SENIOR DIVISIONAL COMMERCIAL MANAGER &OR vs. S.C.R CATERERS,DRY FRUITS,F.J.S.W ASSOCI

1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVILAPPELLATE JURISDICTION CIVIL APPEAL NOS.618-620 OF 2016 (Arising Out of SLP (C) Nos.9921-9923 of 2014) SENIOR DIVISIONAL COMMERCIAL MANAGER & ORS. ………APPELLANTS Vs. S.C.R. CATERERS, DRY FRUITS, FRUIT JUICE STALLS WELFARE ASSOCIATION & ANR. ………RESPONDENTS J U D G M E N T V. GOPALA GOWDA, J. Applications for intervention are allowed. 2.Leave granted. 3.The present appeals arise out of the impugned JUDGMENT 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 Page 1 2 their licenses renewed under the Catering Policy, 2010.

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. JUDGMENT 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 Page 2 3 Categories “D” to “F” Railway Stations were continued under the control of the South Central

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 JUDGMENT 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, Page 3 4 2010. The renewed licenses were to expire on 20.07.2013. On 26.04.2013, the Senior Divisional

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 JUDGMENT 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, Page 4 5 the existing licensees were entitled for renewal of their licenses for a period of three years,

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 JUDGMENT the Catering Policy, 2010, the license fee is liable to be revised based on the potentiality of each Railway Station and the turnover of the licensees during the previous years. Since the license fee is subject to continuous revision and does not remain stagnant, the question of the Railways suffering any loss due to renewals would not arise. The learned single Judge held that the Page 5 6 members of the Welfare Association are entitled for renewal of the licenses of the members subject

2010. On appeal filed by the appellants, the judgment and order of the learned single Judge was upheld by the Division Bench of the High Court in the Writ Appeals vide its judgment and order dated 12.09.2013. Hence, the present appeals are filed by the appellants. 5.We have heard the learned senior counsel for both the parties. On the basis of the pleadings and evidence on record produced before us, the JUDGMENT circumstances of the case and also in the light of the rival legal contentions urged by the learned senior counsel for both the parties, the main question that arises for our consideration is whether the members of the respondents before us are entitled to have their licenses renewed in terms of the Catering Policy, 2010. Page 6 7 6.Mr. N.K. Kaul, the learned Additional Solicitor General appearing on behalf of the appellants drew

reads as under: “1.1 To provide hygienic, good quality affordable food to the travelling public by adopting best trade and hospitality practices. 1.2 The policy will have an inclusive approach where from the least advantaged passenger to the relatively affluent will be provided catering services in a socially responsible manner. 1.3 It should meet all the social objectives of the Government, including provision of reservations as per Government Directives issued from time to time.” JUDGMENT 7. The learned ASG contends that the terms of the Catering Policy, 2010 are absolutely clear. The larger issue here is the right to livelihood of the licensees who are members of the respondents. The welfare of the people is the prime concern of any responsible government under the provisions of the Constitution. The learned ASG places reliance Page 7 8 1 on the case of Lala Ram v. Union of India , wherein the concept of a welfare state has been

JUDGMENT 1 (2015) 5 SCC 813 Page 8 9 of maximum number of people living within its territory. A welfare state must attempt to provide all facilities for decent living, particularly to the poor, the weak, the old and the disabled i.e. to all those, who admittedly belong to the weaker sections of society. Articles 38 and 39 of the Constitution of India provide that the State must strive to promote the welfare of the people of the state by protecting all their economic, social and political rights. These rights may cover, means of livelihood, health and the general well-being of all sections of people in society, specially those of the young, the old, the women and the relatively weaker sections of the society. These groups generally require special protection measures in almost every set up. The happiness of the people is the ultimate aim of a welfare state, and a welfare state would not qualify as one, unless it strives to achieve the same.” (emphasis laid by this Court) 8. The learned ASG further places reliance on the JUDGMENT 2 case of Ram & Shyam Company v. State of Haryana , relevant paragraph of which is quoted hereunder : “12. Let us put into focus the clearly demarcated approach that distinguishes the use and disposal of private property and socialist property. Owner of private property may deal with it in any manner he likes without causing injury to anyone else. But the socialist or if that word is jarring to some, the community or further 2 (1985) 3 SCC 267 Page 9 10

