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1979 DIGILAW 514 (ALL)

Mahabir Jute Mills Ltd. , Sahjanwa, Gorakhpur v. Union of India

1979-04-25

MURLIDHAR, N.D.OJHA

body1979
JUDGMENT Murlidhar, J. - This writ petition by the Mahabir Jute Mills Ltd., Sahjanwa, district Gorakhpur, seeks two reliefs. The first and the main relief is quashing of the orders dated 29-9-1975 (passed by the Railway Rates Tribunal, Madras, dated 22-10-1975 (passed by the General Manager, Commercial, North Eastern Railway, Gorakhpur), dated 9-10-1975 (passed by the Chief Commercial Superintendent, North-Frontier Railway, Pandu) and the consequential order dated 30-10-1975 (passed by the Station Master, Sahjanwa, Gorakhpur) by which the concessional rates allowed to the petitioner regarding jute traffic from certain stations in Bihar and Assam were withdrawn. The second prayer is for a direction requiring the Union of India and the Railway Administrations concerned to refund the excess charges in pursuance of the above orders. 2. The brief facts are these: The petitioner company is one of the three Jute Mills situate in Uttar Pradesh, the other two being at Kanpur. Jute industry started in Uttar Pradesh in 1931 with the opening of the J. K. Jute Mills. The petitioner mill was incorporated in 1935. As Uttar Pradesh produced little jute these mills have been importing a good part of their supplies through rail from Bihar and Assam. Since the very inception the Railway had extended concessional station to station rates to these mills. Since 1-7-1975 a substantial reduction of these concessions was proposed by the aforesaid Railways. The J. K. Jute Mills, Kanpur, filed a complaint under Sec. 41. Indian Railways Act (hereinafter referred to as the Act) before the Railway Rates Tribunal (hereinafter referred to as the Tribunal) against the proposed partial withdrawal of concessional rates and the Tribunal per its order dated 29-7-1956 (hereinafter referred to as the 1956 order) decided that station-to-station rates should be granted from only 22 of Bihar stations to Kanpur at 30 per cent below the class rates applicable, but terminal and transhipment charges would be extra. Against this decision the J. K. Jute Mills filed a writ petition in this court. The petitioner mill also on 2-10-1957 filed (sic) a Tribunal claiming that the withdrawal of concessional rates for the jute traffic to Sahjanwa with effect from 1-7-1955 was unreasonable. On 14-3-1961, the matter was compromised between the petitioner mill and the Union of India representing the two Railway Administrations concerned. The petitioner mill also on 2-10-1957 filed (sic) a Tribunal claiming that the withdrawal of concessional rates for the jute traffic to Sahjanwa with effect from 1-7-1955 was unreasonable. On 14-3-1961, the matter was compromised between the petitioner mill and the Union of India representing the two Railway Administrations concerned. A copy of this compromise is Annexure 2 to the petition but since the whole of it is pertinent for the disposal of this petition it is quoted below: "Terms of compromise between (1) Sri P. D. Maskara, -representing the Mahabir Jute Mills Ltd., Sahjanwa, on the one hand, hereinafter called the Firm, and (2) The President of India acting through the Chief Commercial Superintendent, North-Eastern Railway, Gorakhpur, and the Chief Traffic Superintendent, North-East Frontier Railway, Pandu, on the other hand, hereinafter called the Railway Administrations, in respect of Complaint No. 4 of 1957 before the Railway Rates Tribunal at Madras in re; The Mahabir Jute Mills Ltd., Sahjanwa v. The Union of India owning and representing. The North-Eastern Railway and 2. 'Hie North-East Frontier Railway. 1. In view of this settlement complaint No. 4 of 1957 pending before the Railway Rates Tribunal at Madras shall be withdrawn by the firm. 2. Special rates for jute to Sahjanwa will be quoted by,the Railway Administrations from the stations in the Kathihar, area from which special rates to Kanpur are in force, provided the firm had asked for special rates from these stations in their aforesaid complaint to the tribunal. These special rates will be on the same basis of reduction as is being applied in the case of special rates to Kanpur, i.e. 30% reduction in the Tariff rates. These special rates will take effect from 1st July, 1960. 3. As for bookings made during the earlier periods, the difference between the freight charges due at the normal tariff rates, or the freight actually collected, if it was less from the firm in respect of Jute traffic to Sahjanwa, and the freight payable at the special rates on the same basis as quoted' for Kanpur, will be worked out for the bookings from 2nd October, 1957 (the date of filing of the complaint before the Railway Rates Tribunal) to 30th June 1960, and, two-thirds of the difference will be refunded to the firm by the Railway Administrations. 4. 4. In addition to the special rates from stations referred to in item (2) above, an additional special rate for jute will also be quoted by the Railway Administrations with effect from 1st July, 1960, from Baghdogra, a station situated near Silliguri. The basis of this special rate will, however, be 25% less than the Tariff rate. Refunds on past bookings, as in the case of traffic from other stations vide item (3) above, will also be allowed by the Railway Administrations to the firm in respect of traffic from Baghdogra. 