Supreme Court of India
SENIOR DIVISIONAL COMMERCIAL MANAGER & ORSversusS.C.R. CATERERS, DRY FRUITS, FRUIT JUICE STALLS WELFARE ASSOCIATION & ANR.
- Citation
- 2016 INSC 109
- Decided
- 29 January 2016
- Disposal
- Dismissed
- Bench
- V GOPALA GOWDA
Holding
The 2010 Catering Policy applies to existing licencees and the railways' refusal to renew their licences is arbitrary, unreasonable and violative of Articles 14, 19(1)(g) and 21.
Summary
The appellants, senior divisional commercial managers of South Central Railway, challenged the renewal of licences granted to pre‑existing caterers under the 2010 Catering Policy, arguing that the policy applied only to licences issued after its commencement. The respondents, a welfare association of caterers, contended that the Railway Board’s circulars mandated renewal of all existing minor unit licences for three years, irrespective of when they were originally granted. The Court examined whether the policy’s provisions, read together with the circulars, required renewal and whether denial of renewal violated Articles 14, 19(1)(g) and 21 of the Constitution. Relying on the principles of a welfare state, the right to livelihood and precedents on equality and arbitrariness, the Court held that the policy applied to the existing licencees and that the railways’ refusal to renew was arbitrary and unconstitutional. Consequently, the licences were ordered to be renewed subject to conditions, and the appeals were dismissed.
Issues considered
- The applicability of the Catering Policy, 2010 to licences granted before its commencement.
- Whether denial of licence renewal violates Article 14 (equality), Article 19(1)(g) (freedom of occupation) and Article 21 (right to life) of the Constitution.
- Whether the Railway Board’s circulars override the policy’s non‑renewal provision.
- Whether the State’s action is arbitrary, unreasonable and discriminatory.
- Whether the right to livelihood is enforceable as a facet of the right to life.
Legislation cited
Subjects
licence renewalright to livelihoodArticle 14Article 19(1)(g)Article 21welfare statesocial justiceCatering Policy 2010railway propertyarbitrariness
Judgment
[2016] I S.C.R. 44 7
SENIOR DIVISIONAL COMMERCIAL MANAGER & ORS. A
v.
S.C.R. CArERERS, DRY FRUITS, FRUIT JUICE STALLS
WELFARE ASSOCIATION & ANR.
(Civil Appeal Nos. 618-620of2016) B
JANUARY 29, 2016
(V. GO PALA GOWDA AND AMITAVA ROY, JJ.)
Licence - Renewal of- Under Catering Policy, 2010 of Indian
Railways - To the pre-exisling licencees - Permissihilily - Held:
The provi.i·ions of the 2010 Policy are ~1pplicahle 10 !he pre-exisling
c
licences ~Denial of rene11 al <?f' licence lo the licencees JJre-existing
1
"the 2010 Policy, would amounl lo deprivalion of their righl lo
freedom <if occupation guarunleed u/Arl. 19(1){g) <if !he Co11stilulio11
us well a right lo livelihood - Such ac/ion of" !he S!ale would be
opposed to their constitutional duty toward1· social jus/ice and would D
be arbilrary, unreasonable, unji1ir and discrimina/ory - Conslitulion
of" India, 1950 - Aris. 14, 19(/)(g), 21 and 38.
Dismissing the appeals, the Court
HELD: I. The Railway Board issued Commercial Circular .
No. 37 dated 09.08.2010. This circular Clarifies that the renewal E
of the license is ~equired to be granted to all the existing·Iicensees
of the Minor Units as per clauses 16 and I 7 of the Catering Policy,
·2010. It also becom.es clear that the existing licensees need not
be included in the tender process._ Circular dated 23.08.2011
. issued by the Chief Commercial Manager: of South Central Railway F
directed all the Divisional Commercial Managers and other
subordinate officers of the South Central Railway to confirm that
the tenure ufall GMUs and SMUs at "Al", "A" and "B" category
stations shall be renewed after every 3 years on their satisfactory
performance a.nd payment of all dues and arrears as per the 2010
Policy. In view of the said circular, catering· licenses of all the G
members of the respondent Association were renewed till July
2013. (Para 20] (461-E-H; 462-A(
2. Article 14 of the Constitution of India mand:1tes that
state action must not be arbitrary and discr}minatory. It must :~lso
447
448 SUPREME COURT REPORTS (2016] I S.C.R.
A not be guided by any extraneous considerations which are
antithetical to equality. [Para 20J1462-G-HJ
R.D. Shelly v. International Airport Authority (1979) 3
SCC 489: 1979 (3) SCR 1014 - relied on .
.3. India is a welfare State. As per Article 38 of the
B Constitution, it is the duty of every welfare state to generate
employment. The right to livelihood is a part of right to life. It is
the duty of the state, acting through its instrumentalities to ensure
that no person in a vulnerable position is exploited. This Court,
being entrusted with the task of being the countermajoritarian
institution, is duty bound to ensure that the rights of the
c downtrodden minorities and the members of the weaker sections
of the society are not trampled upon. [Paras 21, 22 and 23)
[463-C, F-G] [464-D-E]
Olga Tellis v. Bombay Municipal Corporation (1985) 3
SCC 545:1985 (2) Suppl. SCR 51 - followed.
D Peoples Union for Democratic Rights & Ors. l( Union
of India (1982) 3 SCC 235: 1983 (I) SCR 456- relied
on.
