Ram Naresh Rai vs Union Of India
2021 Latest Caselaw 4731 Patna

          IN THE HIGH COURT OF JUDICATURE AT PATNA
                      Civil Writ Jurisdiction Case No.5706 of 2020
     ======================================================

Ram Naresh Rai Son of Dhupan Rai Resident of ashrafpur Supaul, P.S.- Patori, District- Samastipur.

... ... Petitioner/s Versus

1. Union of India through the Ministry of Railway, Eastern Central Railway, Sonpur.

2. The General Manager East Central Railway Sonpur.

3. The Commercial Manager Eastern Central Railway Sonpur.

4. The Engineer in Chief Commercial Eastern Central Railway Sonpur.

5. The Assistant Engineer Line Sonpur.

6. The Station Master Shahpur Patori Eastern Central Railway Sonpur.

... ... Respondent/s ====================================================== Appearance :

For the Petitioner/s : M/s Rajendra Narain, Sr. Advocate Surendra Kishore Thakur, Advocate For the Railways : M/s P.K.Verma, Sr. Advocate Dr. Anand Kumar, Advocate ====================================================== CORAM: HONOURABLE MR. JUSTICE PARTHA SARTHY CAV JUDGMENT Date : 20/09/2021

Heard learned senior counsel appearing for the

petitioner and learned senior counsel for the Railways.

2. The petitioner has filed the instant writ

application for the following reliefs:

"(i) For issuance of writ in appropriate nature for quash-

ing of the letter dated, 19 March 2020, issued under

the signature of Zonal Manager Eastern Central Rail-

way Sonpur, whereby and where under Tender agree-

ment Sonpur/w-5/1814 dated 6.11.2019 agreement

number/214/STALLAGE (TAHBAZARI) Has been

cancelled.

Patna High Court CWJC No.5706 of 2020 dt.20-09-2021

(ii) For direction to the respondent authorities to allow

the petitioner for holding stallage (TAHBAZARI), as

the petitioner is the highest bidder and was allotted

said tender, and has deposited earnest amount but

without calling any show cause, the respondent au-

thority's has cancelled the deed of agreement.

(iii) For direction to the respondent authority's not to dis-

turb in peaceful possession of the petitioner for hold-

ing/ and collecting rent, as the petitioner has licensee

and invested huge amount but just after few months

his agreement has been cancelled.

(iv) For any other relief or reliefs for which this Hon'ble

court deem fit and proper."

3. The case of the petitioner in brief is that a ten-

der notice dated 5.8.2019 was issued under the signature of the

Assistant Engineer Line, Sonpur inviting candidates to partici-

pate in an open tender for holding the Tahbazari fixing the date

and place for open tender, for a period of two years. The peti-

tioner being interested participated in the open tender and was

declared the highest bidder. He was selected and directed to de-

posit the earnest amount. Accordingly the petitioner deposited

the earnest amount and the deed of agreement was entered into Patna High Court CWJC No.5706 of 2020 dt.20-09-2021

between the Railways and the petitioner. A letter dated

20.12.2019 was issued under the signature of the Assistant

Zonal Engineer Line, Sonpur informing the Station Master con-

cerned that the petitioner being the highest bidder with the bid

amount of Rs.75,01,000/, an agreement has been entered into on

18.12.2019. Information was given to all that for the period

from 1.1.2020 to 31.12.2022, the petitioner has the right for

holding Tahbazari over the vacant land of the Railways as de-

scribed therein in Shahpur Patoree. All concerned were directed

to cooperate with the petitioner in his holding the Tahbazari

over the land in question. It is the case of the petitioner that pur-

suant to the direction he deposited a sum of Rs.16.30 lacs, how-

ever, only a few months later a letter dated 19.32020 was issued

under the signature of the Divisional Rail Manager (Engineer-

ing), Sonpur, cancelling the right of Tahbazari of the petitioner,

the cancellation coming in effect w.e.f. 19.2.2020. It is against

this order of cancellation of holding of Tahbazari by the peti-

tioner which is under challenge in this writ application.

