W.P.No.336 of 2009 with W.P.No.1070 of 2009 W.P.No.343 of 2009 W.P.No.965 of 2008 IN THE HIGH COURT AT CALCUTTA Constitutional Writ Jurisdiction Original Side Bagadiya Brothers PVT.LTD.& Anr.
versus Union of India & ORS.For the Petitioners : Mr.Shyamal Sarkar, Sr.Advocate Mr.R.A.Agarwal, Advocate Mr.K.Gupta, Advocate Mr.R.Gupta, Advocate Mr.R.Dhara, Advocate Mr.A.G.Mukherjee, Advocate Ms.Nibedita Pal, Advocate For the Respondents : Mr.A.K.Ghosal, Sr.Advocate Mr.Rajendra Chaturvedi, Advocate Mr.D.K.Singh, Advocate Hearing concluded on Judgment on : April 23, 2015 : May 12, 2015 DEBANGSU BASAK, J.:- Four writ petitions concerning identical issues are taken up together for hearing with the consent of the parties.
For the purpose of appreciating the facts giving rise to the issues in the four writ petitions, the factual matrix of W.P.No.336 of 2009 is dealt with.
The facts in the other three writ petitions are similar to that of W.P.No.336 of 2009.
The writ petitioners contend that, the Rationalisation Scheme being General Order No.1/2007 dated 22, 2007 and the Special Rates Circular dated March 27, 2007 and the amendments thereof are ultra vires the provisions of Section 71 of the Railways Act, 1989.
It is contended on behalf of the writ petitioners that, the Rationalisation Scheme has been issued by the Railway Board.
The Indian Railway Board Act, 1905 invests the Railway Board with certain powers of functioning under the Indian Railways Act, 1890.
The Railways Act, 1989 has repealed the Indian Railways Act, 1890.
The Indian Railway Board Act, 1905 has not been amended to empower the Railway Board to act in terms of the Railways Act, 1989.
Consequently, the Railway Board has no jurisdiction to issue the Rationalisation Scheme being General Order No.1/2007 dated March 22, 2007.
Such Rationalisation Scheme could not be construed to be an exercise of power conferred by Section 71 of the Railways Act, 1989.
It is also contended that Section 71 of the Railways Act, 1989 requires the Central Government to form an opinion.
The Central Government could not delegate its power to form an opinion to the Railway Board assuming that the Railway Board is invested with the same powers under the Railways Act, 1989 as that of the Indian Railways Act, 1890.
With regard to the Special Rates Circular dated March 27, 2007 it is submitted that, such Special Rates have been brought into vogue on the basis of the instructions embodied in the Rationalisation Scheme.
Since the Rationalisation Scheme is bad, any step taken pursuant thereto including the Special Rates Circular dated March 27, 2007 would also be bad.
Adverting to the facts of the case it is submitted that the Railway Authorities have claimed diveRs.amounts from the writ petitioners on the ground of undercharging of the Railway Receipt in view of the Special Rates Circular dated March 27, 2007 issued in terms of the Rationalisation Scheme.
It is contended that, such demand had been made subsequent to the delivery of the goods.
Consequently, under Section 78 of the Railways Act, 1989 the Railway authorities could not have demanded any amount on account of undercharging of the Railway Receipt after delivery of the goods.
Reliance is placed on the judgment and order dated February 25, 2015 of the Full Bench rendered in FMA317of 2001 (Union of India v.
Biswanath Agarwal) in support of the contention that the freight charged by the Railways could not be revised after delivery of the goods to the consignee or its order.
With regard to the jurisdiction of this Hon’ble Court it is contended that, this Hon’ble Court has jurisdiction to decide the present writ petition.
The Special Rates Circular dated March 27, 2007 has been issued from the office of the Railways at 14, Strand Road, Kolkata within the jurisdiction of this Hon’ble Court.
Relying upon 1973 Volume 1 Supreme Court Cases page 781 (Union of India v.
M/S.Modi Industries Ltd.) it is contended that the writ petitioner does not have the remedy of a statutory appeal as no appeal lies in the facts of the instant case.
The Railway authorities are represented.
The point of lack of jurisdiction of this court to entertain the writ petition is not pressed on their behalf.
Relying upon Section 71 of the Railways Act, 1989 it is submitted that the Railway Board is duly authorized to issue the impugned Rationalisation Scheme.
Relying upon a Division Bench Judgment dated December 24, 2014 in MAT1970of 2014 with CAN10686of 2014 (Reshmi Metaliks Limited & Anr.v.Union of India & Ors.) it is submitted that the legality of the Rates Circular No.36 of 2009 has been upheld by the Division Bench.