4. The Policy of not renewing the licenses of those persons
who are members of the respondents are completely dependent
E on self-earning from these small units and making them
participate in a public competition is absolutely nnfair,
unreasonable and arbitrary. The chances of such persons being
deprived of their right to livelihood is also an important factor
which has to be taken into consideration by this Court to interpret
the policy framed by the appellants. The callous attitnde as far as
F the inaction on the part of the State in tackling the problem of
rising unemployment is appalling. The situation is made worse
by the handing over of public functions to private entrepreneurs,
which then exploit the policies of the Government against the
poor and downtrodden. [Para 24][464-H; 465-A-BI
G 5. If the appellants under the guise of the policy are
permitted to deny renewal of licenses in favour of the licensees,
it would amount to deprivation of their right to freedom of
occupation guaranteed under Article 19(1)(g) of the Constitution
as well as the right to livelihood, which action of the appellan~
H would be diametrically opposed to their constitutional duty
SR. DIVISIONAL COMMERCIAL MANAGER v. S.C.R. CATERERS, DRY 449
FRUITS, FRUIT JUICE STALLS WELFARE ASSN.
towards social justice as well as uplifting the weaker sections of A
the society and the unemployed youth of the country. [Para 24)
(465-C-D)
Consumer Education & Research Center v. Union of
India (1995) 3 SCC 42: 1995 (1) SCR 626; Sadhura111
Bansal v. Pu/in Sarkarv (1984) 3 SCC 410: 1984 (3) B
SCR 582 - relied on.
6. Keeping in view the evolving concept of social justice,·
the members of respondents who are the licensees are allowed
to continue their petty business, especially in the absence of
employment potentiality in the country on account of non-
governance and non- implementation of the constitutional c
philosophy of an egalitarian society, which provides the
opportunity to all individuals to lead a life of dignity.[Para 26]
(466-D-E]
Francis Coralie Mullin " Administrator, Union Territory
of Delhi & Ors.(1981) 1 SCC 608: 1981 (2) SCR 516 D
- relied on.
7. Therefore, the provisions of the Catering Policy, 2010
are applicable to the concerned respondents. The action of the
railways in not granting renewals of the licenses to the members
of the respondents is arbitrary, unreasonable, unfair and
discriminatory, and the same cannot be allowed to sustain in law. E
JJ,>ara 2?1 [467-Al
8. However, it is clarified that only those licensees may be
eligible for renewal of their licenses who can declare on affidavit
that they do not h.ave the license of more than one shop or kiosk
in their name or benr1111i license at the railway stations with F
periodical reasonable increase of license fee. [Para 28]
[467-9-C]
Lala Ram v. Union of India (2015) 5 SCC 813:2013
(1) SCR 577; Ra111 & Shyam Company v. State of
Haryana (1985) 3 SCC 267:1985 (1) Suppl. SCR 541;
Jivan Das v. Life Insurance Corporation oflndia & G
Anr. 1994 Supp (3) SCC 694; Bank of India & Ors. v.
K. Mohandas & Ors. (2009) 5 SCC 313: 2009 (5) SCR
118; Chant Khurana v. Union of India (2015) 1 SCC
192; LIC v. DJ Bahadur (1981} 1 SCC 315: 1981 (1)
SCR 1083 - referred to.
H
450 SUPREME COURT REPORTS [2016] I S.C.R.
A Case Law Reference
2013 (1) SCR 577 referred to. Para 7
1985 (1) Suppl. SCR 541 referred to. Paras
1994 sui>P (3) sec 694 referred to. Para 12
B 2009 (5) SCR 118 referred to. Para 15
(2015) 1 sec 192 referred to. Para 17
1981 (1) SCR 1083 referred to. Para 18
1979 (3) SCR 1014 relied on. Para 20
c 1985 (2) Suppl. SCR 51 followed. Para 22
1983 ft) SCR 456 relied on. Para 22
1995 (I) SCR 626 relied on. Para 25
1984 (3) SCR 582 relied on. Para 25
D
1981 (2) SCR 516 relied on. Para 26
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 618-
620 of2016
From the Judgment and Order dated 12.09.2013 of the High Court
E of Judicature of Andhra Pradesh at Hyderabad in Writ Appeal No. 1573
to 1575of2013
N. K. Kaul, ASG, Shilpa Nair, R. M. Bajaj, S. N. Bhat, Shreekant
N. Terdal for the Appellants.
P. K. Goswami, Raju Ramachandran, V. K. Shukla, Ms. Anchal
F Mehrotra, Dr. Rajeev Shanna. (For Intervenor), Venkatcswara Rao
Anumolu, Goli Rama Krishna, Shashwat Goel. Arunabh Chaudhary.
Parthiv K. Goswami, Kaustav Talukdar, Yashraj Singh Bundela, Ms.
Diksha Rai, Ms. Ranjceta Rohtagi, Myth iii Vijay KumarT., Vikram Aditya
Narayan for the Respondents.
G The Judgment of the Court was delivered by
V. GOPALA GOWDA, J. I. Applications for intervention are
allowed.
2. Leave granted.
H
SR. DIV. COMMERCIAL MANAGER v. S.C.R. CATERERS. DRY FRUITS. 45 I
FRUIT JUICE STALLS WELFARE ASSN. [V. GOPALAGOWDA, J.]
3. The present appeals arise out of the impugned judgment and A
order dated I 2.09.20 I 3 passed by the High Court of Judicature of Andhra
Pradesh at Hyderabad in W.A. Nos. 1573-1575 of2013, whereby the
·Division Bench of the High Court upheld the order of the learned single
·Judge, wherein it was held that the respondents are entitled to get their
licenses renewed_ under the Catering Policy, 20 I 0.
B
4. The relevant facts which are required for us to appreciate the
rival legal contentions advanced on behalf of the parties are stated in
brief hereunder:
Respondents before us are the South Central Railway Caterers,
Dry Fruits, Fruit Juice Stalls Welfare Association, (hereinafter referred c
to as "the Welfare Association''). The members of the Welfare
Association were granted licenses for running General Minor Units or
Special Minor Units in Categories "A", "B" and "C" Railway Stations.