4. It is submitted by learned senior counsel appear-

ing for the petitioner that from perusal of the order impugned

herein as contained in letter dated 19.3.2020 cancelling the peti-

tioner's right of holding Tahbazari, the only reason for cancella- Patna High Court CWJC No.5706 of 2020 dt.20-09-2021

tion of the concluded contract given there is the restriction im-

posed for allotment of Tahbazari vide Railway Board letter no.

2005/LML/18 dated 10.2.2005. It is submitted that from the

contents of the counter affidavit filed on behalf of the Railways

it transpires that there was some complaint submitted by the vil-

lagers and an enquiry was conducted by the Railways. It is sub-

mitted that the petitioner was not given any information with re-

spect to the complaint and the so-called enquiry was conducted

behind his back. Not having found anything lacking on part of

the petitioner nor anything adverse having transpired in the en-

quiry conducted, the respondent Railways were now relying on

the restriction imposed for allotment of Tahbazari as far back as

in February, 2005, inspite of the fact that the Tahbazari in ques-

tion has been given after following all the procedures like notice

inviting tender, participation by the applicants including the pe-

titioner herein, opening of the tenders, petitioner being selected

being the highest tenderer and an agreement in writing having

been entered into on 18.12.2019 between the Railways and the

petitioner. It is submitted that the Railways having followed the

complete procedure as laid down in law which ended with a

concluded contract having been entered into between the parties

on 18.12.2019, now the Railways could not be permitted to go Patna High Court CWJC No.5706 of 2020 dt.20-09-2021

back from the agreement on account of a 15 years old decision.

Learned senior counsel for the petitioner in support of his con-

tention relies on the Full Bench judgment in the case of M/s

Pancham Singh vs State of Bihar [AIR 1991 Pat 168 (FB)].

5. A counter affidavit as also a supplementary

counter affidavit has been filed on behalf of the Railways. The

case of the Railways is that the Assistant Engineer (Line), Son-

pur, published a notice inviting offer for Tahbazari at Shahpur

Patoree Railway Station vide Auction notice no. 03/2019 dated

5.8.2019 after taking approval of the competent authority for the

purpose to control the encroachment over the plot in question as

well as to earn revenue for Railways at the same time. As per

the said notice the successful bidder was allowed to collect rent

from the small shopkeepers and from temporary and moveable

shops in the vacant railway land near the Railway Station for the

period from 1.1.2020 to 31.12.2022. The petitioner participated

in the said auction and having been found to be the highest bid-

der, entered into an agreement with the railway administration

vide agreement dated 18.12.2019. He started to collect rent from

the shopkeepers from 1.1.2020. Some of the villagers filed a

written complaint on 12.2.2020 alleging that the petitioner was

committing irregularities, spreading dust and littering the sur- Patna High Court CWJC No.5706 of 2020 dt.20-09-2021

rounding area. An enquiry was conducted and a report submitted

on 27.2.2020. As per the report the complainant denied to have

made such a complaint. However, along with the letter dated

28.2.2020 the report was submitted to the Principal Chief Engi-

neer, ECR, Hajipur, seeking instructions as to whether the Tah-

bazari (stallage) be continued or terminated. In response to the

said communication a letter dated 5.3.2020 was received direct-

ing the divisional authority to follow the instructions contained

in Railway Board letter dated 10.2.2005 and para 821L of the

Indian Railway Work Manual according to which no new plots

of railways' land was to be added for Tahbazari/licensing. As the

land allotted to the petitioner on license fee was a new allotment

at Shahpur Patoree, it was decided by the competent authority to

cancel the said allotment. However, the allotment of land for

Tahbazari at Sahdei Buzurg Station were continued in view of

the fact that such licensee was not new but was continuing from

the past.

