M/S. Jiwat Bai And Sons v. G.C Batra And Others

This petition under Articles 226 and 227 of the Constitution of India is directed against the refusal of the Railway Administration to renew a vending contract.

2. According to the petitioner, Triloka Mal deceased had a vending contract with the Railways since the year 1920 until his death in the year 1932 in West Pakistan. On his death, it was transferred in the name of his son Chela Ram. Chela Ram continued to do the said vending business even after partition in Delhi and a vending contract was given to him in lieu of a similar contract held by him before partition. Chela Ram died in 1961 and the contract has since been held in the name of Jiwat Bai and Sons, a business name and style in which Jiwat Bai, his widow and her son Hiralal had been carrying on the vending business. The contract was being renewed from time to time. The last renewal was for a period of three years with effect from August 1, 1971, vide agreement of November 16, 1972 (Annexure R-2) entered into between the President of India, on the one hand, and Hiralal, son of Chela Ram, “carrying on business under the name and style of M/s. Jiwat Bai and Sons which is a proprietorship firm”, on the other. The said contract was for a period of three years and was, therefore, due to expire on July 31, 1974. According to clause 2 (a) of the agreement, the “licence” was renewable “at the discretion of the Railway Administration for subsequent period”. The renewal of the licence is regulated by the policy adopted by the Railway Administration which is modified from time to time. Renewal of the vending licence was regulated, until July 17, 1974, by the Railway Board's letter of September 5, 1973, which apparently did not confer any right of renewal on any class of vending licensees. By its communication of July 17, 1974, the Railway Board modified the then existing policy and decided to exempt certain classes of vending licensees from the operation of the existing policy. The terms of exemption were explained in the Northern Railway's communication of July 24, 1974 (Annexure R-4). The relevant portion of this communication is in the following terms:

“The Board have decided vide their letter No. 73-TGIII/600 dated 17-7-1974 that a vendor who is holding an individual licence in his own name and is himself actually doing the work without any vendor, helper, assistant etc., under him (e.g, plying tea trolly pure/sweetmeat trolly, pan, bidi, cigarettes tray, khochas etc.) as distinct from contractors of Refreshment stalls, tea stalls, etc., having vendors, salesmen, bearers or helpers etc. under them; should be exempted from the operation of the orders contained in the letter mentioned above. Accordingly, all such individual vending licences may be renewed from time to time on expiry of the period of licence without calling for fresh applications even though they might have been held for more than six years, provided the licencees' performance has been found continuously satisfactory. Please take action accordingly and ensure its strict compliance and acknowledge receipt.”

Meanwhile by his letter of July 26, 1974 (Annexure ‘B’), the Superintendent of the Delhi Area, purporting to act for and on behalf of the President of India, informed “M/s. Jiwat Bai and Sons” that the Railway Administration had decided not to renew the vending licence with effect from August 1, 1974. The letter did not give any reasons. Subsequently apparently at the request of the licensee, the licence was “extended upto 31-8-19 7 by Dy. D. S.” vide the Northern Railway's communication of July 31, 1974 (Annexure D-1). This communication was addressed to “M/s. Jiwat Bai and Sons vending contractors”. The process initiated in the meanwhile for the award of the licence to the prospective licensees was stayed until the Railway Minister had seen the papers and it was directed that the status quo should be maintained. (Annexure ‘F’). By his letter of November 22, 1974 (Annexure ‘H’), the Station Superintendent, Northern Railway, informed “M/s. Jiwat Bai and Sons” by an endorsement on his letter addressed to the Divisional Superintendent that the “contract stands terminated as no extension has been accorded and it has been allotted to another contractor”. It is this direction purporting to terminate the contract or refusing to renew the licence which is challenged by the petition. The petition was filed on November 28, 1974. During the pendency of the petition, there was a further change in the policy which is reflected in the Railway Ministry's communication of February 24, 1975 (Annexure ‘AA’). In terms of this communication the Board had decided “to exempt the catering/Vending contracts awarded to bona fide refugees” from the operation of the then existing policy and it was directed that “all such contracts/licences held by bona fide refugees may be renewed from time to time on the expiry of the tenure without calling for fresh application”.

