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2016 DIGILAW 1727 (ALL)

Surya Food and Agro Ltd v. Divisional Railway Manager NCR

2016-05-05

D.Y.CHANDRACHUD, YASHWANT VARMA

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JUDGMENT Initially in 2007, the Indian Railway Catering and Tourism Corporation (IRCTC) invited tenders for management of Automatic Vending Machines (AVMs) for a period of three years. Subsequently, by a communication dated 7 February 2007, a decision was taken to increase the tenure of licences of AVMs from three years to five years with no extension, which was to be applicable for tenders invited after the issuance of the instructions. Contracts were executed with the petitioners on diverse dates. A copy of a sample contract dated 30 July 2009 is annexed as Annexure-2 to the writ petition. The contract was for a period of five years. The contract with the petitioners covered three railway stations - Jhansi, Manikpur and Gwalior. The term of the contract, admittedly, came to an end. An extension protem was granted from time to time. For instance, in respect of Jhansi railway station, an extension was granted by the Divisional Railway Manager (Commercial) on 21 November 2015 until 31 January 2016. This was extended from 1 February 2016 to 30 April 2016. On 30 April 2016, the petitioners were informed that their licences had not been extended and they should hence shut down the AVMs on 30 April 2016. 2. The petitioners contend that one of their associate firms was granted the extension of AVMs functioning at Coimbatore, until 31 May 2016 and similarly, in respect of Agra until 20 October 2016. However, the grievance is that on 2 May 2016, the petitioners have been directed to shut down the AVMs. 3. On behalf of the respondents, the learned Standing Counsel urges that (i) the petitioners have no vested right, contractual or otherwise, to continue after the term of the licence came to an end; (ii) a decision has been taken to not extend the term of the contract, since there were complaints against the petitioners of over charging; and (iii) alternate arrangements have already been made by railway authorities by providing refreshment rooms to take care of the interests of passengers. 4. The Catering Policy of 2010 makes a specific provision in regard to AVMs in Para 11. It stipulates that Zonal Railways shall manage through licensees the AVMs which would be governed by policy guidelines issued by the Railway Board. Para 11.2 provides that the existing AVMs would be allowed to continue until the currency of the existing contracts, without any renewal being permitted. It stipulates that Zonal Railways shall manage through licensees the AVMs which would be governed by policy guidelines issued by the Railway Board. Para 11.2 provides that the existing AVMs would be allowed to continue until the currency of the existing contracts, without any renewal being permitted. Similarly, Para 16 which deals with 'tenure' provides, insofar as is relevant, that the tenure of AVMs will be for a period of five years and there will be no renewals as per policy as these are major units. 5. Before the petitioners can seek a mandamus, as sought, restraining the authorities from interfering with the running of AVMs at Jhansi, Manikpur and Gwalior railway stations until such time as regular selections are made, the petitioners must be in a position to establish a vested legal or contractual right. There is none to that effect. 6. The petitioners have relied upon a decision of the Supreme Court in N B Krishna Kurup Vs Union of India, (2005) 12 SCC 261 . A close reading of paragraph 10 of the judgment indicates that in that case, the learned counsel appearing for IRCTC had divided existing licensees into four categories and Category III elucidated those cases where licences had expired before 31 March 2005 but ad hoc extensions were granted, in which event it was provided that the licensees shall be permitted to continue in terms of the extension already granted and, in any event, till 30 June 2005, whichever is later, so as to grant a window of three months for finalization of fresh licences. Recording the submissions, the Supreme Court had observed thus: "Nothing stated herein shall preclude the Indian Railways/IRCTC from granting ad hoc extensions in the interest of general public travelling in the trains. Such extension, however, shall not create any legal right in the licensee's favour..." 7. These observations indicate that the decision whether or not to grant an ad hoc extension lay in the discretion of the Indian Railways/IRCTC in the interests of the general public travelling in trains. Moreover, an extension was, it was observed, not to create any legal right in favour of the licensees. 8. In the present case, there is clearly no pre-existing legal right. Moreover, an extension was, it was observed, not to create any legal right in favour of the licensees. 8. In the present case, there is clearly no pre-existing legal right. If, as in the present case, the railway authorities have borne in mind the interests of general public and considered it inappropriate to grant a further extension having due regard to the overall performance of the petitioners, this Court would not be justified in issuing a direction for the enforcement of a non-existing contract : non existing in the sense that the term of the contract came to an end by efflux of time. 9. No legal rights, as such, are created by the Circular of 2013 which engrafts only an enabling provision for the zonal authorities to consider the grant of ad hoc extension where disruption of a particular facility will result in detriment to the public. 10. For these reasons, we find no merit in the petition. The petition is accordingly dismissed. There shall be no order as to costs.