Gujarat High Court
Western Railway Caterer'S Association ... vs Union Of India & 4 on 11 September, 2015
Author: Jayant Patel
Bench: Jayant Patel, Rajesh H.Shukla
C/SCA/12796/2014 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 12796 of 2014
With
SPECIAL CIVIL APPLICATION NO. 12828 of 2014
FOR APPROVAL AND SIGNATURE:
HONOURABLE THE ACTING CHIEF JUSTICE MR.JAYANT PATEL Sd/
and
HONOURABLE MR.JUSTICE RAJESH H.SHUKLA Sd/
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1 Whether Reporters of Local Papers may be NO
allowed to see the judgment ?
2 To be referred to the Reporter or not ? NO
3 Whether their Lordships wish to see the
fair copy of the judgment ? NO
4 Whether this case involves a substantial
question of law as to the interpretation NO
of the Constitution of India or any
order made thereunder ?
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WESTERN RAILWAY CATERER'S ASSOCIATION & 2....Petitioner(s)
Versus
UNION OF INDIA & 4....Respondent(s)
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Appearance:
MR MIHIR JOSHI, Sr. Adv. with Mr.K. Talukdar with ARJUN
R SHETH, ADVOCATE for the Petitioner(s) No. 1 3
MR KM PARIKH, ADVOCATE for the Respondent(s) No. 1 5
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CORAM: HONOURABLE THE ACTING CHIEF JUSTICE MR.JAYANT PATEL
and
HONOURABLE MR.JUSTICE RAJESH H.SHUKLA
Date : 11/09/2015
COMMON ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE RAJESH H.SHUKLA)
1. Special Civil Application No. 12796/2014 is filed by the petitioners under Articles 14, 19(1)(g), Page 1 of 36 HC-NIC Page 1 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT 21, 226 and 300A of the Constitution of India as well as under the matter of Railway Catering Policy, 2010 issued by the Railway Board for the prayers regarding the renewal of the licence for the catering services at the General Minor Units (MGU) situated at the platforms as stated in detail on the grounds stated in the memo of petition.
2. Special Civil Application No.12828/2014 is filed by the petitioner under Articles 14, 19(1)(g), 21, 226, 227 and 300A of the Constitution of India for the prayers inter alia that appropriate writ, order or direction may be issued to declare the impugned notice as well as tender documents by the Railway authorities for minor units at Ahmedabad, Palanpur, Gandhidham and Viramgam Railway Stations (Ahmedabad Division) as illegal and arbitrary and has also prayed for the stay of further proceeding of the tender.
3. The facts of the case of Special Civil Application No. 12796/2014 briefly stated are that the petitioners are carrying on business of running canteen in Ahmedabad. That, the notice inviting tender came to be issued by the respondentRailway Page 2 of 36 HC-NIC Page 2 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT Board for provision of Catering Services at Special Minor Unit situated at various platforms. The petitioners have also challenged the said notice inviting tendering on the grounds that tender and/or method of evolution of technical bid is arbitrary and violative of fundamental rights under Articles 14 and 19(1)(g) of the Constitution of India. However, it is contended that the technical criteria stipulated in the said tender attempts to create monopoly in the railway catering business. It is stated that the Railway provide catering services, for which, licences are issued and the Indian Railway has engaged small licence holder for running catering units on stand and pick platforms for long distance train and/or other major units on the basis of the experience and the performance of the contract. However, the Indian Railways having largest network of railway in the world is divided into seven zones and approximately 8056 railway stations and the policy has been framed. It is contended that the Railway always provided the public amenities to serve the passengers and, therefore, the Railways never consider it as a source of profit. Therefore Page 3 of 36 HC-NIC Page 3 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT earning maximum profit from the catering, such service by licence could never be the object of the policy. Reference is made to the report of the Standing Committee of the Railway for 200506, which contains representation of the Railway Board and it has been stated, "object has always been to serve cheap and wholesome food to the passengers", however from time to time, the Railway Board issued catering policy for the aforesaid objectives and at present, Catering Policy of 2010 issued by Commercial Circular dated 21.07.2010 is in force. It is contended that for implementation of the policy, the respondents have issued notice inviting tenders and as stated in detail, the petitioners though eligible may not be able to fulfill the evaluation criteria which has led to the filing of the present petition. It is therefore contended that for GMU, the renewal of the licence is permitted according to the policy of the Railway itself and, therefore, the petitioners have right of the renewal, which cannot be denied arbitrary without affording any opportunity of hearing.