3. According to the cause title of the petition “M/s. Jiwat Bai and Sons” is the petitioner. The precise status of the petitioner is not explicitly disclosed. It describes the petitioner as “a widow” and throughout identifies the petitioner with Jiwat Bai, who has also sworn the supporting affidavit although it mentions that the business was being carried on by her with the help of her son, an apparent reference to Hiralal. It traces the history of the family's association with vending at the Railways since 1920 and lays a claim to renewal of the licence which is used interchangeably with tenancy, inter alia, on the ground that the petitioners, having served the Railways over the years and having been of a satisfactory conduct during the operation of various vending licences granted to the family from time to time, are entitled to the renewal in terms of the Government policy. The termination of the subsisting licence and refusal to renew it are characterised as illegal and mala fide with a view to benefit another person. The petition invokes fundamental right under Article 19 as also the principle of natural justice and it is contended that in terms of the policy, the petitioners were entitled to the renewal of the licence and the renewal could not have been terminated without affording a reasonable opportunity to the petitioner of being heard and without assigning reasons for it.

4. The petition is opposed on behalf the Railway Administration on the grounds that the petitioner has no right to the renewal of the vending licence and could not, therefore, seek a writ of mandamus; that on the expiry of the period for which the licence was granted and of the period for which it was further extended, the licencee died a natural death and nothing survived on which the petitioner could base a claim; that the petitioner was in effect seeking to enforce a contractual right for a contractual obligation for which the present proceedings were not appropriate; and that in refusing to renew the licence of the petitioner and in granting the licence to another person, the Administration had considered the application of the petitioner as well, and that the Railway Administration was under no obligation to disclose the reasons for the refusal to renew the licence. It was further contended that there was no proper petition before this Court and that Jiwat Bai, who was the real petitioner, has no cause of action for it as she was a complete stranger to the vending licence inasmuch as the agreement was entered into in the name of her son Hiralal. It is, however, admitted that a vending licence was granted to M/s. Amrit Rai Chela Ram in 1962 which was later transferred to the name of Chela Ram w. e. f. February 1, 1956 on the deletion of the name of Amrit Rai and that after the death of Chela Ram the licence was transferred in the name of “M/s. Jiwat Bai and Sons” from August 1, 1962 and the same was being extended for three years from time to time and that the last period of the validity of the licence was extended on August 31, 1973 after which it has not been extended. It is further stated that the contract was not in the name of Jiwat Bai but in the name of M/s. Jiwat Bai and Sons and the last agreement was signed by Hiralal, her son. It is further claimed that the licence was not covered by the revised policy which conferred certain additional rights on individual vending licensees.

5. Before dealing with various contentions urged on behalf of the petitioner, it would be proper to deal with the preliminary objection raised on behalf of the respondents that there was no proper petition before the Court and that Jiwat Bai, the real petitioner, had no cause of action for the relief. As has been pointed out above, the petition is in the name of “M/s. Jiwat Bai and Sons”. The body of the petition, however, proceeds on the basis as if Jiwat Bai, widow of Chela Ram, was the petitioner. The supporting affidavit is also sworn by the widow. The petition, however, states that after the death of Chela Ram, husband of Jiwat Bai, the vending licence “was transferred in the names of the petitioners”. At places, the petitioner is described in the singular while elsewhere it is made out to be a group of persons, an apparent reference to Jiwat Bai, the widow of Chela Ram and her son, Hiralal. The last vending agreement (Annexure R-2), however, was entered into between the President of India on the one hand and Hira Lal, son of Chela Ram, on the other. Hiralal was described in the agreement as “carrying on business under the name and style of M/s. Jiwat Bai and Sons”. The aforesaid style is further described in the agreement as “a proprietorship firm”. In the correspondence between the petitioner and the Railway Administration, which has been referred to above, the petitioner is variously described either as “M/s. Jiwat Bai and Sons” or as “Smt. Jiwat Bai”. At places, Jiwat Bai signed for M/s. Jiwat Bai and Sons. In the representation made to the Minister (Annexure ‘E’), wherein Jiwat Bai has thumbmarked for “M/s. Jiwat Bai and Sons, vending contracts”. She has given the particulars of her “dependants” and the list includes Hira Lal, the son of the widow who is described as “working at shop”. The representation recites that the various agreements in the past were “renewed after expiry of those three periods of agreements right from 1920 to 1971 with our family members”. (Emphasis supplied). The letter purporting to terminate the contract is also addressed to M/s. Jiwat Bai and Sons. The petition is either a model of inartistic drafting and gives cause for unnecessary confusion as to the status of the petitioner or petitioners either because of lack of precise instructions as to the person or persons in whose name the vending contract was held or as to the precise constitution of the firm or otherwise or has been drafted with a view to invoke sympathy for a widow and to otherwise give the impression of the licensee being an individual so as to attract the revised policy. Be that as it may, taking advantage of this infirmity Shri Dhebar, who appears for the Railway Administration, contends that the contract was entered into by Hira Lal as a person carrying on business in the name and style of “M/s. Jiwat Bai and Sons” which was described as his “proprietorship firm” and that Jiwat Bai, who is the real petitioner had, therefore, neither any locus standi to file the petition nor a cause of action for the relief. It is true that the last contract was entered into by Hiralal son of Jiwat Bai claiming to be carrying on business in the name and style of M/s. Jiwat Bai and Sons which was described as a proprietorship firm. It is equally true that the petition purports to be by Jiwat Bai and Sons and yet the contents of the petition leave no manner of doubt that Jiwat Bai is the real petitioner. I am, however, unable to accept the contention that such an infirmity would render the petition liable to be thrown out on that ground alone. From what has been stated above, it is obvious that after the death of Chela Ram, Jiwat Bai, his widow and his son Hiralal had been carrying on the vending business for the benefit of the dependants of Chela Ram and the last agreement was entered into in the name of Hira Lal who was described as carrying on business in the name and style of M/s. Jiwat Bai and Sons. M/s. Jiwat Bai and Sons was apparently, a loose name and style to describe the family which consists of Jiwat Bai and Hira Lai. The various descriptions of M/s. Jiwat Bai and Sons were apparently the result of linguistic inexactitude and it would be reasonable to treat the petition as a petition by the members of the family. I do not see why the widow and her son, who and uneducated if not illiterate, should suffer because of legal procedures which involve unnecessary and cumbersome norms and because the counsel who drafted the petition did not or could not have precise instructions as to the status of the family and of the firm. It may be useful to remember that the practice and procedure of Courts is intended to further the course of justice and not to impede or obstruct it. I would, therefore, treat this as a joint petition by Jiwat Bai and Hiralal and that is how the petition was heard on merits. Learned counsel for the petitioners sought to amend the petition so as to add the name of Hira Lal but I do not think it is necessary to have a formal amendment for the purpose. The objection is, therefore, overruled.