JUDGMENT Page 10 11

(emphasis laid by this Court) 9.The interest of the passenger has no correlation with social objectives. The main objective of the Catering Policy, 2010 is to provide food at an affordable price to the railway passengers. The learned ASG further contends that the State is entitled in law to frame a new policy in that respect. The learned ASG contends that the Policy JUDGMENT contains detailed mechanisms and makes it very clear for whom it is meant. The learned ASG draws our attention to clause 3.3.1 of the Policy which reads as under: “3.3.1 All existing major and minor catering units will be awarded and managed by the zonal railways, except Food Plaza, Food Courts, fast food units. All such contracts presently being Page 11 12

to clause 16.1.3 of the 2010 Policy which reads as under: “16.1.3 Allotment of all General Minor Units at A,B & C category stations shall be awarded for a period of five years with a provision for renewal after every 3 years on satisfactory performance and payment of all dues and arrears and withdrawal of court cases, if any. Allotment of all General Minor Unis at D,E & F category stations will be for a period of 5 years with a provision for renewal after every 5 years for a further period of 5 years on satisfactory performance and payment of all dues and arrears and withdrawal of court cases, if any.” JUDGMENT The learned ASG contends that by virtue of clause 16.1.3, the members of the respondents cannot claim renewal of their license as a matter of right. The learned ASG further placed reliance on clause 26.1.1 of the 2010 Policy which reads as under: “26.1.1 All existing operational catering licenses awarded by IRCTC and transferred Page 12 13 to Zonal Railways will be governed by the existing Catering Policy 2005 upto the validity of their contractual period.”

11. The learned ASG further contends that a welfare State has to generate more money to take care of the larger public interest. He further contends that the claim of the members of the respondents that they have a vested right to get the renewal of their license in the railway stations referred to supra and that the government JUDGMENT cannot expand its competitors is completely unsupported in law. 12. The learned ASG further contends that the entire policy is not under challenge. It is only the clause which confers the right of renewal of the license which has been challenged. The scope of the judicial review in such cases is limited. For the Court to examine the validity of the same, the Page 13 14 policy either needs to be arbitrary, or must suffer from some glaring error and must be

contentions, places reliance on the case of Jivan 3 Das v. Life Insurance Corporation of India & Anr. to contend that the right to livelihood of licensees cannot be extended to use public property to the best advantage as a commercial venture. It was held in that case as under: “An owner is entitled to deal with his property in his own way profitable in its use and occupation. A public authority is equally entitled to use the public property to the best advantage as a commercial venture. As an integral incidence of ejectment of a tenant/licensee is inevitable. So the doctrine of livelihood cannot discriminately be extended to the area of commercial operation.” JUDGMENT 13. On the other hand, Mr. Prashanta K. Goswami, the learned senior counsel appearing on behalf of some of the respondents, draws our attention to the Catering Policy, 2010. He contends that 3 1994 Supp (3) SCC 694 Page 14 15 revenue collection for the State cannot be a yardstick or consideration for deciding renewals

small shop/ kiosk owners have been renewed in some zones of the Railways, while in others not renewed, which action of the appellants is violative of Article 14 of the Constitution of India. 14. Mr. Raju Ramachandran, the learned senior counsel appearing on behalf of one of the respondent licensees contends that renewal of the licenses of the members is the norm under the JUDGMENT Catering Policy, 2010 and that the right to renewal must be read into the contracts of the existing licensees. The learned senior counsel further contends that the social objectives of the Central Government, which is running the railways across the country and which is the major transport industry catering to the need of a large number of commuters, must necessarily include the Page 15 16 protection of the right to livelihood of the members of the respondents, apart from the

of India. 15. Mr. Ramachandran further contends that two views are legitimately possible to construe the renewal clause. One is that renewals of the licenses that can be done only through the tender route and the other is to renew the existing or pre-existing licenses. He contends that the same can be resolved by applying the principle of ‘ contra proferentem ’, or interpretation against the draftsman. In this connection, reliance has been JUDGMENT placed by the learned senior counsel upon the decision of this Court in Bank of India & Ors. v. 4 K. Mohandas & Ors. , wherein it has been held as under: “31. It is also a well-recognized principle of construction of a contract that it must be read as a whole in order to ascertain the true meaning of its several clauses and the words of each 4 (2009) 5 SCC 313 Page 16 17