4. The facts of the case of Special Civil Application Page 4 of 36 HC-NIC Page 4 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT No.12828/2014 are that the petitioner by way of present petition is challenging the tender process initiated by the respondent. That, the petitioner is an Indian citizen in the business of canteen at Ahmedabad and is interested in the tender issued by the respondentRailway authorities. However, it has been contended that notice inviting tender by the Railway for providing catering services at GMU situated at various platforms at Ahmedabad, Palanpur, Viramgam and Gandhidham and the methodology for the evolution of the technical and financial bids by the respondent is questioned on the ground that it is arbitrary and violative of Articles 14 and 19 of the Constitution of India as stated in detail in the memo of petition. It is contended that the technical criteria stipulated in the tender attempts to create monopoly tendency in the railway catering business. Reference is made to the Railway Board circular and Catering Policy of 2010. It is also contended that technical criteria of the evolution process is arbitrary and illegal as the persons like petitioners (small vendors) will not be able to fulfill that criteria and it may lead to rejection Page 5 of 36 HC-NIC Page 5 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT of their bid. It has been emphasized that the eligibility criteria which has been stated in the memo of petition referring to the aspect of exercise of catering business, minimum annual turnover and the financial standing as well as evaluation criteria, creates the barer for small players. Reference is made in detail to such aspects to support contentions.
5. Affidavitinreply is filed by the Railway as well as additional affidavitinrely has been filed to justify the policy contending inter alia that in the order passed by the Hon'ble Supreme court in Special Leave to Appeal (C) No.99219923/2014, same issue is pending arising from the judgment of the Hon'ble High Court of Andhra Pradesh. It has been contended that tender process has been permitted. It is contended that the respondent Railway is implementing the Catering Policy of 2010 with the shift in the focus regarding the services to the passengers, for which, the tenders are invited. Reference is made to GMU of A class station and other categories. Similarly, reference is made to the notice inviting tender and bids and the criteria. It has been stated that the Ministry Page 6 of 36 HC-NIC Page 6 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT of Railway and Railway Board, New Delhi has to act according to the rules and policy framed by the Railway Board. It is contended that it is regulating authority depending upon the movement of traffic, fixation of rates, sharing of revenue etc. and criteria for selection of the contractors on both technical as well as financial point of view is fixed by the Railway Board's letter dated 05.07.2011 and uniform policy for implementation of the Catering Policy of 2010 has been evolved. Reference is made to the details of the procedure and criteria to justify the interest of traveling public to provide hygienic, good qualify and affordable as well as better services for the passengers is the object, which is referred. Then it has referred to the policy with different heads like test of responsiveness, discussion on techno
- commercial score and evaluation of eligibility criteria. It is also contended that the criteria for the eligibility is decided by the Railway Board and the policy framed in general and is applicable for Indian Railways and it is not framed keeping in view any individual self interest and tenderers fulfilling criteria can Page 7 of 36 HC-NIC Page 7 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT submit the bid. It is stated that Form Tech2 is mandatory information for the eligibility bid and relevant documents are required to be submitted. It is therefore contended that since it is a matter of policy with regard to the fixation of the criteria of eligibility by the Railway Board and it is a policy matter, scope of judicial review is limited and it is not open for the judicial review by the Hon'ble Court at the instance of the petitioner. It is also contended that some of the submissions and examples shown by the petitioner are hypothetical and may not be considered. It is therefore contended that there is no fundamental rights or equitable rights are affected and the petition is devoid of merits.
6. Heard learned senior counsel, Shri Mihir Joshi appearing with learned counsel, Shri K. Talukadar for learned advocate, Shri Anuj Sheth for the petitioners and learned advocate, Shri K.M. Parikh for the respondents.
Special Civil Application No. 12796/2014
7. Learned counsel, Shri Talukdar referred to the papers particularly the categories according to the passengers for catering policy which broadly Page 8 of 36 HC-NIC Page 8 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT bifurcate as major unit and minor unit and minor category unit are subdivided into general category and special category. He submitted that there are other small stalls and khunchas etc.
