IMPORTANT POINT
The State and its instrumentalities should endeavour to give effect to Directive Principles of State Policy and act in fair and reasonable manner, not in arbitrary or discriminative manner.

Headnote:(a) Catering Policy 2010 – Clause 16.1.3, 26.1.1 and 26.1.4 r/w Commercial Circular No. 37 dated 09.08.2010 – Circular and clause 16 and 17 requiring grant of licence to all existing licensees of Minor Units without being included in tender process – Accordingly, catering licenses of all members of respondent Association renewed till July 2013 – 2010 Policy did not classify the licensees into two categories, namely, those who were granted licenses prior to the commencement of the 2010 Policy and those who were granted licenses after the said Policy – All GMUs and SMUs treated under one category – Policy envisaging renewal of licenses of all categories subject to their fulfillment of the requirements – No reason to differ with findings of the High Court. (Para 20)
       (1981) 1 SCC 315 – Relied upon
       (2015) 5 SCC 813; (1985) 3 SCC 267; 1994 Supp (3) SCC 694 – Referred
       (b) Constitution of India – Article 14, 21 and 38 – Welfare State – Right to livelihood – Generation of employment – Supreme Court, being the countermajoritarian institution, duty bound to protect rights of downtrodden minorities and the members of the weaker sections – Requiring members of the respondent Association to participate in a public competition – Absolutely unfair, unreasonable and arbitrary – Not granting renewals of the licenses to the members of the respondents held arbitrary, unreasonable, unfair and discriminatory – Not sustainable – Members of respondents allowed to continue their petty business. (Para 22, 23, 24, 26, 27)
       (1985) 3 SCC 545; (2015) 1 SCC 192; (1979) 3 SCC 489; (1982) 3 SCC 235; (1995) 3 SCC 42; (1984) 3 SCC 410; (1981) 1 SCC 608 – Relied upon
       Facts of the case:
       Respondents are the South Central Railway Caterers, Dry Fruits, Fruit Juice Stalls Welfare Association. The members of the Welfare Association were granted licenses for running General Minor Units or Special Minor Units in Categories “A”, “B” and “C” Railway Stations. These licenses were granted in favour of the members of the respondents prior to the creation of the Indian Railways Catering and Tourism Corporation Limited under the Catering Policy, 2005.
       The said policy was replaced by the Catering Policy, 2010 pursuant to which the South Central Railway granted renewal of licenses in favour of the licensees for a period of three years with effect from 21.07.2010, the date on which the Catering Policy, 2010 was made effective.
       The renewed licenses were to expire on 20.07.2013.
       On 26.04.2013, the Senior Divisional Commercial Manager, Vijayawada, issued a bid notice 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” Railways Stations in the Vijayawada Division.
       A similar notification dated 03.05.2013 was issued for establishment of catering stalls/fruits and fruit juice stalls in SMUs in “A1”, “A” and “B” Category Railway Stations.
       The respondent-Association, the members of which had existing licenses, filed a Writ Petition.
       The Single Judge held that the members of the Welfare Association are entitled for renewal of the licenses of the members subject to their satisfying the conditions stipulated in paras 16.1.3 and 16.2.1 of the Catering Policy, 2010.
       On appeal filed by the appellants, the judgment and order of the Single Judge was upheld by the Division Bench of the High Court.
       Finding of the Court:
       Impugned judgment does not warrant interference.
       Result: All applications disposed of.

JUDGMENT :

V. Gopala Gowda, J.

Applications for intervention are allowed.

2. Leave granted.

3. The present appeals arise out of the impugned judgment and order dated 12.09.2013 passed by the High Court of Judicature of Andhra Pradesh at Hyderabad in W.A. Nos. 1573-1575 of 2013, whereby the Division Bench of the High Court upheld the order of the learned single Judge, wherein it was held that the respondents are entitled to get their licenses renewed under the Catering Policy, 2010.

4. The relevant facts which are required for us to appreciate the rival legal contentions advanced on behalf of the parties are stated in brief hereunder:-

Respondents before us are the South Central Railway Caterers, Dry Fruits, Fruit Juice Stalls Welfare Association, (hereinafter referred to as “the Welfare Association”). The members of the Welfare Association were granted licenses for running General Minor Units or Special Minor Units in Categories “A”, “B” and “C” Railway Stations. These licenses were granted in favour of the members of the respondents prior to the creation of the Indian Railways Catering and Tourism Corporation Limited (hereinafter referred to as “IRCTC”) under the Catering Policy, 2005. In terms of the said Policy, the contracts under Categories “A”, “B” and “C” Railway Stations were transferred to the IRCTC while the contracts granted under Categories “D” to “F” Railway Stations were continued under the control of the South Central Railways till the IRCTC was equipped to take over these units. The contracts held by the members of the Welfare Association were renewed during the subsistence of the Catering Policy, 2005. The said policy was replaced by the Catering Policy, 2010. Under the new Policy, the contracts of all the existing major and minor catering units were to be awarded and managed by the Zonal Railways. The IRCTC was left with the running of the Food Plaza, Food Courts and Fast Food Units only. Pursuant to the Catering Policy, 2010, the South Central Railway granted renewal of licenses in favour of the licensees for a period of three years with effect from 21.07.2010, the date on which the Catering Policy, 2010 was made effective in respect of the General Minor Units (GMUs) and Special Minor Units (SMUs) taken over from the IRCTC, subject to the conditions stipulated in paras 16.1.3 and 16.2.1 of the Catering Policy, 2010. The renewed licenses were to expire on 20.07.2013. On 26.04.2013, the Senior Divisional Commercial Manager, Vijayawada, issued a bid notice 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” Railways Stations in the Vijayawada Division. A similar notification dated 03.05.2013 was issued for establishment of catering stalls/fruits and fruit juice stalls in SMUs in “A1”, “A” and “B” Category Railway Stations. Aggrieved, the respondent-Association, the members of which had existing licenses, filed a Writ Petition before the single Judge of the High Court of Judicature of Andhra Pradesh at Hyderabad. The respondent-Association urged that the said action of inviting fresh bids is discriminatory and also contrary to the provisions of the Catering Policy, 2010. The main plea of the respondent-Association was that in terms of the Catering Policy, 2010, the existing licensees were entitled for renewal of their licenses for a period of three years, subject to their satisfactory performance, payment of all dues and arrears and withdrawal of court cases, if any. They prayed that the appellant be directed to renew the licenses of the existing license holders of the canteens and fruits and fruit juice stalls. Vide judgment and order dated 16.08.2013, the learned single Judge came to the conclusion that the Catering Policy, 2010 did not differentiate among the licensees based on the number of years for which they have been carrying on their business. It was further held that under the Cate

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2016 Supreme(SC) 90

IMPORTANT POINTThe State and its instrumentalities should endeavour to give effect to Directive Principles of State Policy and act in fair and reasonable manner, not in arbitrary or discriminative manner.

Cases Referred (11)

IMPORTANT POINT
The State and its instrumentalities should endeavour to give effect to Directive Principles of State Policy and act in fair and reasonable manner, not in arbitrary or discriminative manner.