ORDER
K.A. Swami, J.
1. The petitioners in all these petitions are the licensees of one or the other premises situated in several of the bus stands of the 1st respondent - hereinafter referred to as the 'Corporation'. Some of them are running book-stalls, some are running pan-beeda shops and some are running canteens. The period of. licence held by each of them had not expired as on 8-4-1986. The licences pertaining to the petitioners in W.P. Nos. 1752, 1753 and 1759 of 1988 are extended by one year after the expiry of three years.
2. In all these petitions, the contention of the petitioners is that as per the General Standing Order No. 342 dated 8-4-1986, bearing No. KST. CO.TR.COM.RR. GEN/350, the licences held by them are required to be extended by a period of two years after the expiry of three years by extending the licences one year at a time on payment of 10% more than the previous licence fee.
3. On the contrary, it is contended on behalf of the respondents that the General Standing Order No. 342 does not apply to the existing licences. It applies only to such of those licences which are issued subsequent to 8-4-1986. It is also further contended that the petitioners have no legal right to seek extension of the licences inasmuch as it is purely a matter of contract; that on the expiry of the period of licence, the contract comes to an end and the petitioners have no right to seek extension of the period of licence. It is also further contended that as there is no legal right vested in the petitioners, no Mandamus can be issued to the respondents to extend the period of licences. The learned Counsel for the respondents has placed reliance on the two decisions of the Supreme Court in RADHAKRISHNA AGARWAL v. STATE OF BIHAR, AIR 1977 SC 1496 and RAM AND SHYAM CO. v. STATE OF HARYANA, : AIR1985SC1147 .
4.1. The right of the petitioners to seek extension depends upon the scope and ambit of General Standing Order No. 342 dated 8-4-1986. In this regard the contention of the respondents is that General Standing Order No. 342 dated 8-4-1986 has no statutory force ; it is only a policy decision of the Corporation; therefore it is not enforceable in a Court of Law. Hence the petitioners are not entitled to seek any relief on the basis of General Standing Order No. 342 dated 8-4-1986.
4.2. In the light of the aforesaid contentions, the following points arise for consideration :
1) Whether General Standing Order No. 342 dated 8-4-86 has no force of law; and whether the Corporation is not bound by it?
2) Whether the General Standing Order No. 342 dated 8-4-1986 is applicable to the licenses granted to run the refreshment rooms and other stalls at K.S.R.T.C. Bus Stations existing as on 8-4-1986?
3) What order?
POINTS NOS.1 and 2 :
5.1. These two points can conveniently be considered together. It does not lie in the mouth of the Corporation to contend that the General Standing Order No. 342 dated 8-4-1986 is only a policy decision, hence it cannot be enforced in a Court of Law and as such the petitioners cannot rely upon it. The contention is not well-founded. General Standing Order No. 342 is issued pursuant to the decision of the Board of Directors of the Corporation taken in its meeting held on 27-1-1986 as stated in the same General Standing Order. The Corporation is governed by the Road Transport Corporations Act, 1950 (hereinafter referred to as the 'Act'). Under Sub-section (1) of Section 5, the general superintendence, direction and management of the affairs and business of the Corporation vest in the Board of Directors which, with the assistance of its Committees and Managing Director, may exercise all such powers and do all such acts and things as may be exercised or done by the Corporation. The Board of Directors consists of a Chairman and such other Directors, being not less than five and not more than seventeen, as the State Government may think fit to appoint. Thus the powers of general superintendence, issuing of directions and management of the affairs and business of the Corporation vest in the Board of Directors. Section 19(2)(b) of the Act provides that subject to the provisions of the Act, the powers conferred by Sub-section (1) thereof shall include power. -
a) xx xxb) to acquire and hold such property, both movable and immovable, as the Corporation may deem necessary for the purpose of any of the said activities and to lease, sell or otherwise transfer any property held by it;
c) (d) & (e) xx xxf) to enter into and perform all such contracts as may be necessary for the performance of its duties and the exercise of its powers under the Act.
