M/S R.K.Enterprises vs Indian Railway Catering & Tourism ...
2008 Latest Caselaw 1563 Del

* IN THE HIGH COURT OF DELHI AT NEW DELHI


+       W.P.(C) 23241/2005
                                       Reserved on : 13th May, 2008
                                       Date of decision: 5th September, 2008


        M/S R.K.ENTERPRISES               ..... Petitioner
                      Through: Mr.Jayant Bhushan, Sr. Adv. with
                               Ms.G.Prakash, Advocate.


                          Versus


        INDIAN RAILWAY CATERING & TOURISM CORPORATION
        LTD.                                      ..... Respondent
                     Through: Mr.Saurav Aggarwal, Adv. for
                              respondent no.1-IRCTC.
                              Mr.Ashwani Bhardwaj, Adv. for
                              respondent Nos.2 & 3.


        CORAM:
        HON'BLE MR. JUSTICE MUKUL MUDGAL
        HON'BLE MR. JUSTICE V.K.SHALI

     1. Whether reporters of local papers may be
        allowed to see the judgment?                             Yes
     2. To be referred to the Reporter or not?                   Yes
     3. Whether the judgment should be reported in the Digest?   Yes



                         JUDGMENT

% V.K.SHALI, J

1. The present writ petition bearing No.23241/2005 was remanded back

by the Supreme Court vide its order dated 20th March, 2007 after setting

aside the judgment dated 7th February, 2006 passed by the Division Bench of

this Court, for deciding afresh. The matter was accordingly heard and is

being disposed of by the present judgment.

2. Briefly, stated the facts of the case are that the petitioner has

challenged the advertisement dated 11th October, 2005 (Annexure P-5)

issued by the Indian Railway Catering & Tourism Corporation Ltd.

(hereinafter referred to as 'IRCTC'), by virtue of which IRCTC has invited

technical and financial bids from the reputed organizations engaged in

catering business to manage on board catering services in train Nos.2443-

2444 New Delhi- Bhubaneswar Rajdhani Express via Bokaro (hereinafter

referred to as train Nos.2443-2444). It was stated by the learned counsel for

the petitioner that it has been awarded contract in respect of New Delhi-

Bhubaneswar Rajdhani Express bearing train Nos.2421 and 2422

(hereinafter referred to as train Nos.2421-2422) vide agreement dated 1st

July, 2005 for a period of five years. The petitioner has contended that on

16th March, 2005, the IRCTC had formulated a policy for awarding of

contracts for providing catering services in various trains. According to the

petitioner, Clause 6.2.(vi) of the said policy specifically provided that where

the trains which are having same point of origination and destination but are

following different routes with different numbers which are given for

technical reasons, they should be treated as 'one unit' and a 'composite

licence' should be awarded for such trains.

It was on the basis of the aforesaid relevant clause that the petitioner

had contended that as the petitioner had an agreement for providing catering

services in respect of Train bearing Nos.2421-2422 it ought to be given the

catering licence of the train Nos.2443-2444 because this latter train was also

having the same point of origination and destination namely New Delhi-

Bhubaneswar Rajdhani Express though the same was running via Bokaro. It

may be pertinent here to mention that the train Nos.2421-2422 is operating

between New Delhi & Bhubaneswar via Gaya. It was contended that by

virtue of the aforesaid Clause, the petitioner ought to have given the contract

for providing catering services of the said train also on proportionate

increase of licence fee because both these trains are to be treated as 'one

unit'.

As against this, the respondent no.1-IRCTC, respondent No.2-

Railway Board and respondent no.3-UOI contested the claim of the

petitioner and contended that both the train Nos.2421-2422 on one hand and

train Nos.2443-2444 on the other could not be treated as 'one unit' because

both of them though plying between New Delhi-Bhubaneswar but they were

following different routes as the train in respect of which catering contract

was awarded to the petitioner was going through via Gaya while as the new

train was to go through via Bokaro. Further to this, the respondent also

placed reliance on the letter dated 27th June, 2003 issued by the Director

(Tourism & Catering) Railway Board to the General Manager (Catg.),

Northern Railway, Baroda House, New Delhi wherein it was specifically

stated that train Nos.2443-2444 was to be treated as a new train. Therefore,

no 'composite licence' for catering could be issued to the petitioner. It was

also contended that different train numbers can be allotted to 'one catering

licence' only if it is a case of integrated rake or conventional rake given to a

train due to the technical reasons and this is evidently clear from the reading

of second para, which is added in Clause 6.2 (vi) only to clarify the position

that if following two points are satisfied then the 'composite licence' can be

granted:

(1) if the train/rake has the same originating and destination stations with different numbers of different routes,

(2) different numbers have been given with conventional rake due to technical reasons.

