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594 UNION OF INDIA v. WEST COAST PAPER MILLS LTD. October 14, 1970 (J. C. SHAH AND A. N. GROVER, JJ.] Indian Railway A.ct, 1890, s. 24-Railway Rates Tribunalconstituted under s, 24-Jurisdiction of Tribunalunder s. 41(1)(b)-Subject to limitatlons in ss. 29 & 42-Tribimal can give relief if he rates between two stationsare unreasonable and. discriminatdryand thereby in contravention of s. 28. Therespondentcoinpany had a factorywhich was situatedin Dandeli attheterminus of· Alnawar-Dandelibranch of thesouthernRailway. It used the branchline for transportingcoal, limestoneetc. required for its manufactt1ring activitiesand alsoits manufacturedproducts. Initially theRailwayswere levyirig freight on thisbranchline at "commonrates" for all commoditieson "a weight basis". On representationsmade by the users of thisbranchline, the IndianRailwayssubstituted,with effectfrom FebruaryI, 1964, the "standard telescopic class rates". In charging the goodsfreight,however,the actualdistanceof thebranchline was multi plied bythree.The company filed a complaint before theRailwayRates Tribunaland challenged as "unjust, unreasonableand discriminatory" the methodof levy of freighton goodstraffic.The companyclaimed that the levy of ratesoffendedthe provisions.of s. 28 of theIndianRailwaysAct, 1890, and thatthe existingrates wereper se unreasonableThe company claimeda. deeiaration that the ratesbetween he tsations specified in the complaint were unreasonableand a llirection to theRailwayto levy with effectfrom the dateof thecomplaintstandard rates and chargesfor the trafficon thebranchline without "inflating the distance". The Union di India as representingthe SouthernRailway defendedthe complaintand contendedthat the rateswere reasonable,. that theywerenot discrimina tery, andsincethey were fixed by· orderof theCentralGovernmentthe Tribunal was precludedfrom questioningthe legalityand propriety thereof.The .Tribunal held that the rates in questionwere in contraven tion of s. · 28 oftheActbeingunreasonableand discriminatory.It further heldthat it hadjurisdictionunder s. 41 (1) (b) of theIndianRailways Actto considerthe complaint.. By special leave appealagainstthe deci sion of theTribunalwas filed by the Union of India in thisCourt.The Courthad to considerthe question of the. Tribunal'sjurisdictionunder s. 41 (I) (b) in the lightof R. 63 of GoodsTariff No. 28, Rule 69 of GoodsTariff No. 29 and ss. 29 and42 of the RailwaysAct. HELD: Rules 63 of GoodsTariff No. 28 and 67 of GoodsTariff No. 29 refer to "station-to-station" rates.In s. 4f(l) (b) the expressionused ·is not 'station~to-station rates but a rate between two stations which is unreasonable.There is nothing in the rul.es whicheven indirectlyaffects thejurisdiction of the Tribunalto determinewhether the rates for carriage of certainspecifiedcommoditiesbetween the two stationsare unreason able. [601 E] The Tribunal is investedwith the authority subj.Ct to tire limitations containedin s. 29(3) and s. 42 to entertaina complaintand to give re life n respectof rateswhichare foundto beunreasonablebetween two A 225 B c D E F G H .... -~ B c 0 UNION v .. WEST COAST PAPER MILLS (Shah, /,) 59 5 stations. The complaint made by the companyin thepresent case did not seek interventionof the Tribunal in matterswhich may be raised only for decisionto theCentralGovernment by s. 29 and s. 42of theAct, andtheTribunalhad not given anyreliefin contraventionof these pro visions. The Tribunalhad merely declared that the chargeablerate di freight determined by multiplying by three the distanceover which the goods were transported,for specific commodities, was in contraventionof ·s. 28 of theIndian.RailwaysAct. The reliefthus granted by the Tribunal was within its jurisdiction. [601 G] The· view expressed by one of themembersof theTribunalthat even if the Tribunalholds that the ratesbetween · two stationsin respectof a specific commodityare unreasonable,it cannotmake a declarationto that effect,must be rejected. Such a view would deprivetheTribunal of its power 10 give formal shape to its view. [602 A-BJ C1v1L A.PPELLATE JURISDICTION :CivilAppealNo. 1742 of 1966. Appealby specialleave from the judgmertt and orderdated April 18,1966 of theRailwayRates Tribunalat Madrasin Com plaint No. 4 of 1963. Jagadish Swarup, SolicitorGeneral, A. S. Nambyar and S. P. Nayar, fortheappellant. H. R. Gokha/e,M. K. Ramam11rthi, Shyamala Pappu and B. D.Sharma, forthe respondent. BThe Judgmentof theCourt was delivered by- F G H Shah, J.