Karnataka High Court

M/S Seema Caterers vs The Union Of India on 19 February, 2024

Author: M. Nagaprasanna

Bench: M. Nagaprasanna

                           1



Reserved on   : 23.01.2024
Pronounced on : 19.02.2024


       IN THE HIGH COURT OF KARNATAKA AT BENGALURU

         DATED THIS THE 19TH DAY OF FEBRUARY, 2024

                          BEFORE

         THE HON'BLE MR. JUSTICE M. NAGAPRASANNA

         WRIT PETITION No.24488 OF 2023 (GM - RES)


BETWEEN:

M/S. SEEMA CATERERS
SITUATED AT 777, 9TH MAIN ROAD,
3RD BLOCK, 1ST STAGE,
HBR LAYOUT,
BENGALURU - 560 043
REPRESENTED BY ITS
PARTNERSHIP CONCERN.
                                             ... PETITIONER

(BY SRI JAYAKUMAR S.PATIL, SR.ADVOCATE A/W
    SRI MAHAMMAD TAHIR A., ADVOCATE)

AND:

1 . THE UNION OF INDIA
    THE MINISTRY OF RAILWAYS,
    RAISINA ROAD,
    NEW DELHI - 110 001
    REPRESENTED BY ITS SECRETARY.

2 . THE EXECUTIVE DIRECTOR
    (TOURISM AND CATERING)
                          2



   THE DEPARTMENT OF
   TOURISM AND CATERING,
   THE RAILWAY BOARD,
   RAIL BHAWAN, RAISINA ROAD,
   NEW DELHI - 110 001.

3 . THE DIRECTOR
    (TOURISM AND CATERING)
    THE DEPARTMENT OF
    TOURISM AND CATERING,
    THE RAILWAY BOARD,
    RAIL BHAWAN,
    RAISINA ROAD,
    NEW DELHI - 110 001.

4 . THE SENIOR DIVISIONAL
    COMMERCIAL MANAGER
    (THE SR. DCM)
    SOUTH WESTERN RAILWAYS,
    BENGALURU DIVISION,
    DIVISIONAL OFFICE,
    COMMERCIAL BRANCH,
    BENGALURU - 560 023.

5 . THE CHIEF COMMERCIAL MANAGER
    THE CCM PRINCIPAL
    SOUTH WESTERN RAILWAYS,
    HEAD QUARTERS OFFICE,
    2ND FLOOR, WEST WING,
    GADAG ROAD,
    HUBBALLI - 580 020.
                                        ... RESPONDENTS

(BY SRI GOWTHAMDEV C.ULLAL, CGC FOR RESPONDENTS)


    THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR
                                  3



RELEVANT RECORD PENDING ON THE FILE OF RESPONDENTS -
RAILWAYS; QUASH THE IMPUGNED COMMERCIAL CIRCULAR 61 OF
2017 DTD 05.09.2017 AS MULTI PURPOSE STALL (MPS) POLICY -
2017 ISSUED BY THE R2 - THE RAILWAY BOARD THE MINISTRY OF
RAILWAYS VIDE ANNEXURE-G BY TREATING IT AS UNJUST,
UNFAIR AND ULTRA VIRES AND ETC.,

     THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED
FOR ORDERS ON 23.01.2024, COMING ON FOR PRONOUNCEMENT
THIS DAY, THE COURT MADE THE FOLLOWING:-

                                 ORDER

The petitioner is before this Court calling in question Circular

No.61 of 2017 issued by the respondents/Ministry

of Railways and has sought quashment of a licence agreement

dated 19-09-2023 and has also sought certain slew of reliefs

leading to renewal of licences in terms of the judgment of the Apex

Court in Writ Petition No.373 of 2017 delivered on 30-10-2018.

