M/S. S.K.L. CO. Vs. CHIEF COMMERCIAL OFFICER & ORS.
Supreme Court of India (Division Bench (DB)- Two Judge)
Appeal (Civil), 6905 of 2005, Judgment Date: Dec 29, 2015
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVILAPPELLATE JURISDICTION
CIVIL APPEAL No. 6905 OF 2005
M/S. S.K.L. CO. .….. APPELLANT
Vs.
CHIEF COMMERCIAL OFFICER & ORS. .….. RESPONDENTS
J U D G M E N T
VIKRAMAJIT SEN,J.
1 This Appeal assails the Judgment dated 15.7.2004 of the High Court of
Karnataka in Writ Appeal Nos. 5722-5723 of 2001 setting aside the judgment
of the learned Single Judge dated 25.7.2001 who had allowed both the Writ
Petitions and quashed the impugned Notification, holding that the awarding
of contract of lease of FSLR and VP is bad in law. The factual matrix of
the present case is that in pursuance of the budget speech of the Hon’ble
Minister for Railways in the year 1999-2000, the Respondents issued a
tender notice no. 3/2000-2001 (hereinafter referred to as ‘impugned
notice’) on 19.6.2000, inviting sealed tenders from traders and other
interested parties for leasing of Front Second class Luggage Rake of 4 or 8
tons and Ventilated Parcel Van of 18 tons capacity on the Broad Gauge on
payment of lump sum rate for loading of parcels by certain trains for a
period of two years.
2 The first compartment, immediately after the engine, is known as
Front Second Class Luggage Rake (FSLR) and each FSLR consist of four
different sections. The first section is meant for carrying goods/parcels
of 4 tons capacity, followed by the section known as the ‘Brake Van’ which
is occupied only by the guard. The third section is for carrying
unreserved passengers, and the last section is again a luggage compartment
with a capacity of 4 tons. Similarly, the last compartment in each train is
known as Rear Second Class Luggage Rake (RSLR), which also consists of four
sections similar to the FSLR. Further, if there is excess demand, a
Ventilated Parcel Van (VP) is added to the train after reducing, if
necessary, a passenger compartment so as not to exceed the maximum hauling
capacity of the engine. The VP is meant exclusively for the purpose of
carrying parcels and its normal capacity is 18 tons. The Respondents had
noticed that in some trains, most of the time, the luggage capacity
available in FSLR and RSLR was not being fully utilized resulting in loss
of revenue. In view of this, as a matter of policy, it was decided by the
Government of India to lease the luggage space in FSLR to traders and other
interested persons after inviting tenders from them.
3 FSLR of Train no. 2627 Bangalore- New Delhi- Karnataka Express
(Daily) [hereinafter ‘Karnataka Express’] was leased for a period of two
years at Rs. 19,800/- per 4 metric ton space per day. The lease was given
on 24.7.2000 in favour of a company known as BIC Logistic Limited, in
pursuance to a tender issued by the Respondents. The lessees agreed to pay
for the two spaces each of 4 tons at that rate aggregating to Rs. 39,600/-
per 8 tons per day. The Appellant filed Writ Petition No. 27568 of 2000
before the High Court of Karnataka, challenging the impugned notice. The
Appellant is engaged in trading of grapes who contended that as a result of
the Respondents leasing out the FSLR in the Karnataka Express, the
Appellant was denied the facility of transporting grapes from Bangalore to
New Delhi at the rates specified in the Coaching Tariff no. 24 Part III
(Rates for Parcels & Luggage Traffic), which came into effect on 1.4.2000.
Another trader of grapes filed Writ Petition No. 37150 of 2000 before the
High Court of Karnataka on 27.11.2000 seeking to restrain the Respondent-
Railways from charging any tariff other than that specified in Coaching
Tariff No.24 Part III. The learned Single Judge by common Judgment dated
25.7.2001 allowed both the Writ Petitions and quashed the impugned
notification, holding that the awarding of contract of lease of FSLR and VP
is bad in law. Aggrieved by the decision of the learned Single Judge, the
Respondents preferred two appeals.