32. The fundamental position is that it is the banks who were responsible for formulation of the terms in the contractual Scheme that the optees of voluntary retirement under that Scheme will be eligible to pension under Pension Regulations, 1995, and, therefore, they bear the risk of lack of clarity, if any. It is a well-known principle of construction of contract that if the terms applied by one party are unclear, an interpretation against that party is preferred [Verba Chartarum Fortius Accipiuntur Contra Proferentum].” 16. The learned senior counsel further contends that the social objectives of the Policy are clearly JUDGMENT meant to side step the profit making objective. He places reliance on a Constitution Bench decision of this Court in the case of Olga Tellis v. 5 Bombay Municipal Corporation , wherein it was held that the right to life includes the right to livelihood. In that case, the Court held as under: 5 (1985) 3 SCC 545 Page 17 18

JUDGMENT Page 18 19 deprivation would not have to be In accordance with the procedure established by law, if the right to livelihood is not regarded as a part of the right to life. That, which alone makes it possible to live, leave aside what makes life livable, must be deemed to be an integral component of the right to life. Deprive a person of his right to livelihood and you shall have deprived him of his life. Indeed, that explains the massive migration of the rural population to big cities. They migrate because they have no means of livelihood in the villages. The motive force which people their desertion of their hearths and homes in the villages that struggle for survival, that is, the struggle for life. So unimpeachable is the evidence of the nexus between life and the means of livelihood. They have to eat to live : Only a handful can afford the luxury of living to eat. That they can do, namely, eat, only if they have the means of livelihood. That is the context in which it was said by Douglas J. in Baksey that the right to work is the most precious liberty because, it sustains and enables a man to live and the right to life is a precious freedom. "Life", as observed by Field, J. in Munn v. Illinois (1877) 94 U.S. 113, means something more than mere animal existence and the inhibition against the deprivation of life extends to all those limits and faculties by which life is enjoyed. This observation was quoted with approval by this Court in Kharak Singh v. The State of U.P. JUDGMENT 33. Article 39(a) of the Constitution, which is a Directive Principle of State Page 19 20

JUDGMENT (emphasis laid by this Court) 17. The learned senior counsel further places reliance on a recent decision of this Court in Charu Page 20 21 6 Khurana v. Union of India , wherein the above stated principle enunciated in Olga Tellis (supra)

quote Justice Krishna Iyer from the case of LIC 7 v. D.J. Bahadur , wherein the learned Judge has explained what should be the guiding force for judges when faced with matters pertaining to social justice, as under: “Law is no cold-blooded craft bound by traditional techniques and formal forceps handed down to us from the Indo-Anglian era but a warm-blooded art, with a bleak from the past and a tryst with the present, deriving its soul force from the Constitution enacted by the People of India. Law, as Vice President G.S. Pathak used to emphasize in several lectures, is a tool to engineer a peaceful 'civil revolution' one of the components of which is a fair deal to the weaker human sector like the working class. The striking social justice values of the Constitution impact on the interpretation of Indian laws and to forget this essential postulate while relying on foreign erudition is to weaken the vital flame of the Democratic, Socialist Republic of JUDGMENT 6 (2015) 1 SCC 192 7 (1981) 1 SCC 315 Page 21 22 India.” 19. The case of the appellants, in nutshell, is

Policy, only such licensees who were granted license under the 2010 Policy were entitled to get their contracts renewed and the same benefit could not be extended to those licensees who were granted license prior to the 2010 Policy. According to the Catering Policy 2010, no provision is made for the renewal of the existing catering units on the expiry of the term of the licenses. The renewal of the licenses of the JUDGMENT licensee under para 16 of the Policy would apply only to licensees allotted under the Catering Policy 2010. The appellants have further submitted that the renewals of the licenses by the Zonal Railways upto 2013 was only meant to operate as a temporary arrangement till the bidding and allocation process was finally completed. Page 22 23 20. We are unable to agree with the contention advanced on behalf of the Appellants. The Railway

instructions: “1. Transfer of License Units: d. Zonal railways should renew all agreements which have expired or are due for expiry in the next 6 months by giving an extension, subject to a maximum extension of six months from the date of issue of Catering Policy, 2010.” This circular clarifies that the renewal of the license is required to be granted to all the existing licensees of the Minor Units as per JUDGMENT clauses 16 and 17 of the Catering Policy, 2010. It also becomes clear that the existing licensees need not be included in the tender process. Circular dated 23.08.2011 issued by the Chief Commercial Manager of South Central Railway directed all the Divisional Commercial Managers and other subordinate officers of the South Central Railway to confirm that the tenure of all Page 23 24 GMUs and SMUs at “A1”, “A” and “B” category stations shall be renewed after every 3 years on

