MANU/SC/0092/2016

Equivalent Citation: AIR2016SC 668, 2016(3)ALD40, 2016 2 AWC 1784SC , (2016)1MLJ884, 2016(2)SC ALE38, (2016)3SC C 582, 2016 (6) SC J
260

IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 618-620 of 2016 (Arising Out of SLP (C) Nos. 9921-9923 of 2014)
Decided On: 29.01.2016
Appellants:Senior Divisional Commercial Manager and Ors.
Vs.
Respondent:S.C.R. Caterers, Dry Fruits, Fruit Juice Stalls Welfare Association
and Ors.
Hon'ble Judges/Coram:
V. Gopala Gowda and Amitava Roy, JJ.
Counsels:
For Appellant/Petitioner/Plaintiff: N.K. Kaul, ASG, Shilpa Nair, R.M. Bajaj, S.N. Bhat
and Shreekant N. Terdal, Advs.
For Respondents/Defendant: P.K. Goswami, Raju Ramachandran, Sr. Advs., V.K.
Shukla, Anchal Mehrotra, Rajeev Sharma, Advs. for Intervenor, Venkateswara Rao
Anumolu, Goli Ramakrishna, Shashwat Goel, Arunabh Chaudhary, Parthiv K. Goswami,
Kaustav Talukdar, Yashraj Singh Bundela, Diksha Rai, Ranjeeta Rohatgi, Mythili Vijay
Kumar Thallam and Vikram Aditya Narayan, Advs.
Case Note:
Commercial - Renewal of licenses - Objectives required - Respondents were
held entitled to get their licenses renewed under new Railways Catering
Policy, 2010 - Present appeal filed against such order - Whether members
of Respondents were entitled to have their licenses renewed in terms of
Catering Policy, 2010
Facts:
The present appeals arise out of the impugned judgment and order dated
12.09.2013 passed by the High Court of Judicature of Andhra Pradesh at
Hyderabad in W.A. Nos. 1573-1575 of 2013, 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, 2010.
Held, while dismissing the appeal
(1) 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 for the renewal of the existing catering units on
the expiry of the term of the licenses.[19]

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 (2) The Railway Board issued Commercial Circular No. 37 dated 09.08.2010,
which 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 and 17 of the
Catering Policy, 2010. 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 other subordinate officers of
the South Central Railway to confirm that the tenure of all GMUs and SMUs
at "A1", "A" and "B" category stations shall be renewed after every 3 years
on their satisfactory performance and payment of all dues and arrears as
per the 2010 Policy. In view of the said circular, catering licenses of all the
members of the Respondent Association were renewed till July 2013.[20]
(3) 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. India is a
welfare State. In terms of Article 38 of the Constitution of India, it is the
duty of every welfare state to generate employment.[20] and[21]
(4) 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.[23]
(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 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.[24]
(6) Keeping in view the evolving concept of social justice, we allow the
members of Respondents 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.[26]
(7) Therefore, we have to hold that 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.[27]
JUDGMENT
V. Gopala Gowda, J.
1. Applications for intervention are allowed.
2. Leave granted.

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 3 . The present appeals arise out of the impugned judgment and order dated
12.09.2013 passed by the High Court of Judicature of Andhra Pradesh at Hyderabad
in W.A. Nos. 1573-1575 of 2013, 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,
2010.
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 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 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 Railways till
the IRCTC was equipped to take over these units. The contracts held 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, 2010. Under the new Policy, the contracts of all the existing major
and minor catering units were to be awarded and managed by the Zonal
Railways. The IRCTC was left with the running of the Food Plaza, Food Courts
and Fast Food Units only. Pursuant to the Catering Policy, 2010, the South
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 (GMUs) and Special Minor Units (SMUs) taken over from the IRCTC,
subject to the conditions stipulated in paras 16.1.3 and 16.2.1 of the
Catering Policy, 2010. The renewed licenses were to expire on 20.07.2013.
On 26.04.2013, the Senior Divisional Commercial Manager, Vijayawada,
issued a bid notice inviting sealed bids on the Single Stage Two-Packet
System from food and catering service providers for provision of catering
services at the various GMUs of Categories "A" and "B" Railways Stations in
the Vijayawada Division. A similar notification dated 03.05.2013 was issued
for establishment of catering stalls/fruits and fruit juice stalls in SMUs in
"A1", "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 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, 2010. 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 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 came to the conclusion that the Catering Policy, 2010 did not

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 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, 2010, 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 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, 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 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, 2010.
6. Mr. N.K. Kaul, the learned Additional Solicitor General appearing on behalf of the
Appellants drew our attention to the important provisions of the Catering Policy,
2010. 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.
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 of reservations as per Government Directives 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 the provisions of the Constitution. The learned
ASG places reliance on the case of Lala Ram v. Union of India
MANU/SC/0065/2013 : (2015) 5 SCC 813, 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 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 happiness
of all". It is important that public weal be the 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