3. Since in the instant case, the Railway Board has issued a letter that the

train in question in respect of which tender dated 11 th October, 2005 was

floated was a new train and, therefore, it could not be given to the petitioner.

It was also urged that the policy stipulations which is formulated by the

Railway Board has to be given a purposive interpretation and in case the

trains running in two destinations as the point of origination and the

destination are given to the same contractor under one licence then it will

literally result in monopoly of a particular party cornering the substantial

catering business in respect of the trains operating between the two

points/destinations irrespective of the trains being given different numbers.

Substantiating this argument further, it was urged that with the help of an

illustration by the learned counsel for the respondent that an integrated rake

is in fact a set of coaches which consists of a pantry car, a generation unit, a

guard box etc. which in common parlance is called a train. The purpose of

Clause 6.2.(vi) is only to meet certain contingencies to avoid loss of time

spent by the authorities in case the same rake namely the same train ply

under different train numbers of two different destinations. This was sought

to be elaborated by giving an illustration that an integrated rake [set of

coaches] goes from destination A to B and is further used as another train

from Destination B to C. Then the licensee for Train from A to B is also

granted the license for B to C. This also holds true where the rake travels

from Destination A to B and returns back to A and then goes from

destination A to C or from B to C as a different train number. This is done

so that there is no time lost in shunting the coaches or the pantry cars.

4. We have considered the respective submissions of the parties and

gone through the record. At the outset, it must be stated that though the

point in issue involved in the instant case is very short one but the same has

been complicated by the acts of omission and commission of the respondents

themselves. There is no dispute about the factum that there is a policy

formulated by the Railway Board for the award of contracts of catering.

The relevant sub-clauses (v), (vi) and (viii) of Clause 6.2 reads as under:-

6.2 Provision of pantry cars:

i) ..............

ii) ..............

iii) .............

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 licence of a particular train should, therefore, be awarded to one licensee only and should not be split among different licensees for different days.

vi) There may be cases where train services are run with integrated rakes and only one or more trains may be having the pantry cars. In such cases, IRCTC will provide pantry car services on all trains running with integrated rakes to avoid shunting and make optimum use of the rolling stock. IRCTC will however follow the extant instructions for awarding fresh pantry car licence on new train/trains as this will be an additional service.

Trains having the same originating and destination stations (including Rajdhani/Shatabdi express trains), but following different routes with different numbers and Rajdhani/Shatabdi trains running with advanced coaches (IRY / LHB, etc.), which are given different numbers for conventional rakes (due to technical reasons), should be treated as one unit. Composite licence should be awarded for such trains. In case of existing integrated rakes, composite licence may also be awarded for these trains. For holding purpose from the ceiling point of view, one composite tender for such trains will be treated as

one unit.

vii) ...................................

viii) In case of an increase in the frequency of train services and / or extension of trains the existing licencee should manage services on additional trip(s) and / or on extended portion. Railway will correspondingly increase the licence fee in such cases."

5. In the light of the aforesaid policy, first we must determine as to what

is meant by the word 'rake'. It is not disputed by either of the parties that

integrated rake is a technical name given by the Railway authorities to a set

of coaches which consists of an engine, coaches, a pantry car and a

generating unit and the last coach which is used by the guard for the purpose

of facilitating the movement of the train. It is also not in dispute that the

purpose of formulating the policy by the Railway Board for award of

contracts of catering services was to bring uniformity in the award of

contracts for providing catering services in different trains in the country.

One of the contingencies which has been visualized by sub clause (vi) of

Clause 6.2 where a composite licence is to be issued are given as under:-

Firstly, where the trains (including Rajdhani and Shatabdi) having

same originating and destination stations but are following different routes

with different numbers and secondly, where the Rajdhani and Shatabdi trains

are running with advanced coaches and are given different numbers when

running with conventional rakes due to technical reasons. In both the above

contingencies, they should be treated as 'one unit' and 'composite licence'

should be awarded for such trains. In the instant case, there is no denial of

the fact that New Delhi- Bhubaneswar Rajdhani Express bearing Nos.2421-

2422 is operating twice a week via Gaya and is therefore, having one

number while as New Delhi-Bhubaneswar Rajdhani Express which was

newly added train in the year 2003 is operating between the same points via

Bokaro but has been given a different number namely 2443-2444 though

both these trains are having different numbers but they are having same

point of origination and destination point. Therefore, the question which

arises for consideration is as to whether both these trains have to be treated

as 'one unit' or not and accordingly, as to whether a 'composite licence'

should be awarded for such trains or not.

6. It has been the contention of Mr.Jayant Bhushan, learned senior

counsel for the petitioner that both these trains though having different

numbers have to be treated as 'one unit' and, therefore, although the contract

of New Delhi-Bhubaneswar Rajdhani Express bearing train Nos.2421-2422

was awarded to them for a period of 5 years on 1 st July, 2005 yet they are

entitled to be given catering contract of the other train also namely New

Delhi-Bhubaneswar Rajdhani Express via Bokaro bearing train Nos.2443-

2444 on the ground that the point of origination and destination is the same.