These licenses were granted in favour of the members of the respondents
prior to the creation of the Indian Railways Catering and Tourism
Corporation Limited (hereinafter referred to as "IRCTC") under the D
Catering Policy, 2005. In terms of the said Policy, the contracts under
Categories "A", "B" and "C" Railway Stations were transferred to the
IRCTC while the contracts granted under Categories "D" to "F" Railway
Stations were continued under the control of the South Central Rai !ways
till t11e IRCTC was equipped to take over these units. The contracts held E
by the members of the Welfare Association were renewed during the
subsistence of the Catering Policy, 2005. The said policy was replaced
by the Catering Policy, 20 I 0. Under the new Policy, the contracts ofall
the existing major and minor catering units were to be awarded and
managed by the Zonal Railways. lhe IRCTC was l.eTfwith the running
of the Food Plaza, Food Courts and Fast Food Units only. Pursuant to F
the Catering Policy, 20 I O,the Soul!) Central Railway granted renewal of
licenses in favour of the licensees for a period of three years with effect
from 21.07:2010, the date on which the Catering Policy, 2010 was made
effective in respect of the General Minor Units (GM Us) and Special
Minor Units (SMUs) taken over from the IRCTC, subjectto the conditions G
·stipulated in paras 16.1.3 and 16.2. 1 of the Catering Policy, 20 I 0. The
rene)¥ed licenses were to expire on 20.07.2013. On 26.04.2013, the
Senior Divisional Commercial Manager, Vijayawada, issued a p_idmotice
inviting sealed bids on the Single Stage Two-Packet System from food
and catering service ·providers for provision of catering ser•ices at the
H
452 SuPREME COURT REPORTS [2016] I S.C .R.
A various GM!Js of Categories ·'A'' and "B" Railways Stations in the
Vijayawada Division. A simi Jar notification dated 03.05.2013 was issued
for establishment of catering stalls/fruits and fruit ju ice stalls in SM Us in
·'Al". "A" and "B" Category Railway Stations. Aggrieved. the
respondent-Association, the members of which had existing licenses,
filed a Writ Petition before the single Judge of the High Court of
8
Judicature of Andhra Pradesh at Hyderabad. The respondent-Association
urged that the said action of inviting fresh bids is discriminatory and also
contrary to the provisions of the Catering Policy, 20 I 0. The main plea of
the respondent-Association was that in terms of the Catering Policy,
2010, the existing licensees were entitled for renewal of their licenses
C for a period of three years, subject to their satisfactory performance,
payment of all dues and arrears and withdrawal of court cases, if any.
They prayed that the appellant be directed to renew the licenses of the
existing license holders of the canteens and fruits and fruit juice stalls.
Vide judgment and order dated 16.08.2013, the learned single Judge
D came to the conclusion that the Catering Policy, 20 I 0 did not differentiate
among the licensees based on the number of.years for which they have
been carrying on their business. It was further held that under the
Catering Policy, 20 I 0, the license fee is liable to be revised based on the
potentiality of each Railway Station and the turnover of the licensees
during the previous years. Since the license fee is subject to continuous
E revision and does not remain stagnant, the question of the Railways
suffering any loss due to renewals would not arise. The learned single
Judge held that the members of the Welfare Association are entitled for
renewal of the licenses of the members subject to their satisfying the
conditions stipulated in paras 16. 1.3 and 16.2.1 of the Catering Policy,
F 2010. On appeal filed by the appellants, the judgment and order of the
. learned single Judge was upheld by the Division Bench of the High
Court in the Writ Appeals vide its judgment and order dated 12.09.2013.
Hence, the present appeals are filed by the appellants.
5. We have heard the learned senior counsel for both the parties.
On the basis of the pleadings and evidence on record produced_ before
G us, the circumstances of the case and also in the light of the rival legal
contentions urged by the learned senior counsel for both the parties, the
main question that arises for our consideration is whether the members
of the respondents before us are entitled to have their licenses renewed
in terms of the Catering Policy, 20 I 0.
H
SR. DIV. COMMERCIAL MANAGER v. S.C.R. CATERERS. DRY FRUITS. 453
FRUIT JUICE STALLS WELFARE ASSN. [V. GOPALA GOWDA. J.]
6. Mr. N.K. Kaul, the learned Additional Solicitor General A
appearing on behalf of the appellants drew our attention to the important
provisions of the Catering Policy, 20 I 0. The objective of the Policy reads
as under:
"1.1 To provide hygienic, good quality affordable food to the
travelling public by adopting best trade and hospitality practices. B
1.2 The policy will have an inclusive approach where from the
least advantaged passenger to the relatively affluent will be provided
catering services in a socially responsible manner.
1.3 It should meet all the social objectives of the Government,
including provision ofreservations as per Government Directives c
issued from time to time."
7. The learned ASG contends that the terms of the Catering Policy,
2010 are absolutely clear. The larger issue here is the right to livelihood
of the licensees who are members of the respondents. The welfare of
the people is the prime concern of any responsible government under D
the provisions of the Constitution. The learned ASG places reliance on
the case of Lalli Ram v. U11io11 of J1ulill 1, wherein the concept of a
welfare state has been discussed as under:
"A welfare state denotes a concept of government, in which the
State plays a key role in the protection and promotion of the E
economic and social well-being of all of its citizens, which may
include equitable distribution of wealth and equal opportunities
and public responsibilities for all those, who are unable to avail for
themselves, minimal provisions for a decent life. It refers to
"Greatest good of greatest number and the benefit of all and the
F
happiness ofall". It is important that public weal bethe commitment
of the State, where the state is a welfare state. A welfare state is
under an obligation to prepare plans and devise beneficial schemes
for the good of the common people. Thus, the fundamental feature
of a Welfare state is social insurance. Anti-poverty programmes
and a system of personal taxation are examples of certain aspects G
of a Welfare state. A Welfare state provides State sponsored aid
for individuals from the cradle to the grave. However, a welfare
state faces basic problems as regards what should be the desirable
'(2015) 5 sec s13 H
454 SUPREME COURT REPORTS [2016] I S.C.R.
A level of provision of such welfare services by the state, for the
reason that equitable provision of resources to finance services
over and above the contributions of direct beneficiaries would
cause difficultie.s •..A welfare state is one, which seeks to ensure
maximum happiness of maximum number of people living within
its territory. A welfare state must attempt to provide all facilities
B
for decent living, particularly to the poor, the weak, the old and the
disabled i.e. to all those, who admittedly belong to the weaker
sections of society. Articles 38 and 39 of the Constitution oflndia
provide that the State must strive to promote the welfare of the
people of the state by protecting all their econqmic. social and
c political rights. These rights may cover. means oflivelihood. health
and the general well-being of all sections of people in society,
specially those of the young. the old, the women and the relatively
weaker sections of the societv. These groups generally require
special protection measures in almost every set up. The happiness
of the people is the ultimate aim ofa welfare state, and a welfare
D
state would not qualify as one, unless it strives to achieve the
same."
(emphasis laid by this Court)
8. The learned ASG further places reliance on the case of R11m
& Sfly11m Comp11ny v. $t11te of ll11ry11n11', relevant paragraph of which
is quoted. hereunder:
•
"12. Let us put into focus the clearly demarcated approach that
distinguishes the use and disposal of private property and socialist
·property. Owner of private property may deal with it in any manner
F he likes without causing injury to anyone else. But the socialist or
ifthat word is jarring to some, the community or further the public
property has to be dealt with for public purpose and in public
interest. The marked difference lies in this that while the owner
of private property may have a number of considerations which
may permit him to dispose ofhis property for a song. On the other
G hand, disposal of public property partakes the character ofa trust
in that in its disposal there should be nothing hanky panky and that
it must be doQe at the best price so that larger revenue coming
into the coffers of the State administration would serve public
H '(1985) 3 sec 267
SR. DIV. COMMERCIAL MANAGER v. S.C.R. CATERERS, DRY FRUITS, 455
FRUIT JUICE STALLS WELFARE ASSN. [V. GOPALAGOWDA, J.]
purpose viz. the welfare State may be able to expand its beneficent A
activities by the availability of larger funds. This is subject to one
important limitation that socialist property may be disposed at a
price lower than the market price or even for a token price to
achieve some defined constitutionally recognised public purpose,··
one such being to achieve the goals set out in Part IV of the
B
Constitution. But where disposal is for augmentation of revenue
and nothing else, the State is under an obligation to secure the
best market price available in a market economy An owner of
private property need not auction it nor is he bound to dispose it of
at a current market price. Factors such as personal attachment,
or affinity, kinship, empathy, religious sentiment or limiting the c
choice to whom he may be willing to sell, may permit him to sell
the property at a song and without demur. A welfare State as the
owner of the public property has no such freedom while disposing
of the public property. A welfare State exists for the large§-! good
of the largest number more so when it proclaims to be a socialist
D
State dedicated to eradication of poverty. All its attempt must be
to obtain the best available price while disposing of its property
because the greater'the revenue, the welfare activities willget a.
fillip and shot in the arm. Financial constraint may weaken the
tempo of activities. Such a1' approach serves the larger public
purpose of expanding welfare activities primarily for which the E
Constitution envisages the setting up of a welfare State."
(emphasis laid by this Court)
9. The interest of the passenger has rio correlation with social
objectives. The main objective of the Catering Policy, 2010 is to provide
food at an affordable price to the railway passengers. The learned ASG F
further contends that the State is entitled in law to frame a new policy in
that respect. The learned ASG contends that the Policy contains detailed
mechanisms and makes it very clear for whom it is meant. The learned
ASG draws our attention to clause 3.3.1 of the Policy which reads as
under: G
"3.3. I All existing major and minor catering units will be awarded
and managed by the zonal railways, except Food Plaza, Food
Courts, fast food units. All such contracts presently being managed
by the IRCTC, on expiry of the contract period, will be awarded
H
456 SUPREME COURT REPORTS [2016] 1 S.C.R.
A by the zonal railways. IRCTC will not renew any contract required
to be handed over to zonal railways on expiry of the contract."
I 0. The learned ASG further draws our attention to clause 16.1.3
of the 20 I 0 Policy which reads as under:
"16.1.3 Allotment of all General Minor Units at A,B & C category
B stations sh al I be awarded for a period of five years with a provision
for renewal after every 3 years on satisfactory performance and
payment of all dues and arrears and withdrawal of court cases, if
any. Allotment of all General Minor Unis at D,E & F category
stations will be for a period of5 years with a provision for renewal
c after every 5 years for a further period of 5 years on satisfactory
performance and payment ofall dues and arrears and withdrawal
of court cases, if any."
The learned ASG contends that by vi1tue of clause 16. ! .3, the
members of the respondents cannot claim renewal of their license as a
D matterofright. The learned ASG further placed reliance on clause 26.1. I
of the 20 I 0 Policy which reads as under:
"26.1.1 All existing operational catering licenses awarded by
IRCTC and transferred to Zonal Railways will be governed by
the existing Catering Policy 2005 upto the validity of their
E contractual period."
Further, Clause 26.1.4 of the policy reads as under:
"26.1.4 This policy will also apply in case of award of fresh licenses
and licenses awarded in the event of termination, non-renewal.
vacation etc. of the existing licenses."