4 Before the Division Bench, the Respondents contended that the learned
Single Judge erred in holding that the authority of the Respondents to
lease the carrying capacity in the trains is only in accordance with
Section 30 and 32 of the Indian Railways Act, 1989 (for brevity the ‘Act’)
which, for convenience, are reproduced below:
30. (1) The Central Government may, from time to time, by general or
special order fix, for the carriage of passengers and goods, rates for the
whole or any part of the railway and different rates may be fixed for
different classes of goods and specify in such order the conditions subject
to which such rates shall apply.
(2) The Central Government may, by a like order, fix the rates of any other
charges incidental to or connected with such carriage including demurrage
and wharfage for the whole or any part of the railway and specify in the
order the conditions subject to which such rates shall apply.
31. The Central Government shall have power to—
(a) classify or reclassify any commodity for the purpose of determining the
rates to be charged for the carriage of such commodities; and
(b) increase or reduce the class rates and other charges.
32. Notwithstanding anything contained in this Chapter, a railway
administration may, in respect of the carriage of any commodity and subject
to such conditions as may be specified,—
(a) quote a station to station rate;
(b) increase or reduce or cancel, after due notice in the manner
determined by the Central Government, a station to station rate, not being
a station to station rate introduced in compliance with an order made by
the Tribunal;
(c) withdraw, alter or amend the conditions attached to a station to
station rate, other than conditions introduced in compliance with an order
made by the Tribunal; and
(d) charge any lump sum rate.
5 The Respondents contended that the learned Single Judge failed to
understand the objective and purpose with which the available parcel space
in FSLR and VP was being sought to be exploited. The Respondents stated
that it aimed to benefit by getting maximum rate without affecting the
interests of the general public, for whom there was still adequate
provision of space available in every train. The Respondents further stated
that in pursuance of an order of the High Court dated 28.1.2002, an
affidavit had been filed by the Respondents which would allay any
apprehension of the Appellant, with respect to it being inconvenienced in
transporting its commodities. The Respondents will not hesitate to consider
adding another wagon to meet the needs of the general public. Finally, the
Respondents contended that there was no express provision permitting them
to give the wagon on lease, however, au contraire, neither was there any
provision under the Act which prohibited the Respondents from doing so. The
Appellant while supporting the order of the learned Single Judge, placed
reliance on Section 70 and 71 of the Act, which is being provided for the
facility of reference.
70. A railway administration shall not make or give any undue or
unreasonable preference or advantage to, or in favour of, any particular
person or any particular description of traffic in the carriage of goods.
71. (1) The Central Government may, if it is of the opinion that it is
necessary in the public interest so to do, by general or special order,
direct any railway administration—
(a) to give special facilities for, or preference to, the carriage of such,
goods or class of goods consigned by or to the Central Government or the
Government of any State or of such other goods or class of goods;
(b) to carry any goods or class of goods by such route or routes and at
such rates;
(c) to restrict or refuse acceptance of such goods or class of goods at or
to such station for carriage, as may be specified in the order.
(2) Any order made under sub-section (1) shall cease to have effect after
the expiration of a period of one year from the date of such order, but
may, by a like order, be renewed from time to time for such period not
exceeding one year at a time as may be specified in the order.
(3) Notwithstanding anything contained in this Act, every railway
administration shall be bound to comply with any order given under sub-
section (1) and any action taken by a railway administration in pursuance
of any such order shall not be deemed to be a contravention of section 70.
6 The Appellant contended that Section 70 was an implied restriction on
the Respondents capacity to call for such tenders. The only exception to
Section 70 is Section 71, which can be exercised only on the discretion of
the Central Government, for the purpose of public interest. The Appellant
contended that by inviting such tenders, no public interest was being
served and instead has led to the creation of a monopoly in favour of one
person with respect to the mode of transportation, which in turn was
detrimental to public interest. Extending the line of argument on Section
71, the Appellant contended that the Central Government had not issued any
special or general order, enabling the Respondents to give special or
preferential facility in the carriage of goods to anyone who offers the
highest lump sum rate. The Appellant submitted that the content of the
affidavit filed by the Respondent ran counter to the impugned Notification.
