JUDGMENT
S.B. Sinha, J.
1. The petitioner in this application has prayed for issuance of a writ of certiorari for quashing the orders passed by the respondent No. 2 as contained in Memo No. C/470/ MFP/ MPS/91 dated 9-6-1992; a Memo bearing No. C/470/ MUZ dated 30-4-1992 and the consequential order dated 8-11-1992 passed by the respondent No. 5 as contained in Annexures 7, 8 and 9 respectively to the writ application.
2. The fact of the matter is not in dispute.
3. The petitioner’s father (since deceased) was granted a vending licence for a period of three years. The said licence was further renewed for a period of three years. The original vendee died on 13-6-1982 and, thereafter, the licence was transferred in the name of his wife Pratap Kumari (mother of the petitioner) for the unexpired period.
4. The licence was further renewed in the name of Pratap Kumari for a period of eight years. The petitioner, thereafter, applied for transfer of the licence standing in his name as his mother Pratap Kumari died on 3-1-1992 which was permitted for the unexpired period i.e., up to 30-4-1992.
5. After the expiry of the aforementioned period the petitioner’s licence was not renewed. The petitioner filed a writ petition in this Court bearing C.W.J.C. No. 4018 of 1992 which was disposed of by an order dated 18-5-1992 with following observations and directions:–
“We do not propose to go into the merits of the matter. We find that the respondent No. 1 has not applied his mind at all as to whether the performance of the petitioner was satisfactory and in that view of the matter he could have invoked the provisions of Clause (6) of the aforementioned policy decision dated 6-1-1992. It appears that the petitioner’s licence was sought to be cancelled although, he had already filed an application for renewal of his licence on or about 9-4-1992.
Mr. Verma has further pointed out that the performance of the petitioner was not satisfactory. He has drawn our attention to certain documents, which are annexed as Annexures ‘B’ series to the counter-affidavit of respondent No. 1.
Mr. Mookherji, learned counsel appearing on behalf of the petitioner, has, on the other hand, drawn our attention to the working certificates dated 10-4-1992 and 9-4-1992 which are contained in Annexures 4/1 and 4/2, respectively, to the writ petition:
As the matter has to be considered by respondent No. 1 we are not applying our mind to the respective rival contentions of the parties with regard to the performance of the petitioner. In the facts and circumstances of the case, we are disposing of this writ application by directing respondent No. 1 to dispose of the petitioner’s application of renewal of the licence expeditiously and prefer-ably within a period of three weeks from the date of receipt of a copy of this order in accordance with law.”
6. Thereafter, the impugned order dated 9-6-1992 as contained in Annexure-7 to the writ application was passed whereby the petitioner was communicated with the following decision of the Screening Committee:
“Taking into account the totality of the facts, circumstances, the relevant circulars on the subject, the concerning files as well as the decision of the Hon’ble High Court, the Committee is of the view that in fact of several inspection reports submitted by the High Officials of the N. E. Railway disclosing irregularities in the performance of late Pratap Kumari during the agreemental period, the request to Sri Rama Ranjan Prasad Singh for renewal vide his representation dated 9-4-1992 does not merit consideration and, therefore, the Committee is not inclined to recommend for renewal of his licence which was transferred to him only for unexpired period after the death of his mother late Pratap Kumari.
Divisional Railway Manager, the approving authority, has accepted the said observation of the Screening Committee and has rejected your representation dated 9-4-1992 for renewal of your vending licence which has already expired on 30-4-1992.”
7. By reason of an order dated 30-4-1992 as contained in Annexure-9 to the writ application, a vending contract has been granted in favour of Sri Kuwar Ranbir Singh.
8. Mr. S. P. Mukherjee, learned counsel appearing on behalf of the petitioner submitted that froth a perusal of the impugned order dated 9-6-1992 as contained in Annexure 7 to the writ application. It would appear that the Screening Committee took into Consideration the irrelevant facts namely performance of Pratap Kumari, the deceased mother of the petitioner and failed to take into consideration the relevant fact namely performance of the petitioner in execution of the vending contract for the period after his mother’s death.
9. It was further submitted that in any event, new contract could have been granted by the respondent-Railway Administration only upon issuing tenders therefor and not by private negotiation.
10. Reliance in this connection has been placed in Sterling Computers Limited v. M/s. M. & N. Publications Limited, reported in 1993 AIR SCW 683 : 1993 (2) Pat LJR 12. It
was further submitted that in any event contract should not have been granted for a period of five years.