F
11. The learned ASG ftuther contends that a welfare State has to
generate more money to take care of the larger public interest. He further
contends that the claim of the members of the respondents that they
have a vested right to get the renewal of their license in the railway
stations referred to supra and that the government cannot expand its
G competitors is completely unsuppo1ted in Jaw.
12. The learned ASG further contends that the entire pol icy is not
under challenge. It is only the clause which confers the right of renewal
of the license which has been challenged. The scope of the judicial review
in such cases is limited. For the Cou1t t.o examine the validity of the
H same, the policy either needs to be arbitrary, or must suffer from some
SR. DIV. COMMERCIAL MANAGER v. S.C.R. CATERERS. DRY FRUITS. 457
FRUIT JUICE STALLS WELFARE ASSN. [V. GOPALAGOWDA, J.]
glaring error and must be perverse, or be contrary to constitutional A
provisions. The learnedASG, in support of his contentions, places reliance
on the case of JiV<111 D<1s i: Life I11s11ra11ce Corpor<1tio11 of India &
A111: 3 to contend that the right to livelihood oflicensees cannot be extended
to use public property to the best advantage as a commercial venture. It
was held in that case as under:
B
"An owner is entitled to deal with his property in his own way
profitable in its use and occupation. A public authority is equally
entitled to use the public property to the best advantage as a
commercial venture. As an integral incidence of ejectment of a
tenant/licensee is inevitable. So the doctrine oflivelihood cannot
discriminately be extended to the area of commercial operation." c
13. On the other hand, Mr. Prashanta K. Goswami. the learned
senior counsel appearing on behalf of some of the respondents, draws
our attention to the Catering Policy, 2010. He contends that revenue
collection for the State cannot be a yardstick or consideration for deciding
renewals of licenses of licensees. The learned senior counsel further D
submits that the licenses of these small shop/ kiosk owners have been
renewed in some zones of the Railways, while in others not renewed,
which action of the appellants is violative ofArticle 14 of the Constitution
oflndia.
14. Mr. Raju Ramachandran. the learned senior counsel appearing E
on behalf of one of the respondent licensees contends that renewal of
the licenses of the members is the norm under the Catering Policy, 20 I0
and that the right to renewal must be read into the contracts of the
existing licensees. The learned senior counsel further contends that the
social objectives of the Central Government, which is running the railways F
across the country and which is the major transport industry catering to
the need ofa large number of commuters, must necessarily include the
protection of the right to livelihood of the members of the respondents,
apart from the protection of Article 19( I )(g) of the Constitution oflndia.
I 5. Mr. Ramachandran further contends that two views are G
legitimately possible to construe the renewal clause. One is that renewals
of the licenses that can be done only through the tender route and the
other is to renew the existing or pre-existing licenses. He contends that
'1994 Supp (3) sec 694 H
458 SCPREME COURT REPORTS (2016] I S.C.R.
A the same can be resolved by applying the principle of ·contra
proferentem', or interpretation against the draftsman. In this connection,
reliance has been placed by the learned senior counsel upon the decision
of this Court in Bank of!11dia & Ors. v. K. Molumdas & Ors.', wherein
it has been held as under:
B "31. It is also a well-recognized principle of construction of a
contract that it must be read as a whole in order to ascertain the
true meaning of its several clauses and the words of each clause
should be interpreted so as to bring them into harmony with the
other provisions if that interpretation does no violence to the
meaning of which they are naturally susceptible. [(The North
c Eastern Railway Company v. L. Hastings) 1900 AC 260].
32. The fundamental position is that it is the banks who were
responsible for formulation of the tem1s in the contractual Scheme
that the optees of voluntary retirement under that Scheme will be
eligible to pension under Pension Regulations, 1995, and, therefore,
D they bear the risk of lack of clarity, if any. It is a well-known
principle of construction of contract that ifthe terms applied by
one party are unclear, an interpretation against that party is
preferred [Verba Chartanim Fortius Accipiuntur Contra
Proferentum]."
E 16. The learned senior counsel further contends that the social
objectives of the Policy are clearly meant to side step the profit making
objective. He places reliance on a Constitution Bench decision of this
Court in the case of Olga Tellis v. Bombay Municipal Corporation-',
wherein it was held that the right to life includes the right to livelihood. In
F that case, the Court held as under:
"32. As we have stated while summing up the petitioners' case,
the main plank of their argument is that the right to life which is
guaranteed by Article 2 I includes the right to livelihood and since,
they will be deprived of their livelihood if they are evicted from
their slum and pavement dwellings, their eviction is tantamount to
G
deprivation of their life and is hence unconstitutional. For purposes
ofargument, we will assume the factual correctness of the premise
that if the petitioners are evicted from their dwellings. they will be
'(2009)5SCC313
H 't I 985 >3 sec 545
SR. DIV. COMMERCIAL MANAGER v. S.C.R. CATERERS. DRY FRUITS. 459
FRUIT JUICE STALLS WELFARE ASSN. (V. GOPALA GOWDA, J.]
deprived of their livelihood. Upon that assumption, the question A
whicliw~~have to consider is whethertheright to life includes the
rightto livelihood. We see only one answer to thatquesiion, namely,
that it does. The sweep of the right to .J ife conferred by Article 21
is wide and far reaching. It does not mean merely that life cannot
be extinguished or taken away as, for example, byrhe imposition
B
and execution of the death sentence, except according to procedure
established by law. That is but one aspect of the right to life. An
equally important facet of that right is tbe right to livelihood because,
rio person can live without the means of living, that is, the means
oflivelihood. lfthe rightto livelihood is not treated as a part of the
constitutional right to life, the easiest way of depriving a person c
his right to life would be to deprive him of his means oflivelihood
to the point ofabrogation. Such deprivation would not only denude
the life of its effective content and meaningfulness but it would
make life impossible to live. And yet, such deprivation would not
have to be ln accordance with the procedure established by law,
D
ifthe rightto livelihood is not regarded as a part of the right to life.