As a result, the assurance sought to be given by means of an affidavit
appeared to be an imaginary one. Finally, the Appellant submitted that the
contractors are charging an exorbitant rate of Rs.8 per kg for transporting
the consignment, whereas the Railways were charging only Rs.2.38 per kg for
the transport of perishables from Bangalore to Delhi. This power to revise
the tariff rates was bestowed exclusively on the Central Government under
Section 32, and thus its delegation to a third party by entering into a
lease agreement is in contravention of the statutory provisions.
7 In its reply, the Respondents contended that Section 70 of the Act
stated that the Railway Administration shall not give any undue or
unreasonable preference. It was submitted that the Respondent-Railways, by
inviting tenders pursuant to a policy decision will not amount to giving
any undue or unreasonable preference to one competitor over another.
Further, it was submitted that even in the absence of Section 70, the
Railway Administration being an Authority postulated by Article 12 of the
Constitution, could not have discriminated between similarly placed
parties, as that would tantamount to a violation of Article 14 of the
Constitution.
8 The Division Bench of the High Court opined that the impugned
Notification was not issued under Section 30 and 31 of the Act, but instead
was a product of a policy decision of the Government of India which aimed
to augment the earnings of the Respondent-Railways by leasing the FSLR and
VP in different trains. The Respondent-Railways are run as a commercial
undertaking, and its administration cannot be prevented from taking steps
to increase its revenue, as long as they are not detrimental to the
interest of the general public. It was held that the action of inviting
tenders could not be quashed as being opposed to Section 30 and 31. The
High Court observed that to prove that Section 70 had been violated, the
Appellant had to establish that undue preference had been given to one over
another, and as the Appellant failed to provide any cogent evidence to that
effect, this contention was dismissed. The apprehension of the Appellant
was that due to the leasing out of space to a third party, there was less
than adequate space for the general public, and that, as a result they
would have no choice but to approach the third party and pay any rate that
he may quote. The High Court observed that this apprehension of the
Appellant had been allayed by the affidavit filed by the Respondents
wherein they had stated that if the need arises they would ordain more
space for the parcel service. Thus, the High Court allowed the appeals.
However, with the intention of safeguarding the interest of the general
public, it also issued directions to the Respondent to incorporate certain
Regulatory checks on the unbridled power of the lessee. The checks were
meant to be in the form of an upper limit on the tariff that could be
charged by the contractors for different trains. Aggrieved by the decision
of the High Court, the Appellant has filed the present appeal.
9 The arguments of the learned Counsel for the Appellant are fourfold.
Firstly, Babu Verghese v. Bar Council of Kerala, (1999) 3 SCC 422
reiterates that if the manner of taking a particular action is prescribed
under a statute, that action must be undertaken and performed in that
manner or not at all; as there is no provision under the statute to lease
out space to a third party, the Respondents are hit by the said principle.
Secondly, the decision of the Respondent-Railways to lease the parcel space
in favour of a particular individual amounted to an unreasonable preference
being given to that individual and therefore violated Section 70 (supra).
Thirdly, the learned counsel relied on the maxim delegatus non potest
delegare and submitted that under Sections 30 to 32, the power to fix the
tariff rate is conferred only on the Central Government and the Respondent-
Railways. Thus, by further delegating their authority, they violate the
established legal principle that a delegatee cannot sub-delegate. Finally,
the learned Counsel for the Appellant elaborated on the role of the
Railways as a social vehicle, by citing the case of Viklad Coal Merchant v.
Union of India, (1984) 1 SCC 619, the relevant paragraph reads thus:
13. Re Ground 1: Railway is a common carrier and being State owned it is
subject not only to the provisions of the Act but also the fundamental
rights guaranteed by Part III of the Constitution. However much before the
advent of the Constitution when different railways were owned by
incorporated companies, Section 28 of the Act precluded the different
railway administrations from granting undue preference to any particular
person or any particular traffic or to any particular railway
administration, or subject anyone to any undue or unreasonable prejudice or
disadvantage in the matter of transport of goods or passengers. Railway
being a State monopoly, to checkmate its monopolistic power in the larger
public interest it has to be subjected to regulatory measures.
Simultaneously it became necessary to arm Central Government with power to
direct railway administration to give preference in the matter of transport
of the goods of the Government, Central or State or specified goods to meet
the demands of various regions as well as needs of Government. Intention
was to classify Government in a class by itself for the purpose of Article.
