1997 Supreme(SC) 233

1997(5) Supreme 459
SUPREME COURT OF INDIA
Dr. A.S. Anand and S.B. Majmudar, JJ.
Visakhapatnam Port Trust & Anr.  —Appellants
versus
M/s. Ram Bahadur Thakur Pvt. Ltd. etc.—Respondents
Civil Appeal Nos. 3972-74 of 1993
Decided on 10-2-1997
Counsel for the Parties :
For the Appellants : Vinod Bobde, Sr. Advocate, C.K. Sasi, Kailash Vasudev, Advocates.
For the Respondent No. 1 : M.N. Krishnamani, Sr. Advocate, Jitender Mahapatra, Praveen Kumar Singh, T.V. Ratnam, Advocates.
For the Respondents : R.F. Nariman, Sr. Advocate, P.H. Parekh and Ms. Bina Madhavan, Advocates.

Headnote:(i) Major Port Trusts Act, 1963—Sections 52, 53, 54—Imposition and recovery of rates at ports—Prior sanction of Central Government to rates and conditions—When scales of rates for offering handling services are fixed by the Board—They cannot come into force unless prior sanction of Central Government obtained—Power on Board in special cases to give exemption or remission from such fixed and current rates—It is not required to apply to Central Governments for prior sanction of such remission or exemption—Central Government in exercise of its power u/s 54(1) may pass appropriate orders modifying or cancelling sanctioned operative rates in public interest—This power vested in Central Government is independent of power of remission or exemption of rates and charges available to Board u/s 53.

       Held that whenever any scales of rates for trans-shipment and shipping of goods within the limits of the major port are to be fixed by the concerned Board, such scales of rates can be fixed in the light of the conditions under which such concerned services are offered by the Board to the shippers. Therefore, the given scheme of conditions in the light of which scales of rates by way of handling charges are fixed by the Board has a direct impact on the fixation of such scales of rates. In other words such scales of rates are not fixed in vacuum but in connection with he nature of the conditions under which such services are offered by the Board to the concerned consumers of such services, namely, the shippers. When such scales of rates in the light of a given set of conditions for offering handling services are fixed by the Board they cannot come into force unless such scales of rates and the set of conditions for offering such services get prior sanction of the Central Government as enjoined by Section 52 of the Act. So far as Section 53 is concerned, it confers power on the Board in special cases to give exemption or remission from such fixed and current rates as may have received prior sanction of the Central Government under Section 52 meaning thereby that once the Central Government has sanctioned rates and conditions under which such rates are to be imposed by a Board as laid down by Section 52, if the concerned Board in special cases wants to give any exemption or remission for handling any goods or vessels or class of goods or class of vessels from payment of such fixed rates or charges it can do so under Section 53 of the Act. This postulates that once the approved conditions under which sanctioned scales of rates become effective under Section 52 for offering services by the Board remain the same and yet some remission or exemption needs to be granted by the Board in special cases after following the procedure of Section 53, it is not required to apply to the Central Government for prior sanction of such remission or exemption. So far as Section 54 is concerned, it shows that once scales of rates in the light of the approved and existing conditions under which the concerned services and offered by the Board are sanctioned by the Central Government that if it is brought to the notice of the Central Government that it is necessary in the public interest to modify or cancel such sanctioned rates then the Central Government in exercise of its power under Section 54(1) may pass appropriate orders modifying or cancelling the sanctioned operative rates in public interest. This is a power vested in the Central Government which is independent of the power of remission or exemption of rates and charges available to the Board under Section 53. The Board under Section 53 and the Central Government under Section 54 can independently of each other exercise these respective powers within the parameters of the provisions of Sections 53 and 54 of the Act. (Para 7)

       (ii) Major Port Trusts Act, 1963—Sections 52 to 54—Question of levying of appropriate handling charges from various shippers who seek to export manganese ore from wharves of appellants’ Port—Respondents, dealers in Manganese ore export the ore—From 1.1.1984, handling charges levied by appellant Board fixed at Rs. 35/- per M.T.—This rate and conditions under which handling charges were offered were duly sanctioned by Central Government—Representation made by shippers to Board to reduce handling charges—Partly accepted subject to conditions—Conditional remission—System of offering of handling services by Board changed as per circulars dated 19.5.1986, 10.6.1986 and 18.7.1986 and Resolution of Board dated 26.7.1986—Whether these rates require prior sanction of Central Government u/s 52 of the Act?—(Yes)—Whether there was any effective scales of rates for handling manganese ore at premises of appellant-Port during relevant period from 20.5.1986 to 12.2.1992?—(Yes)—Directions issued to Central Government for issuing notices to petitioners before fixing handling charges—Justified in law.

