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

Smt.J. Chandrika & Another v/s The Regional Director Indian Railways Catering and Tourism Corporation Ltd.,(I.R.C.T.C.), Chennai & Others

    W.A.Nos.570 & 571 of 2010

    Decided On, 19 April 2011

    At, High Court of Judicature at Madras


    For the Appellants: K. Sridhar for M/s K. Sridhar Associates, Advocates. For the Respondents: R1 - V.G. Suresh Kumar, R2 & R3 - M. Vellaichamy, Advocates.

Judgment Text

(Prayer: Appeals under Clause 15 of the Letters Patent, against the order dated 15.12.2009 made in W.P.Nos.19848 & 19849 of 2009.)


1. The question as to whether the licensees to run the stalls for vending eatables/refreshments in the various railway station platforms owned by the Indian Railways on their applications, could claim as a matter of right for renewal of those licenses, even when there has been a change of policy in the award of licenses for those stalls for vending eatables/refreshments by calling for public tender, is not new to this Court, as it has come up on many occasions.

2. Prior to the year 2000, licences to run the stalls for vending eatables/refreshments in the various railway station platforms were granted to various individuals including the appellants herein on their applications. The licenses were periodically renewed. On 20.10.2000, a new catering policy was introduced with the main features of (i) two packet system-technical and financial bid, (ii) fixing the license fee at 12% of the sales turnover and (iii) eligibility criteria and minimum turnover were introduced. The new policy was questioned by Indian Railway Canteen Association and some other licensees before the High Court of Kerala and the policy was upheld. That order of the High Court of Kerala was taken to Supreme Court and the same was disposed of with the following observation on 29.3.2005 in Civil Appeal No.4898 of 2002:

"Nothing stated herein shall preclude the Indian Railways/IRCTC from granting adhoc extensions in the interest of general public travelling 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."

3. Subsequent to the judgment, the Railway Board, in its letters dated 24.6.2005 and 30.6.2005, directed the Railways to handover all 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. Pursuant to this direction, the Chief Commercial Manager, Southern Railway by letter dated 2.11.2005 directed all the divisions of Southern Railway to hand over the static units in A, B and C category stations to IRCTC with effect from 15.11.2005. Pursuant to the above direction, the IRCTC took over all the static units, major and minor units from all the divisions, except 21 units in Chennai division in view of the pendency of a batch of writ petitions in W.P.Nos.36263 of 2005 etc. The batch of writ petitions was disposed of on 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 whichever 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 whichever 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 Nos.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."

Thereafter, the Railway Board in Commercial Circular No.8 of 2005 dated 16.3.2005 introduced a new catering policy stipulating 75% of minor units to be awarded to IRCTC through open tender and 25% of the minor units to be allotted by the Divisional Railway Managers. Subsequently, Commercial Circular No.56 of 2005 dated 21.12.2005 and Commercial Circular No.59 of 2005 dated 28.12.2005 were issued revising the catering policy.

4. On the ground that the revision of policy had created a new right to the licensees, number of licensees demanded that they be allowed to run the stalls even after the revision of policy. By the new policy, a joint procedure order was issued in respect of the five divisions, namely, Chennai, Thiruvananthapuram, Palghat, Madurai and Tiruchirappalli of Southern Railway. Pursuant to the joint procedure order, tenders were called for and they were questioned by some of the licensees in Thiruvananthapuram, Palghat, Madurai and Tiruchirappalli divisions in a batch of writ petitions in W.P.Nos.42960 of 2006 and W.P.Nos.33881 of 2006 and connected cases, and this Court dismissed those writ petitions upholding the joint procedure order. While dismissing W.P.Nos.33881 of 2006 etc., by final order dated 21.11.2006, in paragraph 27, 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 and 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."

Similarly, Tambaram to Chennai Beach Soda Water Staff and Book Stall Association filed W.P.2652 of 2007 challenging the order of IRCTC dated 11.1.2007, by which the licensees were directed to close down their stalls. While granting interim order dated 2.11.2007, this Court directed as follows:-

"5. The members of the petitioner Association have 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 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."

5. In view of the above, all stalls were handed over to the control of IRCTC with effect from 13.11.2008 and the tenders were floated for general minor units by IRCTC. Again some of the erstwhile licensees questioned the same by filing a batch of writ petitions in W.P.Nos.3513 of 2009 etc., challenging the tender notice. Those writ petitions were disposed of only with a direction that their representations could be considered. However, pursuant to the floating of tenders, bids were opened on 13.4.2009 and the tenders were finalized in respect of 66 stalls. Some of the erstwhile licensees again filed W.P.Nos.11136 of 2009 etc., challenging the withdrawal of temporary absorption given to them. Those writ petitions were once again dismissed by this Court by order dated 24.8.2009. The writ petitions filed with similar relief in W.P.Nos.7270 of 2009 etc., were also dismissed subsequently on 19.6.2009 with the following direction:-

"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 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."

