S. C. R. Caterers, Dry Fruits, Represented by its Secretary Ritesh Kaushik v. Senior Divisional Commercial Manager, Krishna District
2013-08-16
C.V.NAGARJUNA REDDY
body2013
DigiLaw.ai
JUDGMENT The parties as well as the subject matter of the dispute in these Writ Petitions are common. As such, they are heard and being disposed of together. Introduction: The petitioner in these Writ Petitions is the South Central Railway Caterers, Dry Fruits, Fruit Juice Stalls Welfare Association, Warasiguda, Secunderabad. W.P.No.14577/2013 is filed on behalf of the members of the petitioner-Association running canteens in 25 Railway Stations of the Vijayawada Division. W.P.No.14888/2013 is filed by the members of the petitioner-Association running catering stalls and fruit juice stalls in 29 Railway Stations of the Vijayawada Division. W.P.No.15072/2013 is filed on behalf of the members of the petitioner-Association running catering and other stalls in various Railway Stations of the Guntakal Division. The Facts: The members of the petitioner-Association were granted licences for running General Minor Units (GMUs) or Special Minor Units (SMUs), as the case may be, in Categories A, B and C Railway Stations. The said licences were granted prior to the creation of the Indian Railways Catering and Tourism Corporation Limited (IRCTC) under the Catering Policy 2005 (for short “the 2005 Policy”). Under the 2005 Policy, the contracts under Categories A, B and C Railway Stations were transferred to the IRCTC while continuing the contracts granted under Categories D to F Railway Stations under the control of the South Central Railways (SCR) till the IRCTC was equipped to take over these Units. It is not in dispute that the contracts held by the members of the petitioner-Association were renewed during the subsistence of the 2005 Policy. The 2005 Policy was replaced by the Catering Policy 2010 (for short “the 2010 Policy”). Under this Policy, contracts of all the existing major and minor catering units will be awarded and managed by the Zonal Railways, except Food Plaza, Food Courts and Fast Food Units. It has also envisaged taking over of the management of all mobile catering services including base kitchens and mobile catering through departmental catering in a phased manner. The IRCTC was left with running of the Food Plaza, Food Courts and Fast Food Units alone.
It has also envisaged taking over of the management of all mobile catering services including base kitchens and mobile catering through departmental catering in a phased manner. The IRCTC was left with running of the Food Plaza, Food Courts and Fast Food Units alone. Consequent on the 2010 Policy, the Chief Commercial Manager of respondent No.3 has issued Circular No.78/F/Catering Policy/2010, dated 23-8-2011 wherein it is mentioned that the SCR has decided to grant renewal of licences for a period of three years w.e.f. 21-7-2010 i.e., the date on which the 2010 Policy was made effective in respect of the GMUs and SMUs taken over from the IRCTC, subject to the conditions stipulated in paras 16.1.3 and 16.2.1 of the 2010 Policy. Consequently, proceedings were issued by the Vijayawada and Guntakal Divisions renewing the licences of the members of the petitioner-Association from 21-7-2010 to 20-7-2013. On the eve of expiry of these licences, the Senior Divisional Commercial Manager, Vijayawada, has issued bid notice No.B/C.79/GMUs/BZA/2, Notice No.01/2013, dated 26-4-2013 inviting sealed bids on the Single Stage Two-Packet System from food and catering service providers for provision of catering services at the various GMUs of Categories A and B Railway Stations in the Vijayawada Division. A similar notification dated 3-5-2013 was issued for establishment of catering stalls/fruits and fruit juice stalls in SMUs in A1, A and B Category Railway Stations. The Senior Divisional Commercial Manager, Guntakal of respondent No.3 has issued a similar tender notice dated 15-5-2013 for running of SMUs in A1, A and B category Railway Stations falling under the Guntakal Division. Feeling aggrieved by these tender notifications, the petitioner filed these Writ Petitions. The Pleadings: The main plea of the petitioner, which is common in all these three Writ Petitions, is that under the 2010 Policy, the existing licencees are entitled for renewal of their licences for a period of three years each time in respect of both the GMUs and SMUs in A, B and C Category Railway Stations subject to their satisfactory performance, payment of all dues and arrears and withdrawal of Court cases, if any, and that only in cases where the renewal of licences was not made due to non-performance, non-payment of arrears/dues and pendency of Court cases, the licences will be awarded through fresh tenders. The petitioner has filed material in support of this plea, which will be discussed infra.
