w w w . L a w y e r S e r v i c e s . i n



D. Subramaniam and Sons, Rep. By its Partner, D.S. Sekar, Chennai & Others v/s The Regional Director, Indian Railways Catering and Tourism Corporation Ltd.(I.R.C.T.C), Chennai & Others

    W.P.Nos.19931, 19932, 19847 to 19849 & 20220 to 20222 of 2009 & M.P.Nos.1,2,1,2,1,2,1,2,1,2,1,2,1,2,1 & 2 of 2009

    Decided On, 15 December 2009

    At, High Court of Judicature at Madras

    By, THE HONOURABLE MR. JUSTICE K. CHANDRU

    For the Petitioners: V. Manohar, K. Sridhar, Advocates. For the Respondents: R. Thiagarajan, SC, for M.V.C. Suresh Kumar, for IRCTC, M. Vellaisamy, for Southern Railways.



Judgment Text

(Prayer: W.P.Nos.19931, 19932, 19847, 19848 and 19849 of 2009 are preferred under Article 226 of the Constitution of India praying for the issue of a writ of certiorarified mandamus to call for the entire records, leading to the issue of proceedings bearing No.2009/IRCTC/SZ/MAS-IF dated 24.09.2009 on the file of the first respondent and to quash the same and to direct the respondents 1 to 4 herein to follow the revised catering policy 2005 bearing No.2005/TG-III/600/5 dated 21.12.2005 and proceedings bearing No.2005/TG-III/600/5 dated 09.3.2006 on the file of the fourth respondent and to follow the reservation policy enunciated therein and to renew the license in favour of the petitioners in respect of the Vegetarian Light Refreshments Stall (VLR) Main Unit situated at Platform No.1, Madras Park Station and Trolley (Vegetarian Tea Stall) situated at Egmore Railway Station, Chennai and fruit and fruit juice stall situated at Platform Nos.2 and 3 and 8 and 9 in the Central Railway station, Chennai and fruit and fruit juice stall situated at Platforms Nos.6 & 7 and 10 and 11 in the Central Railway Station, Chennai and also VLR stall situated at Platform Nos.1 and 2 in St. Thomas Mount Railway station, Chennai and Kailash Ice Cream stall situated at Platforms 3 and 4 and 5 and 6 in the Egmore Railway Station, Chennai respectively.


W.P.Nos.20220 and 20222 of 2009 are preferred under Article 226 of the Constitution of India praying for the issue of a writ of mandamus to direct the respondents to allow the petitioners to run the stall on the similar conditions of extension as granted to some of the stalls.)


Common Order:


Heard both sides.


2. These batch of writ petitions are filed by petitioners, who are having licensed stalls for vending eatables or refreshments in various railway station platforms owned by the Indian Railways.


3. In the first five writ petitions, the prayer of the petitioners is to set aside the order, dated 24.09.2009 of the first respondent and consequently, to direct the respondents follow the revised Catering Police, 2005, dated 21.12.2005 and the proceedings, dated 9.3.2006 issued by the Director, Tourism and Catering, Railway Board, New Delhi and to follow the reservation policy as well as to renew their licences in respect of the stalls run by them.


4. The first two writ petitions were admitted on 13.09.2009 and a status quo order was granted. The next three writ petitions were admitted on 29.9.2009 and an interim stay and injunction was granted on the same day. In all these writ petitions, a common counter affidavit was filed by the Indian Railway Catering and Tourism Corporation Ltd. (for short IRCTC).


5. W.P.Nos.20220 to 20222 of 2009 were filed by the licensees, seeking for a direction to respondents to allow them to run their stalls on the basis of similar extension granted to some of the stalls. When these matters came up on 04.11.2009, the earlier writ petitions were directed to be posted along with these writ petitions. They were heard together and a common order is being passed.


