The rule in the Goods Tariff Rules treating a group of box wagons as one unit for demurrage levy is ultra vires of the Indian Railways Act, IX of 1890.

JUDGMENT :

RAGHUVIR, J.

1. The Appellant-company laid a suit against the railway administration for recovery of Rs. 2,333.61 ps. The Appellant transported bulk-rock phosphate fertilisers from Visakhapatnam Port to Krishna Canal Railway Station. The wagons arrived on May 5, 1971 in ten box wagons at the destination. Nine out of the ten wagons, according to them, were unloaded within free time available; one amongst them was not unloaded. Notwithstanding the same, their case was, demurrage for ten wagons was illegaly collected from them, therefore, the suit. The District Munsif at Guntur decreed the suit in the sum of Rs. 966/- with interest thereon at 6% per annum from August 27, 1973. On appeal, the 1st Addl. District Judge at Guntur reversed the decree and dismissed the suit holding the ten wagons reached the destination and shunted to the company's siding on May 5, 1971 at 3.30 a.m.; unloading commenced at 6.30 a.m. and nine wagons were unloaded at 9 a.m. on May 6, 1971 within free time available to the company. All the ten box wagons were not unloaded. The Railways yet were entitled to demurrage for all the ten wagons under the rule. Hence the second appeal.

2. In this appeal, the company and Railways referred to the Goods Tariff Rules of the Southern Railway, Part 1-A and at page 32 of the said book in the remarks column No. 4 which reads as under:

The entire group of box wagons placed for unloading will be treated as one unit for the purpose of levy of demurrage, i.e., even if one wagon out of the group of two or more is detained for unloading beyond the prescribed free time, the demurrage will be levied on all the box wagons in the group.

The company contends that the above rule is ultra-vires of Sections 42, 46-C and 47 of the Indian Railways Act, IX of 1890.

3. The Goods Tariff Rules were promulgated by notification of the Ministry of Railways on August 28, 1958. The question to be considered is whether the above rule is within the framework of the Act IX of 1890. It is argued on behalf of the railway administration that demunage is defined in Clause (d) of Section 48-C and the Supreme Court considered the implications of the word in Raichand Amulakh Shah vs. Union of India, AIR 1964 SC 1268. Placing reliance on the above judgment, it is argued that the above extracted rule had been framed by the authorities to protect the revenue of the railway administration, therefore, the rule does not suffer from any vice, whatsoever. If such a rule is not farmed, the Railways argue, the revenue will be adversely affected, therefore, the rule is a reasonable rule. In support of the same, a decision of the Supreme Court in The Trustees of the Port of Madras vs. Aminchand Pyarelal and Others, (1976) 3 SCC 167, is cited. In that case, bye-laws of the Port Trust pertaining to demurrage were held to be unreasonable by the Madras High Court and the Supreme Court in their turn, on appeal, held that the bye-laws were not unreasonable. The above decision relied on by the railway administration, therefore, does not assist in determining the question whether the above rule is ultra-vires of the Railways Act.

4. The Railways demand demurrage charges for detaining vehicles. If ten box wagons are contracted and five out of them have been unloaded, there is no reason shown as to why demurrage should be collected for the wagons, which have been unloaded. Such a practice does not conform to any mercantile practice. The definition of "demurrage" in Clause (d) Section 46-C states, "the charge levied after the expiry of the free time allowed for loading or unloading a wagon". It is not difficult to hold "wagon" includes "wagons". There is no special reason shown applying the definition to the facts if where ten box wagons are contracted and five out of them were unloaded within free time allowed, by what reason or logic, the demurrage is levied for wagons unloaded. If what is sought to be adopted by Railways is not in conformity of mercantile practice, then