11. The learned counsel further submitted that in fact the Railway Administration has adopted a policy decision to the effect that advertisements would be made inviting tenders before grant of any contract.
12. The petitioner did not have any right of renewal of the licence as such. Admittedly, the petitioner had been allotted to carry on contract job of catering/vending in a Railway Station for the unexpired period of licence granted in favour of his mother Pratap Kumari.
13. In this view of the matter, we are not
impressed by the argument advanced by Mr.
Mukherjee, learned counsel for the petitioner
to the effect that the petitioner was entitled for
renewal of the said vending contract as a
matter of right.
14. The Railway Administration further has given out that a new policy decision has been taken as it appears from the letter dated 6-1-1992 as contained in Annexure-A to counter-affidavit filed by the respondent No. 6.
15. Admittedly, in this case no advertisement had been issued, but the respondent No. 6 has contended that in view of the latest policy decision, the contract could have been granted in his favour without calling for a fresh tender as the said respondent has also a vending licence.
16. It was further submitted that this writ application should be dismissed only on the ground of delay as the same has been filed six months after the impugned order dated 9-6-1992 and 30-4-1992 as contained in Annexures-7 and 9 to the writ application have been passed.
17. Clause III-1(a) of Annexure-A to the counter-affidavit reads thus :–
“Catering/vending licences Should be awarded by calling applications. Tender system for selection of licences shall not be followed.
Applications should be invited only from professional and reputed caterers through press advertisement.
Applications received in response to the advertisement shall be scrutinised by a Screening Committee consisting of 3 Officers of not less than JLG Grade in case of large/ important units and not less than Senior Scale Officers in respect of other units. The Screening Committee Shall short-list the applicants keeping in mind following factors:
Reputation/business standing of the applicant; Turnover of the applicant’s business, if any; Catering experience of the applicant; Financial standing of the applicant; Size of the establishment and staff required for the unit; Location of the unit/units and any other facts considered relevant by the Screening Committee.”
18. The respondents, therefore, are not
correct in contending that a new catering/
vending contract has to be given, pursuant to
the policy decision of the Railway Ad
ministration as contained in letter dated 6-1-
1992, the terms there of the policy of advertisement therefore were not required to be
followed.
19. In Food Corporation of India v.
Kamdhenu Cattle Feed Industries, reported
in 1992 (6) JT (SC) 259 : AIR 1993 SC 1601,
the Supreme Court held as follows (at
p. 1604):
“In contractual sphere as in all other State actions, the State and all its instrumentalities have to conform to Article 14 of the Constitution of which non-arbitrariness is a significant fact. There is no unfettered discretion in public law. A public authority possesses powers only to use them for public good. This imposes the duty to act fairly and not adopt a procedure which is “fair play in action”. Due observance of this obligation as a part of good administration raises’ a reasonable or legitimate expectation in every citizen to be treated fairly in his inter-action with the State and its instrumentalities, with this element forming a necessary component of the decision-making process in all State actions. To satisfy this requirement of non-arbitrariness
in a State action it is, therefore, necessary to consider and give due weight to the reasonable or legitimate expectations of the persons likely to be affected by the decision or else that unfairness in the exercise of the power may amount to an abuse or excess of power apart from affecting the bona fides of the decision in a given case. The decision so made would be exposed to challenge on the ground of arbitrariness. Rule of law does not completely eliminate discretion in the exercise of power, as it is unrealistic but provides for control of its exercise by judicial review. The mere reasonable or legitimate expectation of a citizen, in such a situation, may not be itself a distinct enforceable right, but failure to consider and give due weight to it may render the decision arbitrary, and this is how the requirement of due consideration of a legitimate expectation forms a part of the principle of non-arbitrariness, a necessary concomitant of the rule of law. Every legitimate expectation is a relevant factor requiring due consideration in a fair decision-making process. Whether the expectation of the claimant is reasonable or legitimate in the context is a question of fact in each case. Whenever the question arises, it is to be determined not according to the claimant’s perception but in larger public interest where-in other more important considerations may outweigh what would otherwise have been the legitimate expertion of the claimant. A bona fide decision of the public authority reached in this manner would satisfy the requirement of non-arbitrariness and withstand judicial scrutiny. The doctrine of legitimate expectation gets assimilated in the rule of law and operates in our legal system in this manner and to this extent.”
