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2023 DIGILAW 25 (PAT)

Express Food Service through its Partner namely Shiva Kant Pandey Son of Late Sri S. C. Pandey v. The Union of India

2023-01-09

ASHUTOSH KUMAR, SATYAVRAT VERMA

body2023
JUDGMENT :Ashutosh Kumar, J. 1. Heard Mr. P. K. Shahi, the learned Senior Advocate assisted by Mr. Satyam Shivam Sundaram, the learned Advocate for the petitioner and Mr. Pradeep Kumar assisted assisted by Mr. Radhika Raman, the learned Advocates for the Railway Administration. 2. The petitioner has challenged the decision of the Divisional Commercial Manager, East Central Railway, Danapur dated 15.12.2020, whereby the license fee of the catering stalls held by the petitioner at Patna and Kiul Railway junctions have been revised at astronomical rates which has been made effective from 1.11.2018. 3. For the sake of completeness, the chart below would disclose the earlier assessed license fee and the revised license fee with respect to 13 (thirteen) stalls/kiosks held by the petitioner, a partnership firm. 4. The further prayer in the writ petition is for setting aside the order dated 22.09.2021 issued by the Chief Commercial Manager (Catering), East Central Railway, Hajipur, whereby it has been held that non deposit of the differential arrears of license fee as set out in the tabular chart shall be paid, failing which, all catering units of the licensee would be closed after completion of the renewed period and that for realization of all the dues, the licensee would be debarred and black-listed from participating in any tender floated either by Railways or I.R.C.T.C. for the Indian Railways besides taking other legal action against the licensee. 5. The major thrust of challenge to the aforesaid two communication is non-implementation and non-observance of the provisions contained in Clause 18.3 of the Catering Policy of 2010. Clause 18.3 of the Catering Policy of 2010 reads as hereunder:- “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 to a minimum of 10% increased 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 licencee fee. Renewal will be done for the existing licensees, if any, against the railways and payment of railway dues and arrears”. 6. Renewal will be done for the existing licensees, if any, against the railways and payment of railway dues and arrears”. 6. A bare reading of the aforesaid provision would indicate that at the time of renewal of license, licence fee shall be re-assessed and revised but subject to a minimum of 10% of increase over the prevailing license fee of the unit. 7. The Railway Administration has further been obligated, for any further hike in the license fee, to first arrive at a realistic figure by making a fresh assessment of sales turnover/ revenue during the peak and lean periods i.e. with the periodicity of three months in order to assess the actual sales turnover for fixation of the revised license fee. There is a further caveat in the aforesaid clause which says that there shall be no renewal in case the existing licensees do not withdraw court cases against Railway Administration or for payment of railway dues and arrears. 8. Mr. Shahi contends that for all the 13 units held by the partnership firm/ petitioner, the license fee has been enhanced by more than 100% but without making any assessment of sales turnover/revenue as enjoined under Clause 18.3 of the Catering Policy of 2010. 9. There is no clear answer of the Railway Administration with respect to non-observance of the requirement under Clause 18.3 of the Catering Policy of 2010 before fixing the fresh license fee on renewal. 10. 9. There is no clear answer of the Railway Administration with respect to non-observance of the requirement under Clause 18.3 of the Catering Policy of 2010 before fixing the fresh license fee on renewal. 10. It would be relevant here in this context to refer to the decision of the Supreme Court in Senior Commercial Divisional Manager, South Central Railway and Others v. S.C.R. Caterers, Dry Fruits, Fruit Juice Stalls Welfare Association and Another; 2016 (3) SCC 582 wherein, the mandate of Article 38 of the Constitution, making it obligatory for the State to strive to promote the welfare of the people by securing and protecting as effectively as it may, a social order, in which justice, social, economic and political, shall inform all the Institutions of the national life and the State shall, in particular, strive to minimize the inequalities in income and endeavour to eliminate inequalities in status, facilities and opportunities not only amongst individuals but also amongst groups of people residing in different areas or engaged in different vocations, was taken into account and was held that the Railway Administration ought to grant renewal of licenses under the Catering Policy of 2010 to the members of the Association which was the respondent before the Supreme Court, as not doing so would be arbitrary, unfair, discriminatory and unsustainable in the eyes of law. 11. This judgment was with a disclaimer that the mandate would not be applicable in cases of licensees who would not declare on affidavit that they do not have the license of more than one shop or kiosk in their name or Benami license at the Railway Stations, and the renewal of such licenses shall be made with periodical and reasonable increase of license fee. 12. It would be further relevant here to point out that in the review jurisdiction, the Hon’ble Supreme Court was informed that licensees were not merely individual persons but were co-operative societies, partnership firms and HUF etc. In that situation, each of the associations of persons held more than one license. The observation of the Hon’ble Supreme Court in South Central Railways (supra) was mistakenly taken by the authorities to prevent those persons from claiming renewal of license. 