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2006 DIGILAW 181 (PAT)

Singh Caterers And Vendors v. Railway Board

2006-02-21

S.K.KATRIAR

body2006
Judgment 1. None appears on behalf of the petitioners. Heard learned counsel for the respondents. The two writ petitions are inter-parties, have a good deal in common, one set of arguments have been advanced on behalf of the respondents, and are being disposed of by a common order. 2. Re: CWJC No. 6736 of 2005 Three petitioners have joined together in the two writ petitions. According to the writ petition, Petitioner No. 1 claims to be a partnership firm, and Petitioner Nos. 2 and 3 claim to be its partners. The petitioners are engaged in catering business and have been bagging catering contracts from the Indian Railways from time to time. CWJC No. 6736 of 2005 has been preferred challenging the latest catering policy of 2005 (Annexure 5) issued by the Indian Railways which replaces the earlier policy of the year 2000. The petitioners are, inter alia, aggrieved by the following portion of the policy whereby the basic eligibility criteria for the contenders for doing catering job in different trains have been revised upwardly. The relevant portion of the policy is set out hereinbelow for the facility of quick reference: "14.4 Eligibility Criteria.A three member Tender Committee of appropriate level of Commercial, Finance and one from any another department will scrutinize the technical offers received in Packet "A" to shortlist the eligible candidates. MD/IRCTC will decide the level of the tender committee. The eligibility criteria for scrutinizing applicants would be as under: (i) The applicant should be an individual or a reputed company/firm duly incorporated/registered for catering/hospitality business for handling food and beverages. (ii) The applicant must have a minimum of five years of experience in the field of catering/hospitality business. (iii) The applicant should have a minimum annual turnover in catering/ hospitality and F&B services related business and turnover criterion for different types of units are as under: Rs. 5 crore per annum Mobile catering on Rajdhani/Shatabdi Express trains. Rs. 3 crore per annum Mobile catering on other mail/express trains. In other words, in order to be applicant for mobile catering of Rajdhani/ Shatabdi Express trains, he must show a minimum turnover of 5 crore rupees per annum. Similarly, for mobile catering of other mail/express trains, the applicant must show a minimum turnover of 3 crore rupees per annum. 3. I have perused the materials on record and considered the submissions of the learned counsel for the parties. Similarly, for mobile catering of other mail/express trains, the applicant must show a minimum turnover of 3 crore rupees per annum. 3. I have perused the materials on record and considered the submissions of the learned counsel for the parties. Law is well settled by a long line of cases that the Court should desist from interfering with the policy decisions of bodies which are State within the meaning of Article 12 of the Constitution of India. Subject to the recognized exceptions, it should be left to the policy-makers to formulate the policies so long it applies uniformly to all the people who are governed by the policy decision. Mr. Venkataramani, learned counsel for the Indian Railways, has rightly relied on the judgment of the Supreme Court in (1991)1 SCC 212 (Kumari Srilekha Vidyarthi & Ors. V/s. State of U.P. & Ors.), wherein it has been held as follows: "29. It can no longer be doubted at this point of time that Article 14 of the Constitution of India applies also to mat-ters of governmental policy and if the policy or any action of the Government, even in contractual matters, fails to satisfy the test of reasonableness, it would be unconstitutional. (See Ramana Dayaram Shetty V/s. International Airport Authority of India and Kasturi Lai Lakshmi Reddy V/s. State of Jammu and Kashmir). In Col. A.S. Sangwan V/s. Union of India while the discretion to change the policy in exercise of the executive power, when not trammeled by the statute or rule, was held to be wide, it was emphasised as imperative and implicit in Article 14 of the Constitution that a change in policy must be made fairly and should not give the impression that it was so done arbitrarily or by any ulterior criteria. The wide sweep of Article 14 and the requirement of every State action qualifying for its validity on this touchstone, irrespective of the field of activity of the State, has long been settled. The wide sweep of Article 14 and the requirement of every State action qualifying for its validity on this touchstone, irrespective of the field of activity of the State, has long been settled. Later decisions of this Court have reinforced the foundation of this tenet and it would be sufficient to refer only to two recent decisions of this Court for this purpose." "31......The extent of permissible judicial review was indicated by saying that "actions are amenable to judicial review only to the extent that the State must act validly for a discernible reason, not whimsically for any ulterior purpose....." 