5. If there is any change in the basis of the special rates quoted by the Railway Administrations to Kanpur in future. the rates to Sahjanwa will also be altered by the Railway Administrations accordingly. 6. If any change in the basis of the rates to Kanpur is effected by the Railway Administrations with retrospective effect based on the case filed by J. K. Jute Mills (i.e. by way of reduction in the weight condition etc.) in the Allahabad High Court and, if any additional refund becomes due from the Railway Administrations to the firm on that "basts in respect of bookings from 2nd October, 1957 to 30th June 1960, two-thirds of such an amount will only be refundable. From 1st July 1960 and onwards, the full refund is to be made on that basis. 7. The aforesaid terms of compromise between the parties have been arrived at specifically subject to the condition that these will come into force only after the firm have withdrawn their aforesaid complaint at present pending before the Railway Rates Tribunal at Madras. In withdrawing this complaint, the parties will bear their own costs. For: The Mahabir Jute Mills Ltd. Sahjanwa. Sd/- Illegible Sd/- Illegible 14-3-1961, Chief Commercial Supdt., North-Eastern Railway. Chief Traffic Supdt., North-East Frontier Railway." Under this settlement the Railways granted and continued granting concessional rates for Sahjanwa from the stations mentioned in the compromise on the same lines as allowed by the Tribunal for Kanpur per its 1956 order. In 1974, however, the Railway Administrations moved under Section 41-A of the Act for the revision of rates granted to J. K. Jute Mills, Kanpur. The Tribunal per its order dated 29-9-1975 (Annexure 6 to the petition) allowed this complaint and revoked its earlier order dated 29-7-1956. In 1974, however, the Railway Administrations moved under Section 41-A of the Act for the revision of rates granted to J. K. Jute Mills, Kanpur. The Tribunal per its order dated 29-9-1975 (Annexure 6 to the petition) allowed this complaint and revoked its earlier order dated 29-7-1956. Apparently in view of the above quoted settlement under which the jute traffic (tariff) rate for Sahjanwa was in the matter of concession to follow the rate to J. K. Jute Mills, Kanpur, the two Railway Administrations issued the impugned orders withdrawing the concession to the petitioner also with effect from 29-9-1975, the date of the Tribunals order in the J. K. Jute Mills case. It is to be noted that the orders withdrawing the concessional rates to Sahjanwa were issued by the two Railway Administrations on 9-10-1975 and 22-10-1975, but were to have retrospective effect with effect from 29-9-1975. 3. The petitioners attack on the Tribunals order dated 29-9-1975 can be disposed of briefly. The petitioner was not a party to the proceedings under Section 41-A of the Act by the Railway Administrations before the Tribunal in which that order was passed. The petitioner was also not directly concerned with the rates for Kanpur. It never applied for being impleaded as a party to those proceedings under Rule 18 of the Railway Rates Tribunal Rules, 1959. Under Rule 19 (3) of those Rules a public notice of the proceedings before the Tribunal had been duly published. The object of this is to enable any person interested to intervene under Rule 32 or apply for being made a party. The petitioner never chose to intervene. Learned counsel for the petitioner has referred to Rule 11 under which a complaint under Section 41 is contemplated to have respondents other than the Railway Administrations also in certain cases and it is provided that the complaint in such cases shall set forth the grounds for impleading them. This rule runs as follows: - "11 (1). A complaint under Section 41 (1) shall be addressed to the Tribunal and shall be in writing signed and verified. It shall set out the name, description, and full address of the complainant and, if there be a pleader or representative duly authorised in writing acting for the complainant in the matter, his name and full address shall also be stated. It shall set out the name, description, and full address of the complainant and, if there be a pleader or representative duly authorised in writing acting for the complainant in the matter, his name and full address shall also be stated. (2) The complaint shall contain a clear and concise statement of facts, the grounds of complaint, the relief or remedy which the complainant claims and, where a person other than a Railway Administration is arrayed as respondent, it shall set forth the grounds for impleading him." Since no separate procedure is prescribed for the Railway Administrations complaint under Section 41-A, it may be taken that the procedure prescribed for complaint under Section 41 would also mutatis mutandis apply to proceedings under Section 41-A. The argument is that the Railway Administrations could have and should have impleaded the