitution of India on any of the grounds available in public law field. Even in the case of Tata Cellular v. Union of India reported in AIR 1996 SC 11, the Apex Court held as under :-
113.
The principles deducible from the above are:
The modern trend points to judicial restraint in administrative action.
The Court does not sit as a court of appeal but merely reviews the manner in which the decision was made.
The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible.
The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts.
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 (including its other facts pointed out above)but must be free from arbitrariness not affected by bias or actuated by mala fides.
Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure .
In view of the above, what could be the approach of the writ court exercising power under Article 226 of the Constitution of India in such eventuality is elaborately described by the Apex Court in the case of State of U.P. And Another v. Johri Mal reported in (2004)4 SCC 714 speaking through His Lordship Hon'ble Mr. Justice S.B.Sinha, has held as under :-
JUDICIAL REVIEW:
22.
The power of judicial review is now well-defined in a series of decisions of this Court. It is trite that the court will have no jurisdiction to entertain a writ application in a matter governed by contract qua contract (assuming such professional engagement to be one), as therein public law element would not be involved. (See Life Insurance Corporation Vs. Escorts Ltd. and Ors. [AIR 1986 SC 1370], F.C.I. and Ors. Vs. Jagannath Dutta and Ors., [AIR 1993 SC 1494], State of Gujarat and Ors. Vs. Meghji Pethraj Shah Charitable Trust and Ors., [(1994) 3 SCC 552], Assistant Excise Commissioner and Ors. Vs. Issac Peter and Ors., (1994) 4 SCC 104], National Highway Authority of India Vs. M/s. Ganga Enterprises & Anr. 2003 (7) SCALE 171).
23. In any event, the modern trend also points to judicial restraint in administration action as has been held in Tata Cellular Vs. Union of India [(1994) 6 SCC 651]. (See also Monarch Infrastructure (P) Ltd. Vs. Commissioner, Ulhasnagar Municipal Corporation and Others [(2000) 5 SCC 287] and W.B. State Electricity Board Vs. Patel Engineering Co. Ltd. and Others [(2001) 2 SCC 451)] and L.I.C. and Anr. vs. Consumer Education and Research Centre and Ors., [AIR 1995 SC 1811].
24. The legal right of an individual may be founded upon a contract or a statute or an instrument having the force of law. For a public law remedy enforceable under Article 226 of the Constitution, the actions of the authority need to fall in the realm of public law -be it a legislative act of the State, an executive act of the State or an instrumentality or a person or authority imbued with public law element. The question is required to be determined in each case having regard to the nature of and extent of authority vested in the State. However, it may not be possible to generalize the nature of the action which would come either under public law remedy or private law field nor is it desirable to give an exhaustive list of such actions.
25. In Council of Civil Services Unions Vs. Minister for the Civil Service [(1985) AC 374] while extending the scope of judicial review the House of Lords decided that judicial review should not be available if the particular decision under challenge was not justiciable. However, in granting relief the Court shall take into consideration the factors like national security issue. In Oliver, Dawn : Constitution Reform in the UK, it is stated at page 210:
"In the CCSU case the House of Lords decided that judicial review should not available if the particular decision under challenge was not justiciable. In effect they respected the political Constitution and deferred to government in some sensitive areas. In this case the Government was alleging that for them to have consulted the unions before before the decision was taken would have provoked industrial action at GCHQ, which would in turn have been damaging of national security. In the view of the House of Lords this made an otherwise reviewable decision not suitable for judicial review - not justiciable. Other decisions taken under the royal prerogative, which the court indicated would be non-justiciable, included treaty making and foreign affairs. Despite the outcome of the CCSU that the prerogative is in principle reviewable and that were it not for the national security issue the government should have consulted the unions before imposing these changes was a major step forward in the judicialization of government action, including the actual conduct of government, and a step away from the political Constitution."
26. However, we may notice that judicial review was held to be available when justiciability of foreign relations came to be considered in R. (Abbasi) Vs. Secretary of State for the Foreign and Commonwealth Office and Secretary of State for the Home Department [2002] EWCA Civ., 6 November 2002 stating:
"Although the statutory context in which Adan was decided was highly material, the passage from Lord Cross' speech in Cattermole supports the view that, albeit that caution must be exercised by this Court when faced with an allegation that a foreign state is in breach of its international obligations, this Court does not need the statutory context in order to be free to express a view in relation to what it conceives to be a clear breach of its international obligations, this Court does not need the statutory context in order to be free to express a view in relation to what it conceives to be a clear breach of international law, particularly in the context of human rights."