       Held : A conjoint reading of the circulars dated 19th May 1986, 10th June 1986 and 18th July 1986 and the Resolution dated 26th June 1986 leaves no room for doubt that from 21st of May 1986 entirely a new system for handling the manganese ore at the Port came into existence and in that light a new handling rate for manganese ore was being fixed by the board. Once that happened Section 52 of the Act directly got attracted because the scale of rates at Rs. 30/- per M.T. having a direct nexus with the statement of new conditions for offering handling services by the Board was sought to be got implemented by the Board. Hence prior sanction of the Central Government became a must for such new impos (Para 9)

       The moment new system of handling of manganese ore got introduced any fixation of handling charges of manganese ore in the wake of introduction of such a new system of handling of manganese ore exports would necessarily clothe the new rate with the characteristics of being freshly settled handling charges. Once this conclusion is reached the exercise of the Board undertaken as per Resolution dated 26th June 1986 required, for its efficacy, the prior sanction of the Central Government as enjoined by Section 52. Admittedly, that was not done by the Board. The fixation of an appropriate scale of rates chargeable from the concerned shippers who are now to be offered a different and a truncated type of infrastructural facilities, would call for an exercise to be undertaken subject to the requirements of Section 52 and would go out of the sweep of Section 53 as it would not amount to remission of existing rates of handling charges having a nexus with the erstwhile and unchanged system of infrastructural facilities which no longer remained available to support such a remitted rate of handling charges. In other words the very foundation on which the earlier handling rates operated was knocked off and entirely a new foundation of infrastructural facilities of services came into being. Any handling rates fixed in connection with such a new foundation of handling-services-infrastructure necessarily would assume the form of a new scale of rates. We, therefore find that the Division Bench of the High Court was justified in taking the view that the impugned resolution dated 26th June 1986 seeking to bring into effect new rates of handling charges in the light of entirely new system of services then offered by the Board required prior sanction of the Central Government under Section 52 of the Act and could not be treated to be representing a scheme of remission as envisaged by Section 53 of the Act. (Para 9)

       Further held that the new scale of rates for handling charges of manganese ore pursuant to the Board’s Resolution dated 26th June 1986 was ineffective without prior sanction of the Central Government under Section 52 of the Act. But as a consequence of the said finding it would not necessarily follow that no other effective scale of rates for handling manganese ore would be left in the field. The earlier effective scale of rates as sanctioned by the Central Government which was operative from 1st January 1984 being Rs. 35/- per M.T. was already remitted though conditionally by the appellant-Board itself by its Resolution dated 30th October 1984. Thus from 30th October 1984 the effective scale of rates for handling charges of manganese ore remained Rs. 30/- per M.T. It is this rate which must be treated to have continued during the interregnum period from 20th May 1986 till 12th February 1992. Of course even this remitted rate of Rs.30/- per M.T., from 20th May 1986 onwards had operated in absence of the availability of infrastructural facility of narrow gauge railway line which had stood withdrawn by the Board from the shippers. Consequently, whether the said existing remitted rate of Rs. 30/- per M.T. from 20th May 1986 in the light of the withdrawn infrastructural facility of narrow gauge railway line, which in its turn had shifted the burden of transport charges of manganese ore from plots to the wharf on the shoulders of the shippers, resulted in a lopsided rate and whether it, therefore, became unreasonable or not and by then whether it was backed up by proper quid pro quo or not would remain a burning and moot question which had to be resolved by the appropriate authority under the Act. All the same it could not have been assumed by the High Court in the impugned judgment that during the relevant period from 20th May 1986 to 12th February 1992 there was no effective scale of rates for handling manganese ore at all. To that extent it must be held that the Division Bench was in error when it persuaded itself to hold that view. (Para 11)

       (iii) Major Port Trusts Act, 1963—Sections 52 to 54—Scales of handling charges for handling manganese ore—Challenged as excessive and unreasonable—It will be for Central Government to decide this question and to pass appropriate directions—High Court justified in leaving that question to be decided by Central Government.

