Research › Search › Judgment

Andhra High Court · body

2025 DIGILAW 210 (AP)

Poorna Caterers v. Union of India

2025-02-03

VENKATESWARLU NIMMAGADDA

body2025
ORDER : Venkateswarlu Nimmagadda, J. 1. Both these writ petitions are filed under Article 226 of the Constitution of India by different petitioners, claiming identical relief, as such, I find it expedient to decide both the writ petitions by common order, since the issue involved in all the writ petitions is one and the same. W.P.No.28631 of 2024 2. This writ petition is filed challenging the action of Respondent Nos.2 & 3 in issuing the impugned order vide IRCTC/SCZ/ZO(CATG)/104/2021/ZO/SCZ dated 16.10.2024 directing the petitioner herein to stop the operations i.e. Train Side Vending (TSV) License to manage on Board Catering Services on SC-DHNE Section (including GDW-RC Sub-section) over South Central Railway from 16.12.2024, without considering the request of the petitioner for extension of license for period of contract in which petitioner’s services were non-operational due to Covid-19 Pandemic, as arbitrary, illegal, unjust, contrary to principles of natural justice and violative of petitioner’s right guaranteed under Articles 14 & 19(1)(g) of the Constitution of India . 3. The brief facts of the case are that the petitioner’s firm is engaged in the business of Food Catering Services. The 2 nd respondent issued E-Tender No.IRCTC/SCZ/1/NIT-14/TSV/2019/01 dated 10.08.2019 for Train Side Vending (TSV) License to manage on Board Catering Services on SC-DHNE Section for 5 years. The 3 rd respondent issued a Letter of Award dated 16.10.2019 in favour of the petitioner. Thereafter, an agreement dated 26.10.2022 was entered into between the petitioner and the 2 nd respondent and providing TSV services as per the terms of the Agreement. 4. While things stood thus, due to the onset of Covid-19 Pandemic, the 2 nd respondent vide letter dated 20.03.2020 cancelled all the trains and closed catering/vending services across all sections in the country till 31.03.2020. Following the instructions, the petitioner had shut down all catering operations. However, the respondent imposed force majeure clause and did not renew the TSV License of the petitioner on the ground that the services were non- operational due to Covid-19. 5. The respondents have extended the contract period to various other licensees in the country by invoking the force majeure clause and that the period of contract was extended for the period that the services were non- operational due to Covid-19. 5. The respondents have extended the contract period to various other licensees in the country by invoking the force majeure clause and that the period of contract was extended for the period that the services were non- operational due to Covid-19. Since the period of license was getting expired by 21.11.2024, the petitioner submitted letter dated 10.07.2024 to the respondents requesting to extend the License Period by another 2 years. The petitioner was under an impression that the period of license would be extended for a further period of 2 years on par with other licenses throughout the country. Instead of considering the extension of petitioner’s license, the 3 rd respondent issued proceedings IRCTC/SCZ/ZO(CATG)/104/2021/ZO/SCZ dated 16.10.2024 directing the petitioner herein to stop all operations from16.12.2024 in the said TSV section and surrender all the materials and records pertaining to the said tender. Challenging the proceedings IRCTC/SCZ/ZO(CATG)/104/2021/ZO/SCZ dated 16.10.2024, the present writ petition is instituted. 6. Respondent Nos.2 & 3 filed counter affidavit and vacate stay petition in I.A.No.3 of 2024 denying material allegations. In Paragraph No.6, it is submitted that, the period of license is for 5 years in terms of Clause 5.1 of Section -1 of General Information in E-Tender dated 10.08.2019. The tenure of the license shall be five years from the date of commencement of services in the first train of the section and no renewal is permissible. 7. Further, it is submitted that, as per Tender Condition 5.3.2, IRCTC may exit from the license at any time without liability on either side, after commencement of services by giving 2 months notice in which case, SD, balance proportionate license fee will be refunded after adjusting outstanding if any. It is submitted that, IRCTC has carefully examined the licensee request and decided for discontinuation of sectional TSV contracts in view of the commencement of cluster contracts on PAN India basis in all trains for provision of good quality food. If any continuation of sectional TSV contracts non-period are extended, the purpose of implementation of cluster contracts may get deviated and also may arise conflicts between the sectional and cluster licensees. If any continuation of sectional TSV contracts non-period are extended, the purpose of implementation of cluster contracts may get deviated and also may arise conflicts between the sectional and cluster licensees. As such, IRCTC decided not to extend the dies-non period for the said TSV section and accordingly, vide letter dated 16.10.2024 opted to exit from the said sectional TSV contract as per Tender Condition No.5.3.2 with two months notice period for effective implementation of Cluster Policy (Contracts) for serving good quality and hygienic food to the passengers on trains and requested to dismiss the writ petition. 8. The petitioner filed reply affidavit in I.A.No.3 of 2024, almost reiterating the contentions urged in the writ affidavit. 9. During hearing, learned counsel for the petitioner would submit that, the petitioner did not operate his business on account of Covid-19 for a period of 696 days i.e. from 23.03.2020 to 16.02.2022. Therefore, the petitioner is entitled for extension of TSV License. But, without considering the same, the respondents proceeded further on the ground that the period of lease of the petitioner is already completed by 21.11.2024 and issued fresh Tender Notice dated 16.12.2024. Learned counsel for the petitioner further submits that issuance of fresh tender in respect of the license granted to the petitioner is nothing but contrary to Clause 6.1 of the General conditions. Learned counsel further submits that, as per the counter affidavit filed by the respondents, the petitioner has not operated the business for a period of 696 days, therefore, as per Clause 6.1 of the General Conditions i.e. Force Majeure Clause, the petitioner is entitled for extension of license period for the period during which License was not operational i.e. for 696 days i.e. upto 18.10.2026 and requested to grant the relief as claimed in the writ petition. 