The petitioner has filed material in support of this plea, which will be discussed infra. It needs to be pointed out at this stage that the Writ Petitions were initially filed only against the Senior Divisional Commercial Manager, Vijayawada and Guntakal Divisions in the respective Writ Petitions. However, on the objection taken by the learned Standing Counsel for the SCR, applications for impleadment of the Union of India and the South Central Railways as respondent Nos.2 and 3 were filed by the petitioner. This Court, by order dated 18-7-2013 allowed the said applications, following which the impleaded respondents have filed counter-affidavits similar to that filed by the original respondent. Sri T.S. Venkata Ramana, learned Standing Counsel for the SCR who entered appearance for the Senior Divisional Commercial Managers, Vijayawada and Guntakal Divisions, appeared for the impleaded respondents as well. The learned Counsel has submitted that the arguments advanced by him on behalf of the original respondent are adopted by the impleaded respondents as well. The gist of the counter-affidavits is as follows: The members of the petitioner-Association were granted licences more than 40 years back in some cases and more than 20 years back in some other cases on payment of nominal licence fees and their licences were extended from time to time on more than four occasions. No proof has been submitted by any of the licencees that they were granted licenses either under the 2005 Policy or under the 2010 Policy. As they were not granted licences under either of the said Policies and the licences were granted on nomination basis much earlier thereto, the members of the petitioner-Association are not entitled for renewal of their licences. Respondent No.2 has issued commercial circular No.37/2010 dated 9-8-2010 in continuation of the 2010 Policy with respect to the existing licencees whose licences expired or going to expire. Under Para 1(d) of the Immediate Operating Instructions issued under the said circular, the Zonal Railway should renew all agreements which have expired or are due for expiry in the next six months by giving extension subject to a maximum extension of six months from the date of issue of the 2010 Policy. Under Para 1(e) thereof, the Zonal Railways may take appropriate action as per paras 16 and 17 of the 2010 Policy in respect of the contracts whenever required.
Under Para 1(e) thereof, the Zonal Railways may take appropriate action as per paras 16 and 17 of the 2010 Policy in respect of the contracts whenever required. Under proceedings No.2010/TG.III/645/13, dated 29-12-2010 of respondent No.2, the Zonal Railways were advised that they should renew all agreements which expired or due for expiry in the next six months subject to a maximum of six months from the date of issue of the 2010 Policy and as the preparation of the Standard Bid Document (SBD) and model agreements was entrusted to M/s. RITES and the same was in process, a further extension of contracts for a period of six months by the Zonal Railways was permitted. The SBD was prepared and approved by the Ministry of Railways with the concurrence of the Finance and Legal Directorate of the Railway Board on 5-7-2011. In pursuance of the instructions issued by the Chief Commercial Manager, SCR, vide his letter dated 23-8-2011, the licences transferred to the IRCTC by the Railways from 2005 and continued without any renewal by the IRCTC between 2005 and 2010, were renewed from 21-7-2010 as a stop gap arrangement. But once the SBD is released, the question of continuation of the earlier licencees who were granted licences prior to 2010 Policy does not arise as the extension of their licences was temporary and from time to time and the claim by the petitioner-Association that the existing licencees are entitled for further extension/renewal is contrary to Circular No.37/2010 dated 9-8-2010; proceedings No.2010/T.G.III/645/13, dated 29-11-2010; and proceedings No.2010/TG.III/600/13, dated 1-7-2011, which only envisaged temporary extensions with a view to ensure uninterrupted service to the Railway passengers. The 2010 Policy did not permit renewal of any licences which were originally granted either by the Railways or by the IRCTC and such renewals are confined only to fresh stalls which were allotted after 2010. In short, the stand taken by the respondents is that under the 2010 Policy, such of those licencees who were granted licences under the said Policy alone are entitled for renewal of their contracts and that those licencees who were granted licences prior to the 2010 Policy are not entitled for renewal.