27. In Council of Civil Services Unions Vs. Minister for Civil Service the power of judicial review was restricted ordinarily to illegality, irrationality and impropriety stating:
"If the power has been exercised on a non-consideration or non-application of mind to relevant factors, the exercise of power will be regarded as manifestly erroneous. If a power (whether legislative or administrative) is exercised on the basis of facts which do not exist and which are patently erroneous, such exercise of power will stand vitiated."
28. The Scope and extent of power of the judicial review of the High Court contained in Article 226 of the Constitution of India would vary from case to case, the nature of the order, the relevant statute as also the other relevant factors including the nature of power exercised by the public authorities, namely, whether the power is statutory, quasi judicial or administrative. The power of judicial review is not intended to assume a supervisory role or done the robes of the omnipresent. The power is not intended either to review governance under the rule of law nor do the courts step into the areas exclusively reserved by the suprema lex to the other organs of the State. Decisions and actions which do not have adjudicative disposition may not strictly fall for consideration before a judicial review court. The limited scope of judicial review succinctly put is:
(i) Courts, while exercising the power of judicial review, do not sit in appeal over the decisions of administrative bodies;
(ii) A petition for a judicial review would lie only on certain well-defined grounds.
(iii) An order passed by an administrative authority exercising discretion vested in it, cannot be interfered in judicial review unless it is shown that exercise of discretion itself is perverse or illegal.
(iv) A mere wrong decision without anything more is not enough to attract the power of judicial review; the supervisory jurisdiction conferred on a Court is limited to seeing that the Tribunal functions within the limits of its authority and that its decisions do not occasion miscarriage of justice.
(v) The Courts cannot be called upon to undertake the Government duties and functions. The Court shall not ordinarily interfere with a policy decision of the State. Social and economic belief of a Judge should not be invoked as a substitute for the judgment of the legislative bodies. (See Ira Munn Vs. State of Ellinois, 1876 (94) US (Supreme Reports) 113)
29. In Wade's Administrative Law, 8th edition at pages 33-34, it is stated:
"Review, Legality and discretion The system of judicial review is radically different from the system of appeals. When hearing an appeal the court is concerned with the merits of a decision: is it correct? When subjecting some administrative act or order to judicial review, the court is concerned with its legality: is it within the limits of the powers granted? On an appeal the question is 'right or wrong?' On review the question is 'lawful or unlawful?' Rights of appeal are always statutory. Judicial review, on the other hand, is the exercise of the court's inherent power to determine whether action is lawful or not and to award suitable relief. For this no statutory authority is necessary: the court is simply performing its ordinary functions in order to enforce the law. The basis of judicial review, therefore, is common law. This is none the less true because nearly all cases in administrative law arise under some Act of Parliament. Where the Court quashes an order made by a minister under some Act, it typically uses its common law power to declare that the Act did not entitle the minister to do what he did and that he was in some way exceeding or abusing his powers.
Judicial review thus is a fundamental mechanism for keeping public authorities within due bounds and for upholding the rule of law. Instead of substituting its own decision for that of some other body, as happens when on appeal, the court on review is concerned only with the question whether the act or order under attack should be allowed to stand or not. If the Home Secretary revokes a television licence unlawfully, the court may simply declare that the revocation is null and void. Should the case be one involving breach of duty rather than excess of power, the question will be whether the public authority should be ordered to make good a default. Refusal to issue a television licence to someone entitled to have one would be remedied by an order of the court requiring the issue of the licence. If administrative action is in excess of power (ultra vires), the court has only to quash it or declare it unlawful (these are in effect the same thing) and then no one need pay any attention to it. The minister or tribunal or other authority has in law done nothing, and must make a fresh decision."