petitioner as a respondent in the complaint as a person interested under Rule 11 because they were fully aware that the petitioner was to be vitally affected by the proceedings under Section 41-A and was, therefore, interested in the dispute regarding concessional rates to Kanpur. It has been urged that omission to do this vitiates the order. There is no force in this submission either. To implead a person interested under R. 11 is an optional matter with the complainant and considering the settlement with the petitioner it cannot be said that the Railway Administrations must have impleaded the petitioner in the complaint under Section' 41-A regarding Kanpur rates with which the petitioner had no direct concern. Therefore, that decision cannot be attacked on the ground that the petitioner was not impleaded as a party to that case. In short the petitioners attack on the order dated 29-9-1975 fails on the simple ground that it had not been a party to those proceedings and it not being directly concerned with the rate dealt with by them, has no standing to challenge that order. 4. As regards the consequential orders passed by the Railway Administrations preliminary ground may be cleared by stating the legal position. Under Section 46 of the Act the Railway Administration has a right not only to quote a new station-to-station rate but also to increase, reduce or cancel it subject to certain conditions. This section runs as follows: - "46. 4. As regards the consequential orders passed by the Railway Administrations preliminary ground may be cleared by stating the legal position. Under Section 46 of the Act the Railway Administration has a right not only to quote a new station-to-station rate but also to increase, reduce or cancel it subject to certain conditions. This section runs as follows: - "46. Alteration and cancellation of certain station to station rates - Notwithstanding anything contained in this Chapter, a railway administration may, in respect of the carriage of any merchandise by goods train, - (i) quote a new station-to-station rate or; (ii) increase or reduce or cancel after due notice in the manner prescribed by the Central Government an existing station-to-station rate, not being a station-to-station rate introduced in compliance with an order made by the Tribunal; or (iv) 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." It will be noted that the power to vary the station-to-station rate is available to the Railway Administrations only where the rate has been introduced by the Railway itself and not in case such rate has been introduced under the orders of the Tribunal. The orders of the Tribunal in the matter of rate come under Section 41 which confers a right to make a complaint to the Tribunal inter alia on the ground that the Railway Administration was charging for the carriage of any commodity between two stations a rate which was unreasonable or was levying any other charge which was unreasonable. Such a complaint has to be decided by the Tribunal in accordance with the provisions of the Act. The legal position, therefore, is that in the matter of rates if at any stage the Tribunal has intervened and the rates are the result of Tribunals order, variation can be made by the Tribunal alone. Even the Railway Administration has to seek variation by moving the Tribunal under Sec. 41-A. It will be noted that in accordance with this legal position since the earlier concession enjoyed by J. K. Jute Mills was withdrawn by the Railway Administrations, the J. K. Jute Mills filed a complaint under Section 41 before the Tribunal and secured the 1956 order. The Railway Administration then filed the 1974 complaint under Section 41-A of the Act and got the concession for Kanpur revoked. The Railway Administration then filed the 1974 complaint under Section 41-A of the Act and got the concession for Kanpur revoked. Section 41-A had to be resorted to because the rates under the 1956 order of the Tribunal could not be varied by the Railway Administration under Section 46 of the Act. 5. The concessional rate to Sahjanwa under the compromise earlier quoted was, however, introduced by the Railway Administrations themselves and not under any order of Tribunal and even though this rate followed the Tribunals 1956 order that was only an incidental consideration. The concession itself was granted by the Railway Administrations by virtue of the power they had under Section 46. In this respect there can be no distinction between the concessional rates from Bihar stations from which concession had been granted to Kanpur under the 1956 order and Baghdogra on the North Frontier Railway which had no concessional rate for Kanpur under the 1956 order. The 1956 order of the Tribunal weighed with the Railway Administrations in granting concession under the compromise but the grant was by the Railway Administrations and not by the Tribunal. Therefore, the Railway Administrations had power under Section 46 to vary the same. It has, however, been urged that the variation is illegal be-, cause the essential condition of notice for exercise of the power under Section 46 has not been fulfilled. Learned counsel for the petitioner has