8. Learned counsel, Shri Talukdar referred to the policy and submitted that policy refers to the renewal for both categories, for which, he referred to AnnexureE at page no.53. He also pointedly referred to page no.155 and tender notice. Learned counsel, Shri Talukdar stated that the policy provides for the renewal subject to fulfillment of the conditions that there should be satisfactory performance and no dues should be outstanding. He pointedly referred to clause 17 of the policy produced at AnnexureJ which refers to "renewal". Similarly, he referred to clause 18.3 produced at page no.153 and clause 26.1 which referred to "applicability of new policy". Learned counsel, Shri Talukdar submitted that new policy would not be applicable though in fact, for all other standards or criteria like finance, quality, price etc., new policy is made applicable, whereas for the purpose of renewal, benefit of renewal is denied to the petitioners.
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C/SCA/12796/2014 JUDGMENT
Learned counsel, Shri Talukdar referred to the circular dated 9th August, 2010 produced at AnnexureK. Similarly, he referred to the report of the Standing Committee produced at page no.187 to 190. Learned counsel, Shri Talukdar pointedly referred to clause 7. He also again referred to the circular produced at AnnexureO dated 12/13.01.2012. He also referred to clause 16.3 and submitted that there is ambiguity in the policy and, therefore, as clarified and amended, clause 16.3 has been mentioned. Learned counsel, Shri Talukdar therefore submitted that when the policy of the Railway itself is ambiguous and at the same time providing for the renewal of the licence in favour of the existing licence holder like petitioners, the right cannot be denied. He submitted that this policy which has subject matter of litigation in different courts including one SLP is pending before the Hon'ble Apex Court challenging the tender and the Hon'ble Apex Court has permitted the tender process, however, have continued with extension and, therefore, the present petition may be considered.
9. Learned counsel, Shri Talukdar referred to the Page 10 of 36 HC-NIC Page 10 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT circular dated 29.03.2012 and has also referred to DO letter dated 24.06.2013 produced at page no.357.
10. Learned counsel, Shri Talukdar has also referred to the judgment of the Hon'ble Bombay High Court on the same issue and also emphasized the observations made in the said judgment. Learned counsel, Shri Talukdar therefore submitted that earlier there was no such scheme, thereafter, tender for only major stall or unit was floated, however, the proposed renewal is not granted and the tenders are floated even for minor units denying the right of renewal to the persons like the petitioners. He also referred to the judgment of the Hon'ble Adhra Pradesh.
11. Therefore referring to the papers including the tender and eligibility conditions as well as the original policy which provided for renewal, learned counsel, Shri Talukdar submitted that at least case of the petitioner may be considered for renewal and in fact, such renewal is granted by other division of the same Railway Administration and, therefore, they cannot devoid from their policy. He also referred to the affidavitinreply Page 11 of 36 HC-NIC Page 11 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT filed by the Railway Board.
12. Learned advocate, Shri K.M. Parikh referred to the affidavitinreply and submitted that such policy is a matter of the litigation before the Hon'ble Apex Court and the Hon'ble Apex Court has permitted the tender process, however in order to maintain the services, extensions have been granted to the persons like petitioners, who are having licence. However, he submitted that the persons like the petitioners cannot claim the renewal as a matter of right and if it is accepted, it would amount to perpetual right of renewal. He submitted that in other words, it is a specific performance of the contract though contract has come to an end. Learned advocate, Shri Parikh submitted that the licence which has been granted for years to years, expired on a particular period and, therefore, after efflux of time when the licence has expired, the Railway Administration cannot be bound to renew the licence in favour of the petitioners as it is a matter of discretion with the Railway Administration whether to renew or not. He emphasized that whether there should be renewal of Page 12 of 36 HC-NIC Page 12 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT the licence or tender may be floated, is a policy decision for various consideration including shifting in the policy from earning revenue by better services to the passengers. He submitted that for such small units also, instead of renewal with passage of time, the Railway may not renew or extend the term and may go for the tender process to have better competitive services to serve public at large. He therefore submitted that it is a matter of policy and how the units have to be categorized or what procedure to be followed is a policy matter, where the persons like the petitioners cannot have vested right of renewal of licence perpetually. He pointedly referred to the role of the Railway Board and also the procedure and management. Learned counsel, Shri Parikh has also referred to the tender notice and referred to clause 16. He emphasized that renewal of the licence is not a matter of right but is a matter of discretion at the Railway Administration and once the licence or period of licence has come to an end, it would be a discretion of the Railway whether to renew the licence or not and whether to invite tender for the same work. He pointedly Page 13 of 36 HC-NIC Page 13 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT referred to clauses 16.1.1.1 and 16.1.1.2 and also referred to clause regarding renewal produced and pointedly referred to clause 17.1 r/w clause 22. He submitted that therefore, the present petition may not be entertained as it is a matter of policy and the court may not exercise the discretion in judicial review in such matters of policy.
