Foodworld vs Union Of India (Uoi) And Ors.
2002 Latest Caselaw 1674 Del

JUDGMENT

S.B. Sinha, C.J.

1. The petitioner, a partnership firm, inter alia, carries on the business of providing catering services to the Railways. Respondents No. 2 and 3 awarded a contract for catering services to the petitioner on the Nizamuddin - Secunderabad -- Nizamuddin Rajdhani Express bearing train No. 2437 and 2438 w.e.f. 26th January 1998. The agreement was entered into by and between the petitioner and the said respondents on or about 16th March 1998. The said agreement came into force w.e.f. 26th January 1998 and was to remain in force for a period of five years. The said train was a weekly one. On and from 1st April 1998, the frequency thereof was made bi-weekly wherefor also the catering contract of catering was awarded to the petitioner. In or about September 1998, the Railway Administration took a decision to extend one of the trips of the said train up to Bangalore. The catering contract for the extended trip also was given to the petitioner on 3rd November 1998.

2. It is not in dispute that there existed a bi-weekly Rajdhani Express which used to run between New Delhi and Bangalore bearing train No. 2429/2430. For operational convenience, the number of the extended Rajdhani Express was changed from 2437/2438 to 2429/2430. In or about October 1999, a decision was taken to extend the only trip of Nizamuddin - Secunderabad Rajdhani Express No. 2437/2438 to Bangalore w.e.f 7th January 2000. The number of the train was again changed from 2429/2430 to 2437/2438. The catering services continued to be with the petitioner. However, thereafter, Rajdhani Express ceased to run between Nizamuddin and Secunderabad.

3. The decision of the authorities of the Railway Administration to grant catering services to the petitioner, pursuant to or in furtherance of the afore-mentioned agreement dated 16th March 1998 was subject matter of a writ petition before this court entitled M/s Pee Kay Associates v. Union of India , CWP No. 2/2000. The learned single Judge of this court dismissed the said writ petition. A Letters Patent Appeal was filed thereagainst which was marked as LPA 26/2001. The Division Bench expressed its anguish about the manner in which the Railway authorities as also the Railway Board had handled the matter as a result whereof seemingly conflicting orders were passed conveying an impression as if one zone was pitted against the other. The Division Bench directed:

"Giving regard to all this and to put an end to avoidable litigation., it was deemed appropriate to afford a chance to the Railway Board to have a second look at the matter which could also help in setting its house in order. This was acceptable to all parties concerned facilitating disposal of this appeal by the following consent order:-

"That award of catering license on 4th trip/train NZM-SC/Bangalore/Rajdhani Express shall be examined afresh by all Members of the Railways Board collectively to be convened and headed by its Chairman. The Board shall consider the whole issue in its proper perspective including the dispute in hand viz. Whether 4th trip was a case of increase of frequency of train No. 2429/2430 or extension of train No. 2437/2438 uninfluenced by any orders passed by Member Traffic or any other Railway Authority or any license awarded to licensee earlier or by the judgment of the writ court. It shall accordingly pass appropriate orders giving reasons and signed by all Members within ten days from the receipt of this order. Interim arrangement made vide court order dated 19.1.2001 shall meanwhile continue and remain in force till such orders are passed by the Board."

4. Pursuant to or in furtherance of the said direction, the Railway Board treated the running of the train between Nizamuddin to Bangalore as an extension of Nizamuddin - Secunderabad - Rajdhani Express and not a case of increase in frequency of 2429/2430 Nizamuddin

- Bangalore Rajdhani Express train.

5. The said decision was communicated to the General Manager of the Norther Railway as also General Manager of the Southern Railway.

6. A new weekly Rajdhani Express was introduced between Hazrat Nizamuddin and Secunderabad w.e.f. 7th February 2000 wherefor the contract for making catering arrangements was to be allotted by the fourth respondent in due course. However, the petitioner herein was asked to give its consent regarding managing catering service on the said train temporarily till the contract was allotted.

7. The petitioner gave his consent by a letter dated 14th February 2002. However, in the said letter it was contended that they are entitled to grant of catering contract for the said train also on the ground that the same was an extension of Secunderabad Rajdhani.

8. It is not in dispute that the fourth respondent, however, issued notice inviting tender and by a letter dated 20th February 2002 asked the petitioner to participate in a competitive bidding process for management of catering on the train trip of 2437/2438 Rajdhani Express Nizamuddin SC. The petitioner participated therein without prejudice to his rights and contentions but although he became the highest bidder, according to it, he was entitled to the rant of the contract without undertaking the exercise of the tender process. In the afore-mentioned situation, this writ petition has been filed claiming, inter alia, the following reliefs:

"(i) a writ of mandamus and/or any other appropriate writ, order or direction thereby directing the respondents to adhere to the new catering policy -- 2000 in respect of contract of catering entered with the petitioner on 16.3.1998 in respect of train No. 2437/2438 and to continue with contract of catering in respect of train No. 2437/2438.