6. The petitioners, who are undaunted in filing writ petitions after writ petitions before this court with one pretext or other, has come out with the fourth round of litigation. Initially, the catering and tourism activities were directly handled by the Railways and were granting licences to locate the stalls in platforms for selling eatables, refreshments and bookstalls and other activities. Subsequently, on policy decision taken by the Ministry of Railways, the Management of the entire catering activities were handed over to the IRCTC in phased manner. As per the said policy, non departmental static units run by the Southern Railway were taken over by the IRCTC with effect from 15.11.2005. Prior to the year 2000, the contract for catering unit in various railway stations were not issued on the basis of tender system having two packet system, i.e. Inviting technical and financial bids. The stalls were allotted on the basis of calling for applications through press notification. The erstwhile licesees were managing the stalls as composite units.


7. With effect from 20.10.2000, a new catering policy for Railways were introduced. By the said policy, two packet system of calling for tenders were introduced. The licence fees was fixed at the rate of 12% of the total sale turnover. Further, eligibility criteria and minimum turn over was also introduced. Pursuant to the policy, the IRCTC, South Zone too over the major and minimum units of A,B and C class stations of Southern Railway. When the new policy was introduced with effect from 20.10.2000, the conditions imposed were challenged before the High Court of Kerala by the Catering Association and the other licensees.


8. The Kerala High Court in W.A.No.3044 of 2001 by its judgment, dated 3.12.2001, upheld the policy. The said judgment was challenged before the Supreme Court. The Supreme Court in Civil Appeal No.4898 of 2002 and a batch of cases, by its judgment, dated 29.3.2005 had upheld the policy. In the operative portion of the order of the Supreme Court, the Supreme Court observed as follows:


"Nothing stated herein shall preclude the Indian Railways/IRCTC from granting adhoc extensions in the interest of general public traveling in the trains. Such extensions however shall not create any legal right in the licensees favour. The appellants shall deposit arrears of license fee if any within a period of two months from today. In case the appellants fail to deposit the arrears as directed the Indian Railways/IRCTC would be at liberty to terminate the licensees forthwith and to make recovery of the arrears in accordance with law."


9. Thereafter, the Railway Board by its letter, dated 24.6.2005 and 30.06.2005 directed the Railways to hand over all the static units to IRCTC. The Railways in turn directed all the General Managers to hand over the units in A, B and C category stations. The Chief Commercial Manager, Southern Railway by a further communication, dated 02.11.2005 directed all the divisions on the Southern Railways to hand over the static units in A, B and C category stations to IRCTC with effect from 15.11.2005. The IRCTC took over all the static units major and minors units from all the divisions barring 21 units in the Chennai Division due to the filing of the writ petitions by some of the licensees before this Court. The petitioners in some of the present writ petitions were parties to the batch of writ petitions.



10. This Court by a common order, dated 8.12.2005 disposed of the said batch in the following terms:


"With regard to WP Nos.36263 and 38630 of 2005 where the petitioners have not filed any affidavit of undertaking, considering the undisputed fact that these petitioners have also entered into rider agreement dated 15.07.2003 wherein the license expired on 31.03.2001 was extended till 31.03.2006 or till such time IRCTC takes over which ever is earlier, these writ petitions are dismissed. However granting liberty to the petitioners in these writ petitions to give an undertaking before the respondent within a week from the date of receipt of the copy of this order that they would vacate their respective stalls on or before 31.12.2005 or on the date on which IRCTC confirms to the successful bidders to take over their respective stalls which ever is later, in which event, the respondent shall pass orders permitting the petitioners in terms of the understanding given by them. If the petitioners in WP No.36263 and 38630 of 2005 failed to give such undertaking within the time stipulated above the respondent is at liberty to proceed in accordance with law."


11. Inspite of this order, the Divisional railways retained these units under their management without handing over the same to IRCTC. Thereafter, the Railway Board issued a circular No.8 of 2005 dated 16.03.2005 bringing their new catering Policy of 2005. Under the said policy, in respect of minor units, 75% of minor units should be awarded to IRCTC through open tender and 25% of the minor units to be allotted by the Divisional Railway Manager. The said circular was issued when the earlier batch of writ petitions are pending. They were disposed of only on 08.12.2005. Thereafter, Commercial Circular No.56 of 2005, dated 21.12.2005 followed by another Commercial Circular No.59 of 2005, dated 28.12.2005 were issued revising the Catering Policy.


