The central legal point established in the judgment is the obligation of the state to act fairly, justly, and reasonably in contractual relationships, and the application of the principles of fairness, non-arbitrariness, reasonableness, and non-discrimination under Article 14 of the Constitution of India.

S. Ravindra Bhat, J.

1. In all these writ proceedings, under Article 226 of the Constitution of India, common questions of fact and law arise for consideration. They were, with consent of parties heard together. All the petitioners are licenses of the respondents. They are operating public call offices (PCOs) in one or the other railway platforms/spaces under the control of the second respondent Northern Railways. They are aggrieved by revision of terms of the licenses to the extent that the second respondent has demanded enhancement of commission to up to 102% and more, in comparison with the existing commission. They seek suitable directions that such demands should not be enforced.

2. All the petitioners were allotted/awarded licenses to operate PCOs in premises under the control of the second respondent specifically in railway platforms etc. The conditions of license, among others, stipulated payment of license fee on annual basis with reference to the area occupied. That was made subject to revision/enhancement from time to time. The petitioners were chosen as licensees as a measure of rehabilitation; in many cases these were on compassionate basis. In some cases the allotments were based on the applicants physical disability; and in others on account of unemployment.

3. On 20.05.02, the Ministry of Railways issued a Policy circular namely, No. 32/2002 and applied it to existing STD/ISD/PCOs booth holders/licensees. The said circular reads as follows:

Government of India

Ministry of Railways

(Railway Board)

No.2000/TG.IV/10/P/STD/PCO/Review

New Delhi dt.20.5.2002 The General Manager (Commercial) All Zonal Railways Policy Circular No.36 of 2002-Commercial Directorate Sub:Policy for existing STD/ISD/PCO Booth holders. The policy for allotment of STD/ISD/PCO/FAX/Internet Booths issued vide Boards letter No.2000/TG.IV/10/PCO/TATA dt. 28.4.2000 was stayed vide Boards letter of even dated 12/13.6.2001. The matter regarding review of STD/ISD/PCO booth policy issued vide above quoted letter of even number dt. 28.4.2000 has been under consideration of the Board for quite some time. Ministry of Railways has, thereforee reviewed the matter and has decided that the revised policy for renewal of the existing contract of STD/ISD/PCO/FAX/Internet Booth holders will be as under:

.1. In case of existing STD/ISD/PCO/FAX/Internet booths, the licensee may be allowed to operate the booth up to the unexpired period of existing contract. The contract can be further extended once if considered desirable w.e.f. the date of expiry of the earlier contract and up to 27.4.2005 subject to the following conditions.

.(a) The party agrees to pay land license fee @ 20% of the notified cost of the land price prevailing at a particular station and 10% increase every year as notified by the Railway and a minimum of 10% of the commission earned by them from MTNL, BSNL or any other authorised service provider, etc. till a new contract at the same station as per New Policy for fresh allotment (2002) is finalised. After a new contract is finalised, the rate of commission would be 10% or the rate accepted in the said new contract whichever is higher.

.(b) As per the agreement with STD/ISD/PCO booth holders, the licensee shall pay in addition to license fee other charges such as electric current, water consumption, municipal taxes, etc. as fixed by the administration from time to time regularly.

2. Zonal Railway should expedite the process of inviting open bids so that the benefit of higher rate (over and above the minimum of 10%) accrues to the railways as early as possible.

2.1 A clause may be introduced in their agreement that change/amendment/modification made in policy from time to time will automatically be applicable to the existing license holders without any further action on the part of the railway. This issues with the concurrence of Finance and Legal Directorates of the Ministry of Railways.

Please acknowledge receipt of the letter.

4. (Hindi v