N. Emily Ammal v. General Manager, Southern Railway Office of Southern Railway
2014-06-20
S.VAIDYANATHAN
body2014
DigiLaw.ai
JUDGMENT 1. As per New Catering Policy, 2010, the Divisional Railway Manager (Commercial), Southern Railway/the second respondent herein, invited sealed bids on single stage two packet system from food and catering service providers for provisions of catering services at major static units at various stations including Salem vide Bid No.SA/C79/CATG/MAJ/TENDER dated 02.04.2013, in respect of Salem Division for Vegetarian and Non-vegetarian Refreshment Room, quoting the minimum reserved price. 2. Pursuant to the above, the 4th respondent processed his tender, which was selected as qualified and he was called for technical bid on 17.11.2013 and thereafter, he was declared as successful bidder in respect of Non-vegetarian Refreshment Room at Salem Platform No.3/4. When the license was about to be issued in favour of the 4th respondent, the petitioner herein, who is the existing licensee and whose license has already expired on 30.10.2013, has filed the present writ petition and got interim stay, restraining the second respondent from proceeding further. The matter, is thus, stood there. 3. While so, the case of the petitioner is that earlier her husband, Late Narayanan Nair was granted license to run Non-vegetarian light refreshment stall and Non-vegetarian refreshment room at Salem Junction Railway station and he maintained the same from 1958 onwards by getting the license renewed from time to time. In the year 1998, husband of the petitioner expired and thereafter, the license was given to the petitioner and she maintained both veg and non-veg refreshments till 2010. Later, the second respondent invited the tenders as stated above, for which, the petitioner also submitted her bid with all requisite documents along with EMD. However, she came to know that her bid was rejected while the bid of the 4th respondent was accepted. 4. Questioning the acceptance of the bid of the 4th respondent by the second respondent, the petitioner has come forward with the present writ petition. Along with the writ petition, the petitioner has also filed MP Nos. 1 and 2 of 2013, for a direction to the second respondent to permit the petitioner to run the canteens and also for grant of interim stay to restrain the second respondent to finalize the tender process of the 4th respondent. By order, dated 25.10.2013, this Court granted interim stay. 5.
1 and 2 of 2013, for a direction to the second respondent to permit the petitioner to run the canteens and also for grant of interim stay to restrain the second respondent to finalize the tender process of the 4th respondent. By order, dated 25.10.2013, this Court granted interim stay. 5. The 3rd respondent has filed a counter affidavit, inter alia, stating that all the tenders were considered and scrutinized by a duly constituted tender committee in accordance with terms of the tender and guidelines governing the same and found that one S.K.Rathinavelu, Madhukar Catering is having all requisite eligibility and thus, he became successful bidder. The petitioner has not satisfied the eligibility criteria of having an annual turnover of Rs.50 lakhs during each of the preceding 5 years and also did not possess the financial standing of Rs.20 lakhs during each of the last preceding 5 years and accordingly, they rejected the bid of the petitioner. 6. Mr.S.Kalyanaraman, learned counsel appearing for the petitioner would contend that the second respondent has accepted the bid of the 4th respondent in violation of the terms of the tender, which admittedly, the 4th respondent has not fulfilled. The learned counsel contended that the eligibility norms relating to possessing of a minimum five years of catering business experience and minimum annual turnover of Rs.50 lakhs for each of the preceding five years, were not satisfied by the 4th respondent and that the 2nd respondent was not justified in evaluating the defective bid of the 4th respondent. The second respondent ought to have considered the petitioner for financial bid being eligible since the petitioner is having vast experience in the catering business, i.e. for the decades together and she satisfied the norms of annual minimum turnover. 7. On the other hand, while reiterating the averments of the counter affidavit filed by the 4th respondent, Mr.AR.L.Sunderasan, learned senior counsel appearing for the 4th respondent would contend that having found that the 4th respondent has satisfied all the eligibility criteria for acceptance of the bid, the second respondent has finalized the bid of the 4th respondent. He contended that the 4th respondent submitted the statements showing minimum annual turnover by running a separate catering by name Madhukar Catering.