contended that the words 'increase or reduce or cancel after due notice in the manner prescribed by the Central Government means that prior notice of the proposed variation is a necessary condition for the exercise of that power. Further that since in this case admittedly no such notice had been given the orders of variation of the station-to-station rate introduced by the Railway Administrations under the settlement are bad and liable to be struck down. 6. On behalf of the respondents the reply is that Section 46 (ii), does not require a notice to show cause against the proposed variation and speaks of only a prior notice of the actual variation in the manner prescribed by the Central Government. It has been further contended that the Rules prescribed by the Central Government are found in Conference Rules, Part II, which are in force from 1st March, 1972. It has been further contended that the Rules prescribed by the Central Government are found in Conference Rules, Part II, which are in force from 1st March, 1972. Chapter IV of these Rules relates to quotation of Rates, Fares etc., and paras 403.1, 403.2, 403.3, 405.1 and 405.2 deal with variation of rates. For facility of reference they are quoted below: - "403.1. Advices of changes in rates, fares, rules etc. - Advice of all changes in rates, fares, classifications, rebates and conditions shall be issued as noted below and the following headings shall be adopted: For local booking advices only - "Local Rate Advice". For through booking Advices only - "Through Rate Circular." Local Rate Advices (to contain notifications affecting local traffic only) to be issued on the 15th of each month. Through Rate Circulars (to contain notifications affecting through traffic only) to be issued on the 1st of each month. The only exception to this is the issue of Special Through Rate Circulars concerning such instances as quotation of famine fodder rates, concessions for exhibitions, the opening of new lines or similar cases of an unusually urgent nature." "403.2. Each set of advices shall be serially numbered during each year and a nil form should be sent when no alteration is proposed." "403.3. Each notification in a Rates Advice or Circular should be sufficiently complete in itself to avoid as far as possible, the necessity for referring to previous rate Advice or Circulars." "405.1, Notice to public - No enhancement of rates payable by the public should be made until after 14 days previous notice has been given." "405.2. No reduction in rates in either local or through booking shall be made unless seven days notice is given to the public, through the medium of the press wherever possible except when reductions are necessary with retrospective effect." Note: - In Rule 405.1 the period of 14 days was substituted for the former period of 3 weeks vide Railway Boards Notification No. TCR/1078/74/17 dated 14-8-1974. 7. We cannot agree that the notice required by Section 46 (ii) is a notice before the enhancement of rate. The Railway Administration has been given n peremptory power to revise rates. No enquiry of any kind is provided for by the statute before introducing or varying a station to station rate and no procedure is laid down for fixation of a new rate. The Railway Administration has been given n peremptory power to revise rates. No enquiry of any kind is provided for by the statute before introducing or varying a station to station rate and no procedure is laid down for fixation of a new rate. Any party aggrieved by the rate fixed by the Railway Administration has an elaborate remedy under Section 41 of the Act. In this situation it is not possible to imply the requirement of an opportunity to show cause against a proposed rate on the principles of natural justice in the power to cancel or vary the existing station to station rate conferred by Section 46. The words 'after due notice in the manner prescribed by the Central Government, therefore, mean neither more nor less than that the nature and the manner of notice must be found from the rules framed by the Government. Therefore, Rule 405.1 alone will determine the nature of notice. This rule merely says that enhancement should not be made 'until after 14 days previous notice has been given. The plain meaning of this is that new rates should not be enforced until after the expiry of 14 days of announcement. This interval seems to have been provided for with a view to minimise the dislocation caused by a sudden change to arrangements that may have been entered into on the assumption of the previous rates continuing. Thus the only requirement emerging is that enforcement of new rate can be made only after 14 days of enhancement. It follows that if there is an order of immediate enforcement it will be invalid during this period of 14 days and will take effect only after the expiry of 14 days. It is also clear that on the language of Section 46 and Rule 405.1 aforesaid, there can be no question of any retrospective enhancement of the rate and, therefore, this part of the order 1 is also clearly contrary to law. 8. With regard to the notice requirement learned counsel for the respondents tried to urge the plea of waiver on the basis of the earlier quoted settlement. 