Shiv Kumar & Anr vs Union Of India & Ors
2014 Latest Caselaw 5573 Del

           *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                          Date of decision: 10th November, 2014

+      LPA 887/2013, CMs No.18573/2013 (for stay) & 12873/0214 (for
       filing additional affidavit)

       SH GHANSHYAM & ORS                                   ..... Appellants
                  Through:                   Mr. Mahipal Singh, Adv.

                                          Versus

       UNION OF INDIA & ORS                               ..... Respondents

                    Through:                 Mr. Joydeep Mazumdar and Mr.
                                             Rohit Dutta, Advs. for Northern
                                             Railways.
                                      AND

+      LPA 49/2014, CMs No.1107/2014 (for stay) & 1109/2014 (for

       condonation of 20 days delay in filing the appeal)

       O.P. GUPTA                                               ..... Appellant
                               Through:      Mr. Mahipal Singh, Adv.

                                      Versus

       UNION OF INDIA & ORS                                   ..... Respondents
                    Through:                 Mr. Joydeep Mazumdar and Mr.
                                             Rohit Dutta, Advs. for Northern
                                             Railways.

                                          AND





 +      LPA 76/2014, CMs No.1546/2014 (for stay) & 1548/2014 (for

       condonation of 33 days delay in filing the appeal)

       SHIV KUMAR & ANR                                         ..... Appellants
                    Through:               Mr. Mahipal Singh, Adv.

                                      Versus

       UNION OF INDIA & ORS                               ..... Respondents
                     Through:              Mr. Joydeep Mazumdar and Mr.
                                           Rohit Dutta, Advs. for Northern
                                           Railways.
CORAM:-
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J

1. Each of the three intra-court appeals impugns the common judgment

dated 28th October, 2013 of the learned Single Judge of this Court of

dismissal of W.P.(C) Nos.6990/2007, 3322/2008 and 10539/2009 preferred

by the three sets of appellants respectively.

2. Though LPA Nos. 49/2014 and 76/2014 are accompanied with

applications for condonation of 20 and 33 days delay respectively in filing

thereof and no formal order has been made condoning the said delay but

arguments on all the three appeals were heard together, without regard to the

said aspect and judgment reserved. We accordingly now formally allow the

applications in LPA Nos.49/2014 and 76/2014 for condonation of delay.

3. The writ petitions from which these appeals arise were filed pleading

that:-

(i) The appellants are engaged in the business of Catering /

Vending Contractors and have been providing catering /

vending services to the passengers of Northern Railway at

different railway stations of Delhi Division for the last several

decades and their licences were being renewed from time to

time;

(ii) Prior to the year 2000, the respondent Railways were charging

lumpsum licence fee according to the class of the stations at

which the catering / vending contractor had been granted

licence of stalls / trolleys and keeping in mind other relevant

factors viz. the number of vendors, salesmen / workers / bearers

allowed, importance of station from the point of view of

passenger traffic and demand for items sold, location of the stall

at the railway station etc.;

(iii) However in the year 2000, the respondent Railways issued new

guidelines and started charging licence fee on the basis of 12%

of the annual sales turnover and which resulted in increase of 4

to 5 times from the licence fee being earlier paid;

(iv) However in August, 2007, the respondent Railways suddenly

informed that the appellants are liable to pay arrears with effect

from 1st January, 2006 in accordance with some letter dated 9th

December, 2005 issued by the Railway Board;

(v) On further inquiry, it was learnt that the said demand was in

pursuance to the Commercial Circular No.51 of 2005 dated 9th

December, 2005 of the Railway Board with respect to charging

of licence fee for D, E and F category of railway stations (with

which all the appellants are concerned) and though providing

for licence fee to be at 12% of the sales turnover, further

providing a lumpsum minimum amount to be charged as laid

down therein.

The writ petitions were filed impugning the said Commercial Circular

No.51 of 2005 dated 9th December, 2005 and the demand in pursuance

thereto.

4. The learned Single Judge has dismissed the writ petitions

finding/observing/holding that:-

(a) Though the Railway Board vide Commercial Circular No.70 of

2006 dated 11th August, 2006 partially modified by Commercial

Circular No.75 of 2006 dated 21st September, 2006 in

supersession of the earlier Commercial Circular No.51 of 2005

dated 9th December, 2005 had directed that Divisional Railway

Managers (DRMs) in concurrence with the Divisional Finance

concerned will fix the minimum licence fee at D, E and F

category railway stations, based on rational factors like GDP,

purchasing power, land value, type of clientele, number of

passengers, location of units but it was later realized that the

same was not feasible and accordingly vide letter dated 18 th

April, 2007 of the Chief Commercial Manager, it was directed

that the Commercial Circular No.51 of 2005 dated 9th

December, 2005 be followed.

(b) The railway stations being under the management and control

of Indian Railways and the appellants being its licensees, the

respondent Railways are entitled in law to fix such licence fee

as deemed appropriate by them and if the appellants want to

continue as a licensees, they are under a legal obligation to pay

such licence fee as is fixed from time to time and it would be

competent to the respondent Railways as licensor to terminate

the licence in case the licence fee fixed is not paid.

(c) Reliance was placed on Lala Ram Vs. Union of India (Civil

Appeal No.243-247/2003) reported as 2013 SCC Online SC 91

where the Supreme Court upheld the right of the Railways to

increase the licence fee.