That, which alone makes it possible to live, leave aside what makes
life livable. must be deemed to be an integral component of the
right to life. Deprive a person of his right to livelihood and you
shall have deprived him of his life. Indeed, that explains the massive
migration of the rural population to big cities. They migrate because E
they have no means of livelihood in the villages: The motive force
"'.hich people their desertion of their hearths and homes in the
villages that struggle for survival, that is, the struggle for life. So
unimpeachable is the evidence of the nexus between life and the
means oflivelihood. They have to eat to live: Only a handful can
F
afford the luxury of living to eat. That they can do, namely, eat.
only if they have the means of livelihood. That is the context in
which it was said by Douglas J. in Baksey that the right to work is
the most precious liberty because, it sustains and enables a man
to live and the right to life is a precious freedom. "Life", as
observed by Field, J. in Munn v. lllinois (1877)94 U.S. 113, means G
something more than mere animal existence and the inhibition
againstthe deprivation oflife extends to all those limits and faculties
by which life is enjoyed. This observation was quoted with approval
by this Court in Kharak Singh v. The State ofU.P.
H
460 SUPREME COURT REPORTS (2016] I S.C.R.
A 33. Article 39(a) of the Constitution, which is a Directive Principle
of State Policy, provides that the State shall, in particular, direct its policy
towards securing that the citizens, men and women equally, have the
right to ~n adequate means of livelihood. Article 41, which is another
Directive Principle, provides, inter alia, that the State shall, within the
limits of its economic capacity and development, make effective provision
B
for securing the right to work in cases of unemployment and of
undeserved want. Article 3 7 provides that the Directive Principles, though
not enforceable by any court, are nevertheless fundamental in the
governance of the country. The Principles contained in Articles 39(a)
and 41 111ust be regarded as equally fundamental in the understanding
c and interpretation of the meaning and content of fundamental rights. If
there is an obligation upon the State to secure to the citizens an adequate
means of livelihood and the right to work, it would be sheer pedantry to
exclude the right to livelihood from the content of the right to life. The
State may not, by affirmative action. be compel lab le to provide adequate
means of livelihood or work to the citizens. But, any person. who is
D
deprived of his right to livelihood except according to just and fair
procedure established bv law. can challenge the deprivation as offending
the right to life conferred by A1ticle 21.''
(emphasis laid by this Court)
E 17. The learned senior counsel further places reliance on a recent
decision of this Court in Clwru Kl11m111111: Union of I11dill', wherein
the above stated principle enunciated in Olga Tellis (supra) has been
reiterated.
18. Before we advert to the contentions in detail, we quote Justice
F Krishna Iyer from the case of LIC i: D.J. B11/11ulur'. wherein the learned
Judge has explained what should be the guiding force for judges when
faced with matters pertaining to social justice, as under:
"Law is no cold-blooded craft bound by traditional techniques and
fonnal forceps handed down to us from the Indo-Anglian era but a warm-
G blooded art, with a bleak from the past and a tryst with the present,
deriving its soul force from the Constitution enacted by the People of
India. Law, as Vice President G.S. Pathak used to emphasize in several
lectures, is a tool to engineer a peaceful 'civil revolution' one of the
"(201;11sec192
H '(19811 I SCC315
SR DIV COMMERCIAL MANAGER v. S.C.R. CATERERS. DRY FRUITS. 461
FRUIT JUICE STALLS WELFARE ASSN. [V. GOPALAGOWDA, J.]
components of which is a fair deal to the weaker human sector like the A
working class. The striking social justice values of the Constitution impact
on the interpretation oflndian laws and to forget this essential postulate
while relying on foreign erudition is to weaken the vital flame of the
Democratic, Socialist Republic oflndia."
19. The case of the appellants, in nutshell, is that the railways had B
the right to enact the Catering Policy, 2010. In terms of the said Policy,
only such licensees who were granted license under the 2010 Policy
were entitled to get their contracts renewed and the same benefit could
not be extended to those licensees who were granted license prior to the
2010 Policy. According to the Catering Policy 2010, no provision is made
forthe renewal of the existing catering units on the expiry of the term of
c
the licenses. The renewal of the licenses of the licensee under para 16
of the Policy would apply only to licensees allotted under the Catering
Policy 2010. The appellants have fu11her submitted that the renewals of
the licenses by the Zonal Railways upto 2013 was only meant to operate
as a temporary arrangement till the bidding and allocation process was D
finally completed.
20. We are unable to agree with the contention advanced on behalf
of the Appellants. The Railway Board issued Commercial Circular No.
37 dated 09.08.20 I0, which contained the following instructions:
"I . Transfer of License Un its: E
d. Zonal railways should renew all agreements which have expired
or are due for expiry in the next 6 months by giving an extension,
subject to a maximum extension of six months from the date of
issue of Catering Policy; 201 O."
F
This circular clarifies that the renewal of the license is required to
be granted to all the existing licensees of the Minor Units as per clauses
16 ai;d 17 of the Catering Policy, 20 I0. It also becomes clear that the
existing licensees need not be included in the tender process. Circular
dated 23.08.2011 issued by the Chief Commercial Manager of South
Central Railway directed all the Divisional Commercial Managers and G
other subordinate officers of the South Central Railway to confirm that
the tenure of all GM Us and SM Us at "A 1", "A" and "B" category
stations shall be renewed after every 3 years on their satisfactory
performance and payment ofall dues and arrears as per the 2010 Policy.
