M/S Quinn INDIA Catering, Cuttack vs. Union Of INDIA - Orissa High Court, 26 November 2024

Cause title — parties, addresses and appearances

W.P.(C) No.10776 of 2024 Page 1 of 11 IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No.10776 of 2024 1. M/s Quinn India Catering, a proprietorship concern having its office at: S.Y No.55, P-23, Jeelani Panjatan Estate, Thanisandra Mainraod, Beaahalli Cross, Yelahanka, Post- Bengaluru, Karnataka, through its Authorized Representative Santosh Kumar Singh, aged about 48 years, Son of Late L.B. Singh, At- Sikharpur, Korepokhari, College Chhak, Cuttack. 2. Star Caterers, a proprietorship concern having its office at: H.o. 3190, Kucha Tara Chand, Darya Ganj, Delhi through its Authorized Representative Santosh Kumar Singh, aged about 48 years. Son of Late L.B. Singh, At- Sikharpur, Korepokhari, College Chhak, Cuttack. 3. M/s Manju Gaur And Associates, B-767, Loni Road, MIG Flats, New Delhi, through its Authorized Representative Santosh Kumar Singh, aged about 48 years. Son of Late L.B. Singh, At- Sikharpur, Korepokhari, College Chhak, Cuttack. 4. S.C.R. Caterers & Dry Fruits Juices Stalls Welfare Association, H.No.10-50/74/1/2, Warasiguda, Seetafalmandi, Secunderabad. A registered society, registered under Register Society, Andhra Pradesh, through its Authorized Representative Santosh Kumar Singh, aged about 48 years. Son of Late L.B. Singh, At-Sikharpur, Korepokhari, College Chhak, Cuttack. …Petitioners W.P.(C) No.10776 of 2024 Page 2 of 11 -Versus- 1. Union of India, through the Secretary, Ministry of Railways, Rail Bhawan, Raisina Road, New Delhi-110001. 2. The Railway Board, through the Director (Tourism & Catering), Rail Bhawan, Raisina Road, New Delhi-110001. 3. East Coast Railways, having its Office at Rail Bhawan, Chandrasekharpur, Bhubaneswar, District Khurda, represented through its General Manager, at Rail Bhawan, Chandrasekharpur, Bhubaneswar, District Khurda. 4. The Railway Board, Ministry of Railways, Government of India, through its Chairman having its office at Rail Bhavan, Raisina Road, New Delhi, P.O. Sansad Marg Head Quarter & P.S. Central Delhi, District- Central Delhi, PIN-110001 (New Delhi). 5. M/s. Indian Railway Catering & Tourism Corporation Limited, through its Group General Manager (Procurement), having its office at 10th and 11th Floor, Statesmen House Building, Barakhamba Road, New Delhi. 6. The Group General Manager (Procurement), M/s. Indian Railway Catering & Tourism Corporation Ltd., having its office at 10th and 11th Floor, Statesmen House Building, Barakhamba Road, P.O. & P.S. New Delhi, District-New Delhi, PIN-110001 (New Delhi) …Opposite Parties W.P.(C) No.10776 of 2024 Page 3 of 11 Advocates appeared in the case: For the Petitioners : Mr. K.A. Guru, Advocate For Opp. Parties No.1,2,3 & 4 : Mr. P. K. Parhi, Deputy Solicitor General of India For Opp. Parties No.5 & 6 : Mr. Tushar Mehta, Senior Advocate & Solicitor General of India Mr. Saurav Agrawal, Advocate Mr. Rashmi Ranjan Swain, Advocate CORAM: HON’BLE THE CHIEF JUSTICE HON’BLE MISS JUSTICE SAVITRI RATHO

JUDGMENT 26.11.2024

Chakradhari Sharan Singh, CJ.

Four petitioners as noted above have joined in the present application under Article 226 of the Constitution of India, to challenge a Commercial Circular bearing No.24/2023 dated 14.11.2023, which is an addendum to paragraphs 1 and 3 of the Catering Policy issued by the Railway Board, Ministry of Railways, Government of India, on the ground that the said policy is arbitrary, discriminatory and violative of fundamental rights under Article 21 and constitutional right under

W.P.(C) No.10776 of 2024 Article 300A of the Constitution of India. They have also sought for consequential reliefs.

The petitioners are catering contractors.

