IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH MONDAY, THE THIRTIETH DAY OF JUNE TWO THOUSAND AND FOURTEEN Present HON’BLE SRI JUSTICE P.NAVEEN RAO WRIT PETITION No.17611 of 2014 Between:
M/s. Midwest Caterers Private Limited, A company registered under the Indian Companies Act, 1956, Having its office at 101, 10-3-11, Sri Sai Apartment, Addagutta, East Marredpally, Secunderabad-500 026, Rep. by its authorized signatory, VVVS Prasad, R/o. Hyderabad.
.. Petitioner AND Union of India, Rep. by the General Manager, South Central Railway, Rail Nilayam, Secunderabad & 3 others .. Respondents The Court made the following:
HON’BLE SRI JUSTICE P.NAVEEN RAO WRIT PETITION No.17611 of 2014 ORDER:
The petitioner was granted contract of providing catering services on Train No.5638-37, Guwahati-Secunderabad Express Train. The contract was operational from 07.07.2005. As per the terms of contract, the period of contract was initially for five years and the terms of the contract envisages grant of renewal by the Indian Railway Catering and Tourism Corporation Limited (IRCTC). In the year 2010, a new catering policy is notified by the Indian Railways. The catering services on this train are now entrusted to Northeast Frontier Railway, Maligaon, Guwahati, Assam. In view of the impending notification of new catering policy and before formulizing the various procedures as per the new catering policy, the petitioner was granted extension of catering services on monthly basis and in the said manner, the petitioner continued to provide catering services. While so, on 01.05.2013, tender notifications were issued calling for tenders to provide catering services including the express train on which the petitioner is presently providing the catering services. This writ petition is instituted aggrieved by the issuance of fresh tender notification to select a new caterer for providing catering services.
2. Heard Sri P.S. Rajasekhar, learned counsel for the petitioner, Sri T.S. Venkataramana, learned Standing Counsel for Respondents 1, 2 and 4 and Sri B. Narasimha Sarma, learned Standing Counsel for the 3rd respondent.
3. Learned counsel for the petitioner submits that according to the terms of contract entered with the petitioner, the petitioner was entitled for grant automatic renewal for the next five years, after completion of the five years term. As per the new policy as envisaged in Para No.26.1.1, all existing operational catering licences awarded by IRCTC and transferred to Zonal Railways will be governed by the Catering Policy of the year 2005 upto the validity of their contractual period. Learned counsel for the petitioner submits that the petitioner is the existing operational caterer and therefore cannot be terminated from the catering contract till July, 2015 and, therefore, the question of calling for fresh tenders does not arise and hence, the tender notification, dated 01.05.2013, is illegally and amounts to arbitrary exercise of power.
4. The claim of the petitioner rests on Clause 3.1 of the contract terms read with Para 26.1.1 of the new Catering Policy, 2010.
5. Clause 3.1 of the contract terms reads as under:
3.1 Total tenure of Licence Term of Licence for Pantry Cars will be five years. The Licence may be renewed for another term of 5 years at the sole discretion of the IRCTC and decision of the IRCTC in this regard shall be binding on the Licensee. No additional Concession Fee will be payable by the Licensee on renewal of the Licence. In case of renewal of Licence, minimum Licence fee shall be increased on the basis of actual Sales Turnover subject to a minimum of 10% of the prevailing licence fee, whichever is higher at the time of renewal.
In the case of non-renewal of Licence the Concession Fee/Licence fee or any part thereof are not refundable. Total tenure of the Licence will not exceed 10 years in any case. IRCTC will n o t be obliged to assign any reason for not renewing the Licensee.
6. Para 26.1.1 of the new Catering Policy, 2010, reads as under:
“All existing operational catering licences awarded by IRCTC and transferred to Zonal Railways will be governed by the existing Catering Policy 2005 upto the validity of their contractual period.”
7. As seen from Clause 3.1 of the contract terms, discretion is vested in the competent authority to grant renewal for a further period of five years. Thus, it is for the competent authority to consider to grant renewal and in case renewal is agreed to, such renewal shall be operational for a further period of five years. If any such renewal is granted, in accordance with the provision contained in new catering policy in para 26.1.1, such renewal is also saved. In the instant case, admittedly no renewal was granted before the notification of new catering policy and as admitted by the petitioner, he was granted contract on a monthly basis till date. Thus, by the time new catering policy is notified, renewal for the next five years was not granted. The saving clause provided in para 26.1.1 of the new catering policy, 2010, would apply in case the contract was already renewed and was operational. Obviously, the renewal was not granted in view of the impending new catering policy. The petitioner has agreed for grant of contract on monthly basis and never protested and never sought for grant of extension of contract for a further period of five years as envisaged in his contract. He has challenged the issuance of fresh tender notification and applies to this Court only when a new contract is about to be issued after finalization of the tender process for fresh contracts.
6. Learned counsel for the respondent Corporation submits that the issue of calling for fresh tenders to identify new contractors in catering services and other services provided on the platforms of the railway stations were the subject matter of Special Leave Petitions before the Honourable Supreme Court. The Supreme Court ordered for finalization of the tenders and, accordingly, the tenders are finalized and the contracts are about to be issued.
7. Since the petitioner has successfully completed the first contract period and as there was no right vested in him to seek for renewal and it was only a discretion vested in the competent authority, which discretion was not exercised in favour of the petitioner before the notification of new catering policy, there is no merit in the contention of the petitioner that he is automatically entitled to continue till the next five years i.e., till 07.07.2015. He cannot presume that since the petitioner was granted contract on monthly basis, his contract is deemed to have been renewed for second term. On the contrary, the very fact that he was granted a monthly contract would clearly show that the competent authority has not exercised discretion in his favour to grant renewal for the next five years and original contract has come to an end after completion of five years from 07.07.2005. I, therefore, see no illegality to go for fresh tenders and to award new contract. The Writ Petition is, accordingly, dismissed. There shall be no order as to costs. Miscellaneous petitions, if any, pending in this writ petition, shall stand closed.
P.NAVEEN RAO, J Date: 30th June, 2014 KL HON’BLE SRI JUSTICE P.NAVEEN RAO WRIT PETITION No.17611 of 2014 Date: 30th June, 2014 KL