M/S K.K. Enterprises vs. Union Of INDIA

Held

The Court held that the petitioner does not have a vested right of renewal. The Supreme Court's decision in S.C.R Caterers (supra) was based on the Catering Policy of 2010, which contained a renewal clause. However, the petitioner's license was granted under the Catering Policy of 2017, which explicitly states that there will be no renewal or extension for catering units like the petitioner's, except for specific units mentioned in para 3.8.1, which do not include the petitioner's stall. The contract agreement signed by the petitioner also clearly stipulated no renewal. The Court found that granting renewal would lead to a monopoly and be against the commercial interests of the Railways, as re-tendering generates higher license fees. The Court also noted that its scope of judicial review in commercial policy decisions is limited and that the Railways' policy of not granting renewals is actuated by commercial considerations. The Court dismissed the petition but observed that the petitioner would be given the right to participate in the fresh allotment process for the unit.

Facts

The petitioner, M/s K.K. Enterprises, held a license for a fruit juice stall at Itarsi Station under West Central Railways, granted under the Catering Policy of 2017. The license tenure was 5 years, expiring on 17.10.2024. The petitioner applied for renewal on 09.01.2025, but the Railway authorities did not decide on the application. The petitioner filed a writ petition challenging the inaction and the direction to close the stall, arguing a vested right of renewal based on Supreme Court judgments. The Railways opposed renewal, citing the Catering Policy of 2017 which explicitly prohibits renewal for such units, and argued that renewal would create a monopoly and cause financial loss.

Key Issues

1. Whether the petitioner has a vested right of renewal for the catering unit, considering the Supreme Court's judgment in Senior Divisional Commercial Manager, South Central Railways vs. S.C.R Caterers, Dry Fruits, Fruit Juice Stalls Welfare Association and Others (2016) 3 SCC 582, and the applicable Catering Policy? Petitioner's arguments: The petitioner contended that they have a vested right of renewal based on the Supreme Court's decision in the S.C.R Caterers case, which interpreted the Catering Policy of 2010 and granted renewal rights to vendors. They argued that they have operated the stall successfully since 2019 without complaints and that the Supreme Court's ruling should apply to them. Revenue's arguments: The Railways argued that the S.C.R Caterers case was specific to vendors covered under the Catering Policy of 2010. They asserted that the petitioner was granted the license under the Catering Policy of 2017, which explicitly states there is no renewal. The contract agreement also contained a clear stipulation against renewal. Granting renewal would create a monopoly and be financially imprudent for the Railways, as re-tendering yields higher license fees.