M/S.HOTEL HIGHWAY PALACE V. UNION OF INDIA

WP(C)/11977/2016

AI Insights

The case revolves around a dispute between M/S. Hotel Highway Palace and the Indian Railways Catering and Tourism Corporation Limited (IRCTC) regarding the duration of a license to operate a food plaza at the Ernakulam South Railway Station. The petitioner, having initially won the bid for a nine-year term, sought an extension to fifteen years, citing substantial civil construction similar to other projects that received longer terms. However, the IRCTC and the court maintained that the terms of the bid and the subsequent agreement clearly stipulated a maximum of twelve years (nine years plus three years), and the project did not meet the criteria for substantial civil construction as outlined in the catering policy.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 722361 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 30-09-2016
• Assessment Year: misc
• Laws Referred To: Catering Policy 2000
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: C S DIAS; ASHA CHERIAN
• Assessee Lawyers: T M LATHEEF
• Keywords: Civil construction; License agreement; Food Plaza; Catering Policy

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR FRIDAY, THE 30TH DAY OF SEPTEMBER 2016/8TH ASWINA, 1938 WP(C).No. 11977 of 2016 (V) ------------------------------------------- PETITIONER(S) : ------------------------ M/S. HOTEL HIGHWAY PALACE, NH-47, PEECHI JUNCTION, PATTIKKAD, TRICHUR, REPRESENTED BY ITS MANGING PARTNER JOHN JOSEPH, AGED 63 YEARS, S/O. JOSEPH, PARAKKAL HOUSE, LAKKATTOOR, KOTTAY AM. BY ADV. SRI.T.M.ABDUL LATHEEF RESPONDENT(S) : ---------------------------- 1. UNION OF INDIA, REPRESENTED BY ITS SECRETARY TO GOVERNMENT, MINISTRY OF RAILWAYS, CENTRAL SECRETARIAT , NEW DELHI-110 001. 2. INDIAN RAILWAYS CATERING & TOURISM CORPORATION LIMITED, REPRESENTED BY ITS DIRECTOR, 9TH FLOOR, BANK OF BARODA BUILDING, 16-PARLIAMENT STREET, NEW DELHI-110 001. 3. THE REGIONAL DIRECTOR, INDIAN RAILWAYS CATERING AND TOURISM CORPORATION LTD., 6A, THE RAIN TREE PLACE, NO.9, MC NICHOLAS ROAD, CHENNAI-600 031. 4. REGIONAL MANAGER, REGIONAL OFFICE, INDIAN RAILWAYS CATERING AND TOURISM CORPORATION LTD., 40/8194 SALIH ARCADE (FIRST FLOOR), CONVENT ROAD, ERNAKULAM-682 035. R1 BY ADV. SRI.C.S.DIAS, S.C R2 TO R4 BY ADV. SMT.ASHA CHERIAN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 02-09-2016, THE COURT ON 30-09-2016 DELIVERED THE FOLLOWING: Msd. WP(C).No. 11977 of 2016 (V) ------------------------------------------ APPENDIX PETITIONER(S)' EXHIBITS : EXT.P1 COPY OF THE CERTIFICATE ISSUED BY INDIAN TOURISM DEPARTMENT NO. INDTOUR/CHENNAI/HARACC/2011(KER) 1348 DATED 10.10.2011. EXT.P2 TRUE COPY OF THE RELEVANT PAGES OF THE CATERING POLICY 200 OF RAILWAYS. EXT.P3 TRUE COPY OF THE RELEVANT PAGES OF THE CATERING POLICY 2000 OF IRCTC. EXT.P4 TRUE COPY OF LETTER NO. 2002/IRCTC/CATG/FP-ERS DATED 25.11.2002. EXT.P5 TRUE COPY OF THE LOCATION SKETCH. EXT.P6 TRUE COPY OF THE INCOME TAX RETURN OF THE PETITIONER FOR THE YEAR ENDED ON 31.03.2005. EXT.P7 TRUE COPY OF THE RELEVANT PAGES OF THE TENDER DOCUMENT SHOWING THE ENDORSEMENT. EXT.P8 TRUE COPY OF THE LETTER SUBMITTED BY THE PETITIONER BEFORE IRCTC DATED 27.04.2005. EXT.P9 TRUE COPY OF THE ANOTHER PETITION SUBMITTED BY THE PETITIONER BEFORE IRCTC DATED 27.03.2012. EXT.P10 TRUE COPY OF LETTER SUBMITTED BY THE PETITIONER BEFORE IRCTC. DATED 10.02.2016. EXT.P11 TRUE COPY OF CHELLAN CUM RETURN ISSUE BY THE EMPLOYEES PROVIDENT FUND ORGANIZATION, KALOOR. EXT.P12 TRUE COPY OF LETTER NO. 2016/IRCTC/SZ/FP-ERS DATED 12.02.2016 RECEIVED BY THE PETITIONER FROM THE IRCTC. EXT.P13 TRUE COPY OF THE LETTER NO.2003/IRCTC/FP/ERN DATED 28.02.2003 RECEIVED BY THE PETITIONER FROM THE IRCTC. EXT.P14 TRUE COPY OF THE SCHEDULE ANNEXURE \"A\" IN RESPECT OF ERNAKULAM SOUTH