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 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 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 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 difficulties. 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 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 of India provide that the State must strive to
promote the welfare of the people of the state by protecting all their
economic, social and political rights. These rights may cover, means of
livelihood, 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 society. These groups generally require special
protection measures in almost every set up. The happiness of the people is
the ultimate aim of a welfare state, and a welfare 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 Ram and Shyam Co. v.
State of Haryana MANU/SC/0017/1985 : (1985) 3 SCC 267, 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 he likes without causing
injury to anyone else. But the socialist or if that 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 of his property for a song. On the other hand,
disposal of public property partakes the character of a trust in that in its
disposal there should be nothing hanky panky and that it must be done at the
best price so that larger revenue coming into the coffers of the State
administration would serve public purpose viz. the welfare State may be able
to expand its beneficent 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 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 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

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 largest good of the largest number more so when it proclaims to be a
socialist 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 will get a fillip and shot in the arm.
Financial constraint may weaken the tempo of activities. Such an approach
serves the larger public purpose of expanding welfare activities primarily for
which the Constitution envisages the setting up of a welfare State.
(Emphasis laid by this Court)
9. The interest of the passenger has no 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 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:
3.3.1 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 by the zonal railways. IRCTC will not
renew any contract required to be handed over to zonal railways on expiry of
the contract.
10. The learned ASG further draws our attention to Clause 16.1.3 of the 2010 Policy
which reads as under:
16.1.3 Allotment of all General Minor Units at A, B & C category stations
shall 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
Units at D, E & F category stations will be for a period of 5 years with a
provision for renewal after every 5 years for a further period of 5 years on
satisfactory performance and payment of all dues and arrears and withdrawal
of court cases, if any.
The learned ASG contends that by virtue of Clause 16.1.3, the members of the
Respondents cannot claim renewal of their license as a matter of right. The learned
ASG further placed reliance on Clause 26.1.1 of the 2010 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 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.
1 1 . The learned ASG further 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

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 their license in the railway stations referred to supra and that the government cannot
expand its competitors is completely unsupported in law.
12. The learned ASG further contends that the entire policy 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 Court to
examine the validity of the same, the policy either needs to be arbitrary, or must
suffer from some glaring error and must be perverse, or be contrary to constitutional
provisions. The learned ASG, in support of his contentions, places reliance on the
case of Jivan Das v. Life Insurance Corporation of India and Anr.
MANU/SC/1230/1994 : 1994 Supp (3) SCC 694 to contend that the right to livelihood
of licensees cannot be extended to use public property to the best advantage as a
commercial venture. It was held in that case as under:
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 of
livelihood cannot discriminately be extended to the area of commercial
operation.
1 3 . 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 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 of Article 14 of the Constitution of India.
14. Mr. Raju Ramachandran, the learned senior Counsel appearing on behalf of one
of the Respondent licensees contends that renewal of the licenses of the members is
the norm under the Catering Policy, 2010 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 across the country and which is the major transport industry catering to the
need of a 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(1)(g) of the Constitution of India.
15. Mr. Ramachandran further contends that two views are 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 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 India and Ors. v. K. Mohandas and Ors. MANU/SC/0491/2009 :
(2009) 5 SCC 313, wherein it has been held as under:
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

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 Eastern Railway Co. v. L. Hastings) 1900 AC 260].
32. The fundamental position is that it is the banks who were responsible for
formulation of the terms in the contractual Scheme that the optees of
voluntary retirement under that Scheme will be eligible to pension under
Pension Regulations, 1995, and, therefore, they bear the risk of lack of
clarity, if any. It is a well-known principle of construction of contract that if
the terms applied by one party are unclear, an interpretation against that
party is preferred [Verba Chartarum Fortius Accipiuntur Contra Proferentum].
1 6 . 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 MANU/SC/0039/1985 : (1985) 3 SCC 545, wherein it was
held that the right to life includes the right to livelihood. In that case, the Court held
as under:
3 2 . 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
21 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 deprivation of their life and is hence
unconstitutional. For purposes of argument, we will assume the factual
correctness of the premise that if the Petitioners are evicted from their
dwellings, they will be deprived of their livelihood. Upon that assumption,
the question which we have to consider is whether the right to life includes
the right to livelihood. We see only one answer to that question, namely, that
it does. The sweep of the right to life 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, by the imposition 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 the right to
livelihood because, no person can live without the means of living, that is,
the means of livelihood. If the right to livelihood is not treated as a part of
the constitutional right to life, the easiest way of depriving a person his right
to life would be to deprive him of his means of livelihood to the point of
abrogation. 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 In accordance with the procedure
established by law, if the right to 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 they have no means of
livelihood in the villages. The motive force which 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 of livelihood. They have to eat to live: Only a handful can
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