In view of the said circular, catering licenses of all the members of the
H
462 SUPREME COURT REPORTS [2016] I S.C.R.
A respondent Association were renewed till July 2013. On this aspect of
the case, the learned single Judge of the High Court has held as under:
"While the 2010 Policy proper has not envisaged renewal of the
existing licenses for a period not exceeding six months, the
Immediate Operative Instructions issued in commercial circular
B no. 37/2010 dated 09.08.2010 has directed the Zonal Railways to
renew the licenses for a maximum period of six months from the
date of issue of the 20 I 0 Policy. If the 20 I 0 Policy is understood
as providing renewals only in respect of the licenses issued under
the said Policy, there was no reason why the respondent No. 3
has not called for tenders on the expiry of six months period from
c the date of coming into force of the 20 I 0 Policy. Instead of calling
for tenders, the respondent No.3 has renewed all the GMU and
SMU licenses for a period of three years in tenns of paras 16.1.3
and 16.2.1 of the 20 I 0 Policy. This was done even before Para
16.3 was amended. Having understood the 2010 Policy in its true
D spirit even before the amendment of Para 16.3, it is
incomprehensible that respondent no.3 projects the said policy in
a different light by seeking to give it an interpretation which runs
contrary to its plain language. Nowhere in the 20 I 0 Policy, the
licensees are classified into two categories. namely, those who
were granted licenses prior to the commencement of the 20 I 0
E ,
Policy and those who were granted licenses after the said Policy.
On the contrary, all the GMUs and SMUs were treated under
one category. Irrespective of whether the licenses were granted
by the Railways prior to 2005 or by the IRCTC from 2005 and by
the Indian Railways after 20 I 0. renewal of licenses is envisaged
F for all these categories of licensees subject to their fulfillment of
the three requirements as referred to hereinbefore."
(emphasis laid by this Court)
The findings of the learned single Judge have been upheld by the
Division Bench and we do find any reason to interfere with the same.
G Article 14 of the Constitution of India mandates that state action must
not be arbitrary and discriminatory. It must also not be guided by any
extraneous considerations which are antithetical to equality. A three Judge
Bench of this Court in the case of R.D. Sheffy v. International Airport
Authority' held as under:
H '( 1979) 3 sec 489
· SR. DIV. COMMERCIAL MANAGER v. S.C.R. CATERERS, DRY FRUITS, 463
FRUIT JUICE STALLS WELFARE ASSN. [V.GOPALAGOWDA, J.]
"21 ..... .It must, therefore follow as a necessary corollary from A
·the principle of equality enshrined in Article 14 that though the
·State is entitled to refuse to enter into relationship with any one,
yet ifit does so, it cannot arbitrarily choose any person it likes for
entering into such relationship and discriminate between persons
similarly circumstanced, but it must act in conformity with some
B
·standard or principle which meets the. test of reasonableness and
· non,discrimination and any d¢oarture from such standard or
principle would be invalid unless it can be supported or justified on·
some rational and non-discriminatory ground."
(emphasis laid by this Court)
c
21. India is a welfare State. Article 38 of the C_onstitution oflndia,
which is a Directive Principle of State Policy, reads as under:
"38. State to secure a social order for the promotion of
welfare of the people.-( 1) The State shall strive to promote
the welfare of the people by securing and protecting as effectively D
as it may a social order in which justice, social, economic and
political, shall inform all the institutions of the national life.
(2) The State shall, in particular, strive to minimise the inequalities
in income, and endeavour to eliminate ine~ualities in status, facilities
and opportu1,1ities, not only amongst indi~iduals but also amongst E
groups of people residing in different areas or engaged in different
vocations."
22.'It is the duty ofe\<ery welfare-lltate to generate employment.
Presently,.millions of youth of the_ country are unemployed. The right to
livelihood is.a part of.right to life, as has been-held in the case of Olga
F
Tellis (supra). A vast n1ajority of the ~nemployed population of the country
then, is susceptible to being exploited by the rich.and the capitalists. It is
the dllty of the state, acting through its instrumentalities to ensure that no
· person in a vulnerable position is exploited. In the case of People's Union
for Democratic Ri1:hts & Ors. v. Union oflmli<t', Bhagwati,J. lamenting
on the exploitation of the weak and the powerless held as under: G
" ......... The. Rule of Law does not mean that the protection of
the law must be available only to a fortunate few or that the law
9 (1982)3 SCC235
H
464 SUPREME COCRT REPORTS [2016] 1 S.C.R.
A should be allowed to be prostituted by the vested interests for
protecting and upholding the status quo under the guise of
enforcement of their civil and political rights. The poor too hav_e
civil and political rights and the Rule of Law is meant for them
also, though today it exists only on paper and not in reality. If the
sugar barons and the alcohol kings have the Fundamental Right to
B
carry on their business and to fatten their purses by exploiting the
consuming public, have the 'chamars' belonging to the lowest strata
of society no Fundamental Right to earn an honest living through
their sweat and toil? ......... civil and political rights, priceless and
invaluable as they are for freedom and democracy, simply do not
c exist for the vast masses of our people. Large numbers of men,
women and children who constitute the bulk ofour population are
today living a sub-human existence in conditions ofabject poverty:
utter grinding poverty has broken their back and sapped their moral
fibre. They have no faith in the existing social and economic
system. What civil and political rights are these poor and deprived
D
sections of humanity going to enforce?"
23.This Court, being entrusted with the task of being the
countermajoritarian institution, is duty bound to ensure that the rights of
the downtrodden minorities and the members of the weaker sections of
the society are not trampled upon.