Section 13 of the Act further provides that all orders and decisions of the Board shall be authenticated by the signature of the Secretary or by any such other Officer of the Corporation as may be authorised in that behalf by the Board or under the Regulations made under Section 45 and all other instruments issued by the Board shall be authenticated by the signature of the Managing Director or any other Officer of the Corporation authorised in like manner in that behalf. Thus it is clear from the aforesaid provisions that the powers of the Corporation are vested in the Board of Directors. It is the Board of Directors of the Corporation in its meeting held on 27-1-1986 authorised the Vice-Chairman and Managing Director to grant extension of contract one year at a time upto two years subject to the conditions mentioned in the General Standing Order No. 342. The decision of the Board of Directors as incorporated in the General Standing Order No. 342 has the force of law inasmuch as law can also be an obligatory Rule of conduct imposed and enforced by the State or a Public Authority created under a statute having corporate or legal personality which has the power to manage, control and conduct its own affairs. Law can also be a body of principles recognised and stated by such Public Authority or the State in the administration of its affairs. It is the very essence of Rule of law that a public Authority or the State, as the case may be, when it expresses itself that its affairs will be conducted in a particular manner or it will be governed by a particular decision, principle rule or set of rules it is required to comply with such decisions rule/s or principles, and it is bound by them. It is more so when such Rules, decisions or principles concern to matters wherein the rights and duties or liabilities of third parties come to be affected, as has happened in the instant case. The order relates to grant of licences for running of refreshment rooms and other stalls at the K.S.R.T.C. Bus Stands. Quite naturally the rights and liabilities of such licensees are affected, therefore they are entitled to enforce the order. Viewed from this angle, the Standing Order in question has the force of law. The General Standing Order No. 342 provides for disposal of licences concerning the properties of the Corporation in a particular manner. It is a command issued by the Board of Directors in the matter of licenses granted to run the refreshment rooms and other stalls situated in the K.S.R.T.C. bus stations providing for the procedure for granting the licence for the first time for a period of three years and thereafter extending it by two years, granting extension one year at a time. All the authorities of the Corporation subordinate to the Board including the Managing Director are bound to carry it out. Not only the Corporation is bound by the General Standing Order No. 342 as long as it holds the field but all the licensees to whom it applies are also entitled to rely upon it and enforce it in a Court of law against the Corporation. It confers a right upon the licensees to whom it applies to seek extension of the term of the licenses on complying with the conditions mentioned therein.
5.2. A reading of General Standing Order No. 342 makes it clear that it relates to licences granted to run refreshment rooms and other stalls in KSRTC bus stands. It entitles the licensees to seek extension of their licences. That being so, the contention that it is a policy decision, therefore, it is not available to licensees of refreshment rooms and other stalls at the K.S.R.T.C. Bus stands cannot be accepted. It is not possible to appreciate how the Corporation can take such a stand. It is one thing to contend that the General Standing Order No. 342 does not apply to the existing licences and it applies to licences that would be granted hereafter but it is quite a different thing to contend that the decision is not enforceable in a Court of law. When the Corporation which is a statutory body takes a decision relating to its affairs and announces or publishes it and such a decision affects one way or other the persons connected with the affairs of the Corporation, it is bound by such decision and thereafter it is not open to it to contend that such a decision is not enforceable in a Court of law. Acceptance of such a contention is nothing but to encourage the Corporation to act according to its whims and fancies without being bound by its decisions. The Corporation is a 'State' within the meaning of Article 12 of the Constitution. Therefore, it is required to act in accordance with the provisions contained in Part III of the Constitution. If the stand of the Corporation that it can declare its policy decision concerning its affairs, but at the same time it cannot be enforced against it in a Court of law is accepted, it would be nothing but licensing the Corporation to act arbitrarily in violation of Article 14 of the Constitution. Therefore, the contention that the General Standing Order No. 342 is a policy decision and is not enforceable is only stated to be rejected.
6. The next point to be considered is as to what is the scope of General Standing Order No. 342.
7. The relevant portion of the said Order is as follows :
'The duration of licence granted to run the Refreshment Rooms and other Stalls at KSRTC Bus Stations is 3 years. There had been persistent demands from the licensees to review the duration of the licence citing the examples of other neighbouring S.T. Undertakings.
Board of Directors of the Corporation has in its meeting held on 27-1-86, authorised the Vice Chairman and Managing Director to grant extension of contracts one year at a time and upto 2 years subject to the following conditions.'
A reading of the Standing Order No. 342 makes it abundantly clear that the Corporation has taken this decision in the light of the representations made by the existing licensees, and also in the light of the practice that is prevailing in the State Transport Undertakings of the other States. The first part of the order makes it clear that the duration of the licence granted to run the refreshment rooms and other stalls at the K.S.R.T.C. Bus Stations is three years. At the time this order was passed, the duration of such licence was for a period of three years. The first paragraph further makes a reference to the persistent demands made by the existing licensees to renew the duration of their licenses. In the light of their demands, the duration of licence has been reviewed. In the meeting held on 27-1-1986 the Corporation resolved to authorise the Vice Chairman and Managing Director to grant extension of contracts one year at a time and upto 2 years subject to certain conditions. It is this decision of the Board of Directors that is issued in the form of General Standing Order No. 342. The decision of the Board of Directors, is, as already pointed out, taken in exercise of its power under Section 5 read with Section 19 of the Act.