13. In rejoinder, learned senior counsel, Shri Joshi referred to the policy and emphasized that the policy of the railway itself provides for renewal subject to fulfillment of the conditions or the criteria. He submitted that in fact, when the policy reserves right of renewal of licence, same may not be denied. He submitted that as stated in the observations made by the Hon'ble Bombay High Court as well as in the policy, atleast the petitioners have right for consideration for the renewal and when he fulfills the criteria or the conditions, that consideration could culminate into right, which may not be denied when he is fulfilling the conditions. Further it was submitted that if the criteria is fulfilled and his performance is satisfactory then without any Page 14 of 36 HC-NIC Page 14 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT justification, the renewal cannot be denied or refused particularly when the policy of the Railway Administration provides for the renewal. He emphasized clause 18.3 produced at page nos.197198 and emphasized word "will be". He therefore submitted that it means the policy providing for renewal and when the conditions are fulfilled, it shall be renewed. Learned senior counsel, Shri Joshi submitted that for transparency and fairness, the aspect of renewal requires consideration as to whether there is any justification or ground for refusal for renewal. He emphasized that assuming that there is a discretion left with the Railway Administration, such discretion is required to be exercised in reasonable and fair manner. He therefore submitted that the Court may examine justification for such refusal for renewal and as there is no justification, such action would not be fair. He also submitted that it amounts to denying of opportunity and right to carry on business or trade. He emphasized that the interpretation is required to be placed with regard to the Railways' document like circulars, report of the committee Page 15 of 36 HC-NIC Page 15 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT etc. and when it provide for renewal, justification for refusal for renewal deserves consideration. Learned senior counsel, Shri Joshi also submitted that the submission about the perpetual or renewal cannot be made perpetually, is again a matter, which is required to be considered in background of the fact that the persons like the petitioners having licence are engaged in the business of catering at the Railway Station and they carry on such trade for years and if they are told that it will not be renewed, it would denying them the right to carry on their business without any justification. He also submitted that there is already another petition challenging tender for the same work.
14. Learned senior counsel, Shri Joshi has also referred to the judgment of the Allahbad High Court. He also submitted that assuming that there is no right of renewal, the right of consideration for renewal is made out from the policy itself. Therefore it was submitted that assuming that there is no such right and the discretion is with the Railway Administration then also, refusal must be on the justifiable ground. He submitted that Page 16 of 36 HC-NIC Page 16 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT ultimately the purpose is to serve the hygienic and healthy food or quality food. Learned senior counsel, Shri Joshi has also referred to and relied upon the judgment of the Hon'ble Apex Court in case of Union of India Vs. Dinesh Engineering corporation & Anr., reported in (2001) 8 SCC 491.
15. Learned senior counsel, Shri Joshi submitted that the Court may also consider the applicability of the Policy of 2010 inasmuch as all other criteria like standards and other requirements are considered based on 2010 policy and when it comes to the renewal of the policy, it is contended that such policy is not applicable as the petitioner is governed by earlier policy of 2005.