-This is an appealwith specialleave againstthe order oftheRailwayRates Tribunalconstitutedunder s. 34 of theIndian RailwaysAct 9 of 1890. The WestCoast Paper Mills Ltd.-hereinafter. called · 'the Company'-is a manufacturer of paperand paperproducts .. It has setup a factoryat Bengurnagar in Dandeliat theterminusof Alnawar-Dandelibranch line of theSouthernRailway. This ,branchline 32 Kilo-metersin leugth was a "lfghtrailway"cons tructed and openedfor trafficby theGovernmentof Bombayin 1919, .principallyfor thepurposeof transportingforest produce collectedin thesurroundingregion. With the reorganisationof theStatesunderthe StatesReorganizationAct the ownershipof theRailwaypassed to theMysoreGovernment.The Railway was finally takenover by theGovernmentof Indiawith effectfrom October l, 1962, andnowformspart of theIndianRailways. The Company usedthe branchline for transportingcoal, lime-· stone etc. requiredfor its manufacfuringactivities, and alsofor. transportingits manufactuiedproducts. Initially the Railwavs 'Were levyingfreight over this branchline at "commonrates" for 596 SUPREME COURT REPORTS_ [1971]2 S.C.R. all commoditieson "a weight basis". On representationsmade by theusersof fhisbranchline, the IndianRailwayssubstituted, }Vith effect from February l, 1964,the "standard t~lescopic class rates' In chargingthe goodsfreight,however,the actualdistanceof the .branchline was multipliedby three. A TheCompanyfiled a complaintbefore theRailwayRates Tri- B bunal anc! challenged as "unjust, unreasonableand discriminatory" the methodof levyof fr~ight on goodstraffic.The Company claimedthat the levyof ratesoffendedthe provisionsof s. 28 of ;he Indian RailwaysAct, 1890, and thatthe existingrates were per se unreasonable.The Company Claimed a declarationthat the rate betweenthe stationsspecifiedin thecomplaintwere unreason- c able and a directionto the< Railway to levywitheffectfrom the date ofthecomplaintstandard. rates and chargesfor the trafficon the branchline without "inflating the distance··. The Union of India as representingthe Southern Railwayde fended thecomplaint.They contendedthat theintroduction of "standard rates and fares" over the section "on a continuous dis tancebasis with threetimesinflationof thechargeable distance" for goodswas madeon theauthorityof theCentralGovernment underits directiveand the RailwayRates Tribunal is precluded from questioningits legalityor propriety.They also contenclcd that in any eventthe levy is notunjust,unreasonableor discri;ni natory; that the increasedrate on thebasisof "inflateddistance" was in voguein differentsections of the IndianRailways;that such inflationwas adopted.eitherbecause of thehighercost of operation of theparticularsection or becauseof unusuallyheavy capitalcosts involved on aparticularsystem of Railwayand for similarreasons; thatthe "reason for inflation" on thebranchline wasdue to br~e capitalinvestmentfor therehabilitationof thisbranchline by the Central.Governmentit was taken over fromthe previousowners; thatbeforethe branchline waspurchasedit was.working at a loss fora number ot yearsand for effectivelyworking the branchline it had becomenecessaryto undertake c,xtensive repairsand renewal workincludingcomplete relaying of thetrack, construction of crossingstations etc; thatthe totalcostsof suchrepairsand renewal was Rs. 28.99lakhs, and that evenafter the introductionof higher ratesand fareswith ·~three times inflation" in distance,the users of branchline will be paying less thanwhatthey werepaying be fore the introductionof thenewrates.The Union deniedthe chargeof discriminationand unduepreference and contendedthat the Tribunal had no jurisdictionto hearthe complaint merelybe cause the Companyhad selectedcertain commoditi9S and certain sets of stationsin suppoFtof itsgrievanceunder s. 41(1)(b) of the Indian Railways Acti 1890. D E F G H .. ., ' :; ,.... ' ~ ' h ·- UNION v. WEST COAST PAPER MILLS (Shah, J.) 597 A On the pleadingsbefore the Tribunal,six issueswere settled, B c D E F G four of whichare material: "(I) Is the complaintnot maintainableagainst the respondent (Union ofIndia)under s. 41 ( 1 J(b) of theIndianRailwaysAct, 1890 (Act 9 of 1890)? (2) Whetherrates for the carriageof complainant's traffichave becomeunreasonable as a resultof inflatingthe chargeabledistance OYer the Alnawar-Dandeli Section ? (3)Whetherthe impugnedmethod of chargingon inflated distance (at three times the actual dis tance overihe Alnawar-Dandeli Section to arrive atthedistancefor charge)is governedby any order of the·CentralGovernment, ·and, if so, whetherthe