The Railway Board, apparently in terms of the announcement made by the Ministry of Railways in the Rail Budget 2016-17, came out with a new Catering Policy-2017 (‘2017 Policy’) in supersession of the then existing Catering Policy-2010. By the impugned Commercial Circular No. 24/2023, certain changes have been introduced in paragraphs 1 and 3 of the 2017 Policy, relevant portion of which reads as under:- “1. Objective From the experience gained during the past few years after implementation of Catering Policy 2017, it has been necessitated that state of the art Base Kitchen infrastructure, adequate logistics and service infrastructure, deployment of qualified and skilled manpower to handle food production and services have to be put in place not only at originating but also at enroute stations to ensure service of good quality and hygienic food to passengers on trains. Hence, it is imperative that an experienced professional agency is vested with full accountability of production of meals and services on board under IRCTC’s direct supervision and monitoring of entire operations.

Catering Services in Mobile Units

1 Management of Catering Services

W.P.(C) No.10776 of 2024 3.1.1 Catering services on trains over Indian Railways shall be managed by IRCTC under the framework of this policy and related instructions issued by Railway Board from time to time. The trains for catering services shall be approved by the Board. 3.1.2 Sharing of revenue/license fee between IR and IRCTC shall continue to be governed as per para 3.1 and para 3.8.2 of Catering Policy 2017. …

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3 System of Allotment and Operationalization of Contract. 3.3.1 Tenders shall be awarded for a cluster, consisting of locations required for commissioning of Base Kitchens and the trains identified in the cluster for service, through Two Packet Tender Systems (e-tender). The selected Service Provider shall be responsible for commissioning and operation of Base Kitchens at required locations along with service of meals in all trains of cluster which shall be pre-notified with the bid.

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4 Model of Operation and setting up of Base Kitchens 3.4.1 It shall be ensured that meals of the trains are picked up only from the designated Base Kitchens under direct supervision of IRCTC and no meal is sourced from any other Kitchens. 3.4.2 Locations and specifications for setting up of Base Kitchens shall be pre-notified in the tender document. Location of Base Kitchen shall be decided keeping in view the transit time and delivery to the station so that there is no impact on food quality. 3.4.3 To meet the quality and hygiene in production as per laid down standards, the Service provider shall be responsible for setting up Base Kitchens at all the designated locations (as per route &

W.P.(C) No.10776 of 2024 requirement of trains) before commencement of contract. The Service Provider shall bear the entire investment and make their own arrangements in land/building/space having easy road access.

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3.5.

Eligibility Criteria 3.5.1 Annual Turnover from Food & Beverages Business: (Food & beverages means production, sale/service of cooked food which is to be verified through GSTR (9/9C) and duly certified by approved CAs with UDIN number). During the consideration of 3 FYs, there should not be NIL turnover in any of the years under consideration. a) Rs 25 Cr (for Cluster A) average per year in any of the three years (during the last 6 preceding years). b) Rs 10 Cr (For Cluster B) average per year in any of the three years (during the last 6 preceding years). For avoidance of doubt, an example is given below: (Preceding 6 FYs are 2017-18, 2018-19, 2019-20, 2020- 21, 2021-22 & 2022-23. If the applicant is submitting certified turnover for FYs 2018-19, 2021-22 & 2022-23, the total turnover must not be less than 75 Cr for Cluster A and 30 Cr for Cluster B. Besides above, there should not be NIL turnover during any FYs 2018-19, 2021-22 & 2022-23).

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… Applicability of this Policy This policy supersedes Para 3 of Catering Policy 2017 and related instructions except the provision for sharing of license fee/revenue between IR and IRCTC as referred in Para 3.1.2 of this policy. This policy shall be

W.P.(C) No.10776 of 2024 applicable with immediate effect i.e., from the date of issue.

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It is the case of the petitioners that the aforesaid prescription under the said Commercial Circular is contrary to the object and spirit of the 2017 Policy. It is precisely the case of these petitioners that decision to cluster trains under Clause-3.2 of the impugned Commercial Circular No.24/2023 imposes upon the intending bidders an irrational mandate to opt for all trains in the cluster which may range from 5, 6 to 10 pairs of trains, unlike the previous situation where a bidder could bid for an individual train. It is the petitioners’ further case that such stringent provision for awarding catering contract would benefit only caterers having a large corpus for running the operations and only they would be eligible to bid for the tenders. Such situation would create a monopoly in favour of chosen few bidders. Further, the said Clause is arbitrary and tailor-made to ensure participation of a particular bidder which, in turn, shall deny a level playing field to other bidders and thus oust competition. Clause-3.5 of the impugned addendum lays down the “Eligibility Criteria” in terms of annual turnover from food and beverages business, annual net worth, ownership of kitchen, presence in catering and hospitality