30. It is well-settled that while exercising the power of judicial review the Court is more concerned with the decision making process than the merit of the decision itself. In doing so, it is often argued by the defender of an impugned decision that the Court is not competent to exercise its power when there are serious disputed questions of facts; when the decision of the Tribunal or the decision of the fact finding body or the arbitrator is given finality by the statute which governs a given situation or which, by nature of the activity the decision maker's opinion on facts is final. But while examining and scrutinizing the decision making process it becomes inevitable to also appreciate the facts of a given case as otherwise the decision cannot be tested under the grounds of illegality, irrationality or procedural impropriety. How far the court of judicial review can reappreciate the findings of facts depends on the ground of judicial review. For example, if a decision is challenged as irrational, it would be well-nigh impossible to record a finding whether a decision is rational or irrational without first evaluating the facts of the case and coming to a plausible conclusion and then testing the decision of the authority on the touch-stone of the tests laid down by the Court with special reference to a given case. This position is well settled in Indian administrative law. Therefore, to a limited extent of scrutinizing the decision making process, it is always open to the Court to review the evaluation of facts by the decision maker.
31. In Chief Constable of the North Wales Police Vs. Evans [1982 (3) All ER 141], the law is stated in the following terms:
"...The purpose of judicial review is to ensure that the individual receives fair treatment, and not to ensure that the authority, after according fair treatment, reaches on a matter which it is authorized or enjoined by law to decide for itself a conclusion which is correct in the eyes of the court."
32. Prof. Bernard Schwartz in his celebrated book (Administrative Law, III Edn. Little Brown Company 1991) dealing with the present status of judicial review in American context, summarized as under:
"If the scope of review is too broad, agencies are turned into little more than media for the transmission of cases to the Courts. That would destroy the values of agencies, created to secure the benefit of special knowledge acquired through continuous administration in the complicated fields. At the same time, Court should not rubber-stamp agencies; the scope of judicial enquiry must not be so restricted that it prevents full enquiry into the action of legality. If that question cannot be properly explored by the Judge, the right to review becomes meaningless...in the final analysis, the scope of review depends on the individual judges estimate of the justice of the case."
33. Prof. Clive Lewis in his book (Judicial Remedies in Public Law 1992 Edn. At p. 294-295) stated:
"The Courts now recognize that the impact on the administration is relevant in the exercise of their remedial jurisdiction'...Earlier cases took a robust line that the law has to be observed and the decision invalidated, what ever the administrative inconvenience caused. The Courts now-a-days recognize that such an approach is not always appropriate and may not be in the wider public interest. The effect on the administrative process is relevant to the Court's remedial discretion and may prove decisive...They may also be influenced to the extent to which the illegality arises from the conduct of the administrative body itself, and their view of that conduct."
34. Grahame Aldous and John Alder in "Applications for Judicial Review, Law and Practice" stated thus:
"There is a general presumption against ousting the jurisdiction of the courts, so that statutory provisions which purport to exclude judicial review are construed restrictively. There are, however, certain areas of governmental activity, national security being the paradigm, which the courts regard themselves as incompetent to investigate, beyond an initial decision as to whether the government's claim is bona fide. In this kind of non-justiciable area judicial review is not entirely excluded, but very limited. It has also been said that powers conferred by the royal prerogative are inherently unreviewable but since the speeches of the House of Lords in Council of Civil Service Unions Vs. Minister for the Civil Service this is doubtful. Lords Diplock, Scaman and Roskili appeared to agree that there is no general distinction between powers, based upon whether their source is statutory or prerogative but that judicial review can be limited by the subject matter of a particular power, in that case national security. Many prerogative powers are in fact concerned with sensitive, non-justiciable areas, for example, foreign affairs, but some are reviewable in principle, including where national security is not involved. Another non-justiciable power is the Attorney General's prerogative to decide whether to institute legal proceedings on behalf of the public interest."
35. In Wade's Administrative Law, 8th Edition at pages 551-552, the author states :
"Rights and Remedies: Rights depend upon remedies. Legal history is rich in examples of rules of law which have been distilled from the system of remedies, as the remedies have been extended and adapted from one class of case to another. There is no better example than habeas corpus. This remedy, since the sixteenth century the chief cornerstone of personal liberty, grew out of a medieval writ which at first played an inconspicuous part in the law of procedure: it was used to secure the appearance of a party, in particular where he was in detention by some inferior court. It was later invoked to challenge detention by the king and by the Council; and finally it became the standard procedure by which the legality of any imprisonment could be tested. The right to personal freedom was almost a by-product of the procedural rules.