14. To meet the challenge of Article 19(1)(g) the Central Government was
armed with power to accord priority in transport of goods in larger public
interest. Soon after the advent of the Constitution, to arm the Central
Government with requisite power to direct the railway administration to
give special facilities for or preference to the transport of any such
goods or class of goods consigned to the Central Government or to the
Government of any State or such other goods or class of goods as may be
specified in the order, Section 27-A was introduced in the Act which
enabled it by a general or special order to direct the railway
administration to grant special facilities for or preference to the
transport of goods. Such a general or special order can be issued by the
Central Government if in its opinion it is necessary in the public interest
to do so. Now indisputably the goods consigned to the Central Government or
to Government of any State must obviously have a priority over what we may
loosely describe as private transporters, because it is well-settled that
the Central or the State Government is in a class by itself. This view is
founded on the assumption that all activities of the State are in public
interest in the sense that they are either undertaken on behalf of the
public or that the loss or gain arising from them falls upon the public.
The goods consigned to the Central or the State Government are, unless
shown to the contrary necessarily to be used to carry on governmental
activity undertaken for the benefit of public or to subserve some public
interest and which may as well include the efficient administration of the
governmental agencies. Section 27-A also confers power to direct any
railway administration to give special facilities for or preference to the
transport of goods or a class of goods as may be specified in a general or
special order that may be issued in this behalf. The Central Government is
better equipped to know what class of goods are required to be sent to any
particular area expeditiously to meet some shortage, or for national
security or to meet an emergency or any natural or man-made catastrophe so
as to accord special treatment in the matter of transport. Section 28 can
be said to some extent to be a corollary to Section 27-A inasmuch as the
railway administration on its own is prohibited from giving undue or
unreasonable preference or advantage to, or in favour of, any particular
person or railway administration, or any particular description of traffic,
in any respect whatsoever, or subject any particular person or railway
administration or any particular description of traffic to any undue or
unreasonable prejudice or disadvantage in any respect whatsoever. To repeat
railway being a State monopoly undertaking, it had to be statutorily
controlled from abusing its monopolistic character by prohibiting it from
giving any undue or unreasonable preference or advantage or acting in any
manner which would evidence undue or unreasonable prejudice or disadvantage
in any respect whatsoever. Equality guaranteed by Article 14 is translated
into statutory provision in Section 28. A State monopoly like the railway
administration cannot be trusted to act fairly and that is the object
underlying Section 28. If everyone was to get equal facility for transport
of his goods by railway without anyone claiming priority or anyone having
power to grant preference or special facility, in an emergency this equal
opportunity would create a havoc. Therefore on the other hand, the Central
Government to meet the needs of the country arising in any eventuality can
give directions for giving special facilities for or preference to the
transport of goods or any class of goods. In the absence of power such as
conferred by Section 27-A, floods, droughts, national security
requirements, unscrupulous hoarders, artificial shortages, materials for
national projects in a country of the dimensions of India cannot be
effectively and adequately tackled. This is the genesis of the power
conferred by Section 27-A.
The judgment discusses the Indian Railways Act, 1890 in which, Sections 27
and 28 correspond to Section 70 and 71 of the present Act. To further
buttress his final submission on the role of the Railways, the learned
Counsel for the Appellant also cited P. Nalla Thampy Thera v. Union of
India, (1983) 4 SCC 598, the relevant paragraph has been provided below:
25. We have said earlier that the Railways are a public utility service run
on monopoly basis. Since it is a public utility, there is no justification
to run it merely as a commercial venture with a view to making profits. We
do not know — at any rate it does not fall for consideration here — if a
monopoly based public utility should ever be a commercial venture geared to
support the general revenue of the State but there is not an iota of
hesitation in us to say that the common man’s mode of transport closely
connected with the free play of his fundamental right should not be. We
agree that the Union Government should be free to collect the entire
operational cost which would include the interest on the capital outlay out
of the national exchequer. Small marginal profits cannot be ruled out. The
massive operation will require a margin of adjustment and, therefore,
marginal profits should be admissible.