6. The above order was questioned by some of the licensees in W.A.Nos.1136 to 1138 of 2009 and they were also dismissed by the judgment dated 20.8.2009 with the following observations:-

"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.

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."

7. Not satisfied with the above orders, S.L.P.(Civil) NO.26822 of 2009 was filed before the Supreme Court and the same was withdrawn on 3.11.2009. Under these circumstances, the appellants-writ petitioners who have also approached this Court on many occasions at various stages, filed the writ petitions along with some other individuals questioning the order dated 24.9.2009, wherein they were asked to pay the arrears of licensee fee for the period of their occupation of the stalls while the above proceedings were pending and consequently to vacate and hand over possession of the stalls to IRCTC to enable the successful bidders to operate the stalls. The learned Judge, having noticed the various attempts made by the erstwhile licensees who were granted licenses to the stalls prior to 2000 and had managed to continue the business in the stalls in spite of the various orders of this Court upholding the revised policy of the Railway Board, ultimately, found no merit in the writ petitions and accordingly dismissed the batch of writ petitions. In fact, the learned Judge found that the writ petitions are clear abuse of the process of law, as the writ petitioners had successfully thwarted the steps taken by the Railways and IRCTC in respect of Chennai division. Hence, these writ appeals.

8. Mr.K.Sridhar, learned counsel for the appellants has submitted that even as per the revised policy, the appellants are entitled to the allotment on the quota reserved for women in respect of special minor units. That reservation cannot be refused in view of the earlier proceedings.

9. We have heard Mr.V.G.Suresh Kumar, learned counsel for the IRCTC and Mr.M.Vellaichamy, learned counsel for the Railways.

10. The earlier judgments of this Court as well as the Supreme Court would make the legal position clear declaring that the appellants herein, who were the licensees prior to 2000, cannot have any subsisting right to seek for renewal on the basis of the earlier licenses granted in favour of them after the revision of policy. The legal position is settled, whereby the right of the Railway Board to take a policy decision to hand over the stalls to IRCTC had been upheld. Similarly, the law that the licensees cannot have existing right to seek for renewal after the change of policy. However, the grievance appears to be that since both the appellants are women, they are entitled for reservation in respect of 25 special minor units. As per clause 10.8 of the revised catering policy of 2005, minor units at A, B and C category stations consisting of 25% reservation which are basically for socially backward persons, SC/ST/OBC. In terms of clause 10.3, these reserved category minor units in A, B and C category stations will be allotted by calling for applications and selecting the licensees based on the eligibility criteria and shortlisting. The 25% reservation for minor units in A, B and C category stations consists of the following breakup:-

Scheduled Caste - 6%

Scheduled Tribe-4%

Below Poverty Line people-3%

Freedom Fighters, women including war widows and widows of railway employees, persons who have been dislocated or displaced due to their land having been taken by railways for its own use-4%

Other Backward Class-3%


Physically/mentally challenged persons-2%

Though the appellants have claimed that they are widows, under 4% reservation for freedom fighters, women including war widows, etc., the said reservation is zonal wise and not station wise. Even otherwise, it could be seen that initially the stalls were allotted in favour of the husband of the respective appellant and after their demise, the same had been transferred in the name of the appellants. The question raised in these writ appeals is as to whether they could claim as a matter of right the renewal or allotment

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under the new policy. This contention has to fail for the simple reason that even after the revised policy and even if the appellants could make their claim as against the 4% reservation for widows among others, it should be independently considered for fresh allotment and they cannot claim as a matter of right that they alone should be given the licenses to run the stalls. If the said submission is to be accepted, then the purpose of reservation of 25% in respect of minor units would be defeated, as the stalls may not be available for allotment to each of the category as per the break-up. Therefore, it should necessarily mean that when the policy has been upheld by the Courts and the reservation can only be understood to mean that the widows also are eligible to apply for fresh allotment of stalls as against the 4% reservation for the particular sections considering the total number of stalls available in the entire zone and to be selected on the basis of shortlisting. In that view of the matter, the challenge to the order dated 24.9.2009 asking the appellants to pay the arrears of licensee fee upto the period of their occupation of the stalls during the pendency of the writ petitions cannot be faulted. Similarly, as of now, all of them have handed over the stalls and they were also notified for allotment and in fact, going by the stand of the Railways, the successful bidders have to be allotted the stalls which are claimed by the appellants herein. 11. For all the aforesaid reasons, the challenge to the order impugned in the writ petitions dated 24.9.2009 cannot be accepted, as has been rightly rejected by the learned Judge. Accordingly, both the writ appeals fail and they are dismissed. No costs.