Two writ petitions challenging railway stall allotment delays and applicability of a new catering policy, dismissed because the bidder had not submitted an acceptance letter, negating a contract.
Writ petitions dismissed; prayer for direction to allot stalls and non-application of new policy rejected.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
HONOURABLE SRI JUSTICE ASHUTOSH MOHUNTA
WRIT PETITION Nos. 7426 and 7433 OF 2011 .
DATED 2nd March, 2012
BETWEEN
N.Seshaiah
…Petitioner in both WPs
And
Union of India,rep. by its Managing Director, Indian Railway Catering and Tourism Corporation Limited, New Delhi and ors
….Respondents in both WPs.
HONOURABLE SRI JUSTICE ASHUTOSH MOHUNTA
WRIT PETITION Nos. 7426 and 7433 OF 2011
COMMON ORDER:
As the issue raised in these two Writ Petitions is one and the same, they are heard together and disposed of by this common judgment.
Questioning the action of the respondents in not handing over the space for location of Stall Nos.6 and
7 respectively on platform No.1 of Visakhapatnam Railway Station in terms of the award of license dated 7.11.2007 and causing the delay in operating the business, and for a consequential direction not to apply Clause 26.1.2 of the Catering Policy-2010 to the stalls of the petitioners, the present Writ Petitions are filed.
Pursuant to the tender notification issued by the respondent authorities on 21.5.2007 for grant of license to manage catering/vendor stalls, the petitioner participated in the tender process and stood as highest bidder and the competent authority had accepted the offer of the petitioner to award license subject to submission of willingness and payment of security deposit and first year annual license fee. It is stated that in terms of the said communication, the petitioner conveyed his acceptance. It is the grievance of the petitioner that even after payment of security deposit and first year annual licence fee, and despite several reminders, for about one year and seven months, the respondents have not provided space for location of Stalls 6 and 7. It is stated that after much persuasion, the third respondent entered into agreement with the petitioner on 17-10-2010 for location of the stalls in question in compliance of the
allotment made during the year 2006. It has been averred by the petitioner that the stalls which were allotted to the petitioner were dismantled by the fourth respondent only to avoid payment of the security deposit and one year license fee by the petitioner. It has been averred that while handing over of the space in respect of the stalls in question is pending, the Ministry of Railways have released a New Catering Policy dated 21.7.2010 inter alia mentioning that the tenders for which the letters of allotment have been issued, but the contracts have not operationalised up to the date of issue of the new policy, have no force in law. It has further been averred that in similar and identical circumstances a learned single Judge of Allahabad High Court gave directions in Writ Petition (C) No. 43793 of 2010 directing to comply with the letter of award and hand over the allotted stalls within a period of two months from the date of the said order and that in view of the said order clause 26.1.2 of the said policy-2010 has no force in the eye of law.
A counter affidavit is filed on behalf of respondents 2 and 4, wherein it is stated that the petitioner being the successful bidder, he has been awarded the stalls and the same had been
communicated vide letter dated 7.11.2007 and pursuant to the same, he had been asked to submit his acceptance letter, make the security deposit and first year annual licence fee. It has been stated that there was much delay on the part of the petitioner in fulfilling the tender conditions such as to make security deposit as stated supra; that the petitioner cannot be permitted to take as a precedent or reason for non payment of license fee and the deposit pertaining to another license; and that his representation for allotment of new place cannot be considered since the acceptance was not communicated by him till date and as such there is no obligation on the part of the respondent authorities to provide alternate place. It has mainly been averred by the respondents that though the stalls have been awarded by the respondent authorities, but however, since no acceptance was received from the bidder, there was no contract between the petitioner and the IRCTC and as such IRCTC is not under the obligation to allot the place for location of stalls.
Heard the learned Counsel on either side. Perused the case file.
The learned Counsel for the petitioner while reiterating the averments made in the affidavits filed in
support of the Writ Petitions, submitted that since the stalls have been allotted to the petitioner well in advance, the respondents cannot press into service the new Catering Policy-2010 to the case of the petitioner as the allotment was made as long back as in the year 2007. He submitted that earlier also the petitioner had paid license fee and security deposit, but, the respondents have not allotted the space. He further submitted that the respondents have dismantled the subject stalls only to avoid the petitioner to pay security deposit and licence fee thereby disentitling him for allotment of space to locate the subject stalls in terms of tender conditions. He therefore prayed that the Writ Petition be allowed and direction be issued to the respondent authorities as prayed for.