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 precious freedom. "Life", as observed by Field, J. in Munn v. Illinois (1877)
94 U.S. 113, means something more than mere animal existence and the
inhibition against the deprivation of life 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 of U.P.
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 an
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 for securing the right to
work in cases of unemployment and of undeserved want. Article 37 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 must be regarded as equally fundamental
in the understanding 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 compellable to provide
adequate means of livelihood or work to the citizens. But, any person, who is
deprived of his right to livelihood except according to just and fair procedure
established by law, can challenge the deprivation as offending the right to
life conferred by Article 21.
(Emphasis laid by this Court)
17. The learned senior Counsel further places reliance on a recent decision of this
Court in Charu Khurana v. Union of India MANU/SC/1044/2014 : (2015) 1 SCC 192,
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 Krishna Iyer from
the case of LIC v. D.J. Bahadur MANU/SC/0305/1980 : (1981) 1 SCC 315, 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 formal
forceps handed down to us from the Indo-Anglian era but a warm-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 components of which is a fair
deal to the weaker human sector like the working class. The striking social
justice values of the Constitution impact on the interpretation of Indian laws
and to forget this essential postulate while relying on foreign erudition is to
weaken the vital flame of the Democratic, Socialist Republic of India.
19. The case of the Appellants, in nutshell, is that the railways had 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

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 is made for the renewal of the existing catering units on the expiry of the term of 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 further 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 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 09.08.2010, which
contained the following instructions:
1. Transfer of License Units:
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, 2010.
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 and 17 of the Catering
Policy, 2010. 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 other subordinate officers of the South Central Railway to confirm that the tenure
of all GMUs and SMUs at "A1", "A" and "B" category stations shall be renewed after
every 3 years on their satisfactory performance and payment of all dues and arrears
as per the 2010 Policy. In view of the said circular, catering licenses of all the
members of the 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 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 2010 Policy. If the 2010 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 the date of coming into
force of the 2010 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
terms of paras 16.1.3 and 16.2.1 of the 2010 Policy. This was done even
before Para 16.3 was amended. Having understood the 2010 Policy in its true
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 2010 Policy, the licensees are classified into two categories, namely,
those who were granted licenses prior to the commencement of the 2010
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 2010,
renewal of licenses is envisaged for all these categories of licensees subject
to their fulfillment of the three requirements as referred to hereinbefore.

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 (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. 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. Shetty v.
International Airport Authority MANU/SC/0048/1979 : (1979) 3 SCC 489 held as
under:
21 ...It must, therefore follow as a necessary corollary from the principle of
equality enshrined in Article 14 that though the State is entitled to refuse to
enter into relationship with any one, yet if it 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 standard or principle which meets the test of
reasonableness and non-discrimination and any departure 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)
2 1 . India is a welfare State. Article 38 of the Constitution of India, 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 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 inequalities in status, facilities
and opportunities, not only amongst individuals but also amongst
groups of people residing in different areas or engaged in different
vocations.
22. It is the duty of every welfare state 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 Tellis (supra). A vast majority of the
unemployed population of the country then, is susceptible to being exploited by the
rich and the capitalists. It is the duty 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 Rights and Ors. v. Union of India
MANU/SC/0038/1982 : (1982) 3 SCC 235, Bhagwati, J. lamenting on the exploitation
of the weak and the powerless held as under:
...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 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 have civil and political rights and the Rule of Law is meant for them

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 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 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 exist for the vast masses of our people. Large numbers of
men, women and children who constitute the bulk of our population are
today living a sub-human existence in conditions of abject 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 sections of humanity going to
enforce?
2 3 . 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.
2 4 . One more important aspect to be taken note of by this Court is the non
governance of railway property in the past 67 years since independence. Though, it is
a recognized principle of law 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 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 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 of license fee in respect of such
big operators has not been done by the railways. Also, the Policy of not renewing the
licenses of those persons who are members of the Respondents are completely
dependent on self-earning from these small units and making them participate in a
public competition is absolutely unfair, 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 attitude as far as 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 people of
the country. 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 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 and Research Center v. Union of India
MANU/SC/0175/1995 : (1995) 3 SCC 42 a three Judge Bench of this 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

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 development of personality of every citizen....... Social justice is a dynamic
device to mitigate the sufferings of the poor, weak, Dalits, 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 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, just
and humane conditions of work and leisure to workman are part of his
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 standard of health,
economic security and civilised living while sharing according to the capacity,
social and cultural heritage.
Further, in the case of Sadhuram Bansal v. Pulin Sarkar MANU/SC/0239/1984 :
(1984) 3 SCC 410 this Court held as under:
There is no ritualistic formula or any magical charm in the concept 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 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 of time 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.
26. Keeping in view the evolving concept of social justice, we allow the members of
Respondents 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
with dignity has been interpreted to be a part of right to life by this Court in the case
o f Francis Coralie Mullin v. Administrator, Union Territory of Delhi and Ors.
MANU/SC/0517/1981 : (1981) 1 SCC 608, as under:
We think that the right to life includes the right to live with human dignity
and all that goes along with it, namely, the bare necessaries of life such as
adequate nutrition, clothing and shelter and facilities for reading, writing and
expressing one-self in diverse forms, 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,
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.
27. Therefore, we have to hold that 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,

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 unreasonable, unfair and discriminatory, and the same cannot be allowed to sustain
in law.
2 8 . For the reasons stated supra, this Court cannot interfere with 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 those 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 benami license at the railway stations with
periodical reasonable increase of license fee. All pending applications are disposed
of.
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