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2008 DIGILAW 1094 (JHR)

Utsav Flavours (a Unit of M/s Hotel Amarjeet Pvt. Ltd. , Nagpur) Tatanagar Railway Station v. Union of India through the Secretary, Ministry of Railway

2008-09-09

R.R.PRASAD

body2008
Order This writ application is directed against the order as contained in letter no. 2003/1RCTC/FP/Tata dated 9.10.2007 (Annexure-8) under which license granted to the petitioner to operate Food Plaza at Tatanagar Railway Station was terminated. 2. Indian Railway Catering and Tourism Corporation Limited (IRCTC), Government of India Undertaking in order to upgrade the standard of catering services in Indian Railway and also at important stations including at Tatanagar Railway Station decided to set up Food Plaza so as to fulfill the requirement of large section of passengers. Pursuant to such decision IRCTC invited formal bids, vide bid dated 7.2.2003 from prospective licensees. The petitioner also participated in the bid process and was declared successful. Consequently, the petitioner was awarded with license vide letter dated 18.2.2003 to operate Food Plaza at Tatanagar Railway Station. As per Clause 14.7 of the said offer letter dated 18.2.2003, the petitioner was required to execute an agreement within two months of the issuance of the letter of award. Further as per the terms of the bid license for operating Food Plaza was awarded for a period of 9 years extendable to 12 years. Again under Clause 18 of the bid document locking period of 4 years was provided during which period the licensee was supposed to bound by the projection of annual net sales turnover and if licensee chooses to close the business, he will be forfeiting the security deposit. 2. On getting license to run Food Plaza, the petitioner commenced his business in the name and style as M/s Utsav Flavours at Tatanagar Railway Station with effect from 10.9.2003 and after doing business for about four years, the petitioner entered into an agreement with IRCTC, though as per the terms of the bid, the said agreement was to be executed within two months from the date .of grant of the license. Under the agreement, terms and conditions were the same which were there in the bid document. 3. It is the case .of the petitioner that right from the beginning when business gat started in the month of September, 2003, there has been no complaint about the unhygienic condition or quality of food by the public. Under the agreement, terms and conditions were the same which were there in the bid document. 3. It is the case .of the petitioner that right from the beginning when business gat started in the month of September, 2003, there has been no complaint about the unhygienic condition or quality of food by the public. Despite that, respondent kept an sending notice to the petitioner to make necessary improvement so far hygienic condition is concerned, to which the petitioner always replied that required standards are being maintained and is improving day by day and in order to make .further improvement, petitioner made request far providing additional space far accommodation to the public but the respondent instead of providing any space went an sending notice with mala fide intention to terminate the license .of the petitioner and this mala fide intention gat reflected when the respondent issued a letter dated 12.5.2007 (Annexure-5) initiating pracess .of terminatian calling upon the petitioner to bring about drastic improvement in the upkeeping and maintenance of Food Plaza, to which the petitioner submitted his explanation an 6.8.2007 stating therein that deficiencies, as painted out under notice dated 12.6.2007, have been removed and that entire payments have been made but at the same time made a request far providing space as had been agreed upon. Before submission of the explanation, the respondent in terms of the bid entered into written agreement an 4.8.2007 but all on a sudden respondent issued a letter (Annexure 8) under which license .of the petitioner of the Food Plaza was terminated and the petitioner was asked to vacate the premises .of the Food Plaza, 4. Being aggrieved with that, this writ application has been filed, 5. The case .of the respondents as has been made out in the counter affidavit is that from the very beginning performance of the petitioner was not up to the marks and whenever inspections were made, several deficiencies were noticed and the petitioner was always requested to rectify the deficiencies found in course of the inspections which had been made at several accessions i.e., 10.9.2003. 14.10.2003, 24.1.2004, 25.2.2006. 14.10.2003, 24.1.2004, 25.2.2006. 12.4.2007, 29.4.2007 and 11.5.2007 and therefore, notice to show cause had been issued to the petitioner earlier also on 27.10.2003 and 26.4.2006, to which the petitioner replied with but that was not found to be satisfactory and then lastly notice was issued an 12.6.2007 for termination of the license as there was no improvement in the condition related to hygiene which was replied by the petitioner under his show cause dated 6.8.2007 but that was never found to be satisfactory and hence, license .of the Food Plaza of the petitioner was terminated under Annexure-8. 6. Learned counsel appearing far the petitioner submits that right from the beginning .of the business, the petitioner did feel paucity .of the space and, therefore, petitioner always made request I.O. the respondent far providing accommodation but the petitioner was never provided with the accommodation, still the petitioner maintained the cleanliness and 1here was no complaint whatsoever from the public about unhygienic condition at the Food Plaza centre. Still the licence the petitioner was cancelled without affording any opportunity to the petitioner of personal hearing which is quite illegal and arbitrary. 7. In this respect a decision rendered in a case of Fedco (P) Ltd. and Another VS. S.N. Bilgrami and Others ( AIR 1960 SC 415 ] was referred to holding therein that before canceling the license granted an the ground that it was obtained by fraud, licensee has to be given reasonable opportunity of being heard. 8. Learned counsel further submits that admittedly notice to show cause in the matter of termination was issued on 12.6.2007 but still respondent entered into an agreement on 4.8.2007 presumably on being satisfied that the business is being ru" satisfactorily in terms of the bid, still the impugned order was passed and on this ground alone, the impugned order is fit to be set aside. 