13. In that situation, each of the associations of persons held more than one license. The observation of the Hon’ble Supreme Court in South Central Railways (supra) was mistakenly taken by the authorities to prevent those persons from claiming renewal of license. 13. The Supreme Court, therefore, clarified the same on 30.10.2018 in Vendors Co-Operative Society Ltd and others v. Union of India and others that the observation of the Supreme Court in South Central Railway (supra) was for the purposes of increasing employment amongst those who had opted for this kind of business. It was in this context that the Supreme Court had declined to continue several licenses in the name of one person. It was further explained that if licenses, over and above were distributed to such associations, other applicants who wanted to do the same business, it would only result in more people to get employed. It was further declared that the Supreme Court had not considered the case of the Association of persons like co-operative societies, partnership firms and HUF which held more than one licence. 14. Any limited interpretation of the observations in South Central (supra) would, the Supreme Court observed, result in reducing the employment by restricting the number of licenses to those associations or persons to only one licence. In other words, the Supreme Court held that in addition to the number of existing licenses held by co-operative societies, partnership firms and HUF, other members shall be allowed to carry on such business and their licenses also shall be renewed as before in accordance with existing policy. 15. With respect to partnership firms, it was observed by the Supreme Court that a partnership firm is a compendious name for all the partners and, in essence, a partnership firm consists of number of individuals, who are its partners. In that situation, there would be no reason why a partnership of several partners can have only one license. Similar was the situation in HUF where the Supreme Court considered of a situation/possibility where individuals forming part of same HUF would be interested in doing business individually and out of such HUF. Any other interpretation would mean undue liability imposed on such members of the HUF. 16. Similar was the situation in HUF where the Supreme Court considered of a situation/possibility where individuals forming part of same HUF would be interested in doing business individually and out of such HUF. Any other interpretation would mean undue liability imposed on such members of the HUF. 16. Thus, in sum and substance, it was held that even if the number of licenses held by a Firm or HUF or a co-operative society was more than one, it could be considered for grant of license with respect to the other members of such association and in that case, the benefit of the judgment in South Central (Supra) would not be precluded from being given to such persons. 17. Mr. Pradeep Kumar, the learned Advocate for the Railways has, however, submitted that the case of the petitioner is absolutely different. The same partnership Firm owns 13 such catering units. It is not the case of the petitioner that such licenses are held by different persons under the HUF or partnership firms or whichever association. Be that as it may, instead of cancelling the license of the petitioner at different locations, the Railway Administration has only hiked the license fee. 18. As noted above, there is no rebuttal by the Railway Administration of the charge of the petitioner that such hike was made without any assessment of the sales/revenue turnover. In fact, the categorical statement of the petitioner that there has been no assessment at all under Clause 18.3 of the Catering Policy of 2010, has not at all been controverted. 19. For the afore-noted reason, we hold that the fixation of licensee fee at variance with respect to the stalls held by the petitioner without any assessment as contemplated under Clause 18.3 of the Catering Policy of 2010, is a wrong exercise of power which cannot be sustained in the eyes of law. 20. The same is thus set aside. 21. The matter is remitted to the Railway Administration to make a fresh assessment as contemplated under Clause 18.3 and only thereafter fix the new license fee. 22. This exercise ought to done within a period of three months, to be counted from the date of passing of the order/ production of a copy of this order before the concerned Authority of the Railways. 23. 