He contended that the 4th respondent submitted the statements showing minimum annual turnover by running a separate catering by name Madhukar Catering. The learned senior counsel also would contend that having failed in becoming successful bidder and without having possess requisite eligibility, the petitioner has no locus standi to question the validity or acceptance of the bid of the 4th respondent and hence, the writ petition is liable to be dismissed as not maintainable. 8. In this regard, it is worthwhile to refer a decision reported in “Ramana Dayaram Shetty versus International Airport Authority of India and others” reported in (1979) 3 SCC 489 , wherein, the Hon’ble Supreme Court, while dealing with the similar contention that the appellant therein had no locus standi to maintain the writ petition, has categorically held as under in para 9: “9. That takes us to the next question whether the acceptance of the tender of the 4th respondents was invalid and liable to be set aside at the instance of the appellant. It was contended on behalf GI the 1st and the 4th respondents that the appellant had no locus to maintain the writ petition since no tender was submitted by him and he was a mere stranger. The argument was that if the appellant did not enter the field of competition by submitting a tender, what did it matter to him whose tender was accepted; what grievance could he have if the tender of the 4th respondents was wrongly accepted. A person whose tender was rejected might very well complain that the tender of someone else was wrongly accepted, but it was submitted, how could a person who never tendered and who was at no time in the field, put forward such a complaint ? This argument, in our opinion, is mis-conceived and cannot be sustained for a moment. The grievance of the appellant, it may be noted, was not that his tender was rejected as a result of improper acceptance of the tender of the 4th respondents, but that he was differentially treated and denied equality of opportunity with the 4th respondents in submitting a tender. His complaint was that if it were known that non-fulfilment of the condition of eligibility would be no bar to consideration of a tender, he also would have submitted a tender and competed for obtaining a contract.
His complaint was that if it were known that non-fulfilment of the condition of eligibility would be no bar to consideration of a tender, he also would have submitted a tender and competed for obtaining a contract. But he was precluded from submitting a tender and entering the field of consideration by reason of the condition of eligibility, while so far as the 4th respondents were concerned, their tender was entertained and accepted even though they did not satisfy the condition of eligibility and this resulted in inequality of treatment which was constitutionally impermissible. This was the grievance made by the appellant in the writ petition and there can be no doubt that if this grievance were well founded, the appellant would be entitled to maintain the writ petition. The question is whether this grievance was justified in law and the acceptance of the tender of the 4th respondents was vitiated by any legal infirmity.” 9. Therefore, having regard to the above and since the petitioner is also an aggrieved party since her bid was found ineligible, this Court is of the view that the petitioner is having every locus to maintain the writ petition. 10. The learned counsel appearing for the petitioner would contend that the 4th respondent has not fulfilled the eligibility norms relating to have profit or loss + accumulated serves + share capital minimum of Rs.20 lakhs during each of preceding five years and also relating to the experience of Catering business for a minimum of 5 years. According to the learned counsel for the petitioner, the 4th respondent was running catering business without valid license since the Food Safety and Standards Authority of India (Ministry of Health and Family Welfare), has fixed the last date for obtaining license/registration for the existing food business operations till 4.2.2014 and that as per Section 31 of the Food Safety and Standards Act, 2006 (in short, the Act, 2006) which came into force on and from 29.7.2010 and the Rules, viz., Food Safety and Standards (Licensing and Registration of Food Business) Regulations, 2011 came into force on 5.8.2011, the 4th respondent ought to have obtained the license for the preceding five years to the issuance of tenders.