This tendency has both good and bad effects. It is good in that the emphasis falls on the practical methods of enforcing any right. Efficient remedies are of the utmost importance, and the remedies provided by English administrative law are notably efficient. But sometimes the remedy comes to be looked upon as a thing in itself, divorced from the legal policy to which it ought to give expression. In the past this has led to gaps and anomalies, and to a confusion of doctrine to which the courts have sometimes seemed strangely indifferent."
36. A writ of or in the nature of mandamus, it is trite, is ordinarily issued where the petitioner establishes a legal right in himself and a corresponding legal duty in the public authorities .
In the above decision, Their Lordships referred to the decision in the case of Om Kumar v. Union of India reported in 2001(2) SCC 386, wherein it was held that when administrative action is challenged under Article 14 as being discriminatory, equals are treated unequally or unequals are treated equally, the question is for the Constitutional Courts as primary reviewing courts to consider the correctness of the level of discrimination applied and whether it is excessive and whether it has a nexus with the objective intended to be achieved by the administrator and for judging the arbitrariness of the order, the test of unreasonableness may be applied and such action of the State must be judged with extreme care and circumspection. So in the present case, the petitioners who claim to be licensees of the respondents will have to establish extreme arbitrariness or discriminatory treatment meted out to them by the administrative authority.
Later on, recently the Apex Court in the case of Delhi Development Authority N.D. v. Joint Action Committee, Allottee of SFS Flats reported in 2008 AIR SCW 762, Their Lordships have held as under :-
59. An executive order termed as a policy decision is not beyond the pale of judicial review. Whereas, the superior Courts may not interfere with the ditty grittiest of the policy, or substitute one by the other but it will not be correct to contend that the Court shall like its judicial hands off, when a plea is raised that the impugned decision is a policy decision. Interference therewith on the part of the superior Court would not be without jurisdiction as ti is subject to judicial review.
60. Broadly, a policy decision is subject to judicial review on the following grounds :
(a) if it is unconstitutional;
(b) if it is dehors the provisions of the Act and the Regulations;
(c) if the delegate has acted beyond its power of delegation;
(d) if the executive policy is contrary to the statutory or a larger policy .
Thus, the above broad aspects are to be kept in mind while determining the challenge to a policy decision impugned in this petition by the petitioners by this Court in exercise of powers under Article 226 of the Constitution of India.
I have given my thoughtful consideration to the rival submissions of the learned counsel for the parties and perused the record of the case, including catering policies of 1999, 2000, 2004 and 2005 along with impugned show cause notice and pleadings of the parties.
As recorded earlier, learned counsel for the petitioners was unable to ascertain legal right, if any, based on the terms and conditions of the licenses, only challenge remains qua the impugned show cause notice dated 15.1.2007 by which the petitioners are requested to pay the licence fee as specified in the table issued by the respondent authorities. A brae look at the impugned show cause notice dated 15.1.2007 at Annexure-G to the Special Civil Application No.2291 of 2007 referred to the subject Revision of License Fee w.e.f. 1.11.2006 with reference to Commercial Circular No.56 of 2006 dated 6.7.2006 and another Corporate Office Circular No.2006 dated 7.11.2006 of IRCTC for minimum licence fee for different catering units which were worked out, taken into account rational factors mentioned in Board's letter. The licence fee worked out is minimum licence fee and is liable for revision when adjacent sites are tendered in future. Not only that but it refers to grant of ad hoc temporary extension of licence up to 31.3.2007 or till appointment of licence by IRCTC whichever is earlier subject to compliance of certain conditions. The show cause notice further referred that no legal right is conferred on the addressee as decided by the Hon'ble Supreme Court in judgment dated 29.3.2005 in the case of IRCA v. Union of India, but since the licences are in existence eligibility was conferred to participate in the competitive bidding subject to satisfactory performance and clearance of dues and verification of antecedents.