(ii) A writ of prohibition and/or any other appropriate writ, order or direction may also be passed thereby directing the respondents not to give any decision or order with reference to its letter No. 2001/IRCTC/Catg./Bid Doc. Dated

(Annexure P-20) and prohibiting the respondents from conducting the auction and/or inviting the bid for the contract of catering in respect of train bearing No. 437/2438 during the subsistence and enforcement of the contract of the petitioner dated 16th March, 1998;

(iii) A writ of certiorari and/or any other writ, order or direction thereby quashing the decision of the Railways for holding auction in respect of train No. 2437/2438; and

Any other relief, order or direction which this Hon'ble Court may deem fit and proper considering the facts and circumstances of the case may also be passed in favor of the petitioner."

9. It is not in dispute that a new catering policy was formulated by the Railway Board. Clause 14.10 of the said new policy as regard existing licenses is as under:

"14.10 Application of New Policy to existing licenses

New Catering Policy will taken effect from the date of issue of this policy in case of all new catering/vending licenses. This will also apply in case of award of fresh license in the event of termination, non- renewal, vacation etc. of the existing licenses. However, in the case of existing licenses, which continue to provide satisfactory services, the licensees will be allowed to complete their present term subject to application of all other policy directives issued from time to time.

Thereafter licenses of such existing licensees shall be renewable for such periods so that the total period of operation from the date of issue of New Catering Policy is five years on uniform basis. For instance in case of an existing license which is expiring, say in October, 2001, the license shall be renewable for a further period of 4 years beyond October 2001 i.e. up to October, 2005. If a license is expiring, say in October 2003, the same shall be renewable for a further period of 2 years i.e. up to October 2005. However such renewals should not be automatic and railways will ensure continuous monitoring of performance as per provisions contained in para 14.6.2 and para 14.6.4. All existing licensees may be advised in this regard."

10. The contention of the petitioner is that the train in question is not a new tain but thereby only frequency of an existing train has been increased and in view of the matter, having regard to the fact that the parties had entered into a contract for a period of five years which is still valid, it was entitled to provide catering services on the said train as a matter of right.

11. Mr. Ravinder Sethi, the learned senior counsel appearing on behalf of the petitioner would submit that by reason of the catering policy 2000, all earlier existing policy guidelines issued from time to time were superseded, the relevant provisions whereof are:

"6.2 Provision of pantry cars on different trains will continue to be determined centrally by the Railway Board. Railways will observe following guidelines with regard to mobile catering services: -

(i) to (iv) .....

(v) Pantry car of a particular train is considered as one unit, irrespective of the frequency viz. whether it is a weekly/bi- weekly, etc.; or a daily train service. Pantry car license of a particular train should, therefore, be awarded to one licensee only and should not be split among different licensees for different days.

12. Mr. Sethi would contend that keeping in view the fact that the timing of the train is same and the route thereof is same, the purported introduction of the new Rajdhani Express should be considered to be by way of an additional trip and by reason thereof merely frequency had been increased, the petitioner was entitled to the grant of the contract.

13. He would further contend that even in terms of the new policy, the existing licenses are same and thus petitioner being a licensee in the same route, it cannot be said to be a new train. It has been pointed out that the Railway Administration had not filed any counter-affidavit and as such, the allegations made in the writ petition must be deemed to have been admitted. The contention of Mr. Sethi is that the respondent No. 4, merely being an agent of the Railway Administration, its assertion that the train in question is a new one, should not be accepted. Our attention in this connection has been drawn to the following statements made in the counter-affidavit:

28. "...That the IRCTC is a company incorporated under the Companies Act 1956 and is thus free to lay down its own procedure as per its Memorandum and Articles of Association. The answering respondent is not bound by the catering policy 2000. At any rate the petitioner was invited to participate in the bid process and thus cannot allege any discrimination against him.

29. With respect to the contents of para 29 of the writ petition, it is submitted that Clause No. 6.2(v) of the Catering Policy 2000 is only a board guideline that as far as possible the same contractor should be used for providing catering services on a particular train. It is further submitted that the train in question is a new train, and not an increase in frequency of an existing train therefore the guidelines being relied upon are not applicable in the present case.

Further, at any rate, as stated in the previous para the IRCTC is free to act as per its own policy in accordance with the principles of natural justice."

