# [1967] 3 S.C.R. 219

- **Citation:** [1967] 3 S.C.R. 219
- **Court:** Supreme Court of India
- **Decided:** 1967-03-21
- **Bench:** K. N. Wanchoo, V. Bhargava
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1967-3-s-c-r-219-4200
- **Pages:** 19

## Headnote

March 21, 1967
Indian Railways Act, 1890, ss. 29 and 41-Charges made by Railways for maintenance, etc. of "assisted siding"
constructed to facilitate
goods traffic and for shunting wagon to and from compa11ys' mill-Services rendered by Railways not under any statutory duty but under prlvale
agreement-Railways giving notice of enhancement of charges-Whether
such charges fall within expression 'any other charge' in ss. 29 ( 2) and
4!(1)(c). Therefore wheth:r complaint alleging charges unreasonable can
be entertained by Railway Rates Tribunal under s. 41(1)(c).
The predecessor of the appellant Railway entered into an agreement
in November, 1933, with the respondent
company, which had a large
sugar mill, for the construction of two "assisted sidings" to facilitate the
nlovenent of goods. iraffic to and from the sugar mill.
Under the agreement, part of the expenditure was met by the company and it was provided that the company would pay an annual contribution to the Railways
for the use of the Railway portion of the siding and in lieu of paying
separately the interest and maintenance cost of the siding. It was further
provided that in the event of the contribution not being sufficient to meet
the cost of the working of the siding, the Railway was entiUed, ou giving
six months notice, to modify tho contribut'on and charge the company
such higher amount as it may consider necessary.
By virtue of another arrangement between the Railway and the Company, at the company's request, the Railway would arrange for the
shunting of wagons
from the Company's factory yard to the Railway lines and for doing so,
the Railway would charge the company a shunting engine charge calculated at a fixed rate per hour.
In February 1958, the Railwav gave notice of increased charge.'l to
be paid instead of the fixed contribution. It also demanded an increased
•hunting engine charge. The company thereupon filed a complaint under
s .. 4l(l)(c) of the Indi~n .Railways Act, 1890 bef~re the Railway Rates
Tnbunal at MadraJ, cla1mmg that the charges claimed by the Railway
~ere un!eason~ble and requesting the Tribunal to fix reasonable charges
in exerc1<e of its powers under s. 41(3) of the Act. The complaint was
contested by the Railway o~ the grounds (i) .that the charges to which
the complaint related were tn respect of services that the Railway was
not under any statutory duty to render to the company and was rendering
them under private agreement with
the company; com;equently,
such
charges did not fall
within
the
ellpression
'any
other charge'
in
~· 4!(l)(c) and therefore no complaint could be filed under s. 41 challeng.
mg !hem on the ground of being unreasonable: (ii) that the burden of
provmg the charges were unreasonable was on the company which
had
not be~n discharged and the Tribunal was not competent to call upon
the Radway to prove the reasonableness of the charges and to "reduce the
charges only on the ~round that the Railway had failed to establish their
reasonableness; and (iii) that the charges demanded by the Railway were
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[1967] 3 S.C.R.
in fact reasonable and should not be reduced.
The Tribunal rejected the
Appellants' contentions and revised the charges
on
the
basis of the
evidence adduced before it.
On appeal to this Court.
HELD :
(i) The charges in quest'.on were covered by the expression
"any other charges" ins. 41(1)(c) and the complaint in the present case
was rightly entertained by the Tribunal.
The only charges which could be said to relate to the discharge by
the Railway of its statutory duties would be those fixed under s. 29( I)
of the Act in respect of a commodity carried by the
Railway over its
·own lines. It is clear that a complaint under s. ·U (I) (b) relates to fixation of a rate relating to charges mentioned in s.29(1), whiles. 41(J)(c)
relates to a complaint in respect of any
other charges
mentioned
in
s. 29(2). The expression
"any other char~e" used in ss.
29(2)
and
4l(I)(c) cannot be given the narro

## Text

_Characters 0–39,937 of 57,735. This is a partial read: ask again with offset=39937 for what follows._

A
TIIE UNION OF INDIA, REPRESENTED BY THE GENERAL
MANAGER, NORTH-EASTERN RAILWAY, GORAKHPUJt
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v.
THE INDIAN SUGAR MILLS ASSOCIATION, CALCUTTA &
ANOTHER
[K. N. WANCHOO AND V. BHARGAVA, JJ.)