Thus, by the above show cause notice, the petitioners were requested to pay revised fee elaborately referring to various circulars issued by the Railway Board as well as IRCTC in the year 2006. Instead of replying to the above show cause notice, the petitioners have straightaway approached this Court and in absence of the final order and the consideration that may have weighed with the authorities, had there been reply filed to the show cause notice this Court is unable to review even decision making process. Thus, at the outset, all these petitions deserve to be dismissed on the ground of challenge to the show cause notice which contain elaborate details and authority or jurisdiction to issue such notice is not under challenge and powers have been exercised within frame work of the Catering Policy 2005 and also an agreement arrived at between Indian Railways and IRCTC.
Even on challenge to policy decision, a bare perusal of certain instructions issued by the Railway Board, Ministry of Railways, Government of India as per circular dated 13.9.1999 to all General Managers contain comprehensive instructions for provisions of passenger amenities at stations. The above circular refers to providing amenities by categorizing into `infrastructure facilities' and `passenger amenities' and the stations are categorized into five categories. The subsequent Catering Policy-2000 also refers to need for a new policy in view of increased passenger traffic of Railways and customer wants higher standards of catering services including quality, variety in products, hygiene, better presentation of services etc. The Railways provided certain catering and vending services at Class A, B, C, D and E stations. It also mentioned about shifting of stalls, reduction in the number of stalls on platform and management of departmental units. It also refers to providing pantry car on long distance mail/express trains and other aspects about conditions of licence and clause 12.3 refers to Arbitration, which states that, in the event of any question, dispute or difference arising under these conditions of contract or in connection with the contract, the same shall be referred to the Arbitration Tribunal or the person appointed to be the sole arbitrator by the GM of the concerned zonal office and the award of the Arbitrator shall be final and binding on the parties to the contract. Clause 13 provides for Licensing Policy with regard to allotment of catering/vending licences and clause 14 refers to system for awarding licence in case of major units.
The above policy came to be revised in the year 2004 being Catering Policy-2004 and the purpose for revising the Catering Policy was to generate adequate resources to make the sector self-reliant and other factors remain same which were there in the Catering Policy-2000. The above policy also provided all the relevant provisions as found in the Catering Policy 2000, including the arbitration clause and licence fee was payable by the licensee in the form of percentage of annual sales turnover. The tenure of license for major units will be 5 years and there would be no renewal or extension after expiry of the contract and fresh tenders and should be called and finalized well before the expiry of the existing contract and existing licencees can also apply in the tender process subject to fulfillment of eligibility criteria.
Certain practical problems were faced and representations were received from various corners to bring about change in Catering Policy-2004 and particularly withdrawal of reservation in award of licences of small catering units at `A', `B' and `C' category stations, problems of under-privileged classes, problems of existing licensees, etc. due to non-renewal of licences prescribed in Catering Policy 2004. Subsequently, Hon'ble Minister for Railways made some announcements on the floor of Parliament addressing issues of renewal of licences of small catering units at `D', `E' and `F' category stations, allotment of catering/vending units to some weaker sections of society at `A', `B' and `C' etc., the policy required modification and change to fulfill the social obligation of the Government of India and accordingly the above Catering Policy 2005 was framed.
The above Catering Policy 2005 clearly provides Catering/vending services and Scale of Catering Facilities on Indian Railways, Reduction of Congestion on Stations/Platforms etc. It also provides for Management of Departmental units and Mobile Catering Units. A detailed provision is also made about Tariff, Ceiling Limit on Holdings and Transfer of Licence. The policy also provides certain criterion about use of food grade material so as to maintain standard quality for storage/ packaging of food items in order to avoid chances of contamination and use of eco-friendly material. This policy also provides for Arbitration in clause 12.3 and clause 12.4 is for Model Agreement between licensee and IRCTC and clause 12.5 is for application of new policy to existing licencees. Part B of the above Policy is pertaining to licencing policy for Allotment of Catering Licences and in detail provide System for Awarding Licence in case of Major Units. Clause 14.2 provides for tendering system, clause 14.3 provides for Technical Offer, clause 14.4 provides for Eligibility Criteria and clause 14.5 provides for Financial Bid and clause 15 provide for System for Awarding Licences in case of Small Units. Clause 16 refers to System of Awarding License in case of Small units at `D', `E' and `F' category stations and clause 16.3 is about tenure and 16.4 is about licence fee which provide that licence fee should be enhanced based on actual sales turnover of the unit subject to 10% increase in the prevailing licence fee of the unit.