8. With regard to the notice requirement learned counsel for the respondents tried to urge the plea of waiver on the basis of the earlier quoted settlement. It was urged that in the package deal of the compromise in which the Railway Administration gave the petitioner a substantial concession in Sahjanwa rates the petitioner must be presumed to have knowingly agreed that on any change of the special rates to Kanpur 'the rates to Sahjanwa will also be altered by the Railway Administrations accordingly, and this stipulation by the petitioner was tantamount to a waiver of any notice to which the statute in the ordinary course may have entitled it. Reliance was placed on A. L. Vellayan Chettiar v. Government of Madras, AIR 1947 PC 197 : (1947 All LJ 576) where it was held that there could be a waiver of a right to notice under Section 80. C.P.C. on the principle that the statutory conditions could be waived if the same were inserted by the legislature for the benefit or security of the parties themselves and no public interest was involved. Certain observations to the same effect in Basheshar Nath v. Income-tax Commr. ( AIR 1959 SC 149 ) and Dhirendra Nath v. Sudhir Chandra ( AIR 1964 SC 1300 ) were also referred to. We are of the opinion that this point might have required consideration if it was found that Section 46 of the Act read with the relevant rules required notice of the proposed changes before exercise of the power to vary the rate. But since we have found this not to be the case it is not necessary to go into the question. So far as our finding of the changes in rates being effective only 14 days after their announcement is concerned, we are unable to see any force in the plea of waiver. After all clause 5 of the compromise states merely that the rates to Sahjanwa will also be altered by the Railway Administrations accordingly. This clause does not specifically say that the corresponding change to Sahjanwa rate will also operate from the same date as the change in Kanpur rate. Therefore, this clause is quite consistent with the interpretation that Sahjanwa rates will also be altered to follow the Kanpur rates in the manner provided by law. This clause does not specifically say that the corresponding change to Sahjanwa rate will also operate from the same date as the change in Kanpur rate. Therefore, this clause is quite consistent with the interpretation that Sahjanwa rates will also be altered to follow the Kanpur rates in the manner provided by law. This means that if the was requires a period before enforcement that requirement has to be complied with. The agreement does not in our opinion amount to a waiver of this notice period of 14 days. 9. On the above findings the plea for refund of excess charge can succeed only with regard to the period 29th September, 1975 to 23rd October, 1975 so far as North Frontier Railways is concerned (because the instructions for withdrawal of concession from stations or this Railway were issued on 9-10-1975 vide annexure 4 to the petition). So far as the North Eastern Railway is concerned this period would be 29th September 1975 to 5th November 1975 because a reading of through Rates Circular No. 10 of 1975, which was shown to us on behalf of the respondents, and annexure 3 to the petition show that such instructions were for the first time issued by this Railway on 22-10-1975; although annexure 3 is dated 30-10-1975, it refers to the earlier instructions .of 22-10-1975. Normally a suit would be the proper remedy for claiming any refund, but in the appropriate cases an order for refund can be made in a petition under Article 226 of the Constitution against the State or against an officer of the State to enforce a statutory obligation vide Burmah Construction Co. v. State of Orissa ( AIR 1962 SC 1320 ). In our opinion the present is a fit case for issue of such a direction. 10. In the result, the petition is partly allowed only to the extent that the orders of the North Frontier Railway and North Eastern Railway regarding withdrawal of concessional rates to Sahjanwa for the periods 29-9-1975 to 23-10-1975 and 29-9-1975 to 5-11-1975 respectively are quashed, but with regard to the subsequent period the writ petition is dismissed. The Railway Administrations are also directed to refund the excess amount if any over the former concessional rates charged from the petitioner during the above respective periods as a consequence of the orders for withdrawal of concessional rates to the petitioner. The Railway Administrations are also directed to refund the excess amount if any over the former concessional rates charged from the petitioner during the above respective periods as a consequence of the orders for withdrawal of concessional rates to the petitioner. The Railway Administrations will be entitled to recover the amount due to them from the petitioner in the light of the above order from the bank guarantee furnished by the petitioner in pursuance of the interim order dated 8-1-1976 confirmed on 4-10-1976. This shall be without prejudice to any other mode of recovery admissible under the law. Parties shall, however, bear their own costs.