E
24. One more important aspect to be taken note of by this Court
is the nc-n governance of railway property in the past 67 years since
independence. Though, it is a recognized principle oflaw that the property
of the railways is public property, yet in reality, it is the private players
and industries that are allowed to carry on their business for transport of
F raw materials from one place to another. After the enactment of the
Railways Act, 1989, the Rail Land Development Authority has been
established under Chapter IIA of the Act to manage the railway property
by framing policy or rules for allotment of the same in favour of the
licensees, including fixing license fee or occupation charges in respect
G of the vast extent of vacant property from which huge revenue can be
collected, which is a laudable object to cater to the need of the public at
large. The periodical revision oflicense fee in respect of such big operators
has not been done by the railways. Also, the Policy ofnot renewing the
licenses of those persons who are members of the respondents are
complekly dependent on self-earning from these small units and making
H
SR. DIV. COMMERCIAL MANAGER v. S.C.R. CATERERS. DRY FRUITS. 465
FRUIT JUICE STALLS WELFARE ASSN. [V. GOPALAGOWDA, J.]
them participate in a public competition is absolutely unfair, unreasonable A
and arbitrary. The chances of such persons being deprived of their right
to livelihood is also an important factor which has to be taken into
consideration by this Court to interpret the policy framed by the appellants.
The callous attitude as far as the inaction on the part of the State in
tackling the problem of rising unemployment is appalling. The situation is
B
made worse by the handing over of public functions to private
entrepreneurs, which then exploit the policies of the government against
the poor and downtrodden people of the country. If the appellants under
the guise of the policy are permitted to deny renewal oflicenses in favour
of the licensees, it would amount to deprivation of theirright to freedom
of occupation guaranteed under Article 19( I )(g) of the Constitution as c
well as the right to livelihood, which action of the appellants would be
diametrically opposed to their constitutional duty towards social justice
as well as uplifting the weaker sections of the society and the unemployed
youth of the country.
25. In the case of Consumer Education & Research Ce11ter -v. D
Union of India"' a three Judge Be~cltofthis Court observed as under:
"Social justice, equality and dignity of person are cornerstones of
social democracy. The concept 'social justice' which the
Constitution of India engrafted, consists of diverse principles
essential for the orderly growth and development of personality E
of every citizen ....... Social justice is a dynamic device to mitigate
the sufferings of the poor, weak, Dal its, Tribals and deprived
sections of the society and to elevate them to the level of equality
to live a life with dignity of person. Social justice is not a simple or
single idea of a society but is an essential part of complex social
change to relieve the poor etc. from handicaps, penury to ward F
off distress, and to make their life livable, for greater good of the
society at large. In other words, the aim of social justice is to
attain substantial degree of social, economic and political equality,
which is the legitimate expectation. Social security,justand humane
conditions of work and leisure to workman are part of his G
meaningful right to life and to achieve self- expression of his
personality and to enjoy the life with dignity, the State should provide
facilities and opportunities to enable them to reach at least minimum
'" (1995) 3 sec 42 H
466 SUPREME COURT REPORTS [2016] I S.C.R.
A st?.ndard of health, economic security and civilised living while
sharing according to the capacity, social and cultural heritage."
Further, in the case of S{((l/lllram Bansal v. Pu/in Sarkar" this
Court held as under:
"There is no ritualistic formula or any magical charm in the concept
B of social justice. All that it means is that as between two parties if
a deal is made with one party without serious detriment to the
other, then the Court would lean in favour of the weaker section
of the society, Social justice is the recognition of greater good to
larger number without deprivation of accrued legal rights of
c anybody. If such a thing can be done then indeed social justice
must prevail over any technical rule. It is in response to the felt
necessities oftime and situation in order to do greater good to a
larger number even though it might detract from some technical
rule in favour of a party."
D 26. Keeping in view the evolving concept of social justice, we
allow the members of respondent~ who are the licensees to continue
their petty business, especially in the absence of employment potentiality
in the country on account of non-governance and non- implementation
of the constitutional philosophy of an egalitarian society, which provides
the opportunity to all individuals to lead a life of dignity. The right to life
E with dignity has been interpreted to be a part ofrightto life by this Court
in the case of Francis Comlie Mullin v. Atlmillislmlor, Union
Territory of De/Iii & Ors.1 1 , as under:
"W~ tllink that the right to life ;,;eludes the right to live with human
dignity and all thafgoes along with it, namely, the bare necessaries
F oflife such as adequate nutrition, clothing and shelter and facilities
for reading, writing and expressing one-self in diverse fonns, freely
moving about and mixing and commingling with fellow human
beings. Of course, the magnitude and content of the components
of this right would depend upon the extent of the economic
development of the country, but it must, in any view of the matter,
G
include the right to the basic necessities of life and also the right
to carry on such functions and activities as constitute the bare
minimum expression of the human-self."
"(198~) 3 sec 410
H " (1981) 1sec608
SR. DIV. COMMERCIAL MANAGER v. S.C.R. CATERERS, DRY FRUITS, 467
FRUIT JUICE STALLS WELFARE ASSN. [V. GOPALAGOWDA,J.]
27. Therefore, we have to hold that the provisions of the Catering A
Policy, 20 I 0 are applicable to the concerned respondents. The action of
the railways in not granting renewals of the licenses to the members of
the respondents is arbitrary, unreasonable, unfair and discriminatory, and
the same cannot be allowed to sustain in law.
28. For the reasons stated supra, this Court cannot interfere with B
the impugned judgment and order of the High Court. The Civil Appeals
are dismissed. The order dated 11.04.2014 granting stay of the impugned
order shall stands vacated. We, however, make it clear that only tliose
licensees may be eligible for renewal of their licenses who can declare
on affidavit that they do not have the license of more than one shop or
kiosk in their name or henami license at the railway stations with periodical c
reasonable increase of license fee. All pending applications are disposed
of.
Kalpana K Tripathy Appeals dismissed.
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