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IN THE HIGH COURT OF CALCUTTA
Debangsu Basak, J.
Bagadiya Brothers Pvt. Ltd. & Anr. – Petitioners
Versus
Union of India & Ors. – Respondents
W.P. Nos. 336, 343, 1070 of 2009 and W.P. No. 965 of 2008
Decided On : 12-05-2015
RAILWAYS - RATIONALISATION SCHEME - VALIDITY - INDIAN RAILWAY BOARD - JURISDICTION - SECTION 71 OF RAILWAYS ACT, 1989 - INTERPRETATION - CENTRAL GOVERNMENT'S POWER TO DELEGATE AUTHORITY TO RAILWAY BOARD - SECTION 2 OF INDIAN RAILWAY BOARD ACT, 1905 - SCOPE - REPEAL OF INDIAN RAILWAYS ACT, 1890 - EFFECT - SAVING PROVISION IN SECTION 200 OF RAILWAYS ACT, 1989 - APPLICABILITY - RATES CIRCULAR - LEGALITY - RES JUDICATA - BINDING EFFECT OF DIVISION BENCH DECISION - PER INCURIAM - CONDITIONS FOR APPLICATION - FULL BENCH DECISION IN BISWANATH AGARWAL - RELEVANCE - DISTINCTION.
Fact of the Case:
Writ petitions challenging the validity of the Rationalisation Scheme, Special Rates Circular, and subsequent demand for additional freight by the Railway authorities based on the Rationalisation Scheme.
Finding of the Court:
1. The Railway Board lacks jurisdiction to issue the Rationalisation Scheme under Section 71 of the Railways Act, 1989, as the Central Government has not delegated its power to form an opinion to the Railway Board. 2. Section 2 of the Indian Railway Board Act, 1905, as it stands, does not empower the Central Government to invest the Railway Board with powers under the Railways Act, 1989, as the Indian Railways Act, 1890, which the Railway Board Act refers to, has been repealed. 3. The notification dated January 23, 1995, investing the Railway Board with powers under Section 71 of the Railways Act, 1989, is invalid as it relies on Section 2 of the Indian Railway Board Act, 1905, which does not authorize such delegation. 4. The Division Bench decision in Reshmi Metaliks Limited & Anr. is binding and holds that the Railway Board can exercise jurisdiction to fix rates and classify commodities under the Railways Act, 1989, in view of Section 2 of the Indian Railway Board Act, 1905. 5. The principle of per incuriam does not apply as Reshmi Metaliks Limited & Anr. considered the provisions of the Indian Railway Board Act, 1905, and the Railways Act, 1989. 6. The Full Bench decision in Biswanath Agarwal is distinguishable as it dealt with freight revision based on weighment discrepancies, while the present case involves freight revision due to the Rationalisation Scheme and rates fixed thereunder.
Issues: 1. Whether the Railway Board has jurisdiction to issue the Rationalisation Scheme under Section 71 of the Railways Act, 1989. 2. Whether Section 2 of the Indian Railway Board Act, 1905, empowers the Central Government to invest the Railway Board with powers under the Railways Act, 1989. 3. Whether the notification dated January 23, 1995, investing the Railway Board with powers under Section 71 of the Railways Act, 1989, is valid. 4. Whether the Division Bench decision in Reshmi Metaliks Limited & Anr. is binding and applies to the present case. 5. Whether the principle of per incuriam applies to the Division Bench decision in Reshmi Metaliks Limited & Anr. 6. Whether the Full Bench decision in Biswanath Agarwal is relevant and applicable to the present case.
Ratio Decidendi: 1. The Central Government's power to form an opinion under Section 71 of the Railways Act, 1989, cannot be delegated to the Railway Board. 2. Section 2 of the Indian Railway Board Act, 1905, does not authorize the Central Government to invest the Railway Board with powers under the Railways Act, 1989, as the Indian Railways Act, 1890, which the Railway Board Act refers to, has been repealed. 3. The notification dated January 23, 1995, investing the Railway Board with powers under Section 71 of the Railways Act, 1989, is invalid as it relies on an incorrect provision of the Indian Railway Board Act, 1905. 4. The Division Bench decision in Reshmi Metaliks Limited & Anr. is binding and holds that the Railway Board can exercise jurisdiction to fix rates and classify commodities under the Railways Act, 1989, in view of Section 2 of the Indian Railway Board Act, 1905. 5. The principle of per incuriam does not apply as Reshmi Metaliks Limited & Anr. considered the relevant provisions of the Indian Railway Board Act, 1905, and the Railways Act, 1989. 6. The Full Bench decision in Biswanath Agarwal is distinguishable as it dealt with freight revision based on weighment discrepancies, while the present case involves freight revision due to the Rationalisation Scheme and rates fixed thereunder.
Final Decision: The writ petitions challenging the validity of the Rationalisation Scheme, Special Rates Circular, and subsequent demand for additional freight are dismissed.
Debangsu Basak, J.
1. Four writ petitions concerning identical issues are taken up together for hearing with the consent of the parties.
2. 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.
3. 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.
4. 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.
5. 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.
6. Adverting to the facts of the case it is submitted that the Railway Authorities have claimed diverse 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 FMA 317 of 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.
7. 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.
8. 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 authorised to issue the impugned Rationalisation Scheme.
9. Relying upon a Division Bench Judgment dated December 24, 2014 in MAT 1970 of 2014 with CAN 10686 of 2014 (Reshmi Metaliks Limited & Anr. v. Union of India & Ors.) it i
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