3.1) The Supreme Court has held as follows in the recent judgment reported in (2005)6 SCC 138 [: 2005(3) PLJR (SC)97] (Master Marine Service (P) Ltd. V/s. Metcalf & Hodgkinson): "12. After an exhaustive consideration of a large number of decisions and standard books on administrative law, the Court enunciated the principle that the modern trend points to judicial restraint in administrative action. The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise, which itself may be fallible. The Government must have freedom of contract. In other words, fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principles of reasonableness but also must be free from arbitrariness not affected by bias or actuated by mala fides. It was also pointed out that quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. (See para 113 of the Report, SCC para 94). "13. In Sterling Computers Ltd. V/s. M&N Publications Ltd., it was held as under: (SCC p. 458, paras 18-19) "18. While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the court is concerned primarily as to whether there has been any infirmity in the decision making process.....By way of judicial review the court cannot examine the details of the term of the contract which have been entered into by the public bodies or the State. Courts have inherent limitations on the scope of any such enquiry. But at the same time... the courts can certainly examine whether decision making process was reasonable, rational, not arbitrary and violative of Article 14 of the Constitution. "19. If the contract has been entered into without ignoring the procedure which can be said to be basic in nature and after an objective consideration of different options available taking into account the interest of the State and the public, then court cannot act as an appellate authority by substituting its opinion in respect of selection made for entering into such contract. "14. In Raunaq International Ltd. V/s. I.V.R. Construction Ltd. it was observed that the award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision, considerations which are of paramount importance are commercial considerations, which would include, inter alia, the price at which the party is willing to work, whether the goods or services offered are of the requisite specifications and whether the person tendering is of the ability to deliver the goods or services as per specifications. "15. The law relating to award of contract by the State and public sector corporations was reviewed in Air India Ltd. V/s. Cochin International Airport Ltd. and it was held that the award of a contract, whether by a private party or by a State, is essentially a commercial transaction. It can choose its own method to arrive at a decision and it is free to grant any relaxation. It was further held that the State, its Corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision making process, the court must exercise its discretionary powers under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should interfere." 3.2) The Supreme Court has held as follows in its latest judgment reported in Judgments Today (2005)10 SCC 484 (State of Orissa V/s. Gopinath Das): "6. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should interfere." 3.2) The Supreme Court has held as follows in its latest judgment reported in Judgments Today (2005)10 SCC 484 (State of Orissa V/s. Gopinath Das): "6. While exercising the power of judicial review of administrative action, the court is not the appellate authority and the Constitution does not permit the court to direct or advise the executive in matter of policy or to sermonize any matter which under the Constitution lies within the sphere of the Legislature or the executive, provided these authorities do not transgress their constitutional limits or statutory power. (See Ashif Hamid V/s. State of J&K JT 1989(2) SC 548:1989 SC 1899), Shri Sitarai Sugar Co. V/s. Union of India JT 1990(2) SC 225 : AIR 1990 SC 1277 ). The scope of judicial enquiry is confined to the question whether the decision taken by the Government is against any statutory provisions or it violates the fundamental rights of the citizens or is opposed to the provisions of the Constitution. Thus, the position is that even if the decision taken by the Government does not appear to be agreeable to the Court it cannot interfere." "9. The Court should constantly remind itself of what the Supreme Court of the United States said in Metropolis Theatre Company V/s. City of Chicago [(1912)57 L Ed 730]. The problems of Government are practical ones and may justify, if they do not require, rough accommodation, illogical it may be, and unscientific. But even such criticism should not be hastily expressed. What is the best is not always discernible, the wisdom of any choice may be disputed or condemned. Mere errors of Government are not subject to our judicial review." 