2. Facts, in brief, adumbrated are as follows:-

The petitioner is a licensee from the hands of the

respondents/Railways in Platform No.6 Yeshwanthpur Railway

Station; Platform No.2 at Krishnarajapuram Railway Station and at

Platform No.2 at Cantonment Railway Station, Bengaluru. The

Ministry of Railways to streamline management of miscellaneous

stalls/trolleys at par with other catering and vending units at

different category of stations brings out a commercial circular in

Commercial Circular No.96 of 2007. The said commercial circular

undergoes a change in Commercial Circular No.35 of 2010 notified

on 21-07-2010. The petitioner here comes into the picture when it

was awarded a contract of miscellaneous stalls at Platform No.6 of

Yeshwanthpur Railway Station and other platforms detailed

hereinabove. This Circular permitted renewal of licence on expiry of

the term of 5 years to any awardee of the contract. The petitioner

on 31-1-2011 was awarded a contract for a period of five years

which had commenced from 15-02-2011. Therefore, the said

contract had come to an end on 14-02-2016. The petitioner

accepted the terms of the contract and began to vend in the stalls

at the platforms that were allotted to it in terms of the said

contract.

3. After expiry of the term of the contract, the contract of the

petitioner stood renewed but not under the earlier policy but under

a policy that was notified in terms of certain orders passed by the

Apex Court. The Policy was MPS Policy notified on 05-09-2017. The

petitioner accepted terms of the policy and was awarded the

contract afresh on 05-02-2018. The letter of award of contract

depicted that the contract is awarded in terms of the policy dated

31-10-2017. This policy did not contain any clause of renewal on

expiry of the term. The petitioner on account of onset of COVID-19

was also granted 282 days of extension which would come to an

end on 09-11-2023. The petitioner has knocked at the doors of this

Court by filing the present petition on 27-10-2023 contending that

the petitioner is entitled for renewal of a further three years in

terms of the Policy of 2010 under which it was awarded the contract

earlier.

4. Heard Sri Jayakumar S. Patil, learned senior counsel

appearing for the petitioner and Sri Gauthamdev C.Ullal, learned

Central Government Counsel appearing for the respondents.

5. The learned senior counsel Sri Jayakumar S.Patil appearing

for the petitioner would vehemently contend that the petitioner is

entitled for extension/renewal of license in terms of the earlier

policy, as under the present policy the petitioner was asked to sign

on the dotted line which did not contain the clause for renewal. He

would also submit that the High Court of Delhi in identical

circumstances, calling in question an identical act of the

respondent, has continued the contract in terms of the earlier policy

when the present policy came to be challenged before the said High

Court. He would seek identical relief at the hands of this Court to

the petitioner as well.

6. On the other hand, learned counsel Sri Gauthamdev C.Ullal

representing the respondents would vehemently refute the

submissions contending that the petitioner has enjoyed the award

of contract in terms of the policy of 2017 and is now wanting to

turn around and challenge the subsequent action of entering into

license agreement in terms of the new policy. The petitioner is not

entitled to renewal under the earlier policy of 2010 and is bound by

the terms and conditions of policy of the year 2017. The learned

counsel would further submit that the petitioner having enjoyed the

benefit of virtual five years from the date on which it signed the

conversion to MPS Policy 2017 is now wanting to turn around and

challenge the said policy. He would contend that the judgment

relied on by the learned senior counsel was with reference to

catering policy and not MPS policy. The Apex Court has not

considered MPS policy in the said case. He would, therefore, submit

that the petition be dismissed, as the petitioner, contrary to the

policy, continued to hold the stall.

7. I have given my anxious consideration to the submissions

made by the respective learned counsel and have perused the

material on record.