Special Civil Application No. 12828/2014
16. Learned senior counsel, Shri Joshi referred to the tender documents and pointedly referred to the criteria at page no.81. He also referred to clause 15 and also system for the licence in case of small units. Learned senior counsel, Shri Joshi also referred to clause 15.2.1 and also clauses 3.4 and 3.5, which referred to the financial stability. Learned senior counsel, Shri Joshi also referred to clause 1.9 referring to the Page 17 of 36 HC-NIC Page 17 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT evaluation criteria and submitted that there is ambiguity with regard to the policy. He emphasized that as submitted earlier, on one hand, the renewal is not granted on the ground that the licencee for GMU like the petitioners cannot have right of renewal and on the other hand, they have proceeded to invite tenders fixing criteria, which may not be possible to be fulfilled by small players. He referred to these aspects with details with regard to the evaluation criteria as well as Form Tech2 to be filled in by the bidders. Then he referred to the aspect of annual financial stability, declaration, evaluation criteria. Again referring to clause 3.5 and 3.5.1, learned senior counsel, Shri Joshi therefore submitted that on one hand, object of the policy as stated is to provide better facility and services, for which, now they are resorting to the tenders on the grounds that same licencee cannot claim renewal as a matter of right. However, he emphasized that there is no justification even if there is an option or discretion left to them whether to renew the licence or to invite fresh tender but the underlying purpose based on the Page 18 of 36 HC-NIC Page 18 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT policy is to provide a better service to the passengers. Therefore, learned senior counsel, Shri Joshi submitted that it cannot be overlooked that if the focus is on the services to the passengers, it does not necessarily mean that with big players only, the services could be better or improvised eliminating smaller players like the petitioners. For that, he referred to the hypothetical example as well as details referring to the criteria fixed to emphasis that how the small person or bidder can be eliminated on the ground that he does not fulfill the criteria though as per the requirement of the terms and conditions of the licence, he is fulfilling the condition or minimum condition for the renewal. Learned senior counsel, Shri Joshi therefore submitted that when it comes to the renewal, the argument is that even if the conditions are fulfilled regarding the licence, it has option or discretion to invite for the fresh tender on efflux of the particular time provided in the licence. However in the instant case, the tender documents as well as criteria or the eligibility criteria, technical evaluation and the financial Page 19 of 36 HC-NIC Page 19 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT criteria are considered, it reveals that small players would be eliminated. He therefore submitted that it cannot be proceeded on the assumption of fact that only big players would be able to serve better. Again he submitted that there is confusion with regard to the category or type of station as well as category of such units inasmuch as one cannot have same facility/criteria for the bigger station or metrocities and smaller station with a less traffic or less number of trains or passengers. He therefore submitted that in fact, some uniform policy cannot be sustained as there has to be gradation or some kind of classification with regard to the category of the station or the destination, number of trains and expected turnover of the passengers and also centre with reference to whether it is a bigger unit or smaller unit. Learned senior counsel, Shri Joshi submitted that as stated, this smaller unit also has some bifurcation whether same policy adopted indirectly is hearting smaller bidders eliminating them totally.
17. In view of these rival submissions, it is required to be considered whether the present petitions Page 20 of 36 HC-NIC Page 20 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT deserve consideration or not.
Special Civil Application No. 12796/2014
18. The issue involved is with regard to the policy for catering services of Indian Railway, which in turn has provided for the category of the station for the purpose of licence. The policy has also a category like major units and minor units for the purpose of catering policy. The catering policy of 2010 places on record referred to the shift in the policy with regard to the approach towards the railway catering. (This is in context of the letter of the Government of India, Ministry of Railways (Commercial Circular No.35/2010) dated 21.07.2010, which refers to the railway budget speech, where the Hon'ble Minister had instructed to give priority to provision of good quality food, drinking water, toilet facility etc.). Therefore as stated earlier, catering was independent private sector which is now focused more as a passenger service. Therefore the emphasis has been placed to ensure the availability of quality food for the notso affluent classes of passengers by providing Janta food and Jan Ahaar (economic combo meals by means Page 21 of 36 HC-NIC Page 21 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT of Refreshment Rooms, Stand alone outlets and the vending stalls). Thus the quality and hygienic food is sought to be served to the public. The members of the petitionerunion are minor category units operating small stalls and khunchas and the renewal policy is provided for both minor as well as major units. The Catering Policy of 2010 referred to the objective of the catering policy, role of the Railway Board, which inter alia provides for the renewal of the licence. Clause - 15 provides for the system for awarding licence in case of small units which again provides for definition of small units. Clause 16 refers to the tenure of major units and minor units. Clause 16.1.3. provides, "Allotment of all General Minor Units at A, B & C category stations shall be awarded for a period of 5 years with a provision for renewal after every 3 years on satisfactory performance and payment of all dues and arrears and withdrawal of court cases, if any. Allotment of all General Minor Units at D, E & F category stations will be for a period of 5 years with a provision for renewal after every 5 years for a further period of 5 years on satisfactory Page 22 of 36 HC-NIC Page 22 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT performance and payment of all dues and arrears and withdrawal of court cases, if any. Clause 17 which refers to the renewal part, provide, "Renewal will not be a matter of right. The licencee must apply for renewal minimum 6 (six) months in advance before the expiry of the contract. Renewal will be based on the subclauses mentioned therein. Clause - 17.1 provides, "Satisfactory performance of the licencee during the tenure of the contract. An imposition of fine/warning on more than 5 occasions will result in rejection of the application for renewal. Clause - 18.3 also referred to the renewal of licence. The provisions of Clause - 26.1.1 provides, "All existing operational catering licences awarded by IRCTC and transferred to Zonal Railways will be governed by the existing Catering Policy 2005 upto the validity of their contractual period.