In view of the agreement arrived at between Indian Railways and the IRCTC, on 7.11.2006 a communication was addressed by IRCTC to all GGMs, IRCTC for revision of MLF fixed for Static Units and pursuant to that category-wise and considering various factors as mentioned in the affidavit in reply, which is reflection of the above communication, the licence fee is determined.
The above detailed specifications for awarding licence to various categories of railway stations viz. A, B, C, D, E & F by further categorizing the same into major and small units applying rational criteria of fixation of licence fee as provided in the Circular dated 7.11.2006 which is based on the Catering Policy of 2005 where salient points of the policy contained following aspects :-
License fee must not be less than what has already been tendered in adjacent sites or being given by the current Licensee of the particular site.
License Fee calculated should not be less than 12% of the total sales turnover, if assessed.
In specific cases, wherein the maximum license fee thus arrived is abnormally higher, GGMs are empowered to relax the same through a speaking order.
The maximum license for trolleys and Khomchas for existing licensees is fixed at 40% less than calculated license fee of stalls.
Therefore, keeping in mind the above aspects and the Catering Policy 2005, which is framed to fulfill social obligations to take care of weaker sections as pronounced by the Hon'ble Railway Minister in the floor of Parliament, in any manner it cannot be said that the same is unjust, unreasonable, arbitrary, discriminatory, or violative of Articles 14 ands 19(1)(g) of the Constitution of India.
Even classification of stations in various categories viz. A, B, C, D, E and F was also on the basis of passenger earning of station and it is rational as referred in para 9 of the policy and para 7 of this petition clearly provides category and criteria of stations based on annual passenger earning. The above two aspects viz. categorization of railway stations in various categories viz. A, B, C, D, E & F are salient features as enumerated above and reflected in the circular of IRCTC dated 7.11.2006 do not warrant any interference in view of the decisions of the Apex Court in the cases of Tata Cellular (supra) and Johri Mal (supra) by which scope of interference by this Court in exercise of powers under Article 226 of the Constitution of India inasmuch as subject matter of contract even if statutory in form, is circumscribed. None of the criteria prescribed in the decision of the Johri Mal (supra) for judicial review of the statutory and/or administrative order is satisfied in this case.
The framing of Catering Policy of 2005 by the Railway Board and issuance of circular by IRCTC cannot be said in any manner arbitrary more particularly when the existing licencees were permitted to compete with other bidders/tenderers. The petitioners have agreed to abide by the terms and conditions of the policy before entering into agreement/s. This Court will not assume or undertake the duty and function of the Government by prescribing a new policy or modification or altering it in any manner unless it falls within four corners as laid down in the decision of Delhi Development Authority (supra). It is found that neither the policy is unconstitutional nor dehors provisions of the Act or regulation of the Indian Railways Act and rules made thereunder. Even it cannot be said that it is beyond power to frame such policy or contrary to any statute and I do not find any reason to interfere with the decision of the respondent authorities in framing the Catering Policy 2005 and issuance of show cause notice pursuant to that by the IRCTC, since the petitioners have not paid the revised hike of the licence fee though agreed upon. So far as the challenge to the Catering Policy of 1999 is concerned there is no justification on the part of the petitioners to challenge the same after a period of 9 years inasmuch as thereafter in super-session of earlier policies, the Railway Board has framed Catering Policies of 2000, 2004 and 2005.
In view of the above discussion, it cannot be said in any manner that the policy decisions taken by the Ministry of Railways and IRCTC by various circulars are unreasonable, arbitrary, discriminatory or violative of Articles 14, 19(1)(g) and 21 of the Constitution of India. The above policy decisions are in larger interest of public, within parameters of the powers to be exercised by the authority and four corners of law and not dehors the provisions of the Act, Rules and Regulations or contrary to law laid down by the Apex Court in the cases of Tata Cellular, Johri Mal and Om Kumar (supra). In view of the above, and all these Special Civil Applications are dismissed.
Rule issued in each of the petition stands discharged.
Interim relief granted earlier stands vacated.
The request made by learned counsel for the petitioners to continue interim relief granted earlier cannot be acceded to since learned counsel for the respondent strongly opposed the same.
(ANANT S. DAVE, J.) *pvv Top