In short, the stand taken by the respondents is that under the 2010 Policy, such of those licencees who were granted licences under the said Policy alone are entitled for renewal of their contracts and that those licencees who were granted licences prior to the 2010 Policy are not entitled for renewal. THE 2010 POLICY, CIRCULARS AND THE CORRESPONDENCE: Having regard to the respective pleas of the parties, it is necessary to refer to the 2010 Policy, the amendments made thereto, the relevant Circulars and the relevant correspondence in this regard. The paras of the 2010 Policy which are material for the present purpose are reproduced hereunder : 16. TENURE : 16.1 : TENURE OF MAJOR UNITS & GENERAL MINOR UNITS 16.1.1 Tenure of all major units including food courts, fast food units (except Food Plazas, Base Kitchens and AVMs) will be for a period of 5 years. There will be no renewals. 16.1.2 : Tenure of AVMs will be made for a period of 5 years. There will be no renewals as per policy as these are major units. 16.1.3 : Allotment of all GMUs at A, B & C category stations shall be awarded for a period of 5 years with a provision for renewal after every 3 years on satisfactory performance and payment of all dues and arrears and withdrawal of court cases. Allotment of all GMUs at D, E & F category stations will be for a period of 5 years with a provision for renewal after every 5 years for a further period of 5 years on satisfactory performance and payment of all dues and arrears and withdrawal of court cases, if any. 16.1.4 : Tenure of Food Plaza will be for 9 years with an extension of 3 years on satisfactory performance and payment of all dues and arrears and withdrawal of court cases, if any. 16.1.5 : All efforts must be made to manage the services departmentally at the earliest. The Service contracts for on-board services managed by departmental supervision would have a tenure for 5 years. 16.2 : TENURE OF SPECIAL MINOR UNITS 16.2.1 : SMUs at A, B and C category stations shall be awarded for a period of 5 years with a renewal after every 3 years on satisfactory performance and payment of all dues and arrears and withdrawal of court cases, if any.
16.2 : TENURE OF SPECIAL MINOR UNITS 16.2.1 : SMUs at A, B and C category stations shall be awarded for a period of 5 years with a renewal after every 3 years on satisfactory performance and payment of all dues and arrears and withdrawal of court cases, if any. 16.2.2 : SMUs at D, E, F category stations shall be awarded for a period of 5 years with a provision for renewal after every 5 years for a further period of 5 years on satisfactory performance and payment of all dues and arrears and withdrawal of court cases, if any. Efforts must, however, be made at the time of renewal to ensure a minimum increase of 10% over the prevailing licence fee. 16.2.3 : Licence fee will be reassessed and revised at the time of each renewal. To arrive at a realistic figure zonal railways will ensure that a fresh assessment of sales turnover/revenue is conducted during the peak season and lean season of the year immediately preceding the year of renewal with the periodicity of three – three months in order to assess the actual sales turnover so as to fix the revised licence fee. 16.3 : Allotments after expiry of this extended period will be made by calling for fresh tenders/applications as the case may be, and the process will be started well in time so that fresh allotments are finalized timely and further extension of existing contracts is necessitated. 17. RENEWAL Renewal will not be a matter of right. The licencee must apply for renewal minimum 6 (six) months in advance before the expiry of the contract. Renewal will be based on the following: 17.1 : Satisfactory performance of the licencee during the tenure of the contract. An imposition of fine/warnings on or more than 5 occasions will result in rejection of the application for renewal. 17.2 : Payment of all dues/arrears – No Dues Certificate from the concerned authority, must be attached along with the application for renewal. 17.3 : The applicant must submit the documents afresh along with the renewal application regarding the details mentioned in para 14.2.1.1, 14.2.1.2 and 14.2.1.3 and in case of GMUs relevant documents as mentioned in the Standard Bid Documents will be required to be submitted afresh along with the above mentioned documents.