19. It is not in dispute that the members of the petitionerunion are the licencees, who were granted licence and were renewed till the new policy has been brought in. As stated in detail, as per the new policy, the respondentRailway has Page 23 of 36 HC-NIC Page 23 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT decided to invite fresh tenders instead of renewal of the licence, which is also subject matter of second petition being Special Civil Application No.12828/2014. Therefore, the present petition is with regard to the claim for renewal on the ground that if they are even otherwise eligible and fulfilled the criteria, they are entitled for renewal of licence. Therefore, the moot question is whether the members of the petitionerunion can claim that they are entitled for renewal of the licence as a matter of right in terms of the Railway Catering Policy, 2010 or whether the clause for renewal is providing for the discretion so that the Railway to exercise such discretion on fulfillment of the criteria if they so desired. Further in second petition being Special Civil Application No.12828/2014, the tenders invited by the Railway is challenged on various grounds including with regard to the manner in which it rules out the small operators, who have been holding the licence for years and doing the business and are now sought to be deprived of their right to carry on business. As could be seen from the record, the licences were granted to the Page 24 of 36 HC-NIC Page 24 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT members of the petitionerunion as per the earlier Policy of 2005 and, thereafter, the licence has been renewed. Admittedly in some cases, renewal is also pending and new policy of 2010 has been brought in which provides the option to the railway either to renew or to go for fresh tendering process. It is in this background, when the respondentRailway has taken policy decision that they would invite fresh tenders in respect of some of the stall, where the period of licence has expired by efflux of time, meaning thereby, they have not cancelled the licence but on expiry of the licence, they have decided to go for a fresh tenders instead of renewal of the licence in favour of existing licencees. The licence has defined in the Transfer of Property Act, which would imply the permission or authorization to do thing, which but for such permission or authorization would have been illegal. Again the licence and lease have a specific connotation and meaning as the licence is for a fixed duration, whereas the lease is for longer duration as provided in the Transfer of Property Act. The fact that the members of the petitionerunion were Page 25 of 36 HC-NIC Page 25 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT granted licence, which were renewed from time to time itself does not create a right in favour of the petitioner to claim such renewal of licence as a matter of right. If such submissions are accepted, it would amount to accepting that once the licence is granted, it would be a matter of right for perpetual renewal. The emphasis, which has been made by learned senior counsel, Shri Joshi appearing with learned advocate, Shri Talukdar that the criteria for renewal is fulfilled, which would entitle the petitioner for renewal of the licence, is misconceived inasmuch as the fulfillment of the criteria is one thing without which one cannot claim for renewal. However merely because the criteria is fulfilled, it does not entitle the petitioner for renewal as a matter of right as it has reference to the aspect of eligibility rather than the matter of right. All that is provided that if the criteria is fulfilled, the licence may be renewed. In other words, if the criteria is fulfilled like performance of satisfactory service and other criteria, the Railway authority has the option for renewal of the licence, however, that does not Page 26 of 36 HC-NIC Page 26 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT preclude the respondentRailway from having a fresh policy like Catering Policy of 2010, which in turn provide for inviting tenders for some of the stalls where the period of licence has expired. The emphasis, which has been given in Para No.18.3 and communication from the Minister of Railway dated 22/24.01.2013 produced at AnnexureR also does not support the case of the petitioner for renewal. The emphasis has been given by learned senior counsel, Shri Joshi on following words, "Renewal will be done for the existing licensees only on satisfactory performance, payment of railway dues of license fee as well as other outstanding dues and fulfillment of all terms and conditions by the licensee as per the laid down in the policy from time to time." Learned senior counsel, Shri Joshi therefore submitted that it is provided that the renewal will be made on satisfactory performance and payment of all dues and, therefore, as the petitioners have fulfilled this criteria, the licence has to be renewed. Learned advocate, Shri K.M. Parikh has emphasized the word "policy from time to time", meaning thereby, the renewal shall Page 27 of 36 HC-NIC Page 27 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT be subject to the policy, which may be in vogue from time to time. Therefore, the Catering Policy of 2010 providing for invitation of fresh tender in respect of such stalls or minor units, where the period of licence has expired, cannot be questioned on the ground that existing licences have a perpetual right of renewal.