The learned counsel pointed out that the tender were called for by the second respondent on 21.10.11 and the 4th respondent did not possess license since he did not obtain the same as per the Act, 2006. Therefore, the learned counsel vehemently contended that since the 4th respondent has no valid license as per the Act, 2006, his bid cannot be evaluated as one of the eligibility norms, i.e. “the bidder must have a minimum five (5) years of catering business experience”. 11. In reply, the learned senior counsel appearing for the 4th respondent at the threshold would contend that mere for participating in bids, there is no need for possessing the valid license as per the Act, 2006 but it be would required only if his bid is selected and permitted to carryon the business. However, the learned counsel would contend that the 4th respondent was carrying on the catering business having obtained license as per provisions of the Prevention of Food Adulteration Act, 1954, which has been repealed by the Act, 2006 and since Section 97 of the Act, 2006 specifically provides that such repeal shall not affect the previous operations of the enactments and orders under repeal or anything duly done or suffered thereunder, the previous operation of carrying on catering business by the 4th respondent with the license obtained under the erstwhile Prevention of Food Adulteration Act, 1954 is very well valid and hence, the 4th respondent has satisfied the eligibility norm relating to experience of Catering business for a minimum of 5 years. He would further submit that subsequently, by proceedings dated 4.2.2014, the Food Safety and Standards Authority of India (Ministry of Health and Family Welfare), has issued statutory advisory, extending time line upto 4th August, 2014 for the Food business Operators seeking conversion/renewal of existing license/registration under repealed orders. He also submitted that in fact, the 4th respondent has applied for renewal of the existing license as per the Act, 2006. Therefore, with these contentions, the learned counsel would contend that there is absolutely no irregularity or illegality in act of the second respondent in confirming the bid of the 4th respondent. 12. Having heard the learned counsel appearing for both sides and on going through the entire material placed on record, I find that there is considerable force in the contention of the learned counsel appearing of the 4th respondent.
12. Having heard the learned counsel appearing for both sides and on going through the entire material placed on record, I find that there is considerable force in the contention of the learned counsel appearing of the 4th respondent. As could be seen from the counter affidavit filed on behalf of the 3rd respondent as narrated above, the 4th respondent has fulfilled all the eligibility criteria for accepting the bid. The eligibility criteria relating to the experience of Catering business for a minimum of 5 years is concerned, according to the petitioner, the 4th respondent was running catering business without valid license since the Food Safety and Standards Authority of India (Ministry of Health and Family Welfare), has fixed the last date for obtaining license/registration for the existing food business operations till 4.2.2014 and that as per Section 31 of the Food Safety and Standards Act, 2006 (in short, the Act, 2006) which came into force on and from 29.7.2010 and the Rules, viz., Food Safety and Standards (Licensing and Registration of Food Business) Regulations, 2011 came into force on 5.8.2011, the 4th respondent ought to have obtained the license for the preceding five years to the issuance of tenders and that when the tenders were called for by the second respondent on 21.10.11 and the 4th respondent did not possess license since he did not obtain the same as per the Act, 2006. 13. Sections 31 and 97 of the Act, 2006 is relevant and it is extracted hereunder: “31. Licensing and registration of food business. (1) No person shall commence or carry on any food business except under a licence. (2) Nothing contained in sub-section (1) shall apply to a petty manufacturer who himself manufactures or sells any article of food or a petty retailer, hawker, itinerant vendor or a temporary stall holder or small scale or cottage or such other industries relating to food business or tiny food business operator; but they shall register themselves with such authority and in such manner as may be specified by regulations, without prejudice to the availability of safe and wholesome food for human consumption or affecting the interests of the consumers. (3) Any person desirous to commence or carry on any food business shall make an application for grant of a licence to the Designated Officer in such manner containing such particulars and fees as may be specified by regulations.