14. Having regard to the fact that the respondent No. 4 is under the control of the Railway Administration, Mr. Sethi would contend that any guideline issued by the Railway Administration would be binding upon the fourth respondent. The Memorandum of Understanding, as Mr. Sethi pointed out, entered into by Indian Railways and IRCTC would also show that the fourth respondent is merely an extended arm of the Indian Railways which has been brought into with a view to upgrade, professionalise and manage the catering and hospitality services at stations, on trains and other locations and to promote domestic and international tourism through development of hotels, information, commercial publicity and global reservation system. Our attention in this connection has also been drawn to the earlier policy.

15. The learned counsel would contend that whereas in the earlier policy, the expression used was 'as far as possible', the said expression does not find place in the new policy and as such it is obligatory on the part of the Railway Administration to grant contract to the petitioner in the new route.

16. Mr. Makhija, the learned counsel for the respondents, on the other hand, would contend that the tender in question would be for a new train which has been introduced pursuant to a new policy. The learned counsel has drawn our attention to the statements made in para 22 of the writ petition which is in the following term:

"22. That in February, 2002, the respondents again decided to have another Rajdhani Express between New Delhi to Secunderabad, i.e. 2437/2438, weekly which was suspended in January, 2000 completely. In view of the said decision, the respondent No. 3, vide its letter dated 14th February, 2002, addressed to the petitioner and five other caterers informed about the said decision of the Railways. It was further informed in the said letter that the contract for making catering arrangement on this

in due course and in the meanwhile catering services are to be managed through one of the existing licensees. Therefore, the respondents sought the consent of the existing licensees to provide catering services on a temporary basis till the contract is allotted by the respondent No. 4. Copy of the said letter of the respondent No. 3 is annexed hereto as Annexure P-16. "

17. The learned counsel would contend that if, according to the petitioner himself, the operation of the train was suspended from January 2000 to February 2002, the same was for all intent and purport, amount to termination, thereof.

18. It was pointed out that even prior to introduction of this train, two trains used to operate between Delhi and Bangalore. Drawing our attention to the Railway Budget, the learned counsel would contend that in the Railway Budget itself, it was decided as to which train will have more frequency.

19. The determination of the questions involved in this writ petition, in our opinion are essentially dependent upon question of fact.

20. It is not in dispute that the train which is the subject matter of the present writ petition had been introduced only subsequent to the Railway Budget for the year 2001-2002. From the Railway Budget, a copy whereof has been annexed with the counter-affidavit filed on behalf of the fourth respondent, it would appear that a distinction was made between a new train and increase in the frequency thereof. Para 63 of the Budget relates to the new trains. Item No. 23 of the said Para refers to weekly Rajdhani Express to Secunderabad upon completion of new terminal works at Hazrat Nizamuddin. In contrast, those trains where frequencies were to be increased, had been stated separately. When such frequency of train No. 2429/2430 was increased, the same was categorically stated in the telemax issued on 15th October 1999 in the following terms:

"1. Frequency of 2429/2430 Bangalore Rajdhani Exp should be increased from tri- weekly to 4 days a week w.e.f. 31.12.1999 by cancelling 2437/2438 Secunderabad Rajdhani Exp(.) The days of service will be 2429 Ex. SBC - Monday, Wednesday, Thursday & Sunday; 2430 EX. NZM -

Monday, Tuesday, Friday & Saturday (.)"

21. The said document is contained in annexure SA-3 of the counter-affidavit filed on behalf of the respondent NO. 4.

22. By reason of the same, Secunderabad Rajdhani Express was cancelled by a Circular dated 15th October 1999.

23. From the conspectus of facts, as noticed hereinbefore, it is evident that the number of the train for operational reasons had been changed. Only because the number of the train is the same which was initially allotted to the petitioner, it cannot be held to be of much relevance having regard to the fact that the number of the train for which the catering services had been granted to the petitioner had also been changed. The number of the train is given for the purpose of identification of the same route and for convenience of the passengers and the same cannot be said to have anything to do with the grant of contract.

24. Having regard to the fact that the train in question is a new train, in our opinion, Clause 6.2(v) of the Catering Policy 2000 whereupon Mr. Sethi has placed strong reliance, is not of much relevance. In this view of the matter, we are of the opinion that it is also not necessary to determine the question as to whether the expression "should" is to be construed as mandatory or directory.

25. In any event, the petitioner itself, as noticed hereinbefore in para 22 of his writ petition, categorically admitted that the train No. 2437/2438 is another train and not the same train. The decision of the Division Bench of this court in LPA 26/2001, whereupon Mr. Sethi placed reliance, is again a matter which is of not much importance inasmuch as therein the court was concerned with absolutely a different fact situation.

26. For the reasons afore-mentioned, we are of the opinion that no case has been made out for interference with the impugned policy decision of the Railways in calling for the tenders.

27. This writ petition, therefore, is dismissed but in the facts and circumstances of this case, there shall be no order as to costs.