Krishna Enterprise And Anr. vs. The Union Of INDIA And 5 Ors
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The petitioners, catering contractors under IRCTC, challenged a decision dated 23.11.2022 by the Group General Manager (Procurement), IRCTC. This decision required them to deposit six months' license fees in advance for carrying out catering services on various trains. The petitioners argued that due to the COVID-19 pandemic, rail services and catering operations were disrupted. They contended that the requirement of advance payment of six months' license fees was onerous and discriminatory, especially when compared to 'long term tender licensees' who were permitted quarterly payments for a year. The petitioners participated in the tendering process, and the dispute arose from the terms and conditions imposed by IRCTC.
Held
The Court first addressed the preliminary issue of territorial jurisdiction. It found that the cause of action for the tender and bidding process arose within the jurisdiction of the Delhi courts, as the IRCTC's registered office, tender issuance, and deposit payments were primarily in Delhi. The Court noted that many petitioners had addresses outside Assam and that tender documents often specified Delhi jurisdiction. Therefore, the Gauhati High Court lacked territorial jurisdiction. However, the Court proceeded to examine the merits of the case. On the issue of discrimination, the Court held that the petitioners failed to demonstrate from the catering policy or any other policy that IRCTC had allowed all licensees with a six-month contract tenure to deposit license fees quarterly. The Court found that the IRCTC had made a conscious decision to require advance payment for the current tender, which had a six-month tenure, extendable by another six months. The petitioners participated in the tender with full knowledge of this clause and did not protest. The Court relied on the principles laid down in Meerut Development Authority and Bharat Coking Coal, stating that terms and conditions of a tender are within the realm of commercial contracts, and parties participating with open eyes cannot challenge them later. The Court concluded that the petitioners were not 'long term tender licensees' and thus not entitled to the benefit of the 02.11.2022 letter. The Court found no discrimination against the petitioners as they failed to show that other similar contractors in their category were treated differently. Consequently, the writ petitions were dismissed.
Key Issues
1. Whether the Gauhati High Court has the territorial jurisdiction to entertain the writ petitions, considering that the cause of action primarily arose in Delhi where the IRCTC has its registered office, tenders were issued, and contracts were to be performed, and many petitioners have addresses outside Assam? (Mixed question of law and fact, turning on principles of jurisdiction and cause of action). 2. Whether the condition requiring the petitioners, who have a contract tenure of six months extendable by another six months, to deposit six months' license fees in advance is discriminatory and violative of Article 14 of the Constitution of India, especially when 'long term tender licensees' were allowed quarterly payments for a year? (Question of law, turning on Article 14 of the Constitution of India and principles of non-discrimination). Petitioner's arguments: The petitioners argued that the advance payment requirement was discriminatory and unsustainable, citing a letter dated 02.11.2022 that allowed 'long term tender licensees' to deposit license fees quarterly for one year. They contended that the distinction based on contract tenure was arbitrary. They also argued that the Gauhati High Court had jurisdiction as the cause of action arose within its territory. Revenue/State's arguments: The respondents argued that the cause of action arose in Delhi, and therefore, the Delhi High Court had exclusive jurisdiction. They also contended that the petitioners had participated in the tendering process with full knowledge of the advance payment clause and had not registered any protest, thus they could not challenge it later. They further argued that the petitioners were not 'long term tender licensees' and therefore not entitled to the benefit of the 02.11.2022 letter. They relied on cases like Meerut Development Authority and Bharat Coking Coal.
Sections Cited
Article 14
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Heard together (5 matters)
Read from the judgment's own cause title. This page is filed under one of them.
Cause title — parties, addresses and appearances
J U D G M E N T & O R D E R
2023
Heard Mr. P.K. Goswami, learned senior counsel, assisted by Ms. B. Chowdhury, learned counsel for the petitioners. Also heard Mr. G.N. Sahewalla, learned senior counsel, assisted by N. Anix Singh, learned counsel for the I.R.C.T.C., representing respondent nos. 3 and 4 and Ms. L. Devi, appearing on behalf of Sri R.R.D Choudhury, ASGI.
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As common issue arises in all these five writ petitions, and same set of counsel are representing the parties, these matters are taken up together. In this order, the documents are referred to from the records of W.P.(C) 7138/2022. 3. In all these writ petitions filed under Article 226 of the Constitution of India, the petitioners, who are catering contractors under Indian Railway Catering and Tourism Corporation Ltd. (IRCTC for short), have challenged the decision dated 23.11.2022 communicated to the petitioners by the Group General Manager (Procurement), IRCTC (respondent no. 3) by which the petitioners were required to deposit 6 months’ licence fees in advance to carry out catering service in Rajdhani, Shatabdi, Duronto, Garibrath, Tejas, Vande Bharat, Mail/Express trains and in train side vending (R GTV, M/E, TSV for short).
At the outset, the learned senior counsel for the petitioners has submitted that the petitioner no. 3 in W.P.(C) 7138/2022, by a letter, had informed his learned instructing counsel that he has settled his dispute with the respondent nos. 3 and 4 and would not be prosecuting his case. We have taken note of the said submissions. Nonetheless, the name of the said petitioner cannot be struck off because no application has been filed for the said purpose.