10 Per contra, learned Senior Counsel for the Respondents contended that
the Appellant has only challenged the impugned Notification. However, the
impugned notification was only an extension of what was envisaged in the
policy of the Government, and that the Appellant erred by not challenging
the said policy decision of the Government. The learned Counsel relied on
Article 73 of the Constitution and submitted that the Central Government
had full power to deal with the property of the Respondent-Railways in any
manner it found appropriate or beneficial. Further, it was contended that
the onus to prove unreasonableness was on the Appellant. This contention
was supplemented with the case of DCM v. Union of India (1988) 1 SCC 86,
the relevant portion has been reproduced below:
12. The relevant provisions of the Railways Act, 1890, which have a
material bearing on the question are these:
Section 41 provides for filing complaints against Railway Administration.
The section provides as follows, so far as it is material:
“41. (1) Any complaint that a railway administration
(a) is contravening the provisions of Section 28 or
(b) is charging for the carriage of any commodity between two stations a
rate which is unreasonable, or
(c) * * *
may be made to the Tribunal and the Tribunal shall hear and decide any such
complaint in accordance with the provisions of this chapter.”
Section 28 provides:
28. A Railway administration shall not make or give any undue or
unreasonable preference or advantage to, or in favour of, any particular
person or railway administration, or any particular description of traffic,
in any respect whatsoever, or subject any particular person or railway
administration or any particular description of traffic to any undue or
unreasonable prejudice or disadvantage in any respect whatsoever.
13. The third question formulated by us relates to the contravention of
Section 28 of the Railways Act. The scope of this section has been
considered by this Court in Rajgarh Jute Mills Ltd. v. Eastern Railway.
There it was observed that a party who complains against the railway
administration that the provisions of Section 28 have been contravened must
establish that there has been preference between himself and his goods on
the one hand and his competitor and his goods on the other. Gajendragadkar,
J. (as he then was) observed:
“Section 28 is obviously based on the principle that the power derived from
the monopoly of railway carriage must be used in a fair and just manner in
respect of all persons and all descriptions of traffic passing over the
railway area. In other words, equal charges should normally be levied
against persons or goods of the same or similar kinds passing over the same
or similar area of the railway lines and under the same or similar
circumstances; but this rule does not mean that, if the railway
administration charges unequal rates in respect of the same or similar
class of goods travelling over the same or similar areas, the inequality of
rates necessarily attracts the provisions of Section 28. All cases of
unequal rates cannot necessarily be treated as cases of preference because
the very concept of preference postulates competition between the person or
traffic receiving preference and the person or traffic suffering prejudice
in consequence. It is only as between competitors in the same trade that a
complaint of preference can be made by one in reference to the other.”
14. In the light of these principles, the Tribunal considering the material
on record held that there is no evidence produced by the company to justify
any grievance under Section 28. We see no reason to disagree with this
conclusion. It is, in our opinion, perfectly justified. In fact Mr K.K.
Jain learned Counsel for the appellant also did not seriously dispute the
correctness of that finding recorded by the Tribunal.
15. We may now turn to the second question. Mr K.K. Jain urged that the
rate charged by the Railway Administration is per se unreasonable. Here
again the onus to prove the alleged unreasonableness of the freight rests
on the company. It is for the company to establish that the rate charged by
the Railway Administration for the carriage of Naptha is unreasonable. Of
course, this onus could be discharged by relying upon the material produced
by the Railways. Mr Jain, therefore, relied upon a statement Exhibit C-46
in support of his case. Exhibit C-46 is a statement of surplus “working
cost” in respect of carriage of Naptha from Bajuva to Dadhevi. It is, in
our opinion, not necessary to analyse the statement. Even assuming that the
Railways are earning some surplus income after deducting the operation cost
that by itself is no ground to hold that the freight charged is per se
unreasonable. It must be borne in mind that the Railways are run as a
commercial undertaking and at the same time it being an instrumentality of
the State, should serve the national interest as well. There is however, no
obligation on the Railways to pass on the extra amount realised by the
carriage of goods to customers. Nor it is necessary to share the profit
with the commuters. As Mr Barua learned Counsel for the Railways said that
in the case of commodities of national needs such as foodgrains, crude oil
etc., it may be necessary for the Railways to charge below the operation
cost. To offset such a loss the Railways may charge higher freight for
certain other classified commodities. Therefore, it seems to us, that the
cost of operation cannot by itself be the basis for judging the
reasonableness of the rate charged.