W.P.(C) No.10776 of 2024 business, minimum average workforce etc. Clause-3.5.7 of the impugned circular provides that the joint ventures (JV) / consortium shall not be allowed. It is accordingly the case of the petitioner that the stringent and restrictive clauses in the Catering Policy, 2017 introduced by the impugned Commercial Circular dated 14.11.2023 is discriminatory against individual caterers as the said caterers cannot on their own bid for the cluster of trains, and are also prevented from bidding for the same by forming a joint venture / consortium.

The opposite parties have floated e-tender for provision of on- board catering services in trains for the period of five years for category of cluster-Category-A. The said e-tender notice incorporates the conditions stipulated under the impugned Commercial Circular dated 14.11.2023. It is accordingly the petitioners’ case that the said e- tender notice should also be held to be illegal.

Mr. Tushar Mehta, learned Senior Counsel appearing on behalf of the IRCTC has brought to our notice, a Division Bench decision of the Jharkhand High Court dealing with the same Commercial Circular No. 24/2023 in its judgment dated 27.02.2024 in WP(C) No.766 of 2024 (M/s. Mobile Caterers Welfare Association

W.P.(C) No.10776 of 2024 and others v. Union of India and others) reported in 2024 SCC OnLine Jhar 262. Paragraph 21 of which reads as under:

“21. What can be culled out from the afore- quoted judgments is the limited scope the writ court has of judicial review of the tender process or the decision-making process. The rationale behind issuance of Commercial Circular No. 24/2023 has been suitably explained in the objectives as well as in the counter affidavit and the impugned Circular is based on sound reasoning and such administrative action does not espouse any arbitrariness. The policy is aimed at benefiting a large section of passengers by providing them with good quality hygienic food. In these modern times upgrading the facilities in the trains and making endeavour to provide good quality food prepared at standard kitchens supervised by IRCTC are laudable exercise initiated by the respondents which will ultimately benefit the travellers in the trains. The act of the respondents in issuance of Commercial Circular No. 24/2023 does not suffer from any arbitrariness or unreasonableness and was not designed to exclude the petitioners and bestow favour on someone. The exclusion of Joint Venture /Consortium in the addendum is also as per the policy decision of the respondents and though learned Senior Counsel for the petitioner has referred to Commercial Circular No. 29/2023 but the same relates to a pilot project of Yatri Seva Anubandh (YSA) and it encompasses several facilities which has to be ensured by the service provider. The pilot project operating in a separate domain cannot be taken to be a benchmark to question the action of the respondents and term it as arbitrary. The

W.P.(C) No.10776 of 2024 questions which were formulated in the case of “Michigan Rubber (India) Limited versus State of Karnataka and Others” (supra) and which has been quoted above is answered in the negative. This Court in exercise of the powers of writ juri iction as repeatedly stated above has a limited juri iction of exercising its powers of judicial review and since the Commercial Circular No. 24/2023 does not indicate any arbitrariness in the action of the respondents, we refrain from entertaining this writ application and consequently the same is hereby dismissed.

It is also noticeable that the same view has been taken by the Karnataka High Court in its judgment rendered on 19.02.2024 in W.P.(C) No.4162 of 2024 (South Western Railway Catering Contractors Association (Regd.) v. Union of India and others), reported in 2024 SCC OnLine Kar 729. The Gauhati High Court in its decision rendered on 08.04.2024 in W.P.(C) No.317 of 2024 (M/s. Rathour Services and another v. Union of India and others) has upheld the said impugned Commercial Circular.

Since the said Commercial Circular in the form of catering policy issued by the Railway Board, Ministry of Railways, Government of India, which is uniformly applicable throughout the country, has been upheld by three of the High Courts, we are not

W.P.(C) No.10776 of 2024 inclined to entertain the challenge made to the same policy, out of deference to the said decisions.

Further, we see no reason to take a different view than what has been taken by the Jharkhand High Court at Ranchi, Karnataka High Court and the Gauhati High Court.

Accordingly, the present writ petition stands dismissed. (Chakradhari Sharan Singh) Chief Justice

Savitri Ratho, J. I agree.

(Savitri Ratho)

Judge

S.K. Guin/PA