8. The afore-narrated facts are not in dispute and as such

they do not require reiteration. Railways notified a circular which

was titled as 'clarification for management of Miscellaneous

Stalls/Trolleys'. This was through Commercial Circular No.96 of

2007 which comes to be notified on 17-12-2007. Some of the

clauses that are germane to be noticed are clauses 1.1 and 6. They

read as follows:

"1.1 All the curio stalls, toy stalls and multipurpose stalls except the units selling exclusively catering items, books/magazines and medicines will come under the

broad category of Miscellaneous Stalls/Trolleys which will sell such items that are essential and incidental to the travelling needs of passengers like locks, chains, inflatable pillows, towels, napkins, games, toys, toiletry items, batteries, local handicrafts, gift items, curio items, packed snacks/biscuit and beverages, 'Rail Neer' and other approved BIS certified packaged drinking water, chocolates, mobile recharge coupons etc. Further, the competent authority may allow the sale of common medicines from Miscellaneous Stalls/Trolleys for which Doctor's prescription is not required subject to the condition that alternative medical stall/corner facility is not available or the existing facility is not adequate at the platforms or in railway premises. Necessary drug license, if required as per local State norms has to be obtained by the vendor from the State authorities for this purpose.

... ... ...

6. TENURE AND RENEWAL OF LICENCE

The tenure of license for Misc. Stalls/trolleys will be 5 (five) years.

At A, B and C category stations for general category Misc. Stalls an extension up to 3 years can be considered subject to satisfactory performance and payment of all dues. For licences given on the basis of calling of applications the renewal will be every five years in case of Misc. Stalls and trolleys of D, E and F category stations and it will be every 3 years for reserve category units at A, B and C category stations subject to satisfactory performance and payment of all dues.

At the time of extension/renewal of the unit, license fee should be enhanced based on sales assessment subject to a minimum of 10% increase on the prevailing license fee of the stall/trolley. The monitoring of performance of the licensee should be strengthened during the period."

(Emphasis added)

Clause 1.1 depicts the purpose for which the policy is notified. It is

for vending of Curio, Toys and Multipurpose items all in the

multipurpose stalls. Clause-6 (supra) depicted tenure and renewal

of license. The tenure was five years and miscellaneous stalls could

seek extension for another three years on satisfactory performance

of contract. Then comes another policy by name 'Catering Policy

2010 notified on 21-07-2010'. The said policy has nothing to do

with the present petition as it was for catering purposes. The

petitioner participates in a tender notified by the Railways for

Miscellaneous Stalls and a contract is awarded to the petitioner in

Platform No.6 at Yeshwanthpur Railway Station; Platform No.2 at

Krishnarajapuram Railway Station and at Platform No.2 at

Cantonment Railway Station, Bengaluru. The contract is awarded

on 31-01-2011 for a period of five years. For illustration, the

contract awarded in one of the platforms i.e., platform No.6 is

quoted, the clauses that are germane are as follows:

"1. The Railway Administration is pleased to inform you that your application is considered for award of contract for Miscellaneous Stall on Yesvantpur Railway Station, Platform No.6 for a period of 5 years from 15.2.11.

The following payments are to be made immediate

A Licensee fee 15.2.11 to 14.2.12 : Rs.2,09,000 B Security Deposit : Rs. 10,000 C Total : Rs. 2,19,000 D Total due payable (Rs.14,600 paid Towards EMD). Adjusted towards - Rs. 2,04,400 L/Fee Rs.2,19,000-14,600.

1. You are hereby directed to take position of the stall by erecting temporary structure of size 10x6=60 sq.ft. at your own cost as per the design of the Modular catering stall erected by Indian railway Catering and Tourism corporation limited at Bangalore City Railway Station. A rough sketch along with a plan should be submitted to this office for approval before erection of the stall. The date of opening the stall should be informed.

2. The contract/license will be normally for a period of five years from 15.2.11 for business, subject to renewal if your performance is found satisfactory. The contract is liable to be summarily termination in the event of breach of any of the condition including unsatisfactory service, subletting or any other improper act on your part. The contract is ordinarily terminable on one months notice in writing on either side without assigning any reason"

During subsistence of the contract of the petitioner, the

respondents notified a new 'Miscellaneous Article Stalls/Trolleys

Policy 2012'. It was depicted that all the existing operational

miscellaneous article licenses would be continued under the newly

notified policy of 2012. Clause 18 of the said policy deals with

existing contracts under the old Policy which reads as follows:

"18. APPLICABILITY OF THE NEW MISC. ARTICLE POLICY:

18.1 The revised Misc. Article Policy will be applicable with immediate effect prospectively i.e., from the date of issue.

