Gauhati High Court
N.F. Railway Vending And Catering ... vs The Union Of India And Anr on 24 May, 2022
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GAHC010234382018
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : Arb.A./21/2015
N.F. RAILWAY VENDING and CATERING CONTRACTORS ASSOCIATION
LUMDING DIVISION REPRESENTED BY ITS SECY.
VERSUS
THE UNION OF INDIA and ANR
REPRESENTED BY THE GENERAL MANAGER
N.F. RAILWAY
MALIGAON
GUWAHATI
ASSAM.
2:DIVISIONAL RAILWAY MANAGER C
N.F. RAILWAY
LUMDING DIVISION
LUMDING
ASSAM.
------------
Advocate for : MS.M CHOUDHURY
Advocate for : MR. B SHARMA appearing for THE UNION OF INDIA and ANR
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BEFORE
HON'BLE MR. JUSTICE MANASH RANJAN PATHAK
ORDER
24-05-2022
Heard Mr. Talat Hamid Hazarika, learned counsel for the appellant and Mr. Brijesh
Sarma, learned Standing counsel, Railways for the respondent Nos. 1 and 2.
N F Railway Vending and Catering Contractors Association, Lumding Division has
preferred this Arbitration Appeal under Section 37 of the Arbitration and Conciliation Act,
1996 against the judgment dated 04.04.2014 passed by the Court of learned Additional
District Judge No. 1, Kamrup (Metro), Guwahati dismissing the application filed by the
appellant under Section 34 of said 1996 Act praying to set aside and quash the award dated
12.06.2009 passed by the Sole Arbitrator Dy.CAO [Deputy Chief Administrative Officer] (Cash
and Pay) N F Railway, Maligaon whereby the Sole Arbitrator held as follows:--
1. "The Revision of the licence fee by the respondent in terms of Railway Board's Policy guidelines is
within the terms of the agreement (Para 61(a). Therefore, there is no ground for setting aside and
quashing the revision as applied for by the claimant.
2. Revision of licence fee by the respondent with retrospective effect requires the consent of the
licence in terms of Para 61(b) of the Agreement. Therefore, the proposal for recovery of the arrear
licence fee from 01.10.2000 i.e. date from which the New Catering Policy has been made effective
without giving prior notice to the licence and obtaining their consent is violative of the provision
under Para 61(b) of the Agreement and therefore cannot be acted upon under the Agreement.
Respondent Railway Administration may, however, recover the revised licence fee from the date of
actual revision of the licence fee without insisting upon retrospective effect. In case any licencee
does not give consent to pay the revised licence fee, it will be open to him/her to surrender the
licence after payment of the licence fee at the pre-revised rates.
3. The claimants are not entitled to continue with the pre-revised licence fee even during the
currency of the agreement as because the agreement provides for periodical revision of licence fee
in terms of Para 61(a). Refusal to pay the enhanced licence fee may invite termination of the
agreement as per the agreed terms and therefore the claimants are required to Pay the enhanced
licence fee as decided by the Railway Authority.
4. The Railways Act, 1989, more particularly chapter IV delegates the Railway Administration ample
powers to execute all necessary works relating to maintenance and using the Railway. Hence, the
contention of the claimant that awarding of licence and charging of licence fee is not within the
provision of Railways Act, 1989, is not correct.
5. As indicated in the Judgment and order dated 17.08.2000 passed by the Hon'ble Gauhati High
Court, the claimants are directed to pay the revised licence fee within a period of 60 days from this
award. If the revised licence fee is not paid within the aforesaid period it will be open for the
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respondent authorities to terminate their licence in terms of the agreement.
6. The Civil appeal No(s) 4897-4901/2002 filed by similarly situated parties at the Hon'ble Supreme
Court of India have since been dismissed for want of merit vide Hon'ble Supreme Court's Order dt.
29.03.05 and no advantage is left due to the Claimants from these appeals.
7. Each party will bear the cost of Arbitration, Stamp duty and all other expenses incurred in this
connection."
Members of the appellant Association are engaged in the business of vending and
catering including 'Dallah' in various Railway Stations of the State and for the said purpose
they were issued licence by the respondent Railway authorities in terms of an agreement
signed between the individual vendor(s) and the Railways. The members of the Association
are required to pay licence fee regularly in order to carry out their business in the Railway
Platforms/ Stations. By an order dated 12.11.2003 respondent Railways enhanced the licence
fee with retrospective effect from 01.10.2000 @ 12% on the sale proceeds. Being aggrieved,
the appellant as petitioner preferred a writ petition being WP(C) No. 10546/2003 before this
Court praying for setting aside the enhancement of licence fee with retrospective effect from
01.10.2000.