12. Some of the petitioners have contended that the change in policy had created new rights and therefore, they are entitled to continue to run the stalls. In the earlier as well as in the revised policy, reservation of 25% of minor units in A, B and C category stations was introduced. It was resolved that out of total number of minor units, 75% of the Units will be treated as general minor units by IRCTC and the balance 25% will be allotted by the Divisional Railway Mangers and will be handed over to the IRCTC for management. It was also stipulated that reservation in the minor units will be ensured for all reserved categories as per the percentage earmarked in the policy. The Railway Board, by its letter, dated 9.3.2006 stipulated that IRCTC will draw a Master Plan of the units required in the divisions and make segregation of General Minor Units (for short GMU) and Special minor Units (for short SMU) as per the percentage earmarked and approved by the Divisional Railway Managers. Thereafter, 75% of stalls segregated as GMU will be awarded by inviting open tender as per two packet system by the IRCTC. The Divisional Railway Manager will allot and hand over 25% of stalls identified as SMU.


13. A joint procedure order (JPO) was issued in respect of 5 divisions in the Southern Railways and the units were thus identified. Subsequently, when IRCTC invited tenders for 75% GMU in their divisions at Trivendraum, Palghat, Madurai and Trichy, the same was the subject matter of challenge in W.P.No.42960 of 2006 and batch of cases (P.K.Shefi Vs. IRCTC) and in W.P.No.33881 of 2006 and connected cases by A.M.Shamsu and others Vs. IRCTC and others. This Court dismissed the writ petitions and upheld the tender. Liberty was given to the licensees that they can claim allotment of stalls under reserved category of 25%.


14. Subsequently, the IRCTC raised an issue that the joint procedure order, dated 6.10.2006 was not in conformity with the Railway Board Regulations and therefore, revised the minutes that was drawn and recast the units once again. In the meanwhile, one Tambaram to Chennai Beach Soda Water Stall and Book Stall Association filed a writ petition before this court in W.P.No.2652 of 2007, challenging the order of IRCTC, dated 11.1.2007, by which they were directed to close down their stalls. In the writ petition filed by the said Association, an interim order, dated 2.11.2007 was granted. In paragraphs 5 and 6 of the interim order, it was directed as follows:


"5. The members of the petitioner Association has filed affidavits giving an undertaking that they will hand over the vacant possession of the Soda Water Stall on the last date on which the IRCTC fixed the opening of the tender.


6. In view of this undertaking, the respondents are directed to permit the members of the petitioner association to run the Soda Water Stall upto the last date on which IRCTC fixed the opening of the tender. However, the members of the petitioner association are permitted to participate in the tender Taking note of the fact that the others have paid the revised rate and as on date, no license exists in favour of the petitioner, the members of the petitioner's association are directed to pay the revised rate of rent as fixed by the GDP w.e.f. 1.1.2007. The arrears from the period 1.1.2007 to 31.10.2007 has to be paid within a period of three weeks from the date of receipt of a copy of this order. In the event of failure on the part of the members of the petitioner Association, either to pay the enhanced rent or the arrears for the period from 1.1.2007 upto 31.10.2007, the interim direction granted will stand automatically vacated."


15. Subsequently, the writ petition filed by A.M.Shamsu and the other writ petitions in W.P.No.33881 of 2006 came to be disposed of by a final order, dated 21.11.2006. In paragraph 27 of the order, this court observed as follows:


"27.00. Thus, it can safely be stated that there is no arbitrariness and illegality in the proposed policy of the respondents. In the considered opinion of this Court, the Court cannot restrict the power of the Government of India and the Indian Railways, to change the earlier policy and to formulate a new policy, when the said policy is for betterment of the society. The various clauses of the policy clarify that the railways intend to provide more and more benefits to the passengers, travelling in the trains, and streamline any systematize the existing catering facilities on the railway platforms and in the railway compartments. Therefore, I am not inclined to accept the contention that the new policy is a violation of the fundamental rights."