17.3 : The applicant must submit the documents afresh along with the renewal application regarding the details mentioned in para 14.2.1.1, 14.2.1.2 and 14.2.1.3 and in case of GMUs relevant documents as mentioned in the Standard Bid Documents will be required to be submitted afresh along with the above mentioned documents. 17.4 : The Annual Confidential Reports (ACRs) on catering performance will be modified in accordance with this policy. The detailed instructions on ARCs will be issued by the Railway Board. ACRs maintained by the Railways for the licencee seeking renewal shall be scrutinized by the Competent Authority granting renewal. Based on the ACRs for the period of tenure the marks will be allotted to the licencee. A minimum cut off criteria based on the grading of the ACRs for grant of renewal must be notified by the Zonal Railways in advance. 17.5 : The licence fee shall be revised and reassessed at the time of each renewal subject to a minimum increase of 10% of the existing licence fee. 18. FIXATION OF LICENCE FEE 18.1 : Minimum licence fees/minimum reserve price (in case of tendered units) shall be fixed realistically, equitable in order to have a fair, just and equitable fixation of licence fees without adversely affecting the quality of service. It shall be based on the following factors (i) category of station, (ii) type of licence, (iii) number of originating passengers, (iv) number of trains stopping (day & night), (v) duration of stoppages (vi) location of the unit at the station, (vii) approximate licence fees of a similar type of unit at a similar category of station in proximity. In case of Static Units on Category ‘A1’ and ‘A’ stations of Metro cities and ‘C’ category stations having high purchasing power, the fixation of minimum licence fee will apart from all other factors take into account the Circle rates notified by the competent authority of the State Government as fixed from time to time. The zonal railways shall evolve a formula based on the above parameters for fixing the licence fees for the units falling within their jurisdiction. A Committee comprising three SA Grade officers from Commercial, Finance and Civil Engineering shall be nominated by the General Manager which shall fix the formula for each category of stations. The formula so fixed by the zonal railway shall be applicable to the entire zonal railway.
A Committee comprising three SA Grade officers from Commercial, Finance and Civil Engineering shall be nominated by the General Manager which shall fix the formula for each category of stations. The formula so fixed by the zonal railway shall be applicable to the entire zonal railway. Apart from the above zonal railways may include and consider any other factor/s unique to the unit/units. 18.2 : Minimum licence fee will be fixed as 12% of the estimated annual sales turnover for static units, mobile units of Ordinary Mail/Express trains & premium super fast trains and 15% for Rajdhani/Shatabdi trains/Duronto trains of the annual sales turnover based on actual occupancy figures certified by the Train Superintendent. 18.3 : At the time of renewal of licence, licence fee should be enhanced/reassessed based on actual sales turnover of the unit. Licence fee will be reassessed and revised at the time of each renewal subject to a minimum of 10% increase over the prevailing licence fee of the unit. To arrive at a realistic figure zonal railways will ensure that a fresh assessment of sales turnover/revenue is conducted during the peak period and lean period i.e., with the periodicity of three – three months in order to assess the actual sales turnover so as to fix the revised licence fee. Renewal will be done for the existing licensees only on withdrawal of court cases by the licensees, if any, against the railways and payment of railway dues and arrears. 18.4 : No operational charges like haulage/maintenance/detention etc, in case of mobile services will be recoverable from the licensees. In the case of static units also there will be no separate charges payable towards rent for building/land, vender’s fee and conservancy charges etc, except electricity and water charges, which will be based on actual consumption. 18.5 : Minimum licence fee will be fixed by the Zonal Railways (CCMs) for all major units (except Food Plazas, Fast Food units and Food Courts), GMUs at A, B & C category stations and SMUs at A, B, C categories of stations as per extant instructions issued by Railway Board. For GMUs and SMUs at D, E, F categories of stations minimum licence fee will be fixed by DRMs as per extant instructions issued by Railway Board.