It is also contended by the learned counsel that before formulation of the

policy itself the respondents themselves had issued a fax message annexure

P-4 at page 56 of the paper book stating that the train Nos.2443-2444 is

being added so as to make the train service between New Delhi-

Bhubaneswar Rajdhani Express from bi-weekly to tri-weekly meaning

thereby, the train which was to operate via Bokaro was in fact increasing the

frequency only of the existing train services between New Delhi-

Bhubaneswar although both the trains were to pass through different

destinations on the way. Similar was the letter dated 20 th February, 2003

issued by the General Manager-Catering indicating that the train bearing

Nos. 2443-2444 were added with a view to increase the frequency.

7. Per contra, the learned counsel for the respondent contended that the

communication dated 20th February, 2003 and the fax letter dated 27th June,

2003 relied upon by the learned counsel for the petitioner with a view to

base his arguments that the train Nos.2443-2444 was only increasing

frequency of the existing train is not a valid basis to interpret the policy of

2005 for the simple reason that the policy was formulated in the year 2005

while as these letters are purported to have been written in the year 2003.

Therefore, the policy which is formulated latter in point of time cannot be

permitted to be governed by the letters which have been issued prior to that.

Further the learned counsel for the respondents also referred to the letter

dated 27th June, 2003 issued by the Railway Board in which it was

specifically stated that train bearing Nos.2443-2444 is to be treated as a new

train and, therefore, the catering services of the same could not be ipso facto

granted to the petitioner. In addition to this, it was urged that at the time

when tender in respect of train bearing Nos.2421-2422 was floated and

thereafter awarded the same to the petitioner, it was aware as to what

contract was being awarded to him. It did not raise any objection regarding

the award of the catering contract only in respect of the said train bearing

Nos.2421-2422. If the petitioner was aggrieved at that point of time it ought

to have raised the question of the award of contract in respect of train

bearing Nos.2443-2444 also. Having not done so, the petitioner was deemed

to have admitted that both these two trains were separate and therefore, the

contract of the latter could not be allotted to him on his plea of proportionate

increase of licence fee. It was also contended at the time when the licence

for catering of train Nos.2421-2422 was given to the petitioner the train

Nos.2443-2444 was already in existence and it could not be treated as a new

train nor did it increase the frequency of the existing train Nos.2421-2422 as

the routes were different.

8. We have considered the respective submissions and gone through the

record. We are of the considered view that the respondents themselves are

not sure as to whether the train bearing Nos.2443-2444 i.e. the New Delhi-

Bhubaneswar Rajdhani Express operating via Bokaro is to be treated as a

train increasing the frequency of the train operating between New Delhi-

Bhubaneswar Rajdhani Express via Gaya from bi-weekly to tri-weekly or as

to whether it is to be treated as a new train. In the year 2003, before

formulation of the catering policy of 2005 itself, there are three

communications purported to have been issued by the Railway Board, two

of which gives an impression that train Nos.2443-2444 is increasing the

frequency of the existing train i.e. New Delhi-Bhubaneswar Rajdhani

Express from bi-weekly to tri-weekly while as one communication gives an

impression that it is a new train communicated dated 18th February, 2003

and 20th February, 2003 show that train Nos.2443-2444 is increasing the

frequency of the existing train from bi-weekly to tri-weekly while as letter

dated 30th June 2006, shows that the Headquarter of Northern Railways

latter on formed a view that it is a new train. If it is a new train then the

catering services of the new train cannot be granted under 'composite

licence'. Since both these sets of communications, one with regard to the

increase in frequency or second with regard to it being allegedly a new train

are purported to have been issued before the formulation of the policy on

16th July, 2005, therefore, we do not consider it appropriate to refer to either

of the two sets of communications which shows the then vacillating stand of

the respondents to decide as to whether the respondents were well within

their right to invite the tender on 11th October, 2005 for awarding the

catering services of New Delhi- Bhubaneswar Rajdhani Express via Bokaro

to a bidder. The said controversy can be settled by simple reference to sub

clause (iv) of Clause 6.2 of the catering policy, the contents of which have

been reproduced hereinabove.

9. In terms of the said clause if the point of origination and destination of

a train including that of Shatabdi and Rajdhani happens to be the same then

it is to be treated as 'one unit' a 'composite licence' of providing catering

services of both these trains have to be given to one party.