6. It is submitted by learned senior counsel appear-

ing for the Railways that in view of the complaint of the vil-

lagers and subsequent direction of the East Central Railway

Headquarters the license was decided to be cancelled. As per

clause 5 of the agreement dated 18.12.2019, the petitioner was Patna High Court CWJC No.5706 of 2020 dt.20-09-2021

served with one month notice on 19.3.2020 issued under the sig-

nature of the Divisional Railway Manager for cancellation of

the license w.e.f. 19.4.2020. The license for Tahbazari allotted

to the petitioner was cancelled w.e.f. from 19.4.2020. It was

submitted by learned senior counsel that there being a decision

of the Railway Board, the land in question cannot be given for

collection of Tahbazari, no one was competent to give the same

and a proceeding has been initiated against the erring official of

the Railways. It is submitted that there is no illegality in the or-

der impugned, the petitioner has not made out a case for inter-

ference by this Court and the application be dismissed.

7. Heard Sri Rajendra Narain, learned senior counsel

for the petitioner and Sri P.K.Verma learned senior counsel for

the Railways.

8. The relevant facts not in dispute are that the re-

spondent Railways came out with a notice dated 5.8.2020 invit-

ing desirous candidates to participate in the open tender for col-

lection of Tahbazari at Shahpur Patoree Railway Station vide

auction notice no.03/2019 dated 5.8.2019. This as per the affi-

davit of the Railway was done 'after taking approval of compe-

tent authority' for the dual purpose of control of encroachment

over the plot in question and at the same time to earn revenue Patna High Court CWJC No.5706 of 2020 dt.20-09-2021

for the Railways. Pursuant to the notice for auction the peti-

tioner participated along with other bidders and the petitioner

being the successful bidder, an agreement was entered into be-

ing Agreement no. W/214/Nilami/ Tahbazari/ADEN(line) Son-

pur/W - 5 dated 18.12.2019. A copy of the agreement has been

brought on record as Annexure-4 to the supplementary affidavit

filed on behalf of the petitioner. Pursuant to the said agreement

the petitioner started to collect rent from the shopkeepers from

1.1.2020.

9. It transpires that a written complaint was filed by

some of the villagers on 12.2.2020 making allegations that the

petitioner was committing irregularity spreading dust and litter-

ing the surrounding area. An enquiry was conducted there on

and a report submitted on 27.2.2020. A copy of the report was

sent along with letter dated 28.2.2020 to the Principal Chief En-

gineer, ECR Hajipur, seeking instructions as to whether the Tah-

bazari (stallage) be continued or terminated. In response to the

said communication, a letter dated 5.3.2020 was written direct-

ing the divisional authority to follow the instructions contained

Railway Board letter no. 2005/LML/18 dated 10.2.2005 and

para 821L of the Indian Railway Work Manual. It would be rele-

vant to take note of contents of the letter dated 27/28.2.2020, Patna High Court CWJC No.5706 of 2020 dt.20-09-2021

whereby the Senior Divisional Engineer, Sonpur sought instruc-

tions from The Principal Chief Engineer, EC Railway, Hajipur

with respect to the Tahbazari in question as also the enquiry re-

port which was conducted without any information to the peti-

tioner. The same are quoted herein below for ready reference:-

" East Central Railway Office of the Divi. Rly. Manager (Engg.) Sonpur dt: 27.02.2020

No. W/214/Tahbazari/SPP/W-5/558

Principle Chief Engineer E.C.Rly. Hajipur

Sub:- Granting of permission for Tahbazari at vacant land near LC 24 and LC 25 at Shahpur Patoree at Sonpur Division on East Central Railway.

Ref: - Railway Board letter no. 2020/LML-II/13/7 new Delhi.

dt. 25.02.2020

Vide letter under reference, a enquiry conducted by Sr. DEN/1/ SEE & DSC/RPF/ SEE is enclosed herewith regarding complain received for Tahbazari at Shahpur Patoree. As per enquiry report it is clear that the complain is totally forged and the allegations are baseless. It is only highlighted due to two local groups with vested interest.