11 The Learned Senior Counsel submitted that the Appellant had failed to
furnish any evidence to justify his claim that the Respondents had acted in
an unreasonable manner by favouring one person over another.
12 We have carefully considered all the arguments addressed before us.
We do not find any force in the contention of the Appellant on the
applicability of the Taylor vs. Taylor principle applied by this Court in
most recently in Hussein Ghadially vs. State of Gujarat (2014) 8 SCC 425.
In the instant case the statute does not prescribe any particular manner in
which the wagons are to be leased. On the issue of Section 70 and 71, we
are in agreement with the contention of the Respondent, that the onus to
prove that there has been a violation of the said section is on the
Appellant, who failed to adduce any evidence to establish that the
Respondent – Railways had given undue preference in favour of any person.
This is especially so in light of the fact that the lease was given after
an auction process. The Division Bench directed the Railway Administration
that when calling for tenders, it should fix the outer limit or the upper
limit of rates chargeable by the contractor for different trains. This
ensures a regulatory check upon the unbridled power of the contractor in
fixing the tariff rates while accepting the parcel service of the third
parties. This direction has attained finality so far as the Respondents
are concerned inasmuch as they have failed to challenge them by filing an
appeal. As far back as on 5.8.2015 we had brought this state of affairs
to the notice of the learned Senior Counsel for the Respondents. A
challenge to this direction could have been made in any legally known
manner to rectify the position. This is sought to be salvaged by learned
Senior Counsel by relying on certain observations of a coordinate Bench in
Nalakath Sainuddin v. Koorikadan Sulaiman 2002 (6) SCC 1. However, the
question which has to be addressed by us is whether or not the Respondent
is “a person aggrieved” by the impugned Judgment. In our opinion, we are
not confronted by multiple possibilities on this aspect other than that the
Respondents are persons aggrieved in view of the explicit direction of the
Division Bench in the impugned Judgment extracted above. What we have
before us is not an instance of the Respondents earning an entirely
favourable Judgment, even though some of the arguments proffered by them
may not have found favour with the Court. The settled position in law as
is evident from a proper perusal of Nalakath is that even though several
points pressed by the victor of a litigation may have been viewed with
favour, and the Respondent may have succeeded only one or some, if the
matter is taken by the vanquished party to the portals of a superior forum,
the victor may still press all the points argued by it earlier. The
Judgments of the High Courts which have been analysed by this Court in
Nalakath do not go to the extent, as they clearly cannot, that a critical
direction which is unfavourable to the Respondent can be assailed even in
the absence of filing a cross or a separate appeal. A holistic reading of
the impugned Judgment discloses that this direction was not given en
passant or casually in that in the penultimate paragraph of the impugned
Judgment the Division Bench emphasised that although they were allowing two
writ appeals, they were at pains to reiterate that the success of the
Respondents was subject to compliance with the aforementioned directions
which we entirely affirm.
13 Instead of complying with the directions a futile effort has been
made by the Respondents to dilute them, nay render nugatory by a side wind
in terms of the additional affidavit dated 3.9.2015 a perusal of which
makes it abundantly clear that it should have assailed the directions in
the impugned Judgment. These asseverations, inter alia, are as follows:
“That it is respectfully submitted that fixing of outer/upper limit cannot
be done by Railways for the reasons listed as follows:
The contracts for leasing parcel space of the Brakevans is an activity
which comes under earnings contract in which price is not regulated by
Railways.
The parcel leasing policy is introduced to maximize revenue through
parcel traffic and to avoid underutilization of Parcel space available in
each train.
The leaseholder takes the parcel space of the Brakevans after going through
the competitive bids and he also incurs expenses towards ancillary services
provided to his customers.
The leaseholder cannot charge exorbitant rates because there are
alternative trains for the public in which in which parcel space is held by
other lease holders as well as Railway. The customers can move their cargo
either by road or by air. Thus in effect, these rates are actually market
determined rates and no leaseholder can increase it beyond a point that
traffic can bear in view of presence of other competing modes i.e. trucks
flights and other trains wherein both leased and departmental parcel
portions are available.