       Held that under the scheme of the Act itself the Central Government is the ultimate authority for deciding about the propriety and justness of the scales of rates of services to be rendered to the shippers by the Board of the concerned Ports governed by the Act. In the light of this statutory scheme, therefore, the reasonableness of the settled scales of charges for handling goods as tried to be recovered by the Board under the Act could be validly made the subject-matter of scrutiny of the Central Government by aggrieved parties by invoking the Central Government’s powers under Section 54 of the Act. When the writ petitioners raised the contention about the excessiveness and unreasonableness of the scale of rates of handling charges of manganese ore sought to be recovered from them by the Board and when such contention required scrutiny of relevant evidence which may be led on the point the High Court was perfectly justified in leaving the question to be decided by the Central Government. It is obvious that it will be for the Central Government to decide this question and to pass appropriate directions in this connection which would be binding on the appellant-Board. In short the question whether the scales of handling charges sought to be levied from the respondents for handling their manganese ore during the relevant period between 20th May 1986 and 12th February 1992 were just, fair and legal or not was justifiably left by the High Court to be decided by the Central Government instead of deciding it itself. (Para 10)

       (iv) Major Port Trusts Act, 1963—Sections 52 to 54—Sanctioning scales of handling charges for handling manganese ore—Challenged—Directions issued to Central Government for issuing notices to writ petitioners and for hearing their objections before fixing handling charges—Justified in Law.

       Held that a legislative exercise or exercise by a subordinate legislative agency imposing any tax or fee of charges would not require the affected parties to be heard before such charges or impost are levied. But this argument of Shri Bobde may be relevant at the stage of Section 52 of the Act wherein the scales of rates and statements of conditions framed by the Board are put up for prior sanction of the Central Government. However the said situation would not prevail when a grievance is made by the concerned aggrieved parties who submit that the sanctioned scales of rates which are prevalent and operative require modification or cancellation in public interest as they are unreasonable, excessive or, wholly or partly, lack the back up of quid pro quo. As and when such grievances are made and are required to be examined by the Central Government in exercise of its statutory powers and functions under Section 54 of the Act, if the Central Government gets convinced that in public interest appropriate modifications or cancellation of rates are required to be made, then it would be the statutory obligation of the Central Government to direct the concerned Board accordingly and it will be equally the duty of the Board to carry out such suggested modifications or cancellations as directed by the Central Government. At that stage if the objections of aggrieved parties are directed to be considered by the Central Government in public interest no fault can be found with such a direction. Therefore, we find that the directions issued by the Division Bench in the impugned judgment can be well sustained under Section 54 of the Act by treating the objections raised by the writ petitioners before the High Court as amounting to a request to get appropriate modifications or cancellations of the scales of rates for handling manganese ore at the appellant’s Port in public interest. It is obvious that the Central Government in exercise of its powers under Section 54 of the Act can undertake the exercise enjoined by the said Section if it considers it necessary in public interest so to do. Central Government being an impersonal body functioning far away from the places where the major ports and other ports are situated it would be obvious that relevant facts for invoking exercise of its powers under Section 54 of the Act will have to be brought to the notice of the Central Government and that can be done only by aggrieved interested parties by way of representations. Filing of such representations before the Central Government by the concerned aggrieved parties, therefore, cannot be said to be contra-indicated by Section 54 sub-section (1). Once such representations are moved it will be the statutory obligation of the Central Government to consider the said representations and for effective discharge of its power-cum-duty entrusted to it under Section 54(1) it may be open to the Central Government in appropriate cases to even permit the aggrieved parties representationists to be heard in person, if so thought fit, and thereafter if the Central Government thinks it fit to make appropriate modification of cancellation of the settled and sanctioned scale of rates of handling charges as leviable by the concerned Boards it can proceed under Sections 52 and 54 of the Act calling upon the Board to effect such modifications or cancellations and in the process it has to consider the objections or suggestions of the concerned Boards as laid down by the proviso to sub-section (2) of Section 54. If before effecting such cancellations or modifications in the scale of rates the concerned Boards have to be heard, if found necessary, of their objections are to be considered there is no reason why the aggrieved parties who move the Central Government invoking its powers under Section 54(1) should be treated as total strangers whose objections should not be considered by the Central Government. Of course it has to be left to the Central Government as to how to consider such objections. But it cannot be said that if a competent court gives a direction in an appropriate case to the Central Government to give notice to the objectors call for their objections and to consider the same such a direction would be dehors the scope and ambit of Section 54 of the Act. It must, therefore, be held that the directions issued by the Division Bench of the High Court in the impugned judgment can be effectively sustained under Section 54 of the Act, if not under Section 52 thereof. (Para 12)