6. Whether there is any right to the renewal of the vending license either in terms of the agreement or by virtue of the relevant policy, is the first question that requires consideration. Clause (2) (a) of the agreement provides that renewal of the licence for further period would be at the “discretion” of the Railway Administration. There was, therefore, no right to renewal under the agreement. The revised policy in the matter of renewal of vending licences laid down by the Railway Board in its letter of July 17, 1974, as set in the Railway Board's letter of July 24, 1974, however, clearly confers a right of renewal on such of the existing vendees who conform to the requirements for renewal in terms of the said policy. According to this policy, a vendor who was holding an individual licence in his own name and was himself actually doing the work without any vendor, helper, assistant etc., under him, was entitled to the renewal of the vending licence from time to time even though he might have held it for more than six years provided his performance had been found continuously satisfactory. The policy further lays down that it must be strictly complied with. The power conferred on the authorities to renew licences which satisfy the requirement for renewal laid down in the policy must be construed as a power coupled with a duty that must be exercised in favour of the subject if the requirements for such exercise are satisfied. To quote the language of Lord Cairns in the case of Frederic Guildor Julius v. The Right Rev, the Lord Bishop of Oxford; The Rev. Thomas Thellusson Carter, (1880) 5 AC 214;

“There may be something in the nature of the thing empowered to be done, something in the object for which it is to be done, something in the conditions under which it is to be done, something in the title of the person or persons for whose benefit the power is to be exercised, which may couple the power with a duty, and make it the duty of the person in whom the power is reposed, to exercise that power when called upon to do so.”

The principle was adopted by the Judicial Committee, (Alcock Ashdown and Co. Ltd. v. Chief Revenue Authority, Bombay, AIR 1923 PC 138) and had been approved by the Supreme Court. If the petitioners, being the existing licensees, satisfied the aforesaid, requirement, they were certainly entitled to the renewal in terms of the policy.