For GMUs and SMUs at D, E, F categories of stations minimum licence fee will be fixed by DRMs as per extant instructions issued by Railway Board. 18.6 : The licence fee will be required to pay all the charges as per the contract agreement and all statutory duties/charges/levies etc, would also be borne by the licensee as and when due. However, land licence fee for land leased to IRCTC will be payable by IRCTC and revenue sharing will be as per Memorandum of Understanding in vogue from time to time between IR and IRCTC. As noted from the gist of the counter-affidavits, following the issue of the 2010 Policy, the Railway Board has issued Immediate Operative Instructions on 9-8-2010 for implementation of some aspects of the said Policy. Under para 1-(d) thereof, the Zonal Railways were directed to renew all agreements which have expired or are due for expiry in the next six months by giving extension subject to a maximum extension of six months from the date of issue of the 2010 Policy. In para-2(iv) it was directed that after taking over the licences, the Zonal Railways henceforth will reassess the licence fees based on the parameters stated in the 2010 Policy and the licence fees so assessed shall be levied with prospective effect at the time of renewal after the date of issue of the 2010 Policy. The applications for renewal will be considered by the Zonal Railways only after payment of all the dues, licence fees and arrears. Through its Circular No.78/F/Catering Policy/2010, dated 23-8-2011, respondent No.3 has decided to grant renewal of licence for a period of three years w.e.f. 21-7-2010 (the date on which the 2010 Policy was made effective) in respect of the GMUs and SMUs taken over from the IRCTC subject to the condition stipulated in paras 16.1.3 and 16.2.1 of the 2010 Policy. Accordingly, all the licences of the members of the petitioner-Association were renewed till 20-7-2013. It is significant to note that the Railway Board has issued commercial Circular No.03/2012, dated 12/13-1-2012 by which it has amended paras 16.3 and 21 of the 2010 Policy.
Accordingly, all the licences of the members of the petitioner-Association were renewed till 20-7-2013. It is significant to note that the Railway Board has issued commercial Circular No.03/2012, dated 12/13-1-2012 by which it has amended paras 16.3 and 21 of the 2010 Policy. As para 16.3 alone is relevant for the present purpose, the existing and the amended paras are extracted hereunder : Para 16.3 (Existing): Allotments after expiry of this extended period will be made by calling for fresh tenders/applications as the case may be, and the process will be started well in time so that fresh allotments are finalized timely and further extension of existing contracts is necessitated. Para 16.3 (Amended) : In case of contracts of some units which are not renewed by the Zonal Railways due to non-performance etc., the process should be initiated by the zonal railways for fresh allotment well in time to avoid further extension of existing contracts. When the respective Divisional Managers have issued tender notifications, a representation dated 22-5-2013 was made by the General Secretary, South Central Zone Catering Contractors Welfare Association to the Railway Board. Consequent thereto, the Additional Member (T&C), Railway Board, New Delhi, addressed letter dated 13-6-2013 to the General Manager of the South Central Railway, Secunderabad. The said letter referred to letters No.78/F/Catering Policy/2010, dated 23-8-2011 and 9-9-2011 of the Chief Commercial Manager of respondent No.3 renewing the licences of the GMUs/SMUs as well as the licences granted by the IRCTC for a period of three years in terms of para 16.1.3, 16.2.1 and 18.3 of the 2010 Policy. Para-2 of the letter dated 13-6-2013, which is very relevant for this case, reads as under: “By following para No.5 regarding scale of catering services through static units on each category of Railway Station, a master plan has been prepared, in view of this contracts for only new identified units (GMUs/SMUs) have to be awarded by Division under two packet tender system (GMUs) and by calling of application (SMUs). But South Central Railway Divisions viz., BZA (25 GMU, 29 SMUs), SC (105 GMUs) GTL (14 SMU/19 GMUs) & NED (31 GMU) (total 223) have called for NIT for GMU and calling for applications for SMUs.
But South Central Railway Divisions viz., BZA (25 GMU, 29 SMUs), SC (105 GMUs) GTL (14 SMU/19 GMUs) & NED (31 GMU) (total 223) have called for NIT for GMU and calling for applications for SMUs. In this regard, it is advised to review the issue of the renewal of all the existing minor static catering units in terms of para no.18.3 of catering policy, 2010 along with Board’s Comml. Circular no.12/2013 & letter no.2010/T.G.-III/600/25pt.2 dtd. 22/24.1.13 on the matter. It is also advised that Board’s letter no.2012/T.G.III/600/5 dtd. 13/15.3.12 regarding ceiling limit para no.19.2 is still under review with Board and a final outcome in this regard would be advised accordingly. To reply various representation received in Board’s office on the above, a detailed report on such references may kindly be sent at the earliest” In response to the said letter, the Chief Commercial Manager of respondent No.3 has addressed letter No.C.78/F/Catering Policy/Vol.III, dated 18-6-2013 wherein he has given Division-wise status of the tender process. The said letter referred to the view of the Additional Member (T&C), Railway Board, that contracts for only newly identified units (GMUs/SMUs) have to be awarded by following the Two-Packet System for GMUs and by calling for applications for SMUs. In para-5 of the said letter, it is stated as follows: “This Railway is now proposing to follow para No.16.3 of Correction Slip No.1 to CommercialCircular No.35/2010 (Catering Policy) issued vide Railway Board’s Commercial circular No.03/2012 dt. 12/13-1-2012. Accordingly, all existing minor static units (originally awarded by Railway and handed over to IRCTC and again taken over from IRCTC) will now be processed for further renewals, duly observing various clauses of Catering Policy 2010, as amended from time to time. Hence, the tender process initiated for existing minor static units (awarded by Railway) will be stopped, advising the divisions suitably.” The Additional Member (T&C), Railway Board, has addressed letter dated 18-6-2013 to the General Manager of respondent No.3 wherein he has clarified that para 16.3 of the 2010 Policy was revised by issuing Circular No.3/2012 vide Railway Board’s letter No.2010/T.G.III/600/25/Pt.2 dated 13-1-2012.