20. Another facet of submission, which has also been emphasized by learned senior counsel, Shri Joshi Joshi referring to some communication dated 04.04.2012 at AnnexureQ as well as clarification issued at AnnexureR by Ministry of Railway dated 29/30.08.2012 that there was some ambiguity about the renewal of the existing contract. It was emphasized that in terms of Clause - 16.3, the clarification was made by the board and, therefore according to their own version also, the renewal is required to be granted, who have fulfilled the criteria as stated above of satisfactory performance and payment of all dues. However if that is to be accepted then, there was no need for the Railway to have a fresh Policy of 2010 with an option for inviting fresh tender. Thus, the moot question is whether the members of the petitioner Page 28 of 36 HC-NIC Page 28 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT union can claim the renewal of the licence perpetually as a matter of right. If that is accepted, it would amount to granting the perpetual rights though it is granted only by way of licence for a limited tenure. Further it would also amount to rejecting or denying the Railway administration to have its policy or have the discretion for the change in the policy. However, same thing could be viewed as a discretion and in the matter of policy that the respondentRailway Administration providing for the option for the renewal and/or to invite fresh tenders, whether the licence are not renewed after the expiry of period. Thus it is also a matter of exercise of discretion or option by the railway department for fulfillment of its policy and the object of the policy for catering to the people in public interest. As stated above, the members of the petitionerunion having licence for a specific period or term cannot claim renewal and that too, a perpetual renewal as a matter of right. It would otherwise deny any right or discretion to the Railway administration, which cannot be accepted in public interest. It is also required to be Page 29 of 36 HC-NIC Page 29 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT emphasized that the persons, who are holding licence, are not terminated in the midst of the period of licence but even otherwise, on expiry of the licence by efflux of time, there right under the licence would come to an end. It is at that stage, the discretion or option is left with the Railway Administration whether to renew or to go for fresh tender process in the public interest.
21. Therefore, it is a matter of administrative policy in public interest and since it is in the domain of policy, the Court would not be justified in judicial review to interfere with the discretion or the policy. It is well settled that the concept of judicial review empower the Court to scrutinize the policy or a public policy on certain grounds to rule out the possibility of arbitrariness, illegality, favoritism etc. However at the same time, it is also well settled by catena of judicial pronouncement that the Court will exercise the judicial review with utmost care and circumspection particularly in the matters of policy or administrative policy. It is desirable that such decisions are better left to the executive or the administration. A useful Page 30 of 36 HC-NIC Page 30 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT reference can be made to the observation made by the Hon'ble Apex Court in a judgment in case of State of Uttar Pradesh & Ors. Vs. Anil Kumar Sharma & Anr., reported in (2015) 6 SCC 716, wherein the Hon'ble Apex Court has referred to the doctrine of judicial restraint and it has quoted from the earlier judgment in case of State of U.P. Vs. Jeet S. Bisht, reported in (2007) 6 SCC 586, "Judicial restraint is consistent with and complementary to the balance of power among the three independent branches of the State. It accomplishes this in two ways. First, judicial restraint not only regonises the equality of the other two branches with the judiciary, it also fosters that equality by minimising inter branch interference by the judiciary. In this analysis, judicial restraint may also be called judicial respect, that is, respect by the judiciary for the other coequal branches. In contrast, judicial activism's unpredictable results make the judiciary a moving target and thus decreases the ability to maintain equality with the cobranches, Restraint stabilises the judiciary so that it may better function in a system of interbranch equality."
22. In other words, the Court may not enter into the field of policy making and judicial restraint is called for, which has been emphasized by the judicial pronouncement. At the same time, judicial review is a mechanism for safeguarding the constitution provisions while exercising the power Page 31 of 36 HC-NIC Page 31 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT under two organs. Therefore, it has been said that the doctrine of judicial restraint or self restraint is virtue. It is not a matter of lack of jurisdiction but rather it is a case of exercise of discretion in judicious manner.
23. The Hon'ble Apex Court in a judgment in case of Asif Hameed Vs. State of J & K, reported in 1989 Supp (1) SCC 364 has made observations referring to this aspect of separation of power. It has been observed, "The functioning of democracy depends upon the strength and independence of each of its organs. Legislature and execute, the two facets of people's will, they have all the powers including that of finance. Judiciary has no power over sword or the purse nonetheless it has power to ensure that the aforesaid two main organs of State function within the constitutional limits. It is sentinel of democracy. Judicial review is a powerful weapon to restrain unconstitutional exercise of power by the legislature and execute. The expanding horizon of judicial review has taken in its fold the concept of social and economic justice. While exercise of powers by the legislature and execute is subject to judicial restraint, the only check on our won exercise of power is the selfimposed discipline of judicial restraint."