16. The other writ petitions filed by P.K.Shefi and others covered by W.P.No.42960 of 2006 and a batch of cases, challenging the tender notice were also disposed of by a common order, dated 28.12.2006. In the meanwhile, A.M.Shamsu and the Indian Railway Catering Stalls Association filed Writ Appeals in W.A.Nos.2, 210 and 211 of 2007. The Division Bench confirmed the order of the learned Judge by a common judgment, dated 25.3.2008. It was held that the order of the learned Judge was wrong insofar as following catering policy of the year 2000 and not 2005. But, however, the writ appeals were dismissed as infructuous.


17. Subsequently, the joint procedure order was recast. All the stalls were handed over to the control of the IRCTC with effect from 13.11.2008. Because of transition and in order to avoid difficulties to passenger and public, temporary extensions were granted to the licensees on payment of requisite license fee with a clear stipulation that the temporary extension will not confer any legal right to licensees. This was on the basis of the observations of the Supreme Court in C.A.No.4897 of 2002 in N.B.Krishna Kurup Vs. Union of India and others and in a batch of cases. In that order, it was observed by the Supreme Court as follows:


"Nothing stated herein shall preclude the Indian Railways/IRCTC from granting adhoc extensions in the interest of general public travelling in the trains. Such extension, however, shall not create any legal right in the licensee's favour. The appellant(s) shall deposit arrears of license fee, if any, within a period of two months from today. In case the appellant(s) fail to deposit the arrears, as directed, the Indian Railways/IRCTC would be at liberty to terminate the licenses forthwith and to make recovery of the arrears in accordance with law."


18. Thereafter, as per the joint procedure order, dated 23.12.2008 approved by the Divisional Railway Manager on 5.1.2009, 135 minor units comprising of 103 existing units (functional and closed), six departmental units and 26 sites at Mass Rapid Transit Sections were identified. The GMUs and SMUs were segregated as per the Railway Board's letter. All the erstwhile licensees including the petitioners, who were originally allotted under the general category, started claiming that they belonged to reserved categories and that their cases must be considered against the reserved categories.


19. In the meanwhile, General Minor Units were floated by IRCTC. Once again, some of the petitioners have filed writ petitions in W.P.No.3513 of 2009 and batch cases, challenging the tender notification issued by the IRCTC. Those writ petitions were disposed of by an order, dated 25.3.2009 with a direction to dispose of their pending representations or any fresh representations filed by them. The financial bids were opened on 13.4.2009. By this process, the revenue of Railways were increased to Rs.3.8 crores as against 60 lakhs of license fees which were collected for the 66 stalls which were finalised.


20. Once again some of the petitioners filed W.P.No.11136 of 2009 and batch cases challenging the order dated 13.11.2008 withdrawing temporary absorption given to those petitioners. This batch of writ petitions was once again dismissed by this court on 24.8.2009 based upon the other writ petitions filed in W.P.Nos.7270 of 2009 and connected cases were also dismissed on 19.6.2009. In paragraph 5 of the said order, it was observed as follows:


"5. Now, it is not disputed by the learned counsel for the petitioners that an undertaking has been given by the petitioners. But, the only stand taken by the learned counsel for the petitioners is the cancellation of the joint proceedings. As rightly pointed out by the learned Senior Counsel appearing for the first respondent, when the Railway Board itself has given a direction to proceed with the tender in the matter of this nature, now, basing on the Divisional Officers' proceedings which is an internal communication, the petitioners cannot take advantage of this. That apart, already, the contract has been over and only temporary extension was given and it is for the Railway management to decide the policy with regard to this and even as per the orders of the Hon'ble Apex Court, temporary extension of contract will not confer any right on the petitioners. Consequently, I do not find any reason to interfere with the impugned orders. Hence, the writ petitions are dismissed. No costs. Consequently, connected Miscellaneous Petitions are closed."


In the same judgment, in paragraph 3, the petitioners' undertaking to hand over the stalls on 31.12.2005 or on the date for which the IRCTC confirms to the successful tenderer to take over the stalls whichever is later, were also recorded.