As the appellant/petitioner and the respondent Railways submitted that analogous
matters were disposed of by the Court on 17.08.2006 and the order passed in those cases
may be made applicable to the said writ petition. As such, the Court by order dated
24.08.2006 disposed of said WP(C) No. 10546/2003 with the observation that the decision of
the Court in case Nos. Civil Rule Nos. 2308, 2322, 2949 and 2331 of 1997 and WP(C) No.
7852/2005 shall also govern the said writ petition [WP(C) No.10546/2003].
The appellant subsequently preferred an appeal against the said order dated
24.08.2006 passed in WP(C) No. 10546/2003 being Writ Appeal No. 376/2007 which was
dismissed by Hon'ble Division Bench by order dated 24.08.2007.
In the common order dated 17.08.2006 passed in C.R. Nos. 2308, 2332, 2949, 2331
and 2343 of 1997, and WP(C) Nos. 4041, 4648/2002 and 7852/2005, the Court observed as
follows:-
"17. Upon hearing the learned counsel for the parties and as disclosed from the record available
before me, I find that there is no dispute at the bar regarding reference of the matter for
adjudication to the arbitrator as per the relevant arbitration clause. Section 89 of the CPC also
provides for settlement of such disputes outside the court by way of arbitration and these are one
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of the alternatives modes to settle the disputes which have been brought before the law court for
decision as per the adjudicatory system and this is for the public interest and proper and quick
administration of justice in the matters necessitating factual ascertainment, which the Writ Court is
not equipped with.
Clause 29 referred to above, discloses that the parties have agreed to the methodology of
resolution of the dispute arising out of the contract between the parties for adjudication by way of
arbitration on terms as referred to therein.
18. In view of the aforesaid discussions and considering the submission of the learned counsels I
am of the opinion that the interest of justice would be served if the matter is referred for
adjudication by way of arbitration in terms of Clause 29 of the agreement, more particularly the
parties having agreed to the procedure of such appointment of arbitrator by executing necessary
agreement.
19. It is observed herein that the dispute as to whether the petitioners are entitled to continue with
the licence fee in terms of the original agreement or they are required to pay the enhanced licence
fee as per the 2nd and/ or 3rd report of the recommendation committee of the railway authorities
and whether these conditions for enhancement existed or not are matters to be ascertained on
factual grounds which this Writ Court is not equipped with.
20. Accordingly the said dispute regarding the liability to pay the enhanced licence fee in terms of
the recommendation of the various committee constituted by the railway authorities be referred for
adjudication by way of arbitration as per clause 29 of the agreement.
21. The petitioners, within a period of 30 days from today shall file such necessary and required
application before the concerned authority for referring the matter as indicated above, for resolution
by way of arbitration as per clause 29 of the agreement.
22. So far the challenge of the NIT dated 11.11.2005 made in WP(C) 7852/2005 is concerned, the
impugned NIT, in view of the aforesaid discussion stands quashed and the respondent authorities
are at liberty to issue fresh NIT relating the award of contracts in the related trains. On issuance of
such NIT afresh the petitioners would be entitled to participate in the same, but in issuing such NIT
the authorities shall not insist upon those offending notes in the clause regarding the turnover of
outstanding licence fee, if in the meantime the arbitral proceeding is not concluded. It is however
made clear that this embargo would be applicable so far as the petitioners presently operating the
pantry car in the related trains are concerned.
23. It is further directed that the petitioners would be bound by the decisions of the arbitrator and
if the arbitrator decides that the petitioners are liable to pay the licence fee in terms of the
recommendation of the committees of the railway authorities, as claimed by the respondent
authorities they shall pay such arrear amount within a period of 60 days of such decision. If the
licence fee is not paid within the aforesaid period in the event they are found liable by the arbitrator
then it will be open for the respondent authorities to terminate their licence, provided they are
awarded the contract after issuance of the fresh NIT.
24. With the aforesaid directions and observations this batch of writ petitions stands closed. It is
further made clear that till the next allotment of the contract after issuance of fresh NIT is made the
present arrangement, as existing on today, shall continue."
During the deliberation of the order Mr. T. H. Hazarika, learned counsel, on instruction of
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the appellants, submitted the matter has been settled outside the Court and has become
infructuous and as such appellants shall not press the appeal.
In view of the above, this Arbitration Appeal being not pressed, stands dismissed.
The interim order passed earlier on 23.12.2015 in I.A.(C) No.2851/2015 in Arb. Appeal
No.21/2015 accordingly stands vacated/hereby recalled.
Registry shall communicate this order forthwith to the respondents.
JUDGE
Comparing Assistant
