TMI Blog1987 (10) TMI 369X X X X Extracts X X X X X X X X Extracts X X X X ..... actory is Dadhevi in Rajasthan. The distance between Bajuva and Dadhevi is about 520 kms. For transportation, the Naptha has been classified by the Railway under Clause 110-B of the tariff. Before the actual setting up of the factory, the Company, by its letter dated September 5, 1966 requested the Railway Board for a concessional frieght rate for the carriage of Naptha. It requested the Railway Board for fixed Station to Station rate equivalent to classification 62.5-B. That would have meant reduction of about 43% in the normal tariff under clause 110-B. In that letter it was pointed out that if such concessional rate was not fixed, the Company would be put to disadvantageous position as against the other factories located at ports or near the refineries. The Railway Board by its letter Ex. C5 dated November 5, 1966 agreed to quote station to station rate equal to 85-B (Special). In the said letter it was also stated that as the special rate was being quoted ahead of the actual setting up of the factory the freight rate need to be reviewed when the traffic actually begins to move. When the factory was almost ready for operation the company wrote a letter dated June 5, 1967 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e offered by the Railway Board. There was no scope for any such understanding since the Railway reserved its right to determine the correct rate when the traffic started moving. It was later found that the chemicals have been advisedly given low class rate with a view to encourage fertilizer industry and no further concession was necessary to the company. It was further stated that the question of any undue prejudice of undue favour to any party does not arise when charging the respective class rates for specified commodities. On these pleadings the Tribunal considered among others, the following issues: 1. Whether freight charges, now charged, for the carriage of a Company's traffic in Neptha from Bajuva to Dadhevi station are unreasonable under Section 41(1) of the Indian Railways Act, 1890? 2. Whether the Railways are contravening Section 28 of the Indian Railways Act in charging the respective class rates for commodities naptha, chemical manures, divisions A B, Urea and Gypsum? 3. Whether the Railways are estopped by the doctrine of promissory estoppel in view of the assurance given in the letter Ex. C? The Tribunal determined all these questions against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been considered by this Court in Rajgarh Jute Mills Ltd v Eastern Railway and another, [ 1959] SCR 236 at 241. 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 pas sing 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 un-equal rates in respect of the same or similar class of goods travelling over the same or similar areas, the inequality of rates necessarily attract the provisions of S. 28. All cases of unequal rates cannot necessarily be treated a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis for judging the reasonableness of the rate changed. It was next urged by Mr. K.K. Jain that the crude oil and Naptha are considered as comparable commodities for the purpose of carriage. The crude oil carries the rate equal to class 85-B(old), 85(new) while Naptha carries rate 110- B(old), 105-B(new). In terms of amounts it works out at ₹ 59.45 for crude oil as against ₹ 73.13 for Naptha. The counsel urged that there is no justification shown for this wide disparity in the first place. Secondly, the freight rate of crude oil was the rate offered to the company under Ex. CS and the denial of that rate without any good reason is arbitrary. This argument though attractive does not carry conviction if one analyses the evidence on record. Crude oil has been clubbed with Glycerine, fruit juices and syrups, fibres, flax etc. Naptha has been clubbed with Aviation Spirit, Petrol, Petroleum, Ether and solvent oil. From the evidence produced by the Railways Naptha has been classified as a dangerous commodity with the flash point below 24.4 C spontaneously. The crude oil has no such dangerous characteristics. It is also on record that Naptha requires special type of tank wag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty is the only indispensable requirement of the doctrine. It is not necessary to prove further any damage, detriment or prejudice to the party asserting the estoppel. The Court, however, would compel the opposite party to adhere to the representation acted upon or abstained from acting. The entire doctrine proceeds on the promise that it is reliance based and nothing more. This principle would be clear if we study the cases in which the doctrine has been applied even since it was burst out into sudden blaze in 1946. Lord Denning in Central London Properties Ltd v High Trees House Ltd, 11947] K.B. 130 sitting as a trial judge, asserted: A promise intended to be binding, intended to be acted upon, and in fact acted upon is binding ....... The history of the High Trees principle is too well known to bear repetition. It will be enough to make the following points. The promisor is bound because he led the promisee to commit himself to change the position. If the promisee has acted upon the promise, the promisor is. precluded from receding his promise. No further detriment to the promisee upon his temporal interests need be established. This position has been made clear by Lord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lf and the opposite party, the consequence would be to make his original act or failure to act a source of prejudice. This passage was referred to, with approval, by Lord Denning in Central Newbury Car Auction Ltd v Unity Finance Ltd, [1956] 3 All E.R. 905 at 909. The said passage has also been quoted, with approval, by Bhagwati, J. (as he then was) in Motilal Padampat Sugar Mills Co A Ltd v state of U.P. Ors.,[ 1979]2 SCR 641 at p. 695= 1979(2)SCC 409. The learned Judge then said: We do not think that in order to invoke the doctrine of promissory estoppel it is necessary for the promisee to show that he suffered detriment as a result of acting in reliance on the promise. But we may make it clear that if by detriment we mean injustice to the promisee which could result if the promisor were to recede from his promise then detriment would certainly come in as a necessary ingredient. The detriment in such a case is not some prejudice suffered by the promisee by acting on the promise, but the prejudice which would be caused to the promisee, if the promisor were allowed to go back on the promise. The view taken in Motilal Padmapat Sugar Mills case (supra) has been reitera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fully refer to the following passage from Halsbury's Laws of England, Halsbury's Laws of England 4th Edn. Vol. 16 p. 1071 para 1595. 1595. Representation must be unambiguous To found an estoppel a representation must be clear and unambiguous, not necessarily susceptible of only one interpretation, but such as will reasonably be understood by the person to whom it is made in the sense contended for, and for this purpose the whole of the representation must be looked at. This is merely an application of the old maxim applicable to all estoppels, that they must be certain to every intent The question now is whether the assurance given by the Railway Board in the letter Ex.C5 was clear and unqualified. But unfortunately, it is not so. It was subject to review to be undertaken when the company starts moving the raw material. Ex. C5 reads:- New Delhi I, Dated S Nov., 1966 Dear Sir, Sub: Integrated Fertilizer-PVC project at Kota, Rajasthan Rail movement of Naptha. Ref: Your letter No. SFC/Gen-72 dated 5.9.1966 I am directed to state that the Railway Board agree to quote a special rate equal o class 85-B (Special) CC: K for transport of Naptha in train loads from Bomb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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