21. Some of the petitioners preferred Writ Appeals in W.A.Nos.1136 to 1138 of 2009. The same were also dismissed by the division bench (presided by H.L.Gokhale, C.J.), by its judgment, dated 20.8.2009. In paragraph 9, the division bench observed as follows:


"9. The grievance of the appellant appears to be that by virtue of the renewal made in the year 2005, the licensee should be regularised and granted permanent license. In our opinion, the said contention cannot be accepted. First of all, grant of license is governed by the revised catering policy, which we have quoted earlier. Of course, the existing licensee is entitled to make an application for renewal and on consideration of the application, the renewal could be granted upto a maximum period of three years. As the license of the appellant had expired during the month of December, 2005, the licensee if at all could claim the benefit of clause 10.5 and such benefit could be only for a period of three years. Beyond the said period of three years, there is no right conferred on any licensee to seek either for further renewal or for grant of license."


22. After holding that the petitioners have no right to continue the stalls, in paragraph 11, it was observed as follows:


"11. We may also point out that the policy as such is also not questioned, except claiming that the appellant is entitled to the grant of permanent license which, in our considered opinion, cannot be accepted. Till such time the process for the grant of license commenced and stood completed in terms of the revised catering policy, the licensee was granted the renewal periodically and that too, subject to clauses 10.3 and 10.5 of the revised policy, which provide for such temporary renewal only for a maximum period of three years. Inasmuch as the period of three years is prescribed, the learned Judge has correctly rejected the contention of the licensee and consequently, dismissed the writ petition. Hence, we do not find any reason to interfere with the order passed by the learned single Judge. The facts are also identical in respect of the other two appellants in Writ Appeal Nos.1137 & 1138 of 2009 and for same reason, the said writ appeals are also liable to be dismissed."


23. As against the dismissal of this writ appeal, one of the writ petitioner (Y.Devendra Prasad in W.P.No.19847 of 2009) went before the Supreme Court in SLP (Civil) No.26822 of 2009. When the matter came up on 03.11.2009, he withdrew the Special Leave Petition with liberty to challenge the policy in the writ petition filed by the petitioner. In the light of these developments, the petitioners have come forward either to challenge the order, dated 24.9.2009 or for a direction to allow them to run the stalls as was done in the case of others.


24. It must be noted that the writ petitioner in W.P.No.19847 of 2009 Y.Devendra Prasad in his writ appeal and the writ petitioner S.Ramalingam in w.P.No.19932 of 2009, when they had filed writ appeals (W.A.Nos.1136 and 1137 of 2009) have raised all these issues in their memorandum of grounds before the Division bench. The division bench did not agree with th

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ose contentions. By a final order dated 20.8.2009, the writ appeals were rejected. Therefore, the present writ petitions are nothing, but a rehash of what has been contended all along. Many of the writ petitioners have come before this court for the third time with one pretext or other. The attempt by the petitioners to cling on to the stalls over which they have no licence nor they have participated in the fresh tender. Hence the question of granting them any relief will not arise. 25. The following tabular statement will show the previous cases filed by the petitioners and the result in each writ petition, writ appeals and SLP:- ?TABLE? Foot Note No.1: For Sl.Nos.2 and 3 - W.A.Nos.1137 and 1136 of 2009 - CJ and DMJ dismissed on 20.8.2009 Foot Note No.2: For Sl.No.3 - SLP(C) No.26822/2009 dismissed as withdrawn on 20.8.2009. 26. Thus, the present writ petitions are nothing but an exercise in futility. The question of challenge to a policy or the policy being unconstitutional may not arise as already these contentions have been rejected in several of the proceedings both by this court as well as by the Supreme Court. If the petitioners, who were originally allotted under the general category, wanted to consider their cases under the reserved category, they cannot hold on to the stalls and claim that they are entitled to be allotted to those units without following any procedure. If at all they have any claim against the reserved category, they should make appropriate applications as and when such units were notified and their claims will have to be considered only along with other similarly placed persons. 27. The writ petitions are clear abuse of process of law. The petitioners have successfully thwarted the steps taken by the Railways and the IRCTC in respect of Chennai Division. These writ petitions have been filed with different prayers suiting the occasions. Some of the parties managed to get interim orders and thus delayed the process of respondent Railways in implementing their policy, which was upheld by this court more than once. 28. In the light of the above, all the writ petitions will stand dismissed. No costs. Consequently, connected miscellaneous petitions also stand dismissed.
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