March 21, 1967
Indian Railways Act, 1890, ss. 29 and 41-Charges made by Railways for maintenance, etc. of "assisted siding"
constructed to facilitate
goods traffic and for shunting wagon to and from compa11ys' mill-Services rendered by Railways not under any statutory duty but under prlvale
agreement-Railways giving notice of enhancement of charges-Whether
such charges fall within expression 'any other charge' in ss. 29 ( 2) and
4!(1)(c). Therefore wheth:r complaint alleging charges unreasonable can
be entertained by Railway Rates Tribunal under s. 41(1)(c).
The predecessor of the appellant Railway entered into an agreement
in November, 1933, with the respondent
company, which had a large
sugar mill, for the construction of two "assisted sidings" to facilitate the
nlovenent of goods. iraffic to and from the sugar mill.
Under the agreement, part of the expenditure was met by the company and it was provided that the company would pay an annual contribution to the Railways
for the use of the Railway portion of the siding and in lieu of paying
separately the interest and maintenance cost of the siding. It was further
provided that in the event of the contribution not being sufficient to meet
the cost of the working of the siding, the Railway was entiUed, ou giving
six months notice, to modify tho contribut'on and charge the company
such higher amount as it may consider necessary.
By virtue of another arrangement between the Railway and the Company, at the company's request, the Railway would arrange for the
shunting of wagons
from the Company's factory yard to the Railway lines and for doing so,
the Railway would charge the company a shunting engine charge calculated at a fixed rate per hour.
In February 1958, the Railwav gave notice of increased charge.'l to
be paid instead of the fixed contribution. It also demanded an increased
•hunting engine charge. The company thereupon filed a complaint under
s .. 4l(l)(c) of the Indi~n .Railways Act, 1890 bef~re the Railway Rates
Tnbunal at MadraJ, cla1mmg that the charges claimed by the Railway
~ere un!eason~ble and requesting the Tribunal to fix reasonable charges
in exerc1<e of its powers under s. 41(3) of the Act. The complaint was
contested by the Railway o~ the grounds (i) .that the charges to which
the complaint related were tn respect of services that the Railway was
not under any statutory duty to render to the company and was rendering
them under private agreement with
the company; com;equently,
such
charges did not fall
within
the
ellpression
'any
other charge'
in
~· 4!(l)(c) and therefore no complaint could be filed under s. 41 challeng.
mg !hem on the ground of being unreasonable: (ii) that the burden of
provmg the charges were unreasonable was on the company which
had
not be~n discharged and the Tribunal was not competent to call upon
the Radway to prove the reasonableness of the charges and to "reduce the
charges only on the ~round that the Railway had failed to establish their
reasonableness; and (iii) that the charges demanded by the Railway were
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[1967] 3 S.C.R.
in fact reasonable and should not be reduced.
The Tribunal rejected the
Appellants' contentions and revised the charges
on
the
basis of the
evidence adduced before it.
On appeal to this Court.
HELD :
(i) The charges in quest'.on were covered by the expression
"any other charges" ins. 41(1)(c) and the complaint in the present case
was rightly entertained by the Tribunal.
The only charges which could be said to relate to the discharge by
the Railway of its statutory duties would be those fixed under s. 29( I)
of the Act in respect of a commodity carried by the
Railway over its
·own lines. It is clear that a complaint under s. ·U (I) (b) relates to fixation of a rate relating to charges mentioned in s.29(1), whiles. 41(J)(c)
relates to a complaint in respect of any
other charges
mentioned
in
s. 29(2). The expression
"any other char~e" used in ss.
29(2)
and
4l(I)(c) cannot be given the narrow meanmg of covering a charge in
respect of the statutory duty of the Railway
so as to exclude charges
made or levied for all other services.
It must necessarily cover charges
which are not included in s. 29(1) and s. 4l(l)(b). It was immaterial
that the ch>rrges being levied by the Railway arooe only as a result of a
voluntary agreement which the Railway, at its option, might have refused
10 enter into.
[226H; 2278, E-F]
Ha/sbury's Laws of Engla11d, 2nd Edn. Vol. 27, Paras 434 arnl 436
at p. 196; referred to.
(ii) The figures of the proposed increase in char~es given on behalf
of the company,. which were challenged in the complamt, did prima facie
indicate that the rates fixed and demanded were unreasonable. It could
not therefore be held that the Tribunal committed any error in going into
the evidence given on behalf of the Railway and arriving at reasonable
rates aftet a full consideration of that evidence and the evidence tender~
-ed on behalf of the company.
[229E, F-G]
(iii) It was necessary to include a margin of profit in the ';shunting
engine charge" fixed by the Tribunal and (upon an examination of the
evidence) to revise the siding charges.
[The Court therefore itself fixed the rates for the charges to he levied
by the Railway].