The leaseholder takes the responsibility for safe custody of goods
entrusted to him and compensates for any loss or damages on his own during
transit.
If the charges levied by the leaseholder are high then there is every
chance for the customers to move the traffic by road or air. Hence, the
leaseholder is constrained to keep the rates low after ensuring his
marginal profit.
Since introduction of Parcel Leasing Policy in the year 1991 and till date,
except for this petition there is no other case pending before any of the
Hon’ble Court with regard to fixation of outer/upper limit.
Parcel Leasing Policy is well patronized among the merchant community and
running successfully for the last 25 years all over India and all the
parties viz., the merchant community, leaseholder and Railways are
benefited by this scheme.”
14 The Appeal before us can be disposed of by us without any further
complaint or grievance by the Appellant, by directing the Respondents to
fix the outer or upper limit of rates chargeable by contractors for
different trains. We say this for the simple reason that the Respondents
are bound to follow and implement the ethos and parameters set by the
Railways Act. The learned Single Judge had followed and applied decisions
of this Court when called upon to interpret different sections of the Act.
Over a quarter of a century ago it has been emphasised that the Railways
enjoy a monopolistic character, the justification of corollary of which
would be the fulfilment and attainment of public interest. The Railway
Budget, presented each year, is studied threadbare with special interest
and emphasis on what the Central Government hopes to achieve in the coming
year, and the most prominent and predominant feature whereof is the
advancement of social interests. That the intendment behind a statue can
be metamorphosed or diluted by Parliament but not by a sub-delegate has
been unequivocally reiterated by this Court. Avinder Singh v. State of
Punjab 1979 (1) SCC 137 enunciates that the Legislature cannot efface
itself; it cannot delegate the plenary or essential legislative function;
and even if there is delegation, the delegate must function under its
supervision otherwise “if the delegate is free to switch policy it may be
usurpation of legislative power itself”. In Agricultural Market Committee
v. Shalimar Chemical Works Ltd. (1997) 5 SCC 516 we have restated that “the
legislature cannot abdicate essential legislative function in favour of
another. Power to make subsidiary legislation may be entrusted by the
legislature to another body of its choice but the legislature should,
before delegating, enunciate either expressly or by implication, the policy
and the principles for the guidance of the delegates”. In applying this
dicta, it seems to us that if a shift from the Railways being a social
vehicle to it being essentially a milch cow towards was intended, that
mutation was only within the province of Parliament. This is especially so
keeping in perspective the observations made by this Court in P. Nalla
Thampy Thera and Viklad Coal Merchant. In saying so, we do not intend,
even a whit, to interfere with the right of the executive to formulate
policy, but while doing so the Rubicon dividing the power of the principal
and the delegate or sub-delegatee should not be ignored.
15 Railway tariff no doubt has to be realistic and keep pace with time
and if the State so perceives, need not be a losing financial proposition.
While it may be both pragmatic and sagacious to auction FSLR & VP it can be
done with an objective of gathering the optimum revenue. It has not been
contended before us nor is any material available disclosing that the
tariff itself has been increased by adherence to the statutory procedure.
16 We are, however, unable to accept the argument articulated on behalf
of the Appellant that the Respondents are not entitled or empowered to
auction the space for a particular period. It may do so provided the
auction contractor adheres to the prescribed tariff. We permit a period of
three months to the Respondents to comply with the impugned Judgment of the
Division Bench.
17 The Appeal is accordingly disposed of in these terms. The
Respondents are directed to ensure that the successful tenderer, in our
case, Respondent No.4, does not charge carriage prices in excess of those
prescribed by the Respondents in Coaching Tariff No. 24 Part III. It will
be seen that this direction is not drastically different to that contained
in the impugned Judgment since the fixation of “the outer limit or the
upper limit of rates chargeable by the contractor” would have been carried
out by complying with a procedure envisaged by law. The Judgment of the
Division Bench is upheld, but to this extent only.
…………………………J
[VIKRAMAJIT SEN]
…………………………J
[SHIVA KIRTI SINGH]
New Delhi;
December 29, 2015.
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