This policy supersedes all prior policy circulars issued from time to time unless specifically referred to in this policy document.

18.2 DRM should renew all existing operational Misc. Art. Units licenses agreements which have expired or are due for expiry in the next 6 months by giving an extension, subject to a maximum extension of six months from the date of issue of this Policy.

18.3 All existing operational Misc. Article licenses awarded by Railways will be governed by the Misc. Article Policy, 2007 (CC- 96/2007 dated 17-12-2007) up to the validity of their contractual period. Thereafter, a renewal will be given to them as per proviso mentioned in para No.7 & 8 of this Policy.

18.4 This Policy will also apply in case of award of fresh licenses and licenses awarded in the event of termination, non- renewal, vacation etc. of the existing licensees."

The tenure of licence under this policy was also five years

extendable to three years. Clause 8 deals with renewal of licence

and Clause 8.1 observes that renewal will not be a matter of right.

Clause 8 reads as follows:

"8. RENEWAL OF LICENCE:

8.1 "Renewal will not be a matter of right". The licensee must apply for renewal minimum six months in advance before the expiry of the contract. Therefore, on completion of the contractual period of Misc. Article Stalls i.e., A to F category of stations, the license may be renewed by the Railways on the recommendation of the committee comprising JAG/Sr. Scale Officers from Commercial, Finance and Civil Engg. Deptt. As constituted by DRM. The committee shall take into account all

aspects and make recommendations for renewal or otherwise as the case may be based on satisfactory performance, payment of all dues and arrears and withdrawal of court case, if any. Based on the recommendations of the committee, the renewal of Misc.

Article Stalls may be permitted by the DRM for all category of stations."

(Emphasis added)

This is the marked difference between the earlier policy and the

replaced policy. Therefore, the existing policy came within the

ambit of 2012 policy. The contract of the petitioner was to come to

an end on 15-02-2016 in terms of the award of contract dated

15-02-2011 quoted supra. The contract is continued for a period of

three years from 15-02-2016 to 14-02-2019. This is in terms of the

afore-quoted policy. During the extended period of contract, the

respondents notify another policy. This policy was styled as

Multipurpose Stall (MPS) Policy dated 05-09-2017. The policy was

for the purpose of miscellaneous and curio stalls. Clause 1.2 of the

policy reads as follows:

"1.2 Items permitted for sale at Multi Purpose Stalls are miscellaneous items that satisfy the travelling needs of passengers including artifacts and items of local and regional importance, PAD items (Proprietary Article Depot) as per the extant procedure of Zonal Railway, PDW (Packaged

Drinking Water) as per instructions issued vide Board's letter No.2015/TG-III /631/8 dated 12-02-

2016 and revised from time to time, books/magazines/news paper, chemist stall items- OTC medicines and non-pharmacy items viz., dry/spray milk powder etc. Zonal Railways shall ensure that all MPS stalls must display and sell books pertaining to Indian Tradition, Culture, Values, Morals and History. It shall be mandatory for them to sell and display prominently the Zonal Railway Time Table and 'Trains at Glance' and any other official publications as may be mandated by the Zonal Railway or Division from time to time."

(Emphasis added)

Clause 11 relates to existing stalls. It reads as follows:

"11. Applicability of this policy on the existing stalls.

11.1 No new allotment, renewal, extension of the Bookstall/table (other than philanthropic), Misc. Stalls/trolley, Chemist Stalls/corner etc. shall be done by the railways as of now. All such existing stalls/trolley etc. shall be allowed for conversion into MPS as per the provisions of this policy. However, in case they do not opt for conversion into MPS, the same may be allowed to continue till expiry of the existing agreement/arrangement in vogue.