22. This exercise ought to done within a period of three months, to be counted from the date of passing of the order/ production of a copy of this order before the concerned Authority of the Railways. 23. It would be open for the Railway Administration to also consider at that time whether holding of 13 (thirteen) kiosks by the same partnership firm would come within the definition of such beneficiary as explained by the Supreme Court in South Central (supra). 24. At this point of time, that is when this observation was made in the order, Mr. P.K. Shahi, the learned Senior Advocate, with all humility at his command, suggested to the bench not to make this observation or make for such allowance to the Railway Administration as it has not been pleaded by either of the parties in the writ petition and it would unnecessarily trigger debate Pan-India by unnecessarily stoking of the hornet’s nest, which in ultimate analysis, would only lead to proliferation of litigation at different locations in the country. 25. We have carefully considered the aforenoted objection of Sri Shahi in recording such observation but we reiterate that it would be only in the fitness of things and in the interest of the reason which has been ascribed in South Central (supra) that this consideration be made, viz. whether the observations of the Hon’ble Supreme Court would include within its ambit one single partnership Firm owning 13 kiosks at different Railway Stations. 26. Would it serve the purpose for which the beneficent observation was made in South Central (supra)? 27. We must clarify that we say so on going through the affidavit filed by the Railway Administration which has taken note of other facts, which of course was not made available to the petitioner before filing of the counter affidavit, that the partnership Firm of the petitioner holds kiosks at different Railway Stations. 28. We are constrained to observe that this aspect must be gone into for the sole reason that we find in the case of South Central Railway (supra) the association of the Fruit Merchants were aggrieved by the decision of I.R.C.T.C. in asking them to close down their business. 28. We are constrained to observe that this aspect must be gone into for the sole reason that we find in the case of South Central Railway (supra) the association of the Fruit Merchants were aggrieved by the decision of I.R.C.T.C. in asking them to close down their business. The Supreme Court, taking the welfare responsibility of the State, observed that such petty licensees should not be thrown out of business and for maintaining their right to life, they should be granted license. In fact only to explain it further in Vendors Co-Operative Society Ltd. and Others v. Union of India and Others, the Supreme Court further clarified that in cases of Hindu HUF, partnership Firms and co-operative societies, the observation of South Central (supra) ought not to be seen through a small aperture as the dominant purpose of such observation in South Central (supra) was to prevent lack of employment opportunities to many others, who had been earning their livelihood through that business hitherto. 29. This clarification was necessitated because the members of associations were being prevented from entering into such business over and above such associations. 30. It was in this context that the Supreme Court clarified that a co-operative association can have many members, one out whom still remains a petty business man, seeking his livelihood through this business, who ought not to be excluded from such beneficial interpretation of the Supreme Court. 31. The Supreme Court had thus observed that limiting the license to one person did not mean a different person, who may have formed part of an association or a larger body which already had a licence. 32. These aspects are required to be looked into by the Railway Administration for complete adherence to the judgment of the Supreme Court in South Central Railway (supra) apart from the overall assessment and thus the rationale for raising the license fee of the kiosks held by the petitioner at 13 catering units. In case the license of the petitioner is to be retained and renewed, the fee must be fixed only after appropriate assessment of turnover of sales as contemplated under Clause 18.3 of the Catering Policy of 2010. 33. In case the license of the petitioner is to be retained and renewed, the fee must be fixed only after appropriate assessment of turnover of sales as contemplated under Clause 18.3 of the Catering Policy of 2010. 33. It goes without saying that while making such assessment, the Railway Administration shall take into account the lean period of the Covid -19 times before finally arriving at a figure which should form part of the license fee. 34. We say so for the reason that the Railway Administration has already admitted of such difficult times for the licencees during the Covid period. 35. Till the time a final exercise is made and on a fresh assessment, new license fee is fixed, the petitioner shall be allowed to run all the catering units in accordance with the earlier agreement. 36. The petition stands disposed of accordingly.