However, through his letter dated 19-6-2013, the Additional Member (T&C), Railway Board has withdrawn his letters dated 13-6-2013 and 18-6-2013 and described his telephonic conversation referred in para-1 of the Chief Commercial Manager’s letter dated 18-6-2013 only as “an informal discussion” which cannot supplement or modify the existing policy and that while the issue in para-5 of the letter dated 18-6-2013 is under examination of the Railway Board and the outcome will be intimated in due course, action may be taken in terms of the Policy and the directives in vogue. DISCUSSION: From the operating guidelines issued under the 2010 Policy and the correspondence exchanged between the Railway Board and respondent No.3, what emerges is discussed hereunder: Para 16.1.3 of the 2010 Policy envisages award of licences for GMUs at the A, B and C category Railway Stations for a period of five years and renewal for three years on each occasion. However, such renewal is subject to compliance with three requirements, viz., satisfactory performance, payment of all the dues and arrears and withdrawal of Court cases, if any, against the Railways. Similar is the situation in respect of the SMUs at A, B and C category Railway Stations in para 16.2.1 of the 2010 Policy. Under para-17 thereof, renewal of licence is not made a matter of right. A licencee must apply for renewal minimum six months in advance before the expiry of the contract. If the licencee is imposed fine or administered warnings on more than five occasions, his application for renewal will be rejected. The licence fee is enhanced/re-assessed on actual sales turnover of the Unit. Para 18.3 reiterated paras 16 and 17 relating to the conditions subject to which renewal of the existing licences will be renewed. The primordium of the respondents’ case is rested on circular No.37/2010 dated 9-8-2010 and para 16.3 of the 2010 Policy. It needs to be noted that while paras 16.1.3, 16.2.1 and 18.3 read together leave no scope for any doubt that all licencees are entitled for renewal subject to their complying with the three requirements as envisaged in paras 16.1.3 and 16.2.1, para 16.3 as originally conceived, created ambiguity which declared that after the expiry of the extended licences, allotments will be made by calling for fresh tenders/applications and such process will be started well within the time to avoid further extensions of the licence periods.
This para was however amended by the Railway Board commercial circular No.03/2012 dated 12/13-1-2012 which was reproduced hereinbefore. As per this modified para, allotment through fresh tenders/applications will be made only in cases of contracts which are not renewed by the Zonal Railways due to non-performance etc. Indeed, the amended para 16.3 was specifically emphasized by the Additional Member (T&C) in his letter dated 18-6-2013 addressed to the General Manager of respondent No.3, which, later, for inexplicable reasons was withdrawn by him along with his earlier letter dated 13-6-2013. However, as rightly pointed out by him, any correspondence or communications cannot supplement or modify the existing policy and its true purport has to be culled out from its own contents. Be that as it may, respondent No.3 has very correctly understood the scope of paras 16.1.3, 16.2.1 and 18.3 of the 2010 Policy and renewed the licences in question for a period of three years. While the 2010 Policy proper has not envisaged renewal of the existing licences for a period not exceeding six months, the Immediate Operative Instructions issued in commercial circular No.37/2010, dated 9-8-2010, has directed the Zonal Railways to renew the licences for a maximum period of six months from the date of issue of the 2010 Policy. If the 2010 Policy is understood as providing renewals only in respect of the licences issued under the said Policy, there was no reason why respondent No.3 has not called for tenders on the expiry of six months period from the date of coming into force of the 2010 Policy. Instead of calling for tenders, respondent No.3 has renewed all the GMU and SMU licences for a period of three years in terms of paras 16.1.3 and 16.2.1 of the 2010 Policy. This was done even before para 16.3 of the said Policy was amended. Having understood the 2010 Policy in its true spirit even before the amendment of para 16.3, it is incomprehensible that respondent No.3 projects the said Policy in a different light by seeking to give it an interpretation which runs contrary to its plain language. No where in the 2010 Policy, the licencees are classified into two categories, namely, those who were granted licences prior to the commencement of the 2010 Policy and those who were granted licences after the said Policy came into force.
