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TMI Blog2015 (12) TMI 1697X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... murrage and wharf age 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 FS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med 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 tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port 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 sub serve 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 issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect 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, perfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 k ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is an activity which comes under earnings contract in which price is not regulated by Railways. (ii) The parcel leasing policy is introduced to maximize revenue through parcel traffic and to avoid underutilization of Parcel space available in each train. (iii) 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. (iv) 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. (v) 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. (vi) If the charges levied by the leaseholder are high then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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