20. In Munindra Nath Upadhyaya v. State of U.P., reported in AIR 1992 SC 566, it has been held as follows (at p. 567):–
“It appears to us that a direction for the acceptance of the bid and award of the contract without the satisfaction of other requisite and relevant conditions may not be appropriate. Government should have the liberty to decide the matter in the light of all considerations relevant to the matter. The
High Court is right in its direction to the Government to treat respondent No. 3 as the highest bidder. But in proceeding on that basis Government must be at liberty to deal with the matter in the light of the other conditions applicable to the matter. Therefore, the form in which the direction couched requires to be modified appropriately. While the authorities are directed to accept the third respondent as the highest bidder, it would be open to them to decide whether they would, in the circumstances, accept the highest bid as adequate and to ensure compliance with applicable conditions.”
21. In Navjyoti Co-operative Group Housing Society v. Union of India, reported in 1992 (5) JT (SC) 621: (AIR 1993 SC 155), it has been held as follows (at p. 165 of AIR) :–
“In the aforesaid facts, the Group Housing Societies were entitled to “legitimate expectation” of following consistent past practice in the matter of allotment, even though they may not have any legal right in private law to receive such treatment. The existence of “legitimate expectation” may have a number of different consequences and one of such consequences is that the authority ought not to act to defeat the legitimate expectation’ without Some overriding reason of public policy to justify its doing so. In a case of legitimate expectation if the authority proposes to defeata person’s ‘Legitimate expectation’ it should afford him an opportunity to make representations in the matter. In this connection may be made to the discussions on ‘legitimate expectation’ at page 151 of Volume 1(1) of Halsbury’s Laws of England, Fourth Edition (Re-issue). We may also refer to a decision of the House of Lords in Council of Civil Service Union v. Minister for Civil Service, reported in 1984 (3) All ER 935. It has been held in the said decision that an aggrieved person was entitled to judicial review if he could show that a decision of the public authority affected him of some benefit or advantage which in the past he had been permitted to continue to enjoy either until he was given reasons for withdrawal and the opportunity to comment on such reasons.
It may be indicated here that the doctrine of ‘legitimate expectation’ imposes in essence
a duty on public authority to act fairly by taking into consideration all relevant factors relating to such ‘legitimate expectation’. Within the conspectus of fair dealing in case of ‘legitimate expectation’, the reasonable opportunities to make representation by the parties likely to be affected by any change of consistent past policy, come in. We have not been shown any compelling reasons taken into consideration by the Central Government to make a departure from the existing policy of allotment with reference to seniority in registration by introducing a new guideline.”
22. This aspect of the matter has recently been considered in details in Union of India v. Hindusthan Development Corporation, reported in 1993 (3) JT (SC) 15 : (AIR 1994 SC 980).
23. Further, it is well known that even in the matter of grant of contract the procedures laid down in the policy decision must be followed and the same must conform to the provision of Article 14 of the Constitution of India.
24. Reference in this connection has been made in R. D. Shetty v. International Airport Authority of India, reported in AIR 1979 SC 1628, wherein it has been held as follows (at pp. 1637, 1638):
“Where the Government is dealing with the public, Whether by way of giving jobs of entering into contracts of issuing quotas of licences or granting other forms of largesse, the Government cannot act arbitrarily at its sweet will, like a private individual, deal with any person or pleases, but its action must in conformity with standard of norms which is not arbitrary, irrational or irrelevant. The power of discretion of the Government in the matter of grant of largasse, must be confined and structured by rational, relevant and non-discriminatory standard or norm and if the Government departs from such standard or norm in any particular case or cases, the action of the Government would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational unreasonable or discriminatory.”
25. Reference in this connection may also be made in Star Enterprises v. City and Industrial Development Corporation of Maharashtra Ltd., reported in 1990 (2) JT (SC) 401, wherein it has been held as follows:
“In recent times, judicial review of administrative action has become expansive and it becoming wider day to day. The traditional limitations have been vanishing and the sphere of judicial scrutiny is being expanded. State activity too is becoming fast pervasive. As the State has descended into the commercial field and giant public sector undertakings have grown up, the stake of the public exchequer is also large justifying larger social audit, judicial control and review by opening of the public gaze; (sic) these necessitate recording of reasons for executive actions including cases of rejection of highest offers. That very often involves long stakes and availability of reasons for action on the record assures credibility to the action; disciplines public conduct and improves the culture of accountability. Looking for reasons in support of such action provides an opportunity for an objective review in appropriate cases both by the administrative superior and by the judicial process. The submission of Mr. Dwivedi, therefore; commends itself to our acceptance, namely, that when highest offers of the type in question are rejected, reasons sufficient to indicate the stand of the appropriate authority should be communicated to the concerned parties unless there be any specific justification not to do so.”