7. The next question that requires consideration is as to the nature of such a right. If the right to renewal conferred by the policy is contractual in nature, than obviously the petitioner would not be entitled to enforce that right in the present proceedings because Article 226 of the Constitution of India is not a forum for the enforcement of contractual rights. A regular civil action is the appropriate forum for such a relief. If, however, the right has its genesis not in the contract but in the policy and, therefore, is an executive order, it would not be a contractual right but a right arising out of executive action. Mr. Dhebar, learned counsel for the Railway Administration contends that when the policy confers a right of renewal, assuming that it does, it is in no way different from a unilateral amendment of the agreement as it were to confer an additional right on the other party to the agreement and that the right was in a sense still a contractual right because in the absence of the agreement no right of renewal whatever would have existed. This contention appears to me to be misconceived. The agreement confers no right of renewal whatever. The right of renewal, subject to certain conditions being satisfied, is conferred by the policy even though on persons who held the licences. The foundation for the right is the policy decision of the Government even though the subsistence of the vending licence is a qualifying condition for it. There can be no question of a unilateral modification of the agreement. It is a benefit given to a vendor in additions to those to which he was entitled in terms of the agreement. The right could not, therefore, be considered contractual in its origin so as to disentitle the petitioners to enforce it in the present proceedings.

8. Shri Dhebar, however, contends that assuming that the policy confers a right and that the right was denied to the petitioners in contravention of the policy, the petition for a writ of mandamus would, nevertheless, be not maintainable and the petitioners would not be entitled to any relief because the policy was not statutory in nature and a mere breach of non-statutory policy or instructions would not afford a cause of action for such a relief. Shri Dhebar further contends that a claim for a writ of mandamus must be founded on a legal right and that breach of a mere non-statutory instructions neither confers a right nor gives rise to any statutory obligation which alone could be enforced by a writ of mandamus. It is further contended that an administrative direction like the present policy could not confer any justiciable right upon a citizen which could be enforced in a Court by a writ or order in the nature of mandamus and that the foundation for the issue of a writ or order in the nature of mandamus being the existence of a legal right, and administrative order being incapable of conferring any justiciable right, no writ could be issued. It is true that the policy is not statutory in nature and is, at best, in the nature of executive instructions issued with a view to regulate the renewal of vending licences, and may, in that sense, likened to a Government scheme. It is equally true that when an executive authority commits breach of these instructions, it could not be said that a statutory obligation had been violated. It is also undisputed that ordinarily a claim for mandamus must be based on a legal right and such a writ is granted to compel the performance of a statutory duty. There are, however, well recognised exceptions his general rule. It has been recognised that there are administrative orders which confer right and impose duties and that Court have a power in appropriate cases to compel performance and the obligation imposed by a non-statutory scheme or administrative instructions upon the executive authorities (Union of India v. K.P Joseph, (1973) 2 SCR 752 : (AIR 1973 SC 303); Union of India v. Indo Afghan Agencies, AIR 1968 SC 718). At one time it was no doubt thought that the executive instructions did not bind the authorities, could not confer any right or obligation and could not, therefore, be enforced, in a Court of law. Recent legal thinking has, however, recognised that where there is no statutory provision, executive instructions fill in the gap (Sant Ram v. State of Rajasthan, (1968) 1 SCR 111 : (AIR 1967 SC 1910)) and are not only capable of conferring rights on the citizen and imposing obligations on the authorities, which are charged with the duty of carrying out the policy, but that in appropriate cases Court may even compel the performance of such a duty.

9. The next question that requires consideration is whether in declining to grant renewal, the Railway Administration was under any obligation to disclose its reasons and is a question that, to my mind, must be answered in the affirmative. In a system based on the rule of law, all executive action must conform to constitutional, statutory and policy constraints. These constraints may either confer a right on the subject or impose an obligation on the executive authority and to that extent, therefore, lay down, the limitation of executive action. In such a system, Government being one of laws and not of men, executive action is subject to judicial review with a view to determine if it is within such limitations or transgresses them or is otherwise arbitrary. (E.P Royappa v. State of Tamil Nadu, AIR 1974 SC 555). It is now well recognised that apart from other constraints, the executive action must be bona fide, just, fair and honest (S. Partap Singh v. State Of Punjab., AIR 1964 SC 72; E.P Royappa v. State of Tamil Nadu, AIR 1974 SC 555). There is very little to distinguish this obligation from the duty to act judicially because the requirement of the judicial act is in a sense nothing but a requirement to act justly and fairly and not arbitrarily or capriciously. The dividing line between administrative power and quasi-judicial power, is very thin and is being gradually obliterated (A.K Kraipak v. Union of India, (1970) 1 SCR 457 : (AIR 1970 SC 150)). The requirement to give reason for a decision is an integral part of a judicial or quasi-judicial power. Such a requirement constitutes a built-in safeguard in power against arbitrariness. Without such a requirement, judicial review would not only be difficult but may even be rendered farcical. If judicial review is intended to test the validity of an executive action on the touchstone of constitutional, statutory or policy obligations, how can judicial review be effectively carried out unless the executive action discloses the reasons which led to it. For then alone, it would be possible for a Court to determine if the executive action had transgressed the permissible limits, was just and reasonable, was not arbitrary or based on caprice, malice or other improper motivation. If, for example, in the present case, it is open to this Court to examine the decision not to renew the licence in the context of the revision of the Government policy relating to renewal how is this Court to determine if the action conforms to the policy and is, therefore, neither arbitrary nor unfair or unreasonable unless reasons are disclosed either in the order or otherwise which may enable such a scrutiny or which may make any scrutiny meaningful. It must, therefore, be held that where executive action affects rights of a citizen or is part of process which may give rise to a right, it must disclose reasons so that in the event of the challenge being thrown to such an action, it can be judicially tested. It was not disputed that the impugned order declining to grant renewal did not disclose any reasons. No reasons for it were attributed to it either in the return or in the course of the arguments at the hearing of the petition and it was claimed that the Administration was under no obligation to give any reasons whatever. Such an order could not be allowed to stand and must be quashed.