RAILWAY STATION. EXT.P15 TRUE COPY OF THE SCHEDULE ANNEXURE \"A\" IN RESPECT OF ERNAKULAM NORTH RAILWAY STATION. EXT.P16 TRUE COPY OF THE INCOME TAX RETURN OF THE PETITIONER FOR THE YEAR ENDED ON 31.03.2007. WP(C).No. 11977 of 2016 (V) ------------------------------------------ EXT.P17 COPY OF THE LETTER NO. 20/GENL. DATED 20.08.2003 OF THE SECTION ENGINEER (WORKS), ERNAKULAM JUNCTION. EXT.P18 TRUE COPY OF THE LETTER NO. V/W.193/IRCTC DATED 29.05.2003 OF THE DIVISIONAL RAILWAY MANAGER/WORKS, TRIVANDRUM. EXT.P19 TRUE COPY OF THE PLAN. EXT.P20 TRUE COPY OF THE PLAN. EXT.P21 TRUE COPY OF LETTER NO. V/W.193/IRCTC DATED 11.08.2003 OF THE DIVISIONAL RAILWAY MANAGER/WORKS, TRIVANDRUM. EXT.P22 TRUE COPY OF THE LETTER NO. IRCTC/FOOD PLAZA-ERS/03 DATED 28.07.2003 OF THE GROUP GENERAL MANAGER, IRCT, MADRA. EXT.P23 TRUE COPY OF THE LETTER NO.V/W.193/IRCTC DATED 01.08.2003 OF THE SENIOR DIVISIONAL MANAGER, IRCT, MADRA. EXT.P24 TRUE COPY OF THE LETTER NO. IRCTC/FOOD PLAZA-ERS/03 DATED 11.11.2003 OF THE GROUP GENERAL MANAGER, IRCT, MADRA. RESPONDENT(S)' EXHIBITS : EXHIBIT R4(A): TRUE COPY OF RELEVANT PORTION OF AGREEMENT DATED 10.03.2005 BETWEEN THE PETITIONER AND IRCTC. EXHIBIT R4(B): TRUE COPY OF LETTER DATED 15.07.2013 OF GGM/DCS TO THE PETITIONER. EXHIBIT R4(C): TRUE COPY OF WILLINGNESS LETTER DATED 22.07.2013 OF PETITIONER TO JOINT GENERAL MANAGER. EXHIBIT R4(D): TRUE COPY OF LETTER DATED 24.09.2013 OF GGM/DSC TO THE PETITIONER. EXHIBIT R4(E): TRUE COPY OF LETTER DATED 25.03.2014 OF GGM/DSC TO THE PETITIONER. EXHIBIT R4(F): TRUE COPY FULL TEXT OF THE “AGREEMENT” DATED 10.03.2005 BETWEEN THE PETITIONER AND IRCTC. EXHIBIT R4(G): TRUE COPY OF LETTER DATED 25.11.2002 OF DIRECTOR (T & M) OF IRCTC SENT TO THE PETITIONER ALONG WITH ANNEXURE “A” SITE PLAN AND DETAILS ATTACHED TO THE TENDER DOCUMENT OF FOOD PLAZA AT ERNAKULAM SOUTH RAILWA Y STATION. EXHIBIT R4(H): TRUE COPY OF LETTER DATED 28.02.2003 OF DIRECTOR (T & M) OF IRCTC SENT TO THE PETITIONER ALONG WITH ANNEXURE “A” SITE PLAN AND DETAILS ATTACHED TO THE TENDER DOCUMENT OF FOOD PLAZA AT ERNAKULAM NORTH RAILWA Y STATION. WP(C).No. 11977 of 2016 (V) ------------------------------------------ EXHIBIT R4(I): TRUE COPY OF MINUTES OF THE MEETING HELD ON 23.01.2013 AT THE OFFICE OF THE FOURTH RESPONDENT. EXHIBIT R4(J): TRUE COPY OF MINUTES OF THE MEETING HELD ON 08.07.2013 AT THE OFFICE OF THE FOURTH RESPONDENT. //TRUE COPY// P.S.TO JUDGE. Msd. P.B.SURESH KUMAR, J. ----------------------------------------------- W.P.(C).No.11977 of 2016 ----------------------------------------------- Dated 30th September, 2016. J U D G M E N T The decision of the Indian Railways Catering and Tourism Corporation Limited ('the Corporation' for short), as communicated to the petitioner as per Ext.P12, is under challenge in this writ petition. 2. The facts relevant for decision are the following : The Corporation invited bids for running a food plaza at the South Railway Station, Ernakulam for a period of nine years on the terms and conditions stipulated in the bid document. The petitioner was one among the bidders. The award of the right was based on the percentage of licence fee offered by the bidders on the sales turn over projected by them for the period of nine years. The petitioner being the highest bidder, they were awarded the right to conduct the food plaza. As per the terms of the bid document, the petitioner had to construct the structures required for conducting the food plaza WPC 11977/16 2 in the place earmarked by the Corporation in the Railway Station building. Pursuant to the award, the petitioner had constructed the necessary structures in a portion of the Railway Station building and opened the food plaza on 27.9.2004. Ext.R4(f) is the agreement executed by the petitioner with the Corporation in this connection with