S.Nagarajan vs. The Senior Divisional Commercial Manager

Facts

The petitioner, S. Nagarajan, was awarded a license to operate a Special Minor Unit (SMU) catering stall (SMU-4/MAS) at Chennai Central Railway Junction for five years from February 19, 2015, to February 18, 2020, under the Catering Policy 2010. He paid an annual license fee of Rs. 11,20,000, which included GST. Invoking Clause 16.2.1 of the 2010 Policy, which allows for renewal for every 3 years on satisfactory performance, he sought a three-year renewal. The first respondent, the Senior Divisional Commercial Manager, Southern Railway, rejected his request via an order dated November 16, 2019, directing him to vacate the stall by February 18, 2020. The petitioner challenged this order, seeking its quashing and a direction for renewal. The respondents contended that the Catering Policy 2017 superseded the 2010 Policy, making renewal impermissible as the tenure is now fixed at five years without renewal, and fresh tenders were floated.

Held

The Court held that the impugned order rejecting the renewal application was cryptic and non-speaking, lacking valid reasons. It was not disputed that the petitioner was granted the license under the 2010 Catering Policy, and Clause 16.2.1 of this policy clearly provides for renewal for every 3 years upon satisfactory performance and payment of dues. The Court presumed satisfactory performance as there were no complaints against the petitioner. The respondents' contention that the 2017 Catering Policy superseded the 2010 Policy and barred renewal was rejected, referencing a previous High Court order in W.P.(MD)No.2331 of 2018 which dealt with a similar situation. Furthermore, the Court found Clause 20.2 of the 2017 Catering Policy to be a saving clause that protects the interests of those whose tenders were finalized and LoA issued prior to the notification of the 2017 policy. Therefore, the petitioner was entitled to the benefit of at least the first renewal for three years. The Court also distinguished the Apex Court judgment in Senior Divisional Commercial Manager V. S.C.R. Caterers, Dry Fruits, Fruit Juice Stalls Welfare Association and Others, (2016) 3 SCC 582, noting that Clause 19.2 of the 2010 Policy allowed holding multiple units, and thus the petitioner was not barred from seeking extension. The impugned order was set aside, and the respondents were directed to renew the petitioner's license for a further period of three years.

Key Issues

1. Whether the Catering Policy 2017, which supersedes the Catering Policy 2010, can be applied retrospectively to deny renewal of a license granted under the 2010 Policy, particularly when the petitioner's tender was finalized and Letter of Allotment (LoA) issued prior to the notification of the 2017 Policy? (Question of law) Petitioner's arguments: - The petitioner argued that his license was granted under the 2010 Policy, and Clause 16.2.1 of this policy provides for renewal on satisfactory performance. He relied on his consistent good performance and timely payments, including GST. - He further contended that Clause 20.2 of the 2017 Catering Policy protects the interests of tenderers whose tenders were finalized and LoA issued before the notification of the 2017 policy, entitling him to at least the first renewal. - The petitioner also cited a previous High Court order (W.P.(MD)No.2331 of 2018) where a similar rejection was set aside and renewal was directed. Respondents' arguments: - The respondents argued that the 2017 Catering Policy supersedes the 2010 Policy, and therefore, the petitioner is estopped from seeking relief based on the 2010 Policy. - They claimed that renewal is not a matter of right and that the tenure under the 2017 Policy is five years without renewal. - They also stated that fresh tenders were floated based on the 2017 Policy, and the petitioner, having not participated, cannot seek a remedy.