11.2 After expiry of the current agreement period, space shall be standardized, identified and allotted by Zonal Railways for new MPS as per the extant procedure.

11.3 The existing Bookstall/table (other than philanthropic), Misc. Stalls/trolley, Chemist Stalls/corner etc. shall be given an option to convert to MPS subject to payment of Licence fee as quoted by the prospective bidder for similarly

placed MPS unit at the station/platform. The tenure of 5 years shall commence from the date of conversion of existing stall into MPS.

11.4 The one-time division-wise exercise of providing option of conversion to existing licensees and conversion of existing stalls into MPS shall be completed by the Divisions within 90 days from the date of issue of this policy.

11.5 This Multi Purpose Stall policy will be applicable with immediate effect i.e., from the date of issue. This policy supersedes Misc. Article Policy 2012, Chemist Stall Policy 2000 & 2008 and Bookstall Policies of 2004 and their related instructions, unless specifically referred to in this policy document."

(Emphasis added)

In the afore-quoted clauses the railways notified new allotment,

renewal or extension of bookstall/table, Miscellaneous Staff/ Trolley

inter alia. The petitioner was already under a contract of

Miscellaneous Stall. Clause 11.3 directed that all the licensees of

existing miscellaneous stalls inter alia would be given an option to

convert to MPS i.e., the present policy and the tenure shall

commence from the date of conversion. Here lies the entire issue

in the lis.

9. As observed hereinabove, the tenure of the petitioner was

to come to an end on 14-02-2019. The advantage in the new policy

was that if they would convert from old policy to the new policy,

from the date of such conversion they would get five years.

Looking at the huge advantage, the petitioner accepts for

conversion in to this policy on his volition.

10. The petitioner accepts the conversion of policy

communication dated 31-10-2017 and communicates its acceptance

on 17-11-2017. Pursuant to the said communication comes a letter

of award dated 05-02-2018. The clauses that are germane are as

follows:

"No.B/C.79/Catg./MPS/2018 Date: 05-02-2018

M/s Seema Caterers, Licensee, Miscellaneous Stall, Platform Number 6, No.32, 61/3277, K.Azeez Road, Bangarpet-563 114.

LETTER OF AWARD Sub: Conversion of existing Miscellaneous stall into MPS (Multi Purpose Stall) on Platform No.6 at Yesvantpur Railway Station.

Ref: i. Tender Notice No.01/2009/MISC STALL/ SBC DIVISION dated 20.08.2009.

ii. LOA No.B/C 79//misc.Stall/BNC PF No.2/11 dated 31.01.2011.

iii. Renewal letter No.B/C.79/ Catg./Misc. Stalls/ Renewal/2016 dated 13.12.2016.

iv. Railway Board Letter No.2015/TG-III/461/2 of dated 5.09.2017.

v. This office letter No.B/C.79/Catg/Convert/ SBC/2017 dated 31.10.2017.

vi. Your request dated 17.11.2017.

----

A Miscellaneous Stall on Platform No.06 at Yesvantpur Railway Station was allotted to you vide this office letter dated 31.01.2011 for a period of Five Years with initial license fee of Rs.2,09,000/- per annum.

A renewal was granted for a period of Three Years from 15.2.16 to 14.02.2019 with annual license fee of Rs.4,24,080/- per annum vide this office letter dated 13.12.2016.

Railway Board has issued a Multi Purpose Stall Policy bearing Number 2015/TG-III/461/2 dated 05.09.2017, which gives directive for conversion of existing Miscellaneous stall into MPS. As per policy, all existing miscellaneous stalls/Book Stalls/Chemist Stalls are given an option to convert the existing Miscellaneous Stalls/Book Stalls/Chemist Stalls into Multi-Purpose Stalls. Accordingly, you were advised to offer your willingness to convert your miscellaneous stall into MPS vide this office letter dated 31.10.2017.