of the said circular, catering licenses of all the members of the respondent Association were renewed till July 2013. On this aspect of the case, the learned single Judge of the High Court has held as under: “While the 2010 Policy proper has not envisaged renewal of the existing licenses for a period not exceeding six months, the Immediate Operative Instructions issued in commercial circular no. 37/2010 dated 09.08.2010 has directed the Zonal Railways to renew the licenses for a maximum period of six months from the date of issue of the 2010 Policy. If the 2010 Policy is understood as providing renewals only in respect of the licenses issued under the said Policy, there was no reason why the respondent No. 3 has not called for tenders on the expiry of six months period from the date of coming into force of the 2010 Policy. Instead of calling for tenders, the respondent No.3 has renewed all the GMU and SMU licenses for a period of three years in terms of paras 16.1.3 and 16.2.1 of the 2010 Policy. This was done even before Para 16.3 was amended. Having JUDGMENT Page 24 25

(emphasis laid by this Court) JUDGMENT The findings of the learned single Judge have been upheld by the Division Bench and we do find any reason to interfere with the same. Article 14 of the Constitution of India mandates that state action must not be arbitrary and discriminatory. It must also not be guided by any extraneous considerations which are antithetical to equality. A three Judge Bench of this Court in the case of Page 25 26 8 R.D. Shetty v. International Airport Authority held as under:

21. India is a welfare State. Article 38 of the JUDGMENT Constitution of India, which is a Directive Principle of State Policy, reads as under: “ 38. State to secure a social order for the promotion of welfare of the people. — (1) The State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life. 8 (1979) 3 SCC 489 Page 26 27

22. It is the duty of every welfare state to generate employment. Presently, millions of youth of the country are unemployed. The right to livelihood is a part of right to life, as has been held in the case of Olga Tellis (supra). A vast majority of the unemployed population of the country then, is susceptible to being exploited by the rich and the capitalists. It is the duty of the state, acting through its instrumentalities to ensure that no JUDGMENT person in a vulnerable position is exploited. In the case of People’s Union for Democratic Rights 9 & Ors. v. Union of India , Bhagwati,J. lamenting on the exploitation of the weak and the powerless held as under: “………The Rule of Law does not mean that the 9 (1982) 3 SCC 235 Page 27 28

JUDGMENT 23. This Court, being entrusted with the task of being the countermajoritarian institution, is duty bound to ensure that the rights of the downtrodden minorities and the members of the weaker sections of the society are not trampled upon. Page 28 29 24. One more important aspect to be taken note of by this Court is the non governance of railway

the property of the railways is public property, yet in reality, it is the private players and industries that are allowed to carry on their business for transport of raw materials from one place to another. After the enactment of the Railways Act, 1989, the Rail Land Development Authority has been established under Chapter IIA of the Act to manage the railway property by framing policy or rules for allotment of the same JUDGMENT in favour of the licensees, including fixing license fee or occupation charges in respect of the vast extent of vacant property from which huge revenue can be collected, which is a laudable object to cater to the need of the public at large. The periodical revision of license fee in respect of such big operators has not been done by Page 29 30 the railways. Also, the Policy of not renewing the licenses of those persons who are members of the

them participate in a public competition is absolutely unfair, unreasonable and arbitrary. The chances of such persons being deprived of their right to livelihood is also an important factor which has to be taken into consideration by this Court to interpret the policy framed by the appellants. The callous attitude as far as the inaction on the part of the State in tackling the problem of rising unemployment is appalling. The JUDGMENT situation is made worse by the handing over of public functions to private entrepreneurs, which then exploit the policies of the government against the poor and downtrodden people of the country. If the appellants under the guise of the policy are permitted to deny renewal of licenses in favour of the licensees, it would amount to deprivation of their right to freedom of Page 30 31 occupation guaranteed under Article 19(1)(g) of the Constitution as well as the right to