complaintis notmaintainable for· the samereason ? (4) Whetherthe respondent(Union of India) in chargingthe complainant'straffic over the Alnawar-Dandeli Section attariffrate on conti nuousdistancebasis, but withthreetimesthe in flationin thechargeabledistance over the Sec tion, is subjectingthe complainant's traffic_ to the undueprejudicein contraventionof S; 28 of the IndianRailwaysAct ?" Tho Tribunaldecided the caseagainst'the RailwayAdministration.. In the view of the Chairman and Mr.Munshi(one of the members of theTribunal) on issueNo. ( 1) the complaintwas maintainable againstthe Union of Indiaunder s. 41 (l )(b) of the IndianRailways Act.They observedthat thougha classrate between two stations fora commoditywould fall outsidethe scopeof s. 41(J)(b),it was still opento the ('.:ompany to makea grievancein respectof the selected few items for thepurposeof attack. On IssueNo. (2} · they heldthat the Railwayhad not madeout any "justification for inflatingthe chargeabledistance over the Alnawar-Dandeli Sec- tion''. On IssueNo. (3) theyheldthat thejurisdictionof the Tribunal to examinethe validityof the impugned method of charg ingthe distanceby a umltipleof threeof theactualdistance over the section to arriveat thedistancefor determiningfreight, though governedby theorderof the C~ntral Government, was notexclud ed. On IssueNo. (4) the Chairmanobserved: H "There, is nodoubtthat the orderin question(Ext. B-4) is oneissuedunder Section29(1) or theAct. If theTribunalwere to giveany reliefwhich mighthave evenindirectlythe effectof cancellingthe ~aid II- -L436 Sup CI/71 598 SUPREME COURT REPORTS (1971 J 2 S.C.R. order,it wouldamountto changingthe maxima.and minimaratesandthe levelof classratesapplicableto Alnawar-Dandeli Section whichwouldnot be withinits poweror jurisdiction.However, if it declaredonly cer tain ratesfor specific commoditi~s betweenspecific pairs ofstationsto beunreasonableand fixed newratesin lieu thereof.the levelof class rates as suchwouldnot be iilfected. If such rates are based on the actualdistance theywouldalso fall withinthe maximaand minima underthe inflateddistancesanctioned by Ext. R-4.I, therefore, find that though themethodof chargingon inflateddistanceover the Alnawar-DandeliSection is governed by the orderof theCentralGovernment(Ext. R-4)this Tribunal does not losejurisdictionto decideon theunreasonablenessof ratesarrivedtherebyand the complaintcannot be said to be not maintainablefor thac reason." Mr. Munshiagreed with that view. In his view chargingthe com . pany'straffic ewer the branchline at tariffrates on continuous distancebasis but at threetimesthe chargeal)le distanceover the branchline was "unwarranted, unjustifiedand therefore unreason able. Mr. V. K. Rangaswamithe thirdmemberof theTribunal agreedwith the Chairmanand Mr. Munshion theissueof un . reasonablenessof theratechargedby multiplyingthe disurnce by three. He also agre'ed thatthe jurisdictionof theTribunalto enter- taina complaintrelating to levyof unreasonablecharges between specificstations was not excluded.But he differedwith the other members on thecompetenceof theTribunalto declareinvalid the methodof levyof freight ar1d to tix newratesin lieuof rates declar· ed unreasonable.· In theopinionof themajorityit was competent totheTribunalto do so. Mr. Rangaswamiheld that it wasfor the RailwayAdministrationto considerthe matterand to takeaction tocancelthe inflateddistance·over the branchline generally,and to fix new rates. A B c D E F TheTribunal.by a unanimousorder madethe followingG directions: " ...... !hut the classratewithinflateddistance applicableto theAlnawar-DandeliBranch, subject the complainantto anunduedisadvantage in contraventiion ofSection28 o[ the Indian Railways.Act, and alsoren- derunreasonable perse the ratesfor thecomplainant's H trafficto and from.Dandeli." Againstthat order,this appealhas been filed withspecialleave. B c D E G H UNION V. WEST COAST PAPER MILLS (Shah, J.) 599 The relevantprovisionsof theIndianRailwaysAct 9 of 1890_ maybe brieflyset out: s. 28-"A railwayadministrationshall not makeor giveany undueor unreasonablepreference or advantage to, or in favourof, anyparticularperson or railway adminis· tration, or any particulardescriptionof traffic,in any respectwhatsoever,or subjectany particularperson orrailwayadministrationor anyparticular descrip tion of trafficto anyundueor unreasonableprejudice ordisadvantage in anyrespect whatsoever." s. 29-"(l) TheCentraJGovernmentmay by generalor spe cial order fix maximumand minimumrates for the wholeor anypartof a railway,and