CIVIL APPELLATE JuRJSDJCTIOll: Civil Appeal No. 610 ol
1965.
Appeal by special leave from the judgment and order dated
December 31, 1963 of the Railway Rates Tribunal, Madras in
Complaint No. I of 1962.
N. S. Hindra, R. H. Dhebar for R. N. Sachthey, for the appel·
!ant.
A. K. Sen, B. P. Maheshwari and R. K. Chaudhary, for the
respondents.
The Judgment of the Court was delivered by
Bbargava, J. Belsund Sugar Co. Ltd., Riga, (hereinafter refer·
red to as "the Company") was incorporated in the year 1932.
Soon after the incorporation o~ the Company, the ~omp~ny esta~
lished a. fairly large sugar mill near railway stat10n Riga.
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UNION 1'. SUGAR MILLS ASSOCN, (Bhargava, /.)
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station was on the railway line of the Bengal an~ ~orth Western
Railway which, at that time, was owned by a hm1ted Company
known as the Bengal and North Western R~il~ay Limit~d. At
Riga railway station, the Railway had two mam lines runmng, one
along the passenger platfonn, and another forming a loop ~gainst
it running parallel to the first line with points on both s1d:s. of
the platform for taking the railway trains to line 2 when amvmg
from either direction at Riga railway station.
For the sake of
convenience, the line along. the passenger platform will be referred to as line l, and the other main line forming the loop as line
2. In addition, there was a goods platform and a line was run
connecting line 1 to the line along the goods platform fro~ both
directions.
That line is to be referred to hereinafter as !me 5.
Since the sugar factory of the Company was established close to
Riga station, considerable goods traffic started being received for
the Company and, at the same time, goods traffic was also booked
by the Company for outward transmission from this station.
D~r
ing the crushing season, a large number of wagons loaded with
sugarcane used to be received and, under the existing constructions
of the Railway, delivery of the sugarcane had to be taken from the
goods wagons on line 5 at the goods platform. Since the traffic
was considerable, it became inconvenient and, consequently, an
arrangement was entered into between the Railway and the Company for construction of two sidings, described as assisted sidings.
In pursuance of this arrangement, two further lines (hereinafter
referred to lines 3 & 4) were laid between lines 2 and 5 running
parallel to these lines. Trains from line 1 could be taken to lines
3 and 4 from both directions in the same manner as they could
be taken to line 5. At the time of construction of these assisted
sidings represented by lines 3 and 4, an agreement was entered
into between the Railway and the Company on 21st November,
1933. Under that agreement, part of the expenditure on the construction of these assisted sidings was met by the Company, while
part of the expenditure was incurred by the Railway. It was agreed
m that agreement .that the Company will pay in advance, in two
equal half-yearly mstalments on the first day of April and the
fi~st ~ay of October respectively in each half-year, a fixed contnbut10n. of Rs. 709/8/- per half-year to the Railway for the use
of the rallway portion of the siding. The agreement proceeded to
lay down that th". p~yment of !his contribution by the Company
was to be !aken m lieu of paymg separately for interest on, and
cost .of mam~enance of, the permanent-way, points and crossings
and mterl~c~mg connected therewith and for freight on the traffic
over the s1d~ng.. It was further agreed that, in the event of the
abov~ contnbutm? .not being sufficient to meet the cost of the
workmf of. the s1.dm.g, th". Railway was entitled, on giving six
m?nt~s notice of tis mtention to do so, to modify the above contnbut10n and charge the Company such higher amount as it may
222
SUPREME COURT REPORTS
[1967] 3 S.C.R.
consider necessary to meet the increased cost of working. Further
railway lines were also laid from Riga railway station up to the
factory of the Company. A line ran from the junction of lines 3
and 4 on the western side of the station in a semi-circular loop
and then entered the factory of the Company where the line was
connected to four different lines. This line, running from the junction up to a point where there was further bifurcation of lines, will
be referred to as line .6. At the end of line 6, this line was connected to two lines, one situated to the south, and the other to
the north. There was also a loop form~d by connecting the northern line to the southern line by another connecting line. This
loop is to be referred to as line 7. Lines 6 and 7 were laid at the
cost .of the Company. The arrangement was that the Company
was to take delivery of its sugarcane wagons as well as all other
goods on lines 3 and 4 at the assisted sidings. Thereafter, it was
the duty of the Company to unload the wagons there, or to have
them rolled into their own factory yard. It appears that the Company purchased a railway engine and used it for taking the loaded
wagons to the factory and bringing back the unloaded wagons to
these lines 3 and 4. For outward traffic also, the empty wagons
often used to be loaded in the factory yard and brought by the
factory engine to Riga railway station. On some occasions, the
wagons were taken by being pushed by manual labour instead of
using the engine. A third alternative was that the Company would
request the Railway to arrange for the shunting of their wagons
from lines 3 and 4 to the factory yard. Whenever this arrangement was adopted, the Railway charged the factory for this service
rendered. It appears that between the years 1956-57 to 1958·59,
the Railway used to charge the Company at the rate of Rs. 18/ •
pe~ hour, computing the time taken by the shunting engine in completing the work of the Company.