We have received your request for conversion of existing Miscellaneous Stall on PF-06 at Yesvantpur Railway Station vide your letter dated 17.11.2017. Your request has been considered subject to the following terms and conditions.

1. The period of license of MPS stall is deemed from 01.02.2018.

2. The period of license will be valid for a period of Five years from 01.02.2018 to 31.01.2023 unless

terminated due to breach of agreement. There will be no renewal or extension as per the MPS Policy.

3. The provisional license fee for the converted Multipurpose policy will be initially the same as existing license fee i.e., Rs.4,24,080/-."

            ...                 ...                  ...      ..."


                                           (Emphasis added)

The afore-quoted letter of award issued to the petitioner on

05-02-2018 would steer clear the submission made by the learned

senior counsel for the petitioner which would be that it is not a

catering policy of 2010; it is a multipurpose stall policy dated 05-

09-2017 and the petitioner on its own volition gets conversion from

the policy subsisting to the new multipurpose stall policy. The

period of licence under afore-quoted letter of award was to be

between 01-02-2018 to 31-01-2023. It was made clear that

there will no renewal or extension in terms of MPS policy. The

petitioner was thus completely aware that there can be no renewal

of the contract under the MPS policy. Likewise, the petitioner was

issued same letter of award for all the stalls that it had in different

Railway Stations. The clauses are common.

11. When Globe was engulfed with COVID-19 the Railways

took a policy decision to extend the contract for a period of 282

days. Thus, the petitioner got extension up to 09-11-2023. The

contract had to come to an end on 09-11-2023. At that point in

time, the petitioner files the subject petition on 27-10-2023. The

prayers sought are rather surprising. What is called in question is a

multipurpose stall policy of the year 2017 which the petitioner has

taken advantage of and continued his contract up to 09-11-2023

including 282 days extension; calls in question certain agreements

entered into on 19-09-2023 again on its own volition and also seeks

renewal of licenses in terms of the judgment of the Apex Court in

Civil Appeal No.618-620 of 2016 and Writ Petition (Civil) No.373 of

2017. Therefore, it becomes germane to notice the judgment of

the Apex Court in Civil Appeal Nos.618-620 of 2016. The

respondents therein were S.C.R. Caterers, Dry Fruits, Fruit Juice

Stalls Welfare Association. By their very name they were caterers.

The claim of those respondents which was accepted by the Apex

Court was that they were entitled to get their licenses renewed

under the Catering Policy 2010. The entire order passed by the

Apex Court deals with Catering Policy 2010 and is not with regard

to Multi Purpose Stall Policy. Catering Policy was not multipurpose

stall. What the Apex Court finally observes is as follows:

"27. Therefore, we have to hold that the provisions of the Catering Policy, 2010 are applicable to the concerned respondents. The action of the railways in not granting renewals of the licenses to the members of the respondents is arbitrary, unreasonable, unfair and discriminatory and the same cannot be allowed to sustain in law.

28. For the reasons stated supra, this Court cannot interfere with the impugned judgment and order of the High Court. The Civil Appeals are dismissed. The order dated 11-04- 2014 granting stay of he impugned order shall stands vacated. We, however, make it clear that only those licensees may be eligible for renewal of their licenses who can declare on affidavit that they do not have the license of more than one shop or kiosk in their name or benami license at the railway stations with periodical reasonable increase of license fee. All pending applications are disposed of."

(Emphasis supplied)

The Apex Court holds that the provisions of the Catering Policy are

applicable to concerned respondents and they are entitled to renew

their licenses. Therefore, the Apex Court was considering only

Catering Policy licenses which were of the year 2010.

12. The petitioner, in this petition, is not issued a letter of

award under the Catering Policy of 2010, but under the

Multipurpose Stall Policy of 2017. The two are entirely different.

Much submissions made that all the policies are the same and the

petitioner is entitled to renewal of license under the Catering Policy

were all obfuscatory and nothing in clarity. Another order of the

Apex Court is relied on by the learned senior counsel for the