No where in the 2010 Policy, the licencees are classified into two categories, namely, those who were granted licences prior to the commencement of the 2010 Policy and those who were granted licences after the said Policy came into force. On the contrary, all the GMUs and SMUs were treated under one category. Irrespective of whether the licences were granted by the Railways prior to 2005 or by the IRCTC from 2005 and by the Indian Railways after 2010, renewal of licences is envisaged for all these categories of licencees subject to their fulfillment of the three requirements as referred to hereinbefore. In this context, it is significant to point out that the Chief Commercial Manager, Central Railways, Mumbai, in his letter dated 4-4-2012 addressed to the Additional Member (T&C), Railway Board, pointed out the contradiction between paras 16.3 and 18.3 of the 2010 Policy and referred to the amendment made to para 16.3 thereof. However, he has sought for clarification of this ambiguity. In his letter, the Director (T&C) has referred to the Board’s circular No.3/2012 dated 12-1-2012 and stated that in the said circular it was clarified that renewal of the existing GMUs and SMUs will be considered by the Railways subject to withdrawal of Court cases by the licencees, if any against the Railways, payment of the Railway dues and arrears, if any, and satisfactory performance of the licencees. This letter is a complete fortification of the petitioner’s plea that if a licencee has satisfied the three requirements of satisfactory performance, not being in arrears and non-pendency of Court cases against the Railways, he is entitled for renewal of his licence once in every three years. The plea taken by the respondents is thus contrary to the plain language of the 2010 Policy and their own understanding of the said policy as evident from the various events referred to above, including the renewal of the licences without calling for tenders for a period of three years after the advent of the 2010 Policy. I am therefore in complete agreement with the plea of the petitioner-Association, as ably projected by Mr. C. Ramachandra Raju, its Counsel.
I am therefore in complete agreement with the plea of the petitioner-Association, as ably projected by Mr. C. Ramachandra Raju, its Counsel. Sri T.S. Venkata Ramana, learned Counsel for the respondents, has submitted that even assuming that the licences given to the members of the petitioner-Association are also covered by the 2010 Policy for renewal, they cannot claim renewal of their licences as of right and that unless they satisfy the three requirements envisaged by paras 16.1.3 and 16.2.1, they are not entitled for renewal of the contracts. The learned Counsel also pointed out that under para 17 of the 2010 Policy, a licencee must apply for renewal at least six months in advance before the expiry of the contract and that none of the members of the petitioner-Association have complied with this requirement. With regard to the first part of the submission of the learned Counsel, I find myself in agreement with the same. If and when a licencee applies for renewal, he needs to satisfy the conditions stipulated in the above mentioned two paras of the 2010 Policy. A right for renewal will accrue to such licencee only if he satisfies those requirements. However, every licencee has a right to be considered for renewal in the first place and whether a right for renewal accrued to him or not depends upon his satisfying the stipulated requirements. In none of the cases of the members of the petitioner-Association, respondent No.3 has considered renewal of their licences and it has issued the tender notifications under a misconception that the persons who were granted licences in the previous regime are not entitled for renewal. Respondent No.3 has therefore to evaluate the performance of each of the licencees seeking renewal and consider their applications in the light of the conditions stipulated in paras 16.1.3 and 16.2.1, as the case may be, and take a decision. With regard to the second part of the submission of the learned Counsel for the respondents, it is an admitted fact that none of the licencees in question have applied for renewal of their respective licences six months in advance.