Per contra, the learned Standing Counsel for the respondents have reiterated the averments made in the counter affidavit. It is mainly stated that that dismantling of the subject stalls is only for beautification of the platform and that there was no malafide intention behind it. He stated that the petitioner has not submitted his acceptance letter till the date and since no acceptance was received form the bidder/petitioner, there was no existence of contract in between the bidder/petitioner and
IRCTC/respondents and as such there was no obligation on the part of the respondents to allot the place for location of the subject stalls.
Admittedly there is no dispute that the petitioner is the successful bidder under the tender notification dated 21.5.2007 issued by the respondents and pursuant to the same, the respondents have communicated the petitioner for submitting his acceptance letter as well as payment of security deposit and first year annual licence fee. A perusal of the record discloses that the petitioner has not submitted his acceptance letter till date except payment of security deposit and first year annual licence fee. Though the petitioner has stated that he conveyed his acceptance letter to the respondents, there is no material forthcoming to establish or evidencing the same. Though the petitioner has stated that he was earlier allotted with another stall on platform No.6 for which he had paid the licence fee and security deposit, however, he has not been given possession of the same, it is to be noted that the same cannot be taken as precedent or reason, much less a sufficient cause for the allotment of the present stalls. It is not in dispute that the submission of acceptance letter by the bidder is one of the essential
tender conditions evidencing the acceptance of the tender works pursuant to success in the tender process. As the petitioner failed to submit his acceptance letter within the time specified in the letter of the respondents dated 7.11.2007 or even after, there is no obligation on the part of the respondents to provide space for location of subject stalls in as much as there is no subsisting contract in between the the petitioner and the respondent authorities. Mere payment of security deposit and first year annual licence fee do not mean that the petitioner has complied with the tender conditions in toto. The petitioner failed to comply with one of the tender conditions, namely submission of acceptance letter. His failure to comply with the same crippled the respondents to proceed with allotment of space for location of subject stalls and therefore the respondent authorities cannot be blamed.
Apropos the submission of the petitioner that the applicability of New Catering Policy-2010 to the subject stalls is illegal and arbitrary in as much as he has not yet been allotted stalls, the petitioner is mainly aggrieved by the Clause 26.1.2 which provides that the tenders for which the letters of allotment have been issued, but the contracts have not operationalised or the services have never
commenced up to the date of issue of this policy, will have no force in law. Prima facie, a perusal of the said clause does not appear to be illegal and void in law. The introduction of new Catering Policy-2010 is pursuant to the Cabinet decision and by virtue of the same, Catering Policy 2005 was modified. The main aim and object of the new catering policy is to establish good governance standards and improving the quality of catering services for providing food and beverage services to passengers travelling on trains through mobile catering services and operation and management of the static catering contracts dealing with provision of food and beverages to passengers travelling on train, on railway premises like platforms, concourses etc.,.
In the case on hand, the petitioner has not submitted his acceptance letter till date pursuant to the communication of the respondents dated 7.11.2007. In the absence of such acceptance letter, it cannot be said that the petitioner is operating his contract pursuant to his being the successful bidder in tender notification dated 21.5.2007. When there are no contractual obligations in between the petitioner and the respondent authorities, the question of applying new Catering Policy-2010 to the subject stalls of the petitioner does not arise. Though
the stalls have been allotted by the respondent authorities to the petitioner, as no acceptance was received from the bidder/petitioner, it can safely be said that there was no existing contract in between the petitioner and the respondents as on the date of coming into force of new Catering Policy-2010 and as such the petitioner cannot be permitted to contend that the applying new Catering Policy-2010 to the subject stalls pursuant to the his being the successful bidder in the subject tender notification is illegal and arbitrary in as much as he failed to submit his acceptance letter in regard thereto till date. That being so, the action of the respondent authorities cannot be found fault with.
For the foregoing discussion, I do not see any merit in the Writ Petitions for grant of relief as prayed. The Writ Petitions are accordingly dismissed. There shall be no order as to costs.
JUSTICE ASHUTOSH MOHUNTA
Dated 2nd March, 2012. Msnro
N.Seshaiah
Union of India
Indian Railway Catering and Tourism Corporation Limited
ASHUTOSH MOHUNTA
As recorded by the court registry
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