In brief, the case of the petitioners is that during Covid-19 pandemic, the rail services was disrupted for a long time and even after resumption of service, catering service were not commenced and therefore, for not being able to operate from 26.03.2020 to 24.04.2021, the petitioners had suffered losses. Therefore, by a letter dated 02.11.2022, the General Manager/MCS, IRCTC, Corporate Office, Delhi had informed the Group General
Page No.# 10/16 Manager of IRCTC, for all five railway catering zones, i.e. North Zone, East Zone, West Zone, South Central Zone and South Zone to the effect that upon examining the representation dated 27.09.2022, submitted by the Indian Railway Mobile Caterers Association, New Delhi it was decided that all SBD and “long term tender licencees (R GTV, M/E, TSV)” shall be permitted to deposit the licence fee on quarterly basis for the period of one year only.
Thereafter, the IRCTC had issued notice inviting tenders (NIT for short) for various long distance trains for a period of 6 (six) months, further extendable upto 6 (six) months. The said tenders were to be opened on 09.11.2022 and accordingly, the petitioners had participated in the bidding and they were awarded catering contract for several trains. The description of the trains is not relevant for the purpose of this order and therefore, not mentioned in this order.
The grievance of the petitioners is that without following the policy as communicated vide herein before referred letter dated 02.11.2022, the full licence fees for initial 6 (six) months was required to be paid in advance within 5 (five) days from the issuance of the “letter of intent (LoI for short) and licence fees for extendable period of 6 (six) months, if applicable, was required to be paid 1 (one) month before the date of expiry of the first term of 6 (six) months.
Accordingly, the learned senior counsel for the petitioners has submitted that having taken a policy decision to allow payment of 3 (three) month’s licence fees in advance, the benefit accrued to the petitioners could not have been taken away. It was also submitted that the tender condition to deny the benefit of the policy of the respondents to the petitioners is discriminatory
Page No.# 11/16 and violative of Article 14 of the Constitution of India as relief cannot be denied only on the basis of tenure of contract. Accordingly, it was submitted that the action of the respondent nos. 3 and 4 requiring the petitioners to make advance payment of the full licence fees for initial 6 (six) months was unfair, discriminatory, arbitrary and unreasonable. It was also submitted that all the trains for which contract was awarded to the petitioners are long distance trains, but with short duration of contract. It has also been submitted that the tenders were e-Tenders and could be participated from anywhere in the Country and therefore, this Court would have juri iction to entertain this writ petition notwithstanding that the tender documents had provided that the Courts at Delhi would have juri iction and in this regard it was submitted that this Court, while exercising writ juri iction, had plenary and inherent power to use its discretion to entertain and adjudicate these writ petitions.
In support of his submissions, the learned senior counsel for the petitioners has cited the following cases, viz., L. Chandra Kumar v. Union of India & Ors., (1997) 3 SCC 261 (para-99), and Maharashtra Chess Association v. Union of India, (2020) 13 SCC 285 (para 10, 23 and 24).
Per contra, the learned senior counsel for the respondents has raised preliminary objections as to maintainability of these writ petitions on ground that no part of cause of action arose within the territorial juri iction of this Court. In support of the said submissions, reliance is placed on the following cases, viz., (i) Aligarh Muslim University & Anr. v. Vinay Engineering Enterprises (P) Ltd. & Anr., (1994) 4 SCC 710, (ii) Swastik Gases Pvt. Ltd. v. Indian Oil Corporation Ltd., (2013) 9 SCC 32, (iii) Alchemist Ltd. & Anr. v. State Bank of Sikkim & Anr., (2007) 11 SCC 335, and (iv) Maharashtra Chess
Page No.# 12/16 Association v. Union of India & Ors., (2020) 13 SCC 285. 11. It was also submitted that the policy vide letter dated 02.11.2022 was only for “long term tender licencees”, which would not include petitioners, who are licencees for short term not exceeding six months, extendable to further six months. It was also submitted that “long term tender licencees” would not mean “licencees for long distance trains”. By referring to Annexure-N appended to the affidavit-in-reply filed by the petitioners in W.P.(C) 7138/2022, it has been submitted that sub-clause (b) of clause 4.2 at page 233 thereof would demonstrate that the licence fee for the entire duration of licence was payable on 2+2+1 yearly basis in advance. Thus, it was submitted that “long term tender licencees” would be those licences having tenure of 5 years and it would not mean contracts for 6 months.
It was further submitted that having participated in the bidding process with knowledge of the terms, the conditions of tender cannot be challenged during subsistence of contract. In this regard, the case of Meerut Development Authority v. Association of Management Studies & Anr., (2009) 6 SCC 171, and Bharat Coking Coal Ltd. v. AMR Dev Prabha & Ors., (2020) 16 SCC 759, was referred to. A written note of submission has also been filed.
Considered the writ petition and affidavits exchanged by the parties as well as the submissions of the learned senior counsel on both sides.