9. However, it was replied with on behalf of the respondent that execution of the agreement dated 4.8.2007 was never on account of the fact-that petitioner was found running business in terms of the bid, rather that agreement was executed in terms and conditions of the bid, as such agreement was required to be executed by the parties within two months of the grant of the license but as the petitioner avoided to execute the same in one pretext or the other it could not be executed within the time. 10. It is further submitted that it is not that only on one occasion the condition of the Food Plata was found to be unhygienic, rather at number of occasions whenever the inspection was made, condition of the Food Plaza was never found to be Hygienic and therefore, petitioner was always requested to remove the deficiencies but petitioner never paid any heed to the request made by the authorities and, therefore, the petitioner was ultimately asked under notice dated 12.6.2007 to show cause as to why not license of the petitioner be terminated and when the petitioner submitted his show cause, that was found to be unsatisfactory and under that circumstances, the impugned order was passed and as such respondent can never be said to have acted arbitrarily or illegally. 11. Having heard learned counsel appearing for the parties and on perusal of the record it does appear that show cause notice regarding termination of license was issued on 12.6.2007 calling upon him to do drastic improvement in the maintenance of the Food Plaza and its upkeeping as the same was not found to be Hygienic and under that letter, it had also been intimated that the petitioner had made default in making payment and as such, terms of the bid has been violated but upon hearing counsel for the parties and on going through the document, it does appear that the license has been terminated only on account of the fact that the petitioner in utter disregard of the terms of the bid did not maintain Hygienic condition. Under this situation, the relevant condition regarding hygiene as given in the bid document needs to be noticed which reads as under:- 20. "HYGIENE AND QUALITY CONTROL: 21.1 Licensee will provide sale of products of reputed brands only. The storage, handling of raw materials and finished products will have to be in extreme hygienic conditions. 20.2 IRCTD reserves the right to get the food samples/raw material collected and tested at approved laboratories at the cost of the licensee. 20.3 Licensee will maintain the entire premises neat and clean in order to control pollution and abide by the regulations on the subject." 12. 20.2 IRCTD reserves the right to get the food samples/raw material collected and tested at approved laboratories at the cost of the licensee. 20.3 Licensee will maintain the entire premises neat and clean in order to control pollution and abide by the regulations on the subject." 12. From the statement made in the counter affidavit it does appear that at several occasions inspections were made and at several times deficiencies were found in the matter of hygienic and the petitioner was always called upon to remove the deficiency. However, when, according to respondent, petitioner did not do anything, notice dated 12.6.2007 was issued whereby the petitioner was called upon to remove the deficiency, to which the petitioner did reply at paragraphs 4 and 5 which is being reproduced as under:- "4. We had upgraded and renovated the Food Plaza twice, but it may be kindly kept in view that the problem of cleanliness is mainly due to insufficient space. Despite having lack of space, we are making all efforts to keep Food Plaza clean within constraints faced by us. 5. Despite all the positive efforts taken by us, the washing area could not be separated from the cooking area due to insufficient space and this fact has been regularly witnessed and experienced by the inspecting authorities. This fact has been regularly intimated by us to the Department in written as well a during personal discussion." 13. Thus, there seems to be admission that the problem of cleanliness is there but that deficiency was sought to be justified by taking excuse that it was due to paucity of space but that plea in the facts and circumstances that the petitioner voluntarily accepted the terms and condition of the bid is not tenable. Thus, there remains no doubt that the terms of the bid, as indicated above, regarding hygienic has been violated. 14. So far argument of impugned order being violative of natural justice on account of non-affording of the opportunity of oral hearing is concerned, that also does not seem to be tenable in view of the ratio laid down by the Hon'ble Supreme Court in the case of Union of India vs. Sales Corporation [ (1996)4 SCC 69 ], wherein it has been held as follows:- " It need not be pointed out that under different situations and conditions the requirement of compliance of the principle of natural justice vary. The courts cannot insist that under all circumstances and under different statutory provisions personal hearings have to be afforded to the persons concerned. If this principle of affording personal hearing is extended whenever statutory authorities are vested with the power to exercise discretion in connection with statutory appeals, it shall lead to chaotic conditions. Many statutory appeals and applications are disposed of by the competent authorities who have been vested with powers to dispose of the same. Such authorities which shall be deemed to be quasi judicial authorities are expected to apply their judicial mind over the grievances made by the appellants or the applicants concerned, but it cannot be held that before dismissing such appeals or applications in all events the quasi-judicial authorities must hear the appellants or the applicants, as the case may be. When principal of natural justice require an opportunity to be heard before an adverse order is passed on any appeal or application, it does not in all circumstances mean a personal hearing. The requirement is complied with by affording an opportunity to the person concerned to present his case before such quasi-judicial authority who is expected to apply his judicial mind to the issues involved. Of course, if in his own discretion if he requires the appellant or the applicant to be heard because of special facts and circumstances of the case, then certainly it is always open to such authority to decide the appeal or the application only after affording a personal hearing. But any order passed after taking into consideration the points raised in the appeal or the application shall not be held to be invalid merely on the ground that no personal hearing had been afforded." 15. Thus, what emerges from the ratio laid down by the Hon'ble Supreme Court is that it is never mandatory on the part of the authority to give opportunity of personal hearing always rather it would depend on the facts and circumstances. So far this case is concerned respondent in his wisdom would not have thought it proper and appropriate to give an opportunity of personal hearing as the petitioner in his show cause ha<;:l virtually admitted about the condition of Food Plaza being unhygienic and once acceptance of breach of one of the conditions was there, the respondent cannot be said to have acted arbitrarily in passing the impugned order. 16. 16. Thus, I do not find any merit in this application. Hence, it is dismissed.