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Senior Divisional Commercial Manager & Ors. v. S.C.R. Caterers, Dry Fruits, Fruit Juice Stalls Welfare Association & Anr.

Civil Appeal · Neutral citation not assigned (Civil Appeal Nos. 618-620 of 2016)Decided 29 Jan 2016
Civil Appeal Nos. 618-620 of 2016
Justice V. Gopala Gowda · Justice Amitava Roy

Background

Members of a welfare association held licenses to run small catering/dry-fruit/juice stalls at South Central Railway stations under the Railways' Catering Policy, 2005, later continued under the Catering Policy, 2010. When their licenses came up for renewal, the Railways instead invited fresh bids from the public for these stalls rather than renewing the existing licensees' contracts. The licensees challenged this in the Andhra Pradesh High Court, which ruled in their favour and held they were entitled to renewal under the 2010 Policy; the Railways appealed to the Supreme Court.

Decision Breakdown

The Supreme Court held that the Catering Policy, 2010 did apply to these respondents and entitled them to renewal rather than being forced to compete in a fresh bidding process. It found the Railways' action of inviting fresh bids instead of renewing existing licenses to be arbitrary, unreasonable, unfair and discriminatory, relying on the constitutional right to live with dignity (citing Francis Coralie Mullin v. Administrator, Union Territory of Delhi) to support protecting small licensees' livelihoods. The Court dismissed the Railways' appeals and upheld the High Court's judgment, vacating an earlier stay order. However, it clarified that only those licensees who could affidavit-declare they did not hold more than one shop/kiosk license (including benami licenses) at railway stations would be eligible for renewal, subject to periodic reasonable fee increases.

Lesson Learnt

Government bodies cannot unilaterally bypass their own stated policy to deny renewal to existing small licensees in favour of fresh competitive bidding, doing so can be struck down as arbitrary and discriminatory, especially where livelihoods and the right to a dignified life are at stake.

Official source (sci.gov.in)View Judgment (PDF)

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