the conduct of the food plaza. As per Ext.R4(f), the arrangement was for a period of nine years from 27.9.2004. The period specified in the agreement was due to expire on 26.9.2013. It is also provided in the agreement that the arrangement is renewable by three years more from 26.9.2013. In the light of the said provision, before the expiry of the period, the Corporation sought the willingness of the petitioner to continue the arrangement for a further period of three years as per Ext.R4(b) communication on the further terms and conditions specified therein. Though the petitioner communicated his willingness to continue the arrangement for a further period of three years on the terms and conditions stipulated in Ext.R4(b) as per Ext.R4(c), the arrangement was extended initially only for a period of six months. Later, the arrangement was extended for the balance WPC 11977/16 3 period also. While the petitioner was conducting the food plaza under the extended period, they submitted Ext.P10 representation to the Corporation, stating that the bid process was initiated for award of the right to run the food plaza based on the catering policy evolved by the Railways in the year 2000; that as per the said policy, the tenure of the licence arrangement in respect of projects involving substantial civil construction is twelve years renewable for a further period of three years; that the project undertaken by the petitioner was a project involving substantial civil construction; that the tenure of the licence arrangement was shown by mistake in the bid document and also in the agreement as nine years and that all other similarly placed licensees have been granted a term of twelve years renewable by three years. The petitioner, therefore, prayed for orders permitting them to continue for a period of fifteen years. The request made by the petitioner as per Ext.P10 representation was turned down by the Corporation as per Ext.P12 communication stating that as per the terms of the bid document and the agreement, the petitioner is entitled to licence only for a maximum period of twelve years. Ext.P12 WPC 11977/16 4 is under challenge in this writ petition. 3. A counter affidavit has been filed by the Corporation. The essence of the contentions raised by the Corporation in the counter affidavit is that in the light of the categoric terms in the bid document as also in the agreement executed by the petitioner with the Corporation, the petitioner is not entitled to claim extension of the arrangement beyond twelve years. According to the Corporation, the petitioner was permitted to establish the food plaza in a portion of the Railway Station building and that the twelve year period contemplated in the catering policy is applicable only to bidders who have been given vacant lands for construction of building for the purpose of establishing the food plaza. 4. A reply affidavit has been filed by the petitioner to the counter affidavit filed by the Corporation, contending mainly that the premises handed over to the petitioner for running the food plaza was though a portion of the Railway Station building, the petitioner had to demolish the structures existed there and had to erect a totally new structure spending approximately Rs.75,00,000/- and therefore, the petitioner and WPC 11977/16 5 the bidders who have been handed over vacant sites, cannot be treated differently in so far as the term of the licence is concerned. 5. Heard the learned counsel for the petitioner as also the learned counsel for the Corporation. 