The Division Bench has also held that the Railway Board could exercise jurisdiction to fix rates and classify commodities under the Railways Act, 1989 in view of the provisions contained in Section 2 of the Indian Railway Board Act, 1905.
Referring to Section 200 of the Railways Act, 1989 it is contended that all acts done by the Railway Board have not been repealed.
It is contended that, the Railway authorities have charged the difference of rates only and that they are entitled to do so.
Such rates have been charged in accordance with the Rationalisation Scheme and the Rates fixed thereunder.
On applying such Scheme and the Rates, the Railway authorities had found the Railway Receipts to be undercharged and had, therefore, sought to correct such error in the Railway Receipts by requiring the writ petitioner to pay the difference.
Under Section 83 of the Railways Act, 1989 the Railway authorities have a right of lien.
The writ petitioners were requested to pay the difference in the amounts.
The writ petitioners not paying the difference in the amounts, the Railway authorities thereafter proceeded to adjust the amounts lying with them on account of the writ petitioners against the liability of the writ petitioners towards the Railway authorities.
In reply, learned Counsel for the writ petitioners contends that, in Reshmi Metaliks Limited & Anr.
(supra) the Division Bench did not consider the provisions of the Indian Railway Board Act, 1905 particularly Section 1(2) thereof.
It is submitted that Reshmi Metaliks Limited & Anr.
(supra) was rendered in the context of Sections 30 and 31 of the Railways Act, 1989.
The Rationalisation Scheme and the Rates fixed thereunder impugned in the present case has been claimed by the Railway authorities to be an exercise of power under Section 71 of the Railways Act, 1989.
Sections 30 and 31 on one part and Section 71 on the other part of the Railways Act, 1989 are not pari materia.
Reliance is placed on 2015 Volume 2 Supreme Court Cases page 189 (Hyder Consulting (UK) Limited v.
Governor, State of Orissa) to submit that the decision rendered in Reshmi Metaliks Limited & Anr.
(supra) is per incuriam.
I have considered the rival contentions of the respective parties and the materials made available on record.
The writ petitioners claim to be exporters and to have dealt with export of iron-ore fines in the present case.
The writ petitioners in W.P.No.336 of 2009 had loaded a rake of iron-ore at Barsuan Station under South-Eastern Railway to be moved to the Visakhapatnam Port.
A Railway Receipt dated October 7, 2007 for a freight of Rs.47,52,066/-in respect thereof was issued.
The writ petitioners had paid such freight to the Railway authorities.
The writ petitioners took delivery of the material at the Visakhapatnam on October 17, 2007.
Subsequent to the delivery of the goods, the Railway authorities had raised a demand notice dated May 31, 2008 on the writ petitioners and had handed over the same to the representative of the writ petitioneRs.By such notice dated May 31, 2008 the Railway authorities had demanded a sum of Rs.20,29,631/- in addition to the freight already paid in respect of the Railway Receipt dated October 7, 2007.
The Railway authorities claimed that such demand has been issued in accordance with the Rationalisation Scheme impugned herein.
The writ petitioners had made a representation dated February 16, 2009 with the Railway authorities.
Such representation had been followed up by visits of the representatives of the writ petitioners to the offices of the Railway authorities at Kolkata.
The writ petitioners had other transactions with the Railway authorities.
The writ petitioners had deposited various amounts with the Railway authorities in respect of such transactions.
According to the writ petitioneRs.they have become entitled to receive refund from the railway authorities.
Consequently, the writ petitioners had requested the Railway authorities to refund such amounts.
The Railway authorities did not do so.
The Railway authorities however claim to have adjusted the amounts receivable by the writ petitioners from the Railway authorities on the ground of exercise of lien.
The Rationalisation Scheme impugned herein is dated March 22, 2007.
It has been issued by the Railway Board.
The Rationalisation Scheme is effective from April 1, 2007.
It appears from the Rationalisation Scheme that the Railway Board had exercised powers conferred by Section 71 of the Railways Act, 1989 read with the notification of the Ministry of Railways, Government of India dated January 23, 1995 to issue the Rationalisation Scheme.
Section 71 of the Railways Act, 1989 is as follows:“71.
Power to give direction in regard to carriage of certain goods.— (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 contravention of section 70.” Section 71 of the Railways Act, 1989 empowers the Central Government if it is of the opinion that it is necessary in the public interest so to do, issue general or special orders to the Railway administration in respect of matters specified in sub-section (1) of Section 71 of the Act of 1989.