(3) Any person desirous to commence or carry on any food business shall make an application for grant of a licence to the Designated Officer in such manner containing such particulars and fees as may be specified by regulations. (4) The Designated Officer on receipt of an application under sub-section (3), may either grant the licence or after giving the applicant an opportunity of being heard and for reasons to be recorded in writing, refuse to grant a licence to any applicant, if he is satisfied that it is necessary so to do in the interest of public health and shall make available to the applicant a copy of the order: (5) ….. to (8) ……..” “97. Repeal and savings. (1) With effect from such date as the Central Government may appoint in this behalf, the enactment and Orders specified in the Second Schedule shall stand repealed: Provided that such repeal shall not affect:— i. the previous operations of the enactment and Orders under repeal or anything duly done or suffered there under; or ii. any right, privilege, obligation or liability acquired, accrued or incurred under any of the enactment or Orders under repeal; or iii. any penalty, forfeiture or punishment incurred in respect of any offences committed against the enactment and Orders under repeal; or iv. any investigation or remedy in respect of any such penalty, forfeiture or punishment, and any such investigation, legal proceedings or remedy may be instituted, continued or enforced and any such penalty, forfeiture or punishment may be imposed, as if this Act had not been passed. (2) If there is any other law for the time being in force in any State, corresponding to this Act, the same shall upon the commencement of this Act, stand repealed and in such case, the provisions of section 6 of the General Clauses Act, 1897(10 of 1897) shall apply as if such provisions of the State law had been repealed. (3) Notwithstanding the repeal of the aforesaid enactment and Orders, the licences issued under any such enactment or Order, which are in force on the date of commencement of this Act, shall continue to be in force till the date of their expiry for all purposes, as if they had been issued under the provisions of this Act or the rules or regulations made thereunder.
(4) Notwithstanding anything contained in any other law for the time being in force, no court shall take cognizance of an offence under the repealed Act or Orders after the expiry of a period of three years from the date of the commencement of this Act.” 14. A reading the above provisions would explicit that no person shall commence or carry on any food business except under a license issued by a Designated Officer authorised by the Commissioner of Food Safety and that the repeal shall not affect the previous operations of the enactments under the repeal or anything duly done or suffered thereunder or any right, privilege, obligation or liability acquired, accrued or incurred under any of the enactment under repeal. It is to be noted that the 4th respondent was carrying on the catering business having obtained license as per provisions of the Prevention of Food Adulteration Act, 1954, which has been repealed by the Act, 2006 and as narrated above, since Section 97 of the Act, 2006 specifically provides that such repeal shall not affect the previous operations of the enactments and orders under repeal or anything duly done or suffered thereunder, the previous operation of carrying on catering business by the 4th respondent with the license obtained under provisions of the erstwhile Prevention of Food Adulteration Act, 1954 is very well valid and hence, the 4th respondent has satisfied the eligibility norm relating to experience of Catering business for a minimum of 5 years. In fact, subsequently, by proceedings dated 4.2.2014, the Food Safety and Standards Authority of India (Ministry of Health and Family Welfare), has issued statutory advisory, extending time line upto 4th August, 2014 for the Food business Operators seeking conversion/renewal of existing license/registration under repealed orders. Pursuant to the same, the 4th respondent has applied for renewal of the existing license as per the Act, 2006. 15. Section 31(1) of the Act, 2006 is very clear that no person can commence or carry on any food business except under a licence. The contention of the petitioner that when the 4th respondent did not possess licence at the time of participating in bid, he cannot be awarded contract under the tender, cannot hold water since as stated above, as per the provision 31(1) of the Act, 2006, necessary license is required only at the commencement of the business.
The contention of the petitioner that when the 4th respondent did not possess licence at the time of participating in bid, he cannot be awarded contract under the tender, cannot hold water since as stated above, as per the provision 31(1) of the Act, 2006, necessary license is required only at the commencement of the business. However, it is to be noted that in view of the interim order obtained by the petitioner restraining the 2nd respondent from awarding the license/contract to the 4th respondent, the business of catering is yet to be commenced by the 4th respondent. That apart, as stated supra, the 4th respondent is holding a valid license and he has fulfilled all the norms envisaged in the tender. 15. In the light of above discussion, I find that the 4th respondent has fulfilled all the terms prescribed for acceptance of the bid, which was rightly considered and finalized by the 2nd respondent and as rightly contended by the learned senior counsel, there is no irregularity or illegality thereof. However, considering the fact that the petitioner has been in the field and serving the Railways for the past more than five decades, the respondents/railway authorities are directed to give preference in future tenders if any called for, if her tender is otherwise qualified. 16. For the foregoing reasons, this Writ Petition fails and it is dismissed. No costs. Consequently, connected MPs are closed and the interim order, granted by this Court, dated 25.10.2013 is hereby vacated.