It is noticed that Sri Jayanta Kumar Ghosh, the petitioner no. 2 in W.P.(C) 7138/2022 and W.P.(C) 7597/2022 is not the catering contractor. The petitioner no. 1 in W.P.(C) 7138/2022 and W.P.(C) 7597/2022 are a Company, but it does not have its registered office in Assam. Notwithstanding that the Page No.# 13/16 petitioner no. 3, M/s. Classic Caterers is not prosecuting the said W.P.(C) 7138/2022, the petitioner nos. 3 and 4 are firms, which also do not have its office within the State of Assam. In W.P.(C) 7624/2022, the said M/s. Classic Caterers is petitioner no. 2, and in the cause title, the said firm has given the address at Guwahati, but in the letter of award of contract dated 04.11.2022 (pg. 159), the address of the said firm is at Delhi. The GST registration also discloses Delhi address. It is not in dispute that the registered office of IRCTC is at New Delhi. The tender was issued by respondent no. 3, having office at Delhi. The security deposit and/or other deposit by the bidders was to be paid in Delhi and in several places in the bidding/tender documents, it is clearly mentioned that the Court at Delhi would have juri iction. Therefore, in the considered opinion of the Court, the cause of action for the tender and/or bidding arose within the juri iction of the Court at Delhi and therefore, the Court at Delhi alone would have juri iction. The cases cited by the learned senior counsel for the petitioners would not come to the rescue of the petitioners on the distinguishable facts of this case and therefore, the Court is not inclined to burden this judgment with discussion on the said cases.
Be that as it may, as the preliminary issue was not taken up for hearing at the preliminary stage, the Court does not propose to dismiss this writ petition on this ground alone. Therefore, the merit of the case has also been examined.
The petitioner has annexed a copy of catering policy 2010 vide Commercial Circular No. 35/2010 dated 21.07.2010. As per Clause 16.1.2, 16.2.2, and 16.2.3 thereof the tenure of major units and general minor units is envisaged for a period of 5 (five) years. Similarly, under clause 16.2.1 and Page No.# 14/16 16.2.2, the tenure of the licence is envisaged at 5 (five) years. Therefore, as the petitioners have not been able to demonstrate from the said policy or any other policy that the Railways and/or the IRCTC had allowed all licencees having contract tenure of 6 (six) months, extendable by another 6 months, the Court is constrained to hold that the benefit of the letter dated 02.11.2022 cannot be applied in the case of the petitioners. Thus, in other words, the benefit of letter dated 02.11.2022, permitting the “long term tender licencees” to deposit the licence fees on quarterly basis for the period of one year only cannot be extended to the petitioners.
The learned senior counsel for the petitioner had urged that discrimination on the basis of tenure of contract is unsustainable. After a careful consideration of the submissions made from both sides, the Court is of the considered opinion that the IRCTC had permitted the “long term tender licencees” to deposit the licence fees on quarterly basis for the period of one year only. However, when the present tender was issued, the respondent authorities took a conscious decision to incorporate that the tenure of contract would be 6 (six) months, extendable to a further period of 6 (six) months, and provided that the entire licence fees for 6 (six) months would be payable in advance. The said condition cannot be held to be bad because the petitioners had participated in the tendering/ bidding process with full knowledge of the conditions. The petitioners have not annexed any document to show that they had registered their protest with the tendering authority on the clause relating to payment of licence fees for 6 (six) months in advance. Therefore, having participated in the tendering process with eyes open and with knowledge of the payment clause, the petitioners cannot be permitted to turn around to challenge the tender clause. In this regard, we find support from the case of Meerut
Page No.# 15/16 Development Authority (supra) and Bharat Coking Coal (supra), cited by the learned senior counsel for the respondents. The same would be impermissible because many persons, firms or companies might not have participated in the tender because of such clause. Therefore, the said contention of the petitioners has to be rejected. The Court is of the considered opinion that the licence fee payment clause in the present tender/ contract is not violative of Article 14 of the Constitution of India or discriminatory against the petitioners as the petitioners have not been able to satisfy the requirement of letter dated 02.11.2022 that they are “long term tender licencees”.
Moreover, the Court is of the considered opinion that tender and its terms and conditions are within the realm of commercial contract, where the tendering authority must have freedom to impose terms and conditions. The petitioners have not been able to demonstrate that within their contract category, i.e. tender with 6 (six) months tenure, extendable for a further period of 6 (six) months, after LoI was issued to the petitioners, the respondent authorities had imposed different conditions for payment of licence fees for other similar contractors. Therefore, it cannot be accepted that there was any discrimination with the petitioners. There is no bar for the persons in different category to be treated differently, which solely depends on the wi om of the tendering authority.
Therefore, this writ petition fails on all counts and therefore, these batch of 5 (five) writ petitions stands dismissed. However, the parties are left to bear their own cost.
Needless to mention that the interim orders stand vacated.
Page No.# 16/16 JUDGE Comparing Assistant
Reproduced from the public record of the Gauhati High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.