6. It is beyond dispute that the term for which bids have been invited for establishment of the food plaza is nine years, renewable by an additional period of three years. The said term of nine years renewable by an additional period of three years has been categorically mentioned in the agreement entered into by the petitioner with the Corporation. According to the petitioner, in the light of the specific provision in the catering policy, in so far as the project awarded to them is a project involving substantial civil construction, the term specified in the tender document and in the agreement is a mistake and therefore, they are entitled to run the food plaza for fifteen years. According to the Corporation, fifteen year term is applicable only to projects where vacant lands are given to successful bidders and in so far as the petitioner has been given a portion of the Railway Station building, they are not WPC 11977/16 6 entitled to the benefit of fifteen years. The short question, therefore, is whether the term specified in the bid document as also in the agreement is a mistake and if so, whether the petitioner is entitled to run the food plaza for a period of fifteen years in terms of the grant. 7. It is seen that it is by virtue of the terms of the catering policy formulated by the Railway in the year 2000, projects in the nature of one referred to in the writ petition have been introduced. It is also seen that the said policy provides for a longer tenure of twelve years for projects involving substantial civil constructions. The fact that all the projects referred to in the catering policy would involve civil constructions is not in dispute. The petitioner has no case that there exists any guidelines for categorising projects involving substantial civil works and projects not involving substantial civil works. In the absence of any guidelines to distinguish the projects, the freedom to distinguish the projects has to be conceded to the Corporation. As such, in so far as the Corporation classified the project as a project not involving substantial civil construction by prescribing a period of nine WPC 11977/16 7 years for grant of licence, the petitioner is not entitled to challenge the said specification on any ground whatsoever. Even if the project is one involving substantial civil construction and similar projects have been classified so by the Corporation by prescribing a tenure of twelve years for grant of licence, the petitioner is not entitled to the benefit of the said longer period for reasons more than one. First of all, as noted above, bid was invited for the project only for a period of nine years. It is conceded by the parties that it is based on the higher turn over projected by the petitioner and the percentage of licence fee offered by the petitioner based on the projected sales turn over for a period of nine years, the bid has been confirmed in favour of the petitioner. Having obtained the bid for running the food plaza for a period of nine years, the petitioner cannot claim the right to conduct the food plaza for an extended period, for, had such an option been available at the time of invitation of the bid, it cannot be said that the petitioner would have been the successful bidder in the bid process. Further, Ext.R4(f) is the agreement executed by the petitioner in connection with the conduct of the food plaza. It is categorically stated in Ext.R4(f) WPC 11977/16 8 agreement that the petitioner is entitled to run the food plaza only for a period of nine years, renewable by another period of three years. The petitioner has been granted a term of twelve years as per the terms of the contract. Having agreed to run a food plaza for a period of nine years renewable by another period of three years, the petitioner cannot be heard to contend that he is entitled to run the food plaza for a period beyond the term specified in the contract. The writ petition, in the circumstances, is devoid of merit and the same is accordingly dismissed. Sd/- P.B.SURESH KUMAR, JUDGE. tgs (true copy) "