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2006 Supreme(Cal) 622
BHASKAR BHATTACHARYA AND PRABUDDHA SANKAR BANERJEE, JJ.
Divisional Railway Manager, Eastern Railway, Sealdah
versus
Kalighat Railway Plot-holders Association and Anr.
MAT No. 2312 and CAN 8930 of 2002 with COT No. 2984 of 2006
Decided on : 21 -9 -2006.
R. N. Das, Asit Kumar Banerjee and P. K. Ghosh, for Appellant; Ratnaka Banerjee and Ms. Aparajita Rao, for Respondents.
Enhancement of license fees by the railway authority based on land valuation and at a reasonable rate, following a settled principle, is not arbitrary and does not warrant judicial interference. However, such enhancement should be given prospective operation from the date of publication of the notification to the licensee.
Headnote:
LICENCE FEE ENHANCEMENT - RAILWAY LAND - EASTERN RAILWAY - LICENCE FEE ENHANCEMENT POLICY - LAND VALUATION - RETROSPECTIVE EFFECT - ARBITRARINESS - VALIDITY - INTERPRETATION OF RAILWAY BOARD CIRCULAR DATED 29TH AUGUST, 1995.
Fact of the Case:
The dispute arose when the Eastern Railway issued demand notices to various licensees occupying railway plots for payment of arrear dues in respect of revised license fees with effect from April 1, 1986, up to 1996-97. The licensees challenged the notices, contending that the revision of license fees was unjust, violative of Article 14 of the Constitution, and arbitrary, especially with retrospective effect.
Finding of the Court:
The court held that the policy decision of the railway authority to assess valuation by fixing 6% of the land value and enhancing the land value at the rate of 10% every year was not arbitrary and did not warrant judicial interference. However, the court found merit in the contention that any enhancement of license fees should be given prospective operation from the date of publication of the notification to the licensee.
Issues: 1. Whether the railway authority's policy decision to enhance license fees at a rate of 10% per annum based on land valuation was arbitrary and could be interfered with by the court. 2. Whether the enhancement of license fees could be applied retrospectively from a date ten years prior to the issuance of demand notices.
Ratio Decidendi: 1. The court relied on the Supreme Court's decision in Ugar Sugar Ltd. (AIR 2001 SC 1447) to hold that policy decisions taken by the State should not be interfered with in the writ jurisdiction unless tainted with malice or arbitrariness. In the present case, the court found no mala fide intention on the part of the railway in formulating the new policy. 2. The court held that imposing new license fees at an enhanced rate from an anterior date deprived the licensees of the opportunity to decide whether to retain the license or vacate the property. Therefore, the owner could not enforce the enhanced rate of license fees from an earlier date.
Final Decision: 1. The court set aside the order of the single judge and approved the policy decision taken by the railway authority, subject to the condition that it would be effective from the date of communication to the licensee and not retrospectively. 2. The court allowed the mandamus appeal to the extent that the railway authority could realize the excess amount from the date of communication of the decision to the licensees, namely, June 1996.
BHASKAR BHATTACHARYA, J. :- This mandamus-appeal is at the instance of the Union of India and is directed against order dated 10th August, 2001 passed by a learned single Judge of this Court by which His Lordship allowed a writ-application filed by the respondents and directed the appellant, the railway authority, to issue fresh demand notice for the purpose of realisation of the licence-fees involved therein and to determine the licence-fees in terms of the circular dated August 29, 1995 being Annexure 'X' to the affidavit-in-opposition subject to the condition that enhancement of the licence-fees should be made once in five years and not in every year.
2. Being dissatisfied, the railway authority has come up with the present mandamus-appeal and at the same time, the writ-petitioners have also filed a cross-objection alleging that the learned single Judge ought to have held that the licence-fees could not be claimed at the enhanced rate with retrospective effect from an earlier date.
3. The facts giving rise to filing of the present mandamus-appeal may be precised thus :
a) Kalighat Railway Plot Holders Association and its Secretary were the writ-petitioners. By Annexure 'A' to the writ-application, the writ-petitioners have set out the details of the plots of land occupied by the members of the petitioners' association which according to them are held by them on licence under Eastern Railway. Names of 22 licensees with plot numbers were specified in Annexure 'A'. The licensees, according to the writ-petitioners, have been using the said plots of land in connection with the business of various natures, like, dumping of stone chips, coal, cement etc. by raising structures and/or erecting stalls in the plots.
b) The main controversy in the writ-application was with regard to the increase of annual licence-fees. The writ-petitioners questioned the notices, 12 in number collectively marked as Annexure 'H', by which the railway authorities have demanded payment of arrear-dues in respect of the revised licence-fees with effect from April 1, 1986 up to 1996-97. the licence-fees determined for the respective years have been specified and after deducting the amount paid towards licence-fees by the respective licensees for the period from 1986-87 to 1996-97, the balance amount arrived at has been determined and consequently, claimed.
c) By those notices, respective licensee was informed that the revision of licence-fees had been under active consideration since 1st April, 1986 at the rate of 10 per cent per annum as fixed by the railway-board which had already been intimated to the petitioners vide demand notice for the year 1995-96. According to the railway authority, since L.A. Collector had furnished the land-valuation of the area in question and the standing committee of the railways approved the same, the petitioners were required to pay the arrear-dues within the time specified therein.
d) According to the writ-petitioners, such revision of licence-fees was unjust and was liable to be set aside on the ground of violation of Article 14 of the Constitution of India. Moreover, according to the writ-petitioners such revision of licence-fees with retrospective effect from a day ten years ago is totally arbitrary.
(e) In the affidavit-in-opposition filed on behalf of the appellant, it was contended that the members of the association as shown in Annexure 'A' were not the authorised-licensees and only those persons or concerns whose names appeared in the said list against the serial Nos. 2, 3, 6, 8, 10, 15, 19 and 22 were the authorised-licensees whose licences had been renewed and the modified demand notices for payment of the enhanced rate had been served only upon those eight persons. It was, therefore, contended that other members mentioned in the list appearing as Annexure 'A' to the writ application had no locus standi to move the writ application since their licences had been cancelled in the year 1987.
(f) It was further conten