With regard to the second part of the submission of the learned Counsel for the respondents, it is an admitted fact that none of the licencees in question have applied for renewal of their respective licences six months in advance. Significantly, in the affidavits filed in the Writ Petitions, a reference to the 2005 Policy was made and it was averred that under the said Policy, a licencee shall apply for renewal one month prior to the expiry of the licence period and that therefore the members of the petitioner-Association have got time upto the end of June 2013 to apply for renewal of their licences. The learned Counsel for the petitioner has submitted that his clients were under a mistaken notion that they are entitled to apply for renewal one month prior to the expiry of their licences and therefore they could not comply with the requirement of para-17 of the 2010 Policy. He has also submitted that almost all the licencees are either semi-literates or illiterates and they are not aware of the implications of non-compliance with the said para. It is true that under the 2010 Policy, applications for renewal have to be made at least six months before the expiry of the existing licences and it is equally true that this condition is not complied with by the members of the petitioner-Association. But respondent No.3 has refused to renew the licences not on the ground of failure of the licencees to apply for renewal six months in advance. On the contrary, the respondents have initiated the tender process in the view that under the 2010 Policy, these licencees are not entitled for renewal. Therefore, it would have hardly made any difference even if the members of the petitioner-Association made their applications six months before the expiry of their licence periods. In the light of these facts, I am not prepared to non-suit the members of the petitioner-Association only for the reason of non-compliance with para-17 of the 2010 Policy. It is not the case of respondent No.3 that any prejudice is caused to the Railways by such non-compliance by the members of the petitioner-Association or that the latter’s failure to apply for renewal six months in advance was with any mala fide intention.
It is not the case of respondent No.3 that any prejudice is caused to the Railways by such non-compliance by the members of the petitioner-Association or that the latter’s failure to apply for renewal six months in advance was with any mala fide intention. I have no reason to disbelieve the version of the learned Counsel for the petitioner that his clients’ non-compliance with para-17 of the 2010 Policy was a bona fide mistake. When the licencees are entitled for consideration of their cases for renewal, it would be wholly iniquitous to deny the same to them on a technicality such as this. As pointed out hereinbefore, non-consideration of renewal of licences of the members of the petitioner-Association was not on the ground that they have not applied for the same six months in advance and this objection of the respondents, therefore, is a pure afterthought. The learned Counsel for the respondents submitted that since the members of the petitioner-Association have been conducting their respective businesses for the past 40/20 years, there is no justification for them to seek renewals and that by renewing their licences, the Railways will lose revenue. I do not find any merit in this submission. The 2010 Policy does not differentiate among the licencees based on the number of years for which they have been carrying on their businesses. Moreover, under the 2010 Policy, the licence fee is liable for revision based on the potentiality of each Railway Station and the turnover of the licencees during the previous years. Therefore, the question of the Railways suffering any loss due to renewals would not arise. At any rate, in the face of the plain Policy of the Railways providing for renewal of licences, respondent No.3 cannot act contrary thereto, either on the ground of the licencees having long standing or the purported loss of revenue. Conclusion And The Result: For all the above reasons, I am of the opinion that the claims of the members of the petitioner-Association for renewal of their licences deserve to be considered on their own merits and that they are entitled for renewal subject to their satisfying the conditions stipulated in paras 16.1.3 and 16.2.1 of the 2010 Policy. In the result, the Writ Petitions are allowed in the following terms: 1. The members of the petitioner-Association shall make applications for renewal of their licences within one month from today. 2.
In the result, the Writ Petitions are allowed in the following terms: 1. The members of the petitioner-Association shall make applications for renewal of their licences within one month from today. 2. Respondent No.3 shall consider each of such applications with reference to paras 16.1.3 and 16.2.1, as the case may be, and communicate its decision to the members of the petitioner-Association. 3. In the event of rejection of the application of any of the licencees for renewal, respondent No.3 shall record reasons therefor and communicate the same to the licencee concerned. 4. Till completion of the above mentioned process, the members of the petitioner-Association shall be permitted to continue to run their respective GMUs and SMUs. As a sequel to the disposal of the Writ Petitions, the Miscellaneous Petitions, if any pending, shall stand disposed of as infructuous.