10. Shri C.G Suri, who appears for the petitioners, claimed that on the conclusion that I have arrived at, a writ of mandamus must issue directing the Administration to renew the licence because in terms of the policy, the petitioners were entitled to such a renewal as of the right. Learned counsel for the parties invited me to construe the terms of the policy and to determine if, having regard to the conditions for the renewal, the petitioners were entitled to renewal or not. The policy no doubt envisages a right to renewal for the category of vendees covered by the policy unless their performance had been found to be “continuously satisfactory”. It was not disputed that there was nothing on the record to indicate that the petitioners had been guilty of any improper conduct or that their performance has not been found to be continuously satisfactory. The controversy between the parties, however, turned on the question if the petitioners belonged to the category on which additional right had been conferred by the revised policy. While it was contended on behalf of the petitioners that the revised policy applied to such of the licensees who were plying their vending trade of their own without any outside help irrespective of whether the licensee was an individual or a family, as in the present case, it was contended on behalf of the Administration that on a true construction of the policy it must be held that it applied only to an individual licensee and the moment it was conceded that the petitioners in this case were a group of two persons or even if it were one the vending business was being done with the help of a son or a mother, the petitioners would be outside the policy. Shri Suri also made a strong plea for the benefit of the latest policy contained in the Railway ministry's communication of February 24, 1975 (Annexure ‘AA) even though this policy was introduced subsequent to the filing of the present petition.

11. It, however, appears to me that it would not be proper for this Court in the peculiar circumstances of this case to interpret the policy or to determine if the petitioners satisfied the condition for the renewal and was, therefore, entitled to a renewal of the licence. The claim of the petitioners for a renewal has not been considered in terms of the aforesaid policy. The right of renewal in terms of the policy is subject to the petitioners’ satisfying the conditions for the renewal. Whether the petitioners satisfied the condition or not, involves not only an interpretation of the policy but also certain facts which must be determined by the authorities charged with the duty, and after giving to the petitioners an opportunity of being heard and by a proper decision disclosing its reasons. Such a determination can more conveniently be made in the first instance by the authorities themselves. It would be unfair to the authorities if this Court were to embark upon an interpretation of the policy or the determination of questions of fact without giving such an opportunity to the authorities themselves. The question whether the petitioners should be given benefit of the latest policy which protects the vending licences granted in favour of displaced persons is also a matter for the consideration of the authorities. It would be for the authorities to consider if the benefit of the latest policy should be made available to a vending licensee whose licence was not renewed although he continued to do the vending business even after the said policy was announced although initially by virtue of a ministerial order and later under the auspices of this Court. It is, however, not proper for this Court to express any opinion on this question at this stage.

12. In the circumstances, I would accept the petition, quash the order terminating the licence and/or refusing to renew the licence and would direct that the Railway Administration would consider, within three months from today, if the petitioners are entitled to the renewal of the licence in terms of the revised policy announced by the Railway Board in its communication of July 17, 1974, after hearing the petitioners and considering such material as may be placed before the authorities by them and decide the question by a speaking order. The Administration would also consider if there is a case for the benefit of the latest policy being given to the petitioners. I further direct that until such a decision shall have been arrived at, status quo would be maintained and the petitioners would not be disturbed.

13. The petitioners would have their costs. Counsel's fee is assessed at Rs. 350/-.

Petition allowed.