10. On the other hand, Smt. K. Aruna, learned Standing Counsel for IRCTC would submit that, as per Clause 5.3.2 of the Tender Conditions, IRCTC may exit from the license at any time, without liability either side, after on commencement of services by giving two months notice in which case the SD, balance proportionate license fee will be refunded after adjusting outstanding if any. Accordingly, the respondents intended to exist from the subject license granted in favour of the petitioner and further proceeded and issued fresh notice, modifying the entire operational area by way of new policy. Accordingly, the respondents intended to exist from the subject license granted in favour of the petitioner and further proceeded and issued fresh notice, modifying the entire operational area by way of new policy. Therefore, continuation of period of license, as claimed by the petitioner does not arise. 11. She further submits that, the petitioner has not paid the license charges for 696 days. Therefore, no prejudice would be caused to the petitioner due to closure of the license period of the petitioner and proceeding further, by calling new tenderer by issuing fresh tender notice is in accordance with law. She further submits that, if any security deposits are pending with the respondents, the same will be returned to the petitioner under proper acknowledgment, but the fact remains that no license fee was collected for the non-operational period and requested to dismiss the writ petition. 12. Having regard to the submissions made by learned counsel for the petitioner and learned Standing Counsel for IRCTC, admittedly, the petitioner was granted Train Side Vending (TSV) License to manage on Board Catering Services on SC-DHNE Section for a period of five years i.e. from 22.11.2019 to 21.11.2024 plus extended period upto 15.12.2024 (total 1851 days). The petitioner/licensee has operated the contract for the period from 22.11.2019 to 22.03.2020 (122 days) and from 17.02.2022 upto 15.12.2024 (1033) = Total 1155 days. The non-operation period on account of Covid from 23.03.2020 to 16.02.2022 was (696) days. Therefore, out of 1851 days, the petitioner has operated the contract for 1155 days and did not operate for 696 days. 13. Clause 6 deals with Force Majeure and according to Clause 6.1, in the event of any unforeseen event directly interfering with the operation of License arising during the currency of the license agreement; such as but not limited to war, insurrection, restraint imposed by the Government, act of Legislature or other authority, explosion, accident, strike, riot, lock out of, act of public enemy, acts of God, sabotage or other act beyond the reasonable control of a party; the Licensee shall, within a week from the commencement thereof, notify the same in writing to the Licensor with reasonable evidence thereof. The Services shall be restored as expeditiously as possible, or, as the case may be, the impediment to accessibility shall be removed as expeditiously as possible. The Services shall be restored as expeditiously as possible, or, as the case may be, the impediment to accessibility shall be removed as expeditiously as possible. If the said property cannot be rendered fit for occupation and use for more than thirty days, the Licensee shall not pay License Fee for such period till the said property becomes accessible and operational following cessation of force majeure event mentioned above. The period of license will be further extended for the period during which License was not operational. 14. On perusal of Clause 6.1, once it is clearly admitted by both parties that the petitioner did not operate for a period of 696 days, he is entitled for extension of license, subject to payment of license fees and compliance of General Terms of License and Terms of License. 15. Further, as contended by learned Standing Counsel for IRCTC, that, as per Tender Clause No.5.3.2, it contemplates to withdraw the license by giving two months notice to invoke the said condition, the respondents issued impugned proceedings dated 16.10.2024 to withdraw the lease period/license granted in favour of the petitioner. 16. For better appreciation of the case, Tender Clause 5.3.2 reads as follows: “IRCTC may exit from the license at any time, without liability either side, after on commencement of services by giving 2 months notice in which case the SD, balance proportionate license fee will be refunded after adjusting outstanding if any. However, the Special Security Deposits paid towards security for the meals supplied in unbundling model shall only be refunded on production of No Due Certificate from respective kitchen licensee.” 17. On perusal of the Tender Clause 5.3.2, it is contrary to the Force Majeure Clause i.e. Clause 6.1 of the General Conditions of License as well as the Terms of Agreement dated 26.10.2022. Therefore, enforcement of Clause 6.1 is also notified by way of office memorandum stating that the subject period is classified as Pandemic and Clause 6.1 can be implemented in respect of the period not operated by the petitioner. 18. In view of the reasons stated above, the petitioner is entitled for extension of TSV License for non-operative period of 696 days in view of Clause 6.1 of the General Conditions i.e. upto 18.10.2026 as per the Terms of Agreement and General Conditions of License. 18. In view of the reasons stated above, the petitioner is entitled for extension of TSV License for non-operative period of 696 days in view of Clause 6.1 of the General Conditions i.e. upto 18.10.2026 as per the Terms of Agreement and General Conditions of License. However, the respondents are at liberty to proceed further as per the schedule of Tender Notice issued in March, 2024 in respect of the petitioner’s license, subject to completion of period of petitioner i.e. 18.10.2026. 19. With the above direction, writ petition is disposed of. No costs. 20. Consequently, miscellaneous applications pending if any, shall stand closed. W.P.No.28633 of 2024 21. In view of the detailed order passed by this Court in W.P.No.28631 of 2024; W.P.No.28633 of 2024 is disposed of, holding that, the petitioner is entitled for extension of TSV License for non-operative period of 711 days in view of Clause 6.1 of the General Conditions i.e. upto 11.11.2026 as per the Terms of Agreement and General Conditions of License. However, the respondents are at liberty to proceed further as per the schedule of Tender Notice issued in March, 2024 in respect of the petitioner’s license, subject to completion of period of petitioner i.e. 18.10.2026. 22. Consequently, miscellaneous applications pending if any, shall stand closed.