4. It is further relevant to state that the previous policy decision of 2000 was the subject matter of a batch of writ petitions before the Kerala High Court which were dismissed by a Division Bench by judgment dated 3.2.2001, passed in WA No. 2913 of 2001 (K.N.Venkateswaran V/s. Govt. of India & Anr.). A copy of the judgment is annexed to the counter affidavit of the Railways, Paragraph 56 whereof is reproduced hereinbelow: "56. of India & Anr.). A copy of the judgment is annexed to the counter affidavit of the Railways, Paragraph 56 whereof is reproduced hereinbelow: "56. In the changing life style and global economy, so as to be in the business, drastic policy decisions have to be conceived and implemented and at times it may appear to be unconventional. As the Supreme Court said in Government of India V/s. HDC [1993(3) SCC 499] change in policy does not by itself vitiate the action taken pursuant thereto, if they are reasonable and rational. The view has been reiterated in M.V. Al. Quamar V/s. Tsavliris Salvage (International) Ltd., [2000(2) SCC 278]. It will be wholly irregular to doubt the wisdom of the Administration, and for the only reason that it may not be agreeable to ones conventional views. The additional income does not go to private hands, and is pumped back to the system, to make it more healthy, and ultimately caters to better public interest. In this view, the Court is constrained to adopt a realistic attitude. The Railway Board, it appears, have bestowed thought to revamp the organisation, and are introducing policies to cope up with the changing situation. The petitioners have therefore to adapt themselves to the changes, and cannot insist them to stick on to the old patterns." 5. I am thus of the view that raising the turn-over criterion is neither arbitrary, discriminatory or irrational, nor whimsical, nor with ulterior motive. The petitioners have not been able to make out a case for interference with the impugned policy decision. CWJC No. 6736 of 2005 is accordingly dismissed. 6. Insofar as CWJC No. 7018 of 2005 is concerned, the petitioners did submit their tenders under the new policy decision. The tenders had to be submitted in two envelopes one of which was with respect to technical offers in Packet A. The second envelope had to contain tender papers relating to the price bid. Envelope A of all the contenders had to be opened first, and the second envelope of only those of the tenderers had to be opened which survived the first stage of the scrutiny. The petitioners did not survive the first stage of scrutiny. It is thus manifest on the face of it that the petitioners have not been able to answer the description of the terms and conditions of the advertisement. 7. The petitioners did not survive the first stage of scrutiny. It is thus manifest on the face of it that the petitioners have not been able to answer the description of the terms and conditions of the advertisement. 7. There is yet another aspect of the matter which completely disentitles the petitioners from further hearing. By order dated 25.7.2005, this Court had directed the petitioners to deposit the amount of Rs.16,70,216/- as per the directions contained in letter dated 21.6.2005 (Annexure H to the counter affidavit). These were the dues with respect to the outstanding licence fee. The petitioner did not deposit the amount leading to the following order dated 17.8.2005: "Learned counsel for the petitioners, learned counsel for respondent nos. 1, 2 and 4, learned counsel for respondent nos. 3 and 5, and learned counsel for respondent no. 6 are present. Learned counsel for the petitioners prays for one weeks time to ascertain and file an affidavit stating therein whether or not the order dated 25.7.2005 has been complied with........................" No such affidavit on behalf of the petitioners has been filed showing deposit of the amount. Equally regrettable aspect of the matter is that the learned counsel for the petitioners stopped appearing thereafter and did not appear on 18.1.06, 2.2.06, nor is present today. This Court records its strong displeasure against the conduct of the petitioners which amounts to a gross abuse of the process of the Court. 8. I must note the submission advanced by Mr. Ahsanuddin Amanullan, learned counsel for respondent nos. 3 and 5 (the Indian Railways Catering & Tourism Corpn. Ltd.) that the writ petition is not maintainable. In view of the foregoing discussion, l do not feel the necessity to examine the issue. 9. In the result, CWJC No. 7018 of 2005 is dismissed with costs quantified at Rs. 25,000/- (twenty five thousand) which the respondents would be entitled to recover alongwith the earlier dues from the petitioners.