26. The Supreme Court recently in Sterling Computers Ltd. v. M & N Publications Limited, reported in 1993 AIR SCW 683, held as follows (at p. 698):
“Philanthropy is no part of the management of an undertaking, while dealing with a contractor entrusted with the execution of a contract. The supply of the directories to public in time, was a public service which was being affected by the liberal attitude of the MTNL and due to the condonation of delay on the part of the UIP/UDI. There was no justification on the part of the MTNL to become benevolent by entering into the supplemental agreement with no apparent
benefit to the MTNL, without inviting fresh tenders from intending persons to perform the same job for the next five years. Public authorities are essentially different from those of private persons. Even while taking decision in respect of commercial transactions a public authority must be guided by relevant considerations and not by irrelevant ones. If such decision is influenced by extraneous considerations which it ought not to have taken into account the ultimate decision is bound to be vitiated, even if it is established that such decision had been taken without bias. The contract awarded for the publication of the directories had not only a commercial object but had a public element at the same time i.e. to supply the directories to lacs of subscribers of telephones in Delhi and Bombay, every year within the stipulated time free of cost. In such a situation MTNL could not exercise an unfettered discretion after the repeated breaches committed by UIP/UDI, by entering into a supplemental agreement with the sterling for a fresh period of more than five years on terms which were only beneficial to UIP/UDI/Sterling with corresponding no benefit to MTNL, which they have realised only after the High Court went into the matter in detail (in its judgment under appeal.
The supplemental agreement is really a fresh agreement with fresh terms arid conditions which has been entered by MTNL without anything any tender for the same.”
27. However, in this case, admitted by no advertisement has at all been made. The Railway Administration, therefore, has given a complete go by to its own policy decision.
28. It is also well known that any deviation and/departure of its policy decision without any justifiable reason itself attracts the wrath of Article 14 of the Constitution of India.
29. Respondent No. 1 has relied upon clause 8 of Annexure-A to the counter-affidavit. The said clause 8, in our opinion, has no relevance at all.
30. It is true as has been submitted by Mr. S. K. Singh that there has been some delay in filing this writ application. This writ
application has been filed on 4-12-1992, although the contract had been granted in favour of Respondent No. 6 on 30-4-1992. But as in our opinion, the grant of contract for a period of five years without following the rules was wholly illegal, this writ petition should not be dismissed on the ground of delay only.
31. In this view of the matter, in our opinion the interest of justice would be sub-served if the writ petition be disposed of with the following directions;
(i) Respondent No. 2 within two weeks from the date of receipt of a copy of this order, shall issue advertisement in terms of the policy decision of the Railway Board as contained in Annexure-A to the counter-affidavit.
(ii) Respondent No. 2 upon consideration of the case of all eligible candidates shall grant contract of vending/catering in relation to the Muzaffarpur Railway Station to the successful party in favour of a person recommended by the Screening Committee.
(iii) The Screening Committee as also the other authorities of the Railway Administration must strictly abide by the conditions laid down in Annexure-1 aforementioned.
(iv) In the event if it is decided that the Railway Administration should grant contract in favour of Respondent No. 6, Annex-ure-9 shall remain valid and operative for the period of five years.
(v) If the contract of vending and/catering is granted in favour of any other person, the contract of vending/catering granted in favour of Respondent No. 6 shall stand terminated and he would be entitled to obtain proportionate refund of the licence fee deposited by him, if any.
32. It is stated that Respondent No. 6 has deposited license fee Rs. 6516/- from the month of July to December, 1993. The Railway Administration must complete all formalities relating to grant of contract within a period of three months from the date of receipt of a copy of this order.
33. Before parting with this case, we may mention that we have not applied our mind to the allegation and counter-allegation made by the petitioner and the Respondent No. 6 against each other with regard to their respective performances as it would be only for the Screening Committee to consider the same while considering the matter relating to grant of contract along with the case of all other persons who may submit their tenders pursuant to the advertisement made by the Railway Administration, in this regard.
34. For the reasons aforementioned, this application is allowed to the extent mentioned hereinbefore.
35. In the facts and circumstances of the
case, there will be no order as to costs.