The Railway Board does not figure in Section 71 of the Act of 1989.
The Railway authorities contend that the Railway Board had exercised powers under Section 71 of the Railways Act, 1989 in view of the provisions of the Indian Railway Board Act, 1905.
Sections 1(2) and 2 of the Indian Railway Board Act, 1905 is as follows:- “1(2).It shall be read with, and taken as part of, the Indian Railways Act, 1890.” “2.
The Central Government may, by notification in the official Gazette, invest the Railway Board, either absolutely or subject to conditions:(a) with all or any of the powers or functions of the Central Government under the Indian Railways Act, 1890, with respect to all or any Railways, and (b) with the power of the officer referred to in Section 47 of the said Act to make general rules for Railways administered by the Government.” The Indian Railway Board Act, 1905 has not been amended to allow the Central Government to invest the Railway Board with all or any of the powers or functions of the Central government under the Railways Act, 1989.
The Indian Railway Board Act, 1905 as it stands, empowers the Central Government to invest the Railway authorities with all or any of the powers or functions of the Central government under the Indian Railways Act, 1890.
The Indian Railways Act, 1890 has been repealed by the Railways Act, 1989.
Section 200 of the Railways Act, 1989 deals with repeal and saving.
Section 200 of the Railways Act, 1989 is as follows:- “200.
Repeal and saving.— (1) The Indian Railways Act, 1890 is hereby repealed.
(2) Notwithstanding the repeal of the Indian Railways Act, 1890 (hereinafter referred to as the repealed Act)— (a) anything done or any action taken or purported to have been done or taken (including any rule, notification, inspection, order or notice made or issued, or any appointment or declaration made or any licence, permission, authorization or exemption granted or any document or instrument executed or any direction given or any proceedings taken or any penalty or fine imposed) under the repealed Act shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions of this Act; (b) any complaint made to the Railway Rates Tribunal under sub-section (1) of section 41 of the repealed Act but not disposed of before the commencement of this Act and any complaint that may be made to the said Tribunal against any act or omission of a railway administration under the repealed Act, shall be heard and decided by the Tribunal constituted under this Act in accordance with the provisions of Chapter VII of this Act.
(3) The mention of particular matters in sub-section (2) shall not be held to prejudice or affect the general application of section 6 of the General Clauses Act, 1897, with regard to the effect of repeal.” The Railways Act, 1989 has come into effect from July 1, 1990.
On and from such date therefore the Indian Railways Act, 1890 stands repealed.
It is contended by the Railway authorities that in view of subsection 2 of Section 200 of the Act of 1989 notwithstanding the repeal of the Indian Railways Act, 1890, the Central Government acting under Section 2 of the Indian Railway Board Act, 1905 could invest the Railway Board with all or any powers or functions of the Central Government under the Railways Act, 1989 by virtue of sub-section 2 of Section 200 of the Act of 1989.
With respect I am not in a position to agree with such a contention of the Railway authorities.
Section 200 of the Act of 1989 provides for repeal of the Indian Railways Act, 1890.
The Act of 1989 has come into effect on and from July 1, 1990.
On and from July 1, 1990 therefore the Indian Railways Act, 1890 stands repealed.
Sub- section (2) of Section 200 of the Act of 1989 specifies that notwithstanding the repeal of the Indian Railways Act, 1890 anything done or any action taken or purported to have been done or taken under the Act of 1890 shall in so far as it is not inconsistent with the provisions of the Act of 1989 be deemed to have been done or taken under the corresponding provisions of the Act of 1989.
The Railway Board is sought to be vested with the authority to exercise powers under Section 71 of the Railways Act, 1989 by the notification dated January 23, 1995.
The notification dated January 23, 1995 of the Ministry of Railways has been disclosed by the Railway authorities in their affidavit.
The notification stipulates that the Central Government in exercise of powers conferred by Section 2 of the Indian Railway Board Act, 1905 has invested the Railway authorities with all the powers and functions of the Central Government under Section 71 of the Railways Act, 1989.
Section 2 of the Indian Railway Board Act, 1905 empowers the Central Government to invest the Railway Board either absolutely or subject to conditions with all or any of the powers or functions of the Central government under the Indian Railways Act, 1890.
The authority of the Central Government to invest the Railway Board with the powers and functions of the Central Government under the Railways Act, 1989 under Section 2 of the Indian Railway Board Act, 1905 has been considered in Reshmi Metaliks Limited & Anr.
(supra).The legality of the Rates Circular No.336 of 2009 is one of the issues raised therein.