However, as far as policy is concern, it is totally tried on experimental basis to restrict the encroachment around the station area as well as earn some money to railway for unused land. Unexpectedly on purely temporary basis with no erection of permanent structures, we have received Rs.75,01,000/- royality for small piece of land, which is already encroached by a small shops of Sabjimandi/Thela Patna High Court CWJC No.5706 of 2020 dt.20-09-2021

shop for a period of three years.

It is here to mentioned that this helps not only increase our sundry earning but also restrict to develop the hard encroachments over the small piece of land. The complains received vide above letter is totally forged and baseless and initiated only by rivalry party of highest bidder who collecting the money before this Tahbazari unauthorisedly.

In view of above, it is requested to issue the instruction regarding this tahbazari should be either continue or terminated Sd/-

27.2.20 Sr. Divl. Engineer/Co.Ord.

Sonpur DA: As above.

Enquiry report conducted by Sr. DEN/1/SEE & DSC/RPF/SEE regarding Tahbazari at Shahpur Patoree in C/W GM/Vigilance letter dt. 20.02.2020.

As per the instructions we the undersigned visited Tahbazari site at Shahpur Patoree on dt. 27.02.2020. We have gone through the complaint received regarding Tahbazari at Shahpur Patoree vide GM/vigilance letter dt. 20.02.2020 in which it is requested that:

1. To demark the area for Tahbazari

2. to inform the rate collected to retail sellers,.

3. To close the chicken shop.

During the course of enquiry the following persons who signed on the representation were randomly enquired and recorded their statements.

1. Manoj Sahani S/o Prabhu sahani

2. Amar Chowdary, S/o Syambabu Chowdary

3. Ramdayal Shah @ Nanki shah S/o Ramashraya shah Patna High Court CWJC No.5706 of 2020 dt.20-09-2021

4. Rekha Devi W/o Dularchand Ram

5. Manju Devi W/o Birju Sahani All the above persons stated that they never signed or submitted any representation regarding Tahbazari at Shahpur Patoree. Except sl no 3 all are illiterates and unable to sign.

As regards to demarcating of Tahbazari, On 10.01.2020 the area of Tahbazari ie., 3911 Sqft was demarcated and handed over to the bidder after removal of unauthorized encroachments. During visit it is found that the Tahbazari is being conducted as per the demarcation made by the Railway.

The rate collected from retail shopkeepers is not in the scope of terms and condition of Tahbazari. However, the contractor has been advised to display the rate collected per Sqft at prominent location to bring transparency of royalty collected from different shopkeepers.

Further, running of Chicken shop is also not in the scope of terms and condition of Tahbazari. However, the licensee has been instructed to keep the allotted area clean and not to sell chicken in open place.

During visit, it is also seen that the way to the shops of local villagers situated abutting to railway land are obstructed due to Tahbazari as there is no gap between the Railway land and private land. It is also learnt from the locals that due to rivalry between successful bidder of Tahbazari and one local person by name Atul Trivedi, he is instigating the local shopkeepers and vendors to make complaint against the successful bidder of Shahpur PatoreeTahbazari. Shri Atul Trivedi who runs his own market just adjacent to Railway Tahbazari is objecting Tahbazari from the begging and making complaints with vested interest to uphold his influence/ command on the market.

It is also cleared from on-spot enquiry conducted that signatures made on the representation or forged signatures. The statements taken from the villagers, who signatures appear on the representation, are enclosed. Patna High Court CWJC No.5706 of 2020 dt.20-09-2021

Hence it is proved that the signatures on the complaint vide above letter are --------------- and allegations are baseless

-------------- group with vested interests.