The time computed began
when the shunting engine came to lines 3 and 4 to take away the
Company's wagons, and ended when the engine returned to the
railway station after completing the work of shunting the wagons.
Sometimes, on return, the engine brought empty wagons, but this
was considered immaterial, because the charge was made from the
Company by the Railway on the basis of the time actually taken by
the shunting engine calculated @ Rs. 18/ • per hour. This rate
of Rs. 18/. per hour will be described hereafter as the rate of the
shunting engine charge.
It may be mentioned that, in the year
1942, the Bengal and North Western Railway was taken over by
the Indian Government and, at the relevant time in the year 1958,
the Railway was owned by the Union Government and was run
under the name of North Eastern Railway, which is the name it
continues to bear at present.
The arrangement, mentioned above, co!1tinued up t? 8th
February, 1958. On this date, a notice was given by the Railwav
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UNION v. SUGAR MILLS ASSOCN. (Bhargava, !.)
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to the Company proposing enhancement of the charges to be levied
in pursuance of the agreement which had been entered into on 21st
November, 1933, under which the Railway was empowered to
enhance the charges, if it considered it necessary to meet the increased cost of the working of the assisted sidings. By this letter
dated 8th February, 1958, the Railway gave six months' notice of
enhancement of the charges, after mentioning that the fixed contribution of Rs. 709/8/- per half-year for use of the Railway portion
of the siding in lieu of paying separately for interest on, and cost of
maintenance of, the permanent-way, points and crossings and interlocking connected therewith and for freight on the traffic over the
siding was not considered sufficient to meet the cost of present-day
working of the siding. The charges to be levied in lieu of existing
fixed contribution were mentioned as a sum of Rs. 603.7nP per
half-year in respect of interest on the capital and cost of maintenance of the permanent way, points and crossings and interlocking
connected therewith, while for the freight on the traffic over the
siding, described as the siding charge, the Railway demanded
Re. 1 /- per 4-wheeled wagon hauled over the siding, subject to a
minimum of Rs. 7 /- per shunt. The new rates were to come into
force with effect from 10th August, 1958. Though the Company
did not agree to these new rates, the Railway demanded payment at
these rates and, ultimately, the Company was informed by the
Railway that, if payments at new rates were not made, the facility
of the assisted siding would be withdrawn. The Company made
payments under protest. Further, the Railway also enhanced the
rate for the shunting engine charge. The rate was enhanced to
Rs. 28/- per hour for the year 1959-60 and to Rs. 30/50nP per
hour for the year 1960-61.
The Company, bein~ dissatisfied with these charges, filed a
complaint under section 4l(l)(c) of the Indian Railways Act, 1890
(h~reinafter referred to as "the Act") before the Railway Rates
Tn?unal at Madras (hereinafter referred to as "the Tribunal")
agamst the enhancement of the shunting engine charges from
Rs. 18/- per hour to Rs. 28/- and subsequently Rs. 30/50nP per
~our, as -well as the enhancement of the siding charges by prescribmg a scale of payment @ Re. 1/- per wagon with a minimum of
Rs_. 7 /- per s.hunt. It appears. that there were a large number of
sugar mills s1tuate.d along van?us railway stations served by the
North Eastern Railway, and with them also there existed similar
arrangeme~ts as the one arrived at between the Railway and the
Company m 1933 under the agreement mentioned above.
All
t!1ese sug~r mills Vfe~e membe.rs. of the Indian Sugar Mills Associat10~. This Association also iomed as a complainant in the complamt of the Company representing all its constituent sugar mills.
In the proceedings before the Tribunal, however, the Indian Sugar
Mills Association did not take any active part and the case was
224
SUPREME COURT· REPORTS
(1967) 3 S.C.R.
act~ally fought out by the Company. It was urged in the complaint that both the shunting engine charges and the siding charges
at the enhanced rates claimed by.the Railway were unreasonable
and the Tribunal was requested to fix reasonable charges in exercise
of its powers under s. 41(3) of the Act.
The complaint was contested by the Railway on three grounds.