10. So far as the second contingency where user of advanced coaches or

conventional coaches and the different number of the train is concerned, that

contingency does not arise in our case. Therefore, we refrain to refer to the

same as the present case is covered by the first contingency itself. That

being the position, a 'composite licence' ought to have been issued to one

party in respect of both these trains namely New Delhi Bhubaneswar via

Gaya bearing train Nos.2421-2422 and New Delhi- Bhubaneswar Rajdhani

Express via Bokaro Nos.2443-2444. But on account of certain background,

the respondent themselves did not act timely and wisely so as to float one

tender for the reason that one of the parties namely M/s P.R.Catering is

purported to have gone to Calcutta High Court and obtained some restraint

order with regard to the award of catering contract of train bearing

Nos.2443-2444 which is stated to be continuing as on date also. We have

been informed that M/s P.R. Catering was providing the catering services

under a licence of train Nos. 2421-2422 which came to an end on 18th May,

2005 whereupon a tender was floated and licence was awarded to M/s R.K.

Enterprises, the present petitioner being the highest bidder in respect of train

bearing Nos.2421-2422. So far as the licence for providing catering services

of train Nos. 2443-2444 is concerned, this being a new train, (as train

Nos.2421-2422 was inexistence at a given point of time) which was floated

in the year 2003, the licence was awarded on ad hoc basis to M/s

P.R.Catering which was then existing contractor/licencee in respect of train

Nos.2421-2422 on ad hoc basis. On 11th July, 2003, bid for giving the

licence to provide catering services of train Nos.2443-2444 as a new train

were floated and since the floating of new tender would have displaced the

ad hoc licencee M/s P.R.Catering, therefore, they are purported to have

obtained an ex parte injunction order on 23rd July, 2003 from the Calcutta

High Court and it was by virtue of such interim order that the licence for the

new train i.e. 2443-2444 which was started in June 2003 could not be

finalized.

11. We have been informed that after passing of the aforesaid interim

order, a new catering policy was formulated and it is by virtue of new

catering policy that the bids for train Nos. 2443-2444 were floated on 11th

October, 2005. Although in October, 2005 itself, M/s P.R.Catering is

purported to have gone to Calcutta High Court and filed a Contempt Petition

against the respondents on account of being threatened to be de-licensed

from providing catering services in New Delhi- Bhubaneswar Rajdhani

Express via Bokaro, therefore, as on date even though we hold that the

tender for new train i.e. New Delhi- Bhubaneswar Rajdhani Express via

Bokaro ought to be treated as 'one unit' and be given on 'composite licence'

basis to M/s R.K. Enterprises namely, the petitioner in the instant case, yet

the said direction cannot be implemented by the respondents with impunity

as it will tantamount to violation of the ex parte interim order of High Court

of Calcutta. Therefore, under these circumstances, though we are of the

considered view that the tender dated 11th October, 2005 is liable to be

quashed on account of the fact that it is in violation of the catering policy of

the respondents themselves as being violating of clause 6.2.(iv) inasmuch as

the licence of train bearing Nos. 2443-2444 New Delhi- Bhubaneswar

Rajdhani Express via Bokaro is to be treated as 'one composite' unit with

the already operating train between New Delhi- Bhubaneswar Rajdhani

Express via Gaya bearing Nos.2421-2422 and both are ought to be given to

the petitioner but as there is a restraint order from Calcutta High Court,

therefore, the respondents will be at liberty to either get the said stay order

vacated and grant the ad hoc licence of train Nos.2443-2444 to the petitioner

on proportionate increase in the existing licence fee or alternatively it will be

open to the respondents to invite fresh tenders in respect of both these trains

after getting the stay vacated from Calcutta High Court and also after getting

the licence dated 1st July, 2005 in favour of the petitioner pertaining to train

Nos. 2421-2422 determined. We do not agree with the submission of the

learned counsel for the respondents that grant of licence to one person for

catering in respect of different trains on the basis of same point of

origination and destination would result in monopoly of catering service.

Assuming that it will do so then the defect lies in the formulation of the

policy or its language which the respondents are free to rectify. We have not

gone into the question of integrated rake, or the trains having different

number on account of user of new or conventional coaches as that is not the

issue involved in the present case.

12. In the light of the aforesaid observations, we allow the writ petition of

the petitioner and direct the respondents to either allot/grant the licence in

respect of train Nos.2443-2444 New Delhi- Bhubaneswar Rajdhani Express

via Bokaro to the petitioner so as to terminate with its existing licence of

train Nos.2421-2422 on proportionate increase of licence fee or alternative if

it deem fit to invite fresh bid for a composite licence of both these trains

after getting the stay vacated from the Calcutta High Court and also after

taking steps to shorten the licence of the existing train Nos.2421-2422 if it is

permissible under the Contract dated 1st July, 2005.

13. In terms of the above directions, the writ petition stands disposed of.

No order as to costs.

V.K.SHALI, J

MUKUL MUDGAL,J September 05, 2008 RN