duty towards social justice as well as uplifting the weaker sections of the society and the unemployed youth of the country. 25. In the case of Consumer Education & Research 10 Center v. Union of India a three Judge Bench of this Court observed as under: “Social justice, equality and dignity of person are cornerstones of social democracy. The concept 'social justice' which the Constitution of India engrafted, consists of diverse principles essential for the orderly growth and development of personality of every citizen.……Social justice is a dynamic device to mitigate the sufferings of the poor, weak, Dalits, Tribals and deprived sections of the society and to elevate them to the level of equality to live a life with dignity of person. Social justice is not a simple or single idea of a society but is an essential part of complex social change to relieve the poor etc. from handicaps, penury to ward off distress, and to make their life livable, for greater good of the society at large. In other words, the JUDGMENT 10 (1995) 3 SCC 42 Page 31 32

Further, in the case of Sadhuram Bansal v. Pulin 11 Sarkar this Court held as under: “There is no ritualistic formula or any magical charm in the concept of social justice. All that it means is that as between two parties if a deal is made with one party without serious detriment to the other, then the Court would lean in favour of the weaker section of the society, Social justice is the recognition of greater good to larger number without deprivation of accrued legal rights of anybody. If such a thing can be done then indeed social justice must prevail over any technical rule. It is in response to the felt necessities of time and situation in order to do greater good to a larger number even though it might detract from some technical rule in favour of a party.” JUDGMENT 11 (1984) 3 SCC 410 Page 32 33 26. Keeping in view the evolving concept of social justice, we allow the members of respondents who

potentiality in the country on account of non-governance and non- implementation of the constitutional philosophy of an egalitarian society, which provides the opportunity to all individuals to lead a life of dignity. The right to life with dignity has been interpreted to be a part of right to life by this Court in the case of Francis Coralie Mullin v. Administrator, Union 12 Territory of Delhi & Ors. , as under: JUDGMENT “We think that the right to life includes the right to live with human dignity and all that goes along with it, namely, the bare necessaries of life such as adequate nutrition, clothing and shelter and facilities for reading, writing and expressing one-self in diverse forms, freely moving about and mixing and commingling with fellow human beings. Of course, the magnitude and content of the components of this right would depend upon the extent of the economic 12 (1981) 1 SCC 608 Page 33 34

27. Therefore, we have to hold that the provisions of the Catering Policy, 2010 are applicable to the concerned respondents. The action of the railways in not granting renewals of the licenses to the members of the respondents is arbitrary, unreasonable, unfair and discriminatory, and the same cannot be allowed to sustain in law. 28. For the reasons stated supra, this Court cannot JUDGMENT interfere with the impugned judgment and order of the High Court. The Civil Appeals are dismissed. The order dated 11.04.2014 granting stay of the impugned order shall stands vacated. We, however, make it clear that only those licensees may be eligible for renewal of their licenses who can declare on affidavit that they do not have the license of more than one shop or kiosk in their Page 34 35 name or benami license at the railway stations with periodical reasonable increase of license

…………………………………………………J. [V. GOPALA GOWDA] …………………………………………………J. [AMITAVA ROY] New Delhi, January 29, 2016 JUDGMENT Page 35 36 ITEM NO.1A-For Judgment COURT NO.10 SECTION XIIA S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS

VERSUS S.C.R CATERERS,DRY FRUITS,F.J.S.W ASSOCI AND ANR. Respondent(s) Date : 29/01/2016 These appeals were called on for pronouncement of JUDGMENT today. For Appellant(s) Mr. Shreekant N. Terdal,Adv. For Respondent(s) Ms. Ranjeeta Rohtagi,Adv. Ms. Diksha Rai,Adv. Mr. Venkateswara Rao Anumolu,Adv. Mr. Goli Rama Krishna, Adv. Mr. Prabhakar Parnam, Adv. Mr. Shashwat Goel, Adv. JUDGMENT Dr. Rajeev Sharma,Adv. Hon'ble Mr. Justice V.Gopala Gowda pronounced the judgment of the Bench comprising His Lordship and Hon'ble Mr. Justice Amitava Roy. Applications for intervention are allowed. Leave granted. The appeals are dismissed in terms of the signed Page 36 37 Reportable Judgment. All pending applications are disposed of. (VINOD KUMAR) (MALA KUMARI SHARMA) COURT MASTER COURT MASTER (Signed Reportable Judgment is placed on the file) JUDGMENT Page 37