                           Sd/ 27/2/020                               Sd/ 27/2/2020
                           DSC/RPF/SEE                              Sr.DEN/1/SEE"

10. From the materials on record as also the con-

tentions of the parties, it is clear that a written agreement had

been entered into on 18.12.2019 between the petitioner and the

Railways for holding of Tahbazari for the period from 1.1.2020

to 31.12.2022. It was a concluded contract. The same was done

by the Railways after taking approval of the competent author-

ity. The complaint filed against the petitioner and which was en-

quired into in detail and report of which has been reproduced

herein above clearly found the allegation to be baseless and hav-

ing been made due to rivalry between the successful bidder and

one local person named in the report who was instigating the lo-

cal shopkeepers and vendors.

11. So far as the letter dated 5.3.2020 of the Deputy

Chief Engineer, East Central Railway is concerned wherein di-

rection has been given that instructions contained in the letter

dated 10.2.2005 and para 821 of the Indian Rail Work Manual is

concerned, it may be stated here that the said letter dated

10.2.2005 of the of the Railway Board has been brought on

record as Annexure-D to the counter affidavit filed on behalf of Patna High Court CWJC No.5706 of 2020 dt.20-09-2021

the respondent Railway. Clause 2.0 of the said letter dated

10.2.2005 is being quoted here in below for ready reference:

"2.0 General

2.1. Leasing of land is not permitted except in cases

where it is specifically approved by the Railway Board. Lands

for the purpose of commercial use should be given on licensing

basis only. In this connection, Board's letter No.

82/W2/LM/18/116 dt. 22.11.1982 may please be referred to.

2.2 Temporary licensing of railway land to private

individuals for the purpose of setting up shops, commercial of-

fices, vending stalls, clinics etc. not connected with the Railway

working was stopped in terms of Board's letter No.

80/W2/18/0/A dt. 7.6.1984. This ban will continue. In excep-

tional cases, where such licensing may have to be done with the

prior approval of the Board, licence fee must be fixed by resort-

ing to public auction/ open tenders for getting the maximum rev-

enue.

2.3 Licensing of ordinary commercial plots con-

nected with Railway working, as indicated in para - 3 below

will be done with the personal approval of General Manager in

consultation with FA&CAO. The periodical review may, how-

ever, be approved by DRM on the recommendation of Commit-

tee of Divisional Heads of Engineering, Commercial and Fi-

nance Departments.

2.4 Licenses of existing licencees, not connected

with the Railway working as mentioned in Para 3(f) below may, Patna High Court CWJC No.5706 of 2020 dt.20-09-2021

however, be renewed from time to time so long as the land is not

required by Railway for its own purpose but on new terms and

conditions indicated in this letter.

2.5 In each case of licensing, proper agreement must

be executed between the Railway Administration and the li-

cencees before the licencee is given possession of the land/plot.

This must be strictly followed and for any violation of these in-

structions, the official handing over land before the execution of

agreement, shall be held personally responsible by the Railway

Administration."

12. From the relevant part of the letter dated

10.2.2005 quoted herein above it would be evident that the pro-

visions contained in the said letter are also not worded in such a

manner, so as to create an absolute bar on the leasing and re-

newal of Railway land.

13. Learned Senior Counsel for the petitioner re -

lied on the full bench judgment of this Court in the case of M/s.

Pancham Singh vs The State of Bihar and others [AIR 1991 Pat

168(FB)]. In paragraph hno.19 of the judgment, the Court held:

" .... I have already pointed out above, that there

will be difference, where the cancellation is because of

the breach of any of the terms of the contract and

where cancellation of the contract, is on a ground de

hors the terms of the contract. In my view, where an Patna High Court CWJC No.5706 of 2020 dt.20-09-2021

agreement executed in accordance with Article 299 of

the Constitution is cancelled on a ground which is not

referable to any of the terms of the contract, and is per

se violative of Article 14 of the Constitution, this Court

can exercise the jurisdiction under Article 226 of the

Constitution. ..."