prescribe the conditionsin whichsuch rates will apply. (2) (3) Anycomplaintthat a railwayadministration is contraveningany orderissued by the Central Govern mentundersub-section (1) shall be determinedby the Central Government." s. 41-"(1) Anycomplaintthat a railwayadministration (a) is contraveningthe provisionsof section28, or (b) is chargingfor thecarriageof anycommodity between tVo stationsa ratewhich is unreason able,or (c) may be madi; to theTribunal,and the Tribunal shall hearand decideany such C011iplaint in accordance withthe provisionsof this Chapter. s. 42-"The Central Governrr11!11t aloneshall have power (a) to' classifyor reclassify any commodity; (b) to increaseor reducethe level of class rates and other charges." Thejurisdictionconferred upon the Tribunalby s. 41 and re lating to matters set outin claus~ (a) to (c) thereof is restrictedby .the !~ ?f s. 29(3) an~ s. 42.. Section28 prohibitsa railway atlJn!n1stration from m~l'1ng und~I'. pre~erence orsubjectingany particularperson or railwayadnurustrauonor anyparticular des criptionof trafficto anyundue or unreasonableprejudice or dis advantage. But evenin a disputerelatingto thematters set outin - 600 SUPREME COURT REPORTS . [1971) 2 S.C.R. s. 41(1)(a), (b) and (c), where the CentralGovernmenthas fixed bygeneralor specialorder maximumand minimu':11 range of rat~s for thewholeor anypartof a railwaythe complamtthat the rail way administrationhas contravenedany orderissuedby theCentral _ Governmentmay be determined by theCentralGovernmentand not by the'Tribunal.Similarly, the CentralGovernmenthas and theTribunalhas not the powerto classifyor reclassify.any com modity and to increaseor reducethe levelof classratesand other charges.Subject to theserestrictions,the Tribunalhas the power todeterminewhether the RailwayAdministrationhasacted in contraventionof theprovisionsof s. 28, i.e. it has gra.n.ted any un dueor unreasonablepreference or advantageto, or in favourof anyparticularperson, or shownany undueor unreasonable pre judiceor disadvantageto anypersonor railwayadministrationor anyparticulardescrjptionof traffic,and was chargingfor the carriageof anycommoditybetween two stations a ratewhich was unreasonableor was levying any otherchargewhich was unreason able. In the presentcase the maximumand minimumrange of rates havebeen fixed by t)!e CentralGovernment.A complaintthat t.he railway administrationhas acted in contraventionof theorder issuedby theCentralGovernment may be determined by the Cen tral Gov~rnment andnot by theTribunal.Again the Central Governmentalone has the powerto classify or reclassifyany com modity or t.o increaseor reducethe levelof classrates anJ other charges.The Tribunalaccepted these limitationsupon the exer cise of its powers.The Tribunalhowever found that the charge inad~, by the railway aWhich might e"l'en indirectlycancel the orderof theCentral Governmentunder ·s. 19(1), for, it wouldamount to changingthe range and level of classratesapplicable to the branchline. But iftheTribunaldeclared that onlycertainrates for specific com modities,between specifiedpairs of stations,are unreasonable,the levelof classrates is not affected.The Tribunal is investedwith theauthoritysubject to thelimitationscontained in s. 29(3) and s. 42 to entertaina complaintand to give reliefin respectof &ates which are found· to be unreaionable betweentwo stations.The complaintmade J?y the Company did not ~eek interventionof the Tribunal in matters which may beraisedonly for decisionto the Cenft1l-Govem:nent bys. 29 a1Jd s. 42of the A.ct, andthe Tribunal has notgivenany reliefin contraventio11 of thoseprovisions.The Tribunalhas merelydeclaredthat the chargingrate of freight determinedby inultiplyingby three th~ distanceover whichthe goods are transportedfor specificcomm0dities is in contravention of s. 28 of the IndianRailwaysAct, 1890. 602 SUPREME COURl" REPORTS (1971] 2 S.C.R. We do not see forcein theopinionexpressedby Mr. V. K. A Rangaswamiand evenif theTribunalholds that the ratesbetween twostationsin respectof a specificcommodityare unreasonable, it cannotmake a declarationto thateffect.Such a view would deprivethe Tribunalof itspowerto giveformalshape to its view. We are notcalledupon to decidewhetherthe Tribunalhas power to fix ratesin substitutionof ratesdeclaredunreasonablein exer- B ciseof thejurisdictionunder. s. 41(1)(b), because no suchratesare fixed by orderof theTribunal. Therelief.granted by the Tribunalis, in ourjudgment,within · its jurisdiction. Theappealfails and is dismissedwith costs.C G.C. Appeal dismissed. |