24. Therefore, when the respondentRailway has already exercise the option of inviting tenders, which has again matter of litigation pending before the Hon'ble Apex Court by way of SLP No.992123/2014 Page 32 of 36 HC-NIC Page 32 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT arising out of the judgment of the Hon'ble Andhra Pradesh Court, it has hold that existing licencees are entitled for the renewal of the licences, particularly when the Hon'ble Apex Court has also permitted the respondentRailway Administration to undertake the tender process, it would not be proper to exercise the jurisdiction under Article 226 of the Constitution of India directing renewal of the licence.
Special Civil Application No.12828/2014
25. As stated above, this petition is filed for challenging the exercise of option of inviting tenders by the Railway asking for the prayers to issue writ or certiorari or appropriate writ restraining the respondents from proceeding with the tender process, however, same cannot be entertained when same issue is pending before the Hon'ble Apex Court pursuant to the judgment and order passed by the Hon'ble Andhra Pradesh Court.
26. Further, the submissions which have been made emphasizing about the arbitrariness or the manner in which small operators are sought to be ruled out in the tendering process deserves a close scrutiny. There is some substance in the Page 33 of 36 HC-NIC Page 33 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT submission made by learned senior counsel, Shri Joshi that while fixing the criteria both with regard to the technical bid as well as financial bid, small operators or the persons, who have been doing business since years pursuant to the licence granted in their favour, cannot match those standards, requires consideration. Again as emphasized, the standards are not fixed but it will very with the competitors with regard to the annual turnover as well as financial capacity. Reference can be had to the papers, which provide for the criteria like selfdeclaration for techno commercial experience and technical commercial bid, which is placed on record in the present petition.
27. Therefore on principle, renewal cannot be claimed as a matter of right and the Railway may have the discretion or option to invite fresh tenders again. However while allowing the option to the Railway Administration for the policy of inviting tenders, it may also have to be considered with reference to the criteria or the yard stick for such tenders. The criteria for the eligibility has to be examined on the touch stone of fairness and Page 34 of 36 HC-NIC Page 34 of 36 Created On Wed Sep 16 01:19:06 IST 2015 C/SCA/12796/2014 JUDGMENT reasonableness to provide an equal opportunity to the small operators so that they are not totally ruled out. In other words, for the purpose of fresh tenders, reasonable criteria for the technical bid and financial bid may have to be fixed, which does not rule out small operators or the persons, who are already in the business on the basis of the licence granted to them. A useful reference can also be made to the observation in the judgment of the Hon'ble Apex Court in case of State of Gujarat Vs. Mirzapur Moti Kureshi Kassab Jamat & Ors., reported in AIR 2006 SC 212. Thus, the petitioners of Special Civil Application No.12796/2014 may not claim the renewal as a matter of right and the petitioners, as stated above, deserves to be dismissed. However even in public interest, till the tender process which has been invited afresh pursuant to the Catering Policy of 2010 is finalized, renewal may be granted to the existing licence holders for a limited period of six months or as the Hon'ble Apex Court may pass appropriate orders as per the order passed earlier in SLP No.992123/2014 with regard to the tenders.
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C/SCA/12796/2014 JUDGMENT
28. In view of the aforesaid observations and discussions, following order is passed: 28.1 Special Civil Application No.12796/2014 asking for the prayer with regard to the direction for the renewal of the licence in favour of the petitioners cannot be sustained and deserves to be dismissed and accordingly stands dismissed. Rule is discharged. Interim relief stands vacated.
28.2 Special Civil Application No.12828/2014 deserves to be dismissed and accordingly stands dismissed. However, it is clarified that till the issue involved pending before the Hon'bla Apex Court as stated above is considered, as an interim measure, the existing licence holders may be granted renewal for a fixed period not more than six months, which would serve the purpose. Rule is discharged. Interim relief stands vacated.
Sd/ (JAYANT PATEL, ACJ.) Sd/ (RAJESH H.SHUKLA, J.) Gautam Page 36 of 36 HC-NIC Page 36 of 36 Created On Wed Sep 16 01:19:06 IST 2015