14. So far as the facts of the instant case is con -

cerned, as narrated herein above, the respondent Railways do

not allege any violation or breach of any of the terms of the con-

tract. Thus the next question would be as to whether the action

of the respondents satisfies the test of reasonableness.

15. In the above case of M/s. Pancham Singh (supra)

this Court in paragraph no.15 held:

"15. Recently in the case of Mahabir Auto Stores

v. Indian Oil Corporation, (AIR 1990 SC 1031) the

same question was considered. In that case the peti-

tioners' firm was carrying on business of sale and dis-

tribution of lubricants for 18 years on the basis of sup-

ply being made by Indian Oil Corporation. Abruptly

the supply of lubricants was stopped to the firm by the

Indian Oil Corporation without any notice or intima-

tion. In that connection it was pointed out as follows:

Patna High Court CWJC No.5706 of 2020 dt.20-09-2021

"In case any right conferred on the citizens

which is sought to be interfered, such action is

subject to Article 14 of the Constitution, and

must be reasonable and can be taken only upon

lawful and relevant grounds of public interest.

Where there is arbitrariness in State action of

this type of entering or not entering into con-

tracts, Article 14 springs up and judicial review

strikes such an action down. Every action of the

State executive authority must be subject to rule

of law and must be informed by reason. So,

whatever be the activity of the public authority,

in such monopoly or semi monopoly dealings, it

should meet the test of Article 14 of the Consti-

tution. If a Government action even in the mat-

ters of entering or not entering into contracts,

fails to satisfy the test of reasonableness, the

same would be unreasonable. It appears to us

that rule of reason and rule against arbitrari-

ness and discrimination, rules of fair play and

natural justice are part of the rule of law appli-

cable in situation or action by State instrumen- Patna High Court CWJC No.5706 of 2020 dt.20-09-2021

tality in dealing with citizens in a situation like

the present one. Even though the rights of the

citizens are in the nature of contractual rights,

the manner, the method and motive of a deci-

sion of entering or not entering into a contract,

are subject to judicial review on the touchstone

of relevance and reasonableness, fair play, nat-

ural justice, equality and non-discrimination in

the type of the transactions and nature of the

dealing as in the present case."

16. In the instant case, the case of the Railways is

that 'after taking approval of competent authority' for the dual

purpose of control of encroachment over the plot in question

and at the same time to earn revenue for the Railways, they pro-

ceeded with the auction. The Railways came out with an adver-

tisement wherein the petitioner also participated and being the

highest bidder an agreement in writing was entered into between

the Railways and the petitioner on 18.12.2019. Thus the exis-

tence of a concluded contract is not in dispute. Also not in dis-

pute is the fact that there is no breach of any of the terms of the

agreement, by the petitioner. The petitioner started to act in

terms of the contract w.e.f 1.1.2020. At this stage a complaint is Patna High Court CWJC No.5706 of 2020 dt.20-09-2021

made against the petitioner, which the Railway authorities get

inquired, without any notice to the petitioner. In the enquiry re-

port, the Railway authorities come to the conclusion that there is

no merit in the complaint against the petitioner and the com-

plaint was made at the instance of a local person who was him-

self running a market adjacent to the land of the Railways set-

tled for collection of Tahbazari with the petitioner. At this stage

the Railways decides to pass the order impugned dated

19.3.2020 in view of the letter dated 10.2.2005, relevant portion

of which is quoted above, and that too without any show cause

notice having been issued.

17. Thus in view of these facts, neither the action

of the respondents nor the order impugned herein can be said to

be reasonable. The same being unreasonable, arbitrary and in vi-

olation of the principles of the natural justice, it is unsustainable

in law and the same is set aside.

18. The writ application stands allowed.

(Partha Sarthy, J) Spd/-

AFR/NAFR
CAV DATE                23.03.2021
Uploading Date          21.09.2021
Transmission Date