8. However, Sri R.V. Jayaprakash, learned Counsel appearing for the Corporation has strongly relied upon condition No. 4 of the Order in support of his contention that the order does not apply to licences existing on the date of the order. Condition No. 4 reads thus :
'All future contracts be awarded after giving due publicity of the above conditions through tender.'
It is submitted on the basis of the aforesaid condition that General Standing Order No. 342 is applicable only to licences issued from the date of the order and it does not apply to the existing licences.
9. It is not possible to hold that condition No. 4 relates to the scope and effect of the order. It only states that in awarding contracts in future, due publicity should be given of the conditions mentioned therein through tender. This does not mean that the existing licensees are not entitled to seek the benefit of the order nor can it be said that the order does not apply to the existing licences.
10. At the time when the General Standing Order No. 342 was issued, the Corporation was fully aware of the existing licensees. In fact the Corporation took this decision mainly on the representations made by the existing licensees. It is in this background the order was passed providing for extension of licence for a period of two years after the expiry of the first three years but extending it once a year.
11. It is contended on behalf of the respondents that in some cases wherever tenders are called for, the licence fee offered is several time more than the one paid by the holders of the existing licences. Therefore, if General Standing Order No. 342 is interpreted to apply to the existing licences, the Corporation would be put to great financial loss. It is in this connection the learned Counsel has placed reliance on a decision of the Supreme Court in Ram and Shyam Co. v. State of Haryana, : AIR1985SC1147 . No doubt in the said decision it is observed that while disposing of the property of the State or the public body, the Court must take care to see that no financial loss is caused to the Government or public body. It is further observed that the Government cannot sell or lease out its property for a consideration less than what it fetches in the open market, unless, of course, there are other considerations which render it reasonable in public interest to do so.
12. The above decision on the facts and circumstances of the case on hand has no bearing. In the instant case, as it is already pointed out, the Corporation Board of Directors -took a decision in respect of the duration of licence. Hitherto the duration of licence relating to running of refreshment rooms and other stalls at the K.S.R.T.C. Bus Stations was three years. By the General Standing Order No. 342 in question it has now been made extendable for two more years after the expiry of three years, As per the General Standing Order No. 342, licence should be granted for a period of three years and the licensee will be eligible for extension of the licence upto two years and the extension being granted one year at a time. The order also further provides for enhanced licence fee at 10%. Thus it is not possible to hold that General Standing Order No. 342 amounts to disposing of the licence on a nominal sum. It does provide for payment of additional licence fee during the extended period. When the Corporation takes a decision and issues an order providing for extension of licence and the order does not specifically state that it is applicable to licences granted after the order is issued and the wordings of the order take into their fold the existing licences, it is neither reasonable nor is in conformity with the Rules of construction to construe such an order as applicable to fresh licences granted after the order comes into force and not to the licences existing as on the date the order came into force. Hence it is held that the General Standing Order No. 342 dated 8-4-1986 is applicable to all the licences granted to run the refreshment rooms and other stalls at K.S.R.T.C. Bus Stations and existing as on that date and such licensees, if they satisfy all the requirements of the General Standing Order No. 342 dated 8-4-86, are entitled to seek extension of the lease license for the period stipulated therein in terms of that order. It is not possible to hold that the decision in Radhakrishna
Agarwal's case, AIR 1977 SC 1496 supports the contention of the respondents. On the contrary, as held by the Supreme Court in R.D. SHETTY v. I.A. AUTHORITY, : (1979)IILLJ217SC the respondents are not entitled to act arbitrarily in the matter of extension of licences in question. They are bound to conform to the norms laid down in the General Standing Order No. 342. Failure to act in conformity with the General Standing Order No. 342 will result in violation of the Constitutional mandate of Article 14 of the Constitution.
13. For the reasons stated above, point Nos. 1 and 2 are answered as follows :
i) General Standing Order No. 342 dated 8-4-1986 has the force of law and the Corporation is bound by it as long as it holds the field.
ii) General Standing Order No. 342 dated 8-4-1986 is applicable to the licences granted to run the refreshment rooms and other stalls at K.S.R.T.C Bus Stations existing as on 8-4-1986.
14. For the reasons stated above, a direction shall issue to the respondents to consider the request of the petitioners for extension of the licences in terms of General Standing Order No. 342 dated 8-4-1986. Until a decision is taken in this regard, the petitioners shall not be dispossessed. No order as to costs.