(d) In view of the letter dated 18th April, 2007 (supra), the reliance

by the appellants on the Commercial Circulars No.70 and 75 of

2006 was misconceived.

(e) Though the counsel for the appellants without pleading it, also

sought to challenge the classification by the respondent

Railways of the railway stations but the appellants have no

locus to challenge the same unless it was shown that the

classification is based on grounds which are wholly irrational,

arbitrary and unreasonable and which the appellants had failed

to do; even otherwise a perusal of the catering policy showed

the classification to be reasonable and rational.

Accordingly, the writ petitions were dismissed.

5. It would thus be seen that the validity of the Commercial Circular

No.51 of 2005 dated 9th December, 2005 challenging which the writ

petitions were filed, was not adjudicated, perhaps in view of the subsequent

developments.

6. The counsel for the appellants before us also, without challenging the

Commercial Circular No.51 of 2005 dated 9th December, 2005 and

challenging which the writ petitions were filed, has only argued that:-

(I) Since the said Circular No.51 of 2005 dated 9th December, 2005

has been superseded by subsequent Commercial Circulars

No.70 and 75 of 2006, all that the appellants are seeking is for

being governed by the said Circulars No.70 and 75 of 2006 and

not by the superseded Commercial Circular No.51 of 2005

dated 9th December, 2005 as is being illegally done by the

respondent Railways. With respect to the reasoning given by

the learned Single Judge, of the Circulars No.70 and 75 of 2006

having stood superseded by the letter dated 18 th April, 2007, it

is argued that while the Circulars are issued by the Railway

Board, the letter dated 18th April, 2007 is of the Chief

Commercial Manager and the Chief Commercial Manager

could not have changed the decision taken by the Railway

Boards.

(II) The application of the Commercial Circular No.51 of 2005

dated 9th December, 2005 by the respondent Railways qua the

category D, E and F stations is resulting in the respondent

Railways charging / claiming licence fee from the category D,

E and F railway stations (which are supposed to be low revenue

earning) at a rate higher than from the category A, B and C

railway stations; reliance in this regard is placed on responses

received to the queries under the RTI Act with respect to the

licence fee of category A, B and C stations.

7. Per contra, the counsel for the respondent Railways argued that:

(A) The appellants were the licensees / vendors of the respondent

Railways for nearly 60 years;

(B) The appellants during the pendency of the writ petitions from

which these appeals arise were permitted to continue by paying

50% of the dues;

(C) Though the learned Single Judge ultimately dismissed the writ

petitions and there is no stay of that order in these appeals but

the appellants still did not pay the balance licence fee which

had / has accumulated as due from them;

(D) The licences of the appellants have been terminated and the

appellants are now no longer the licensees of the respondent

Railways and have been thrown out from the respective railway

stations.

8. Though the contention of the appellants that the Chief Commercial

Manager of the respondent Railways vide letter dated 18th April, 2007 could

not have negated the Commercial Circulars No.70 and 75 of 2006 issued by

the Railway Board cannot be said to be without any merit but the position as

aforesaid which emerges is that there have been substantial subsequent

developments since the filing of the writ petitions. As aforesaid, writ

petitions were filed impugning the Commercial Circular No.51 of 2005

dated 9th December, 2005 and which stood superseded by Commercial

Circulars No.70 and 75 of 2006. The learned Single Judge has also decided

the writ petitions from which these appeals arise taking note of the said

subsequent as well as of the yet further subsequent event of the letter dated

18th April, 2007 of the Chief Commercial Manager of the respondent

Railways, though all without any pleadings and which has resulted in the

argument aforesaid raised before us, either being not raised before the

learned Single Judge or being not answered in the impugned judgment. Now

we have been told that the licences of the appellants have been terminated

and the appellants have been removed from the railway stations of which

they were earlier the licensees. However there are no pleadings whatsoever

on the said aspect. We, in the absence of pleadings, are unable to decide the

contentions of the appellants. Moreover, substantial time has elapsed since

2006-07 also. We do not know what is the policy today with respect to such

licences. From the order dated 11th April, 2014 of the Supreme Court in

Special Leave to Appeals (Civil) No.9921-9923/2014 titled Senior

Divisional Commercial Manager Vs. S.C.R. Caterers, Dry Fruits, F.J.S.W.

Association handed over by the counsel for the respondents during the

hearing, it appears that now the respondent Railways is resorting to tenders

in this regard. The website of the Railways shows the Railway Board to

have formulated and brought into force a new catering policy in the year

2010 and which provides for all existing operational catering licences to be

governed by the earlier policy only upto the validity of their contractual

period. If that is so, it would not be proper for us to in these appeals pass

any orders which would not be in consonance with the prevalent situations.

Even during the hearing there was no clarity on the said aspects.

9. We may also notice the contention of the counsel for the respondent

Railways that one of the appellants has also filed a Civil Suit with respect to

the same cause of action and which is pending consideration. On the basis

thereof, it was argued that the writ petition in any case is not maintainable.

10. We accordingly dispose of these appeals giving leave and liberty to

the appellants to if remain aggrieved including from the non application of

Commercial Circulars No.70 and 75 of 2006 by the respondent Railways, if

the same are still applicable and if continue as licensees, to file a fresh

proceeding.

In the circumstances, no costs.

RAJIV SAHAI ENDLAW, J

CHIEF JUSTICE NOVEMBER 10, 2014 'gsr'