Such Rates Circular has been issued by the Railway Board in exercise of powers under Sections 30 and 31 of the Railways Act, 1989.
After considering Sections 30 and 31 of the Railways Act, 1989 and Section 2 of the Indian Railway Board Act, 1905 it has held that, though the jurisdiction for fixation of rates and classification of commodities has been given to the Central Government by the Railways Act, 1989 such jurisdiction could also be exercised by the Railway Board in view of the provisions contained in Section 2 of the Indian Railway Board Act, 1905.
In the present case the Rationalisation Scheme has been brought about in exercise of powers conferred under Section 71 of the Act of 1989.
The view expressed by the Division Bench is binding upon me.
Section 2 of the Indian Railway Board Act, 1905 has been considered in Reshmi Metaliks Limited & Anr.
(supra).Section 1(2) of the Indian Railway Board Act, 1905 may not have been placed before the Division Bench.
However, such section does not alter the position that the Central Government can empower the Railway Board to exercise powers and functions of the Central Government under the Railways Act, 1989.
In Hyder Consulting (UK) Limited (supra) it has been held that, “46.
Before I consider the correctness of the aforementioned decisions, it would be necessary to elaborate upon the concept of “per incuriam”.
The Latin expression “per incuriam” literally means “though inadvertence”.
A decision can be said to be given per incuriam when the court of record has acted in ignorance of any previous decision of its won, or a subordinate court has acted in ignorance of a decision of the court of record.
As regards the judgments of this Court rendered per incuriam, it cannot be said that his Court has “declared the law” on a given subject-matter, if the relevant law was not duly considered by this Court in its decision.
In this regard, I refer to State of U.P.v.
Synthetics and Chemicals Ltd., wherein R.M.Sahai, J.
in his concurring opinion stated as follows: (SCC p.
162, para
40) “40.
‘Incuria’ literally means ‘carelessness’.
In practice per incuriam appears to mean per ignoratium.
English courts have developed this principle in relaxation of the rule of stare decisis.
The ‘quotable in law’ is avoided and ignored if it is rendered, ‘in ignoratium of a statute or other binding authority’.” “47.
Therefore, I am of the considered view that a prior decision of this Court on identical facts and law binds the Court on the same points of law in a later case.
In exceptional circumstances, where owing to obvious inadvertence or oversight, a judgment fails to notice a plain statutory provision or obligatory authority running counter to the reasoning and result reached, the principle of per incuriam may apply.
The said principle was also noticed in FueRs.Day Lawson Ltd.v.Jindal Exports Ltd.” The ratio laid down in Hyder Consulting (UK) Limited (supra) is not attracted in the facts of the instant case as Reshmi Metaliks Limited & Anr.
(supra) has considered the provisions of the Indian Railway Board Act, 1905 as well as the Railways Act, 1989.
The writ petitioners have contended that the freight charged could not be revised subsequent to delivery of the goods on the ground of mistake in view of the pronouncement by the Full Bench in Biswanath Agarwal (supra).Two questions were referred to the Full Bench in Biswanath Agarwal (supra).Such two questions are as follows:- “(1) Whether the Railway Authority, after booking of a consignment, can, on the basis of its own reweighment in couRs.of transit without notice to the owner, levy further charge on the ground of excess loading by rejecting an application for reweighment filed by the owner at the destination on the plea that there is no facility of such reweighment at the destination without making arrangement for reweighment at the nearest station from the destination where such facility is available?.
(2) Whether a demand of reweighment mentioned in the above situation comes within the purview of section 79 of the Act so as to reject such prayer on a ground for which the owner cannot be held responsible and at the same time, compelling the owner to pay the excess charge on the basis of reweighment in the absence of and without the notice of the owner?.” The Full Bench in my view did not consider a scenario where the freight charged is revised on the basis of a Rationalisation Scheme and which such Rationalisation Scheme has nothing to do with weighment.
It was concerned with a scenario where the freight is revised on the basis of discrepancy in weighment.
In the instant case, the upward revision in the freight is not due to difference in weighment; rather due to the application of the Rationalisation Scheme and the rates fixed under the Rationalisation Scheme.
Since in the present case weighment of the consignment is not an issue rather the rates applicable pursuant to the Rationalisation Scheme is in issue, in my view, the ratio of Biswanath Agarwal (supra) is not attracted to the facts of the instant case.
In such circumstances, the four writ petitions fail.
W.P.No.336 of 2009, W.P.No.1070 of 2009, W.P.No.343 of 2009 and W.P.No.965 of 2008 fail and are dismissed, however, without any order as to costs.
[DEBANGSU BASAK, J.].