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High Court Of Madhya Pradesh
A. K. MATHUR, DEEPAK MISRA
MAHENDRA KUMAR TIWARI - Appellant
Versus
UNION OF INDIA - Respondents
W. P. 1864 Of 1997
Decided On : 08/27/1997
RAILWAY CATERING LICENCE - GRANT ON AD HOC BASIS - ARBITRARINESS - PUBLIC INTEREST - CANCELLATION OF LICENCE - RESTORATION ON AD HOC BASIS - UNJUSTIFIED - POLICY FOR GRANT OF LICENCE - APPLICABILITY - FAIR COMPETITION - LEGITIMATE EXPECTATION - JUDICIAL REVIEW.
Fact of the Case:
The petitioner, a public-spirited person, challenged the Railway authorities' decision to grant catering licenses to respondents 4 to 6, despite their previous unsatisfactory performance and cancellation of licenses. The Railway Administration had terminated the licenses of four contractors, including respondents 4 to 6, due to poor and unsatisfactory service. The termination was challenged in a civil court, which refused to grant an injunction. The Railway Administration later decided to restore the licenses of respondents 4 to 6 on an ad hoc basis for six months, subject to certain conditions.
Finding of the Court:
The court held that the Railway Administration's decision to grant catering licenses to respondents 4 to 6 on an ad hoc basis was arbitrary, unreasonable, and an abuse of discretion. The court found that the Railway Administration had not followed the established policy for grant of licenses, which required inviting applications through press advertisement and selecting the most suitable candidate based on their reputation, capability, experience, and track record. The court also held that the Railway Administration had failed to take steps to engage a licensee on a regular basis, thereby depriving other potential applicants of a fair opportunity to compete.
Issues: 1. Whether the Railway Administration's decision to grant catering licenses to respondents 4 to 6 on an ad hoc basis was justified. 2. Whether the Railway Administration had followed the established policy for grant of licenses. 3. Whether the Railway Administration had taken steps to engage a licensee on a regular basis.
Ratio Decidendi: 1. The court held that the Railway Administration's decision to grant catering licenses to respondents 4 to 6 on an ad hoc basis was arbitrary, unreasonable, and an abuse of discretion. The court found that the Railway Administration had not followed the established policy for grant of licenses, which required inviting applications through press advertisement and selecting the most suitable candidate based on their reputation, capability, experience, and track record. The court also held that the Railway Administration had failed to take steps to engage a licensee on a regular basis, thereby depriving other potential applicants of a fair opportunity to compete. 2. The court held that the Railway Administration had not followed the established policy for grant of licenses, which required inviting applications through press advertisement and selecting the most suitable candidate based on their reputation, capability, experience, and track record.
Final Decision: The court quashed the Railway Administration's orders granting catering licenses to respondents 4 to 6 on an ad hoc basis and directed the Railway Administration to take appropriate steps to select regular licensees for catering within two months. The court also restrained respondents 4 to 6 from operating the stalls.
( 1 ) THE petitioner, a public spirited person has called in question the propriety and validity of the action of the Railway authorities who have in total violation of the established norms and procedure and on consideration of extraneous facts have granted catering licences to the respondents 4 to 6, though the Railway Administration on objective assessment of complaint had cancelled their licences on earlier occasion.
( 2 ) THE essential facts which need narration for disposal of the present application are as follows :-ITARSI Railway Station is an important railway station of the Central Railway. Approximately 190 trains carrying passengers regularly pass through Itarsi Railway Junction in a span of 24 hours and about 1. 5 lacs of passengers pass everyday through this junction. To take care of the need of food of the travelling people four contractors were awarded contracts for catering services. The respondents 4 to 6 have been carrying on the catering service for some decades. There is averment in the petition that the four contractors continued to run their catering services though there had been no renewal of the said contracts/licences. As the facts have been putforth the Railways Administration terminated the licences of all the contractors on 2-8-96 on the ground of continuous poor and unsatisfactory performance and the said termination of licences was challenged before the Civil Judge, Class-II, Itarsi. In the suit an application was filed seeking injunction which was resistedby the Railway authorities contending, inter alia, that there was justification for termination of the contracts because of the unsatisfactory service and series of complaints received against the caterers. The Civil Court refused to grant injunction and an appeal being preferred, the appellate Court affirmed the view expressed by the learned Civil Judge. Revision before this Court met with similar fate. It was pleaded by the Railway Administration before the Court below that the Railway Administration vide Notification invited applications for grant of licences and a number of persons have submitted their applications. While this was the situation, as alleged in the petition, the Railway Administration coming under extranuous pressure decided to give catering services to the old contractors, the respondents 4 to 6 and the applications which were invited, remained processed. The petitioner making various other allegations has prayed for issuance of a direction to conduct an inquiry with regard to grant of licences for running catering services to respondents 4 to 6 by the Central Bureau of Investigation, the respondent 7.
( 3 ) A return has been filed by the respondents 1 to 3, the Railway authorities. While traversing the allegations made by the petitioner they have stated that as initially there was an order of status quo by the Court and the licensees continued but ultimately on assessment of their performance their licences were terminated. In the second round of litigation before the Civil Court, the Court refused to grant any interim order of injunction. They have disputed the fact of issuance of avertisement to fill up the vacancies caused due to termination of licences of respondents 4 to 6. Their stnd is that a Notification was issued for filling up to vacancies caused due to the termination of the licence of Shri V. P. Diwadkar, a catering licensee of Itarsi. It is also disputed by the Railway Administration that no loss had ever been caused to the Railways. However, it is admitted by the said respondents that though the licences of the respondents 4 to 6 were terminated but on a review of the matter it was decided to restore their licences on ad hoc basis on certain terms and conditions for a period of six months. The said grants have been made by order dated 26-2-97 which has been brought on record under R-3.
( 4 ) A counter affidavit has been filed by respondent 4, M/s. S. D. Tiwari and sons indicating that the pet
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