The first ground was that the charges, to which the complaint related, were in respect of services which the Railway was not bound
to render to the Company and was rendering under private agree·
ments with the Company and, consequently, no complaint could
be filed under s. 41 of the Act challenging them on the ground of
being unreasonable.
This plea was taken on the basis that the
expression "any other charge" ins. 41(1)(c) of the Act could only
cover a charge made by the Railway in discharge of its duties
under the statute and could not cover a charge made by the Railway
for voluntary services which the Railway might render under a
private agreement of a commercial nature to any other party. The
se«>nd ground was that the complainants had not succeeded in
showing that the charges demanded by the Railway were unreason·
able and, that burden of proof not having been discharged by the
complainants, the Tribunal was not competent to call upon the
Railway to prove the reasonableness of the charges and to reduce
the charges only on the ground that the Railway had failed to establish their reasonableness.
The third point of contest was that
the rates, at which the charges were demanded by the Railway,
were, in fact, reasonable and should not be reduced.
The Tribunal held that the complaint was competent and that
the expression "any other charge" in s. 41(l)(c) of the Act did
cover both these charges to which the complaint related. The Tri·
bunal did not, in specific words, hold that the complainants had
established that the charges were unreasonable, before proceeding
to examine the reasonableness of the charges. On the other hand,
the Tribunal proceeded to examine the evidence of the parties adduced before it and came to the finding that, in both cases, the
charges being demanded were unreasonable. Further. after examin·
ing in detail the evidence given on behalf of the Railway, and on
making its own computation, the Tribunal held that a sum of
Rs. 20/- per hour was a reasonable rate for the shunting engine
charge. In respect· of the siding charge, the Tribunal rejected the
plea of the Railway that this charge should also be levied on the
basis of the time taken in shunting the wagons of the Company to
lines 3 and 4, after taking into account the shunting engine charge.
lt was held that, in the original agreement of 1933, parties, had
agreed to a lumpsum in respect of various services, and the subsequent conduct of the Railway established that, out of the total sum
of Rs. 1,419/-per year, a sum of Rs. 1,206/14nP per year repreB
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UNION v. SUGAR MILLS ASSOCN. (Bhargava, J.)
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sented charges in respect of interest c;>n the capita~ and c~st of
maintenance of the permanent way, pomts and crossmg and mterlocking connected therewith. The remaining sum of Rs. 212 and
odd was held to represent the freight on the traffic over the assisted
sidin~ and was treated as the siding charge. In the absence of
reliable material provided by the Railway for arriving at a reasonable figure on any other basis, the Tribunal held that the only
amount which the Railway could be permitted in respect of the
siding charge would be double the amount originally chargeable
under the agreement of 1933 and, consequently, allowed the Rai!·
way siding charge at a fixed rate of Rs. 424/- per year. It 1s
against this decision of the Tribunal that the Ra!IV'.ay has come
up in this appeal to this Court by special leave, and, m the appeal,
has taken all the three points, mentioned above, on the basis of
which the complaint before the Tribunal was resisted.
Dealing with the first. question, which was the only questi?n of
law raised in this case, learned counsel appearing for the Railway
drew our attention to the definition of "railway" in s. 3(4) of the
Act and, in particular, to clause (b) thereof under which the "railway" is defined to include all lines of rails, sidings or branches work·
ed over for the purposes of, or in connection with, a railway. It
was urged that the assisted sidings, comprised of lines 3 and 4,
were not worked over for the purpose of, or in connection with, the
work of the railway and, consequently, these assisted sidings could
not be held to be a part of the railway. Attention was also drawn
to s. 11 of the Act, which lays down the duty of the Railway to
make and maintain certain works, to show that there was no duty
on the Railway to maintain the permanent way, points and crossings and interiock;ing connections existing for the service of these
assisted sidings, lines 3 and 4. The duties of the Railway in respect
of goods traffic are laid down in s. 27 which requires the Railway
to ~ffo~d all reasonable facilities for the receiving, foIV·arding and
dehvenng of traffic upon and from the several railways belonging
to o~ ~orked by it and for the return of rolling stock. Under this
provmon also, there was no duty on the Railway to give delivery of
goods to the Company on lines 3 and 4. The duty was to carry
~oods o~ th: Company an~ to d~liver them on line 5 which was the
lme mamtamed by the Railway itself for delivery of goods
It was
ur~ed that, in th~se circumstances, it must be held that th~ charges
levied by the Railway for taking the wagons, containing the goods
?f the Company, to lines 3 and 4, as well as the charges for renderm~ the sel'vice of taking the wagons of the Company to the prem1~es of its factory over lines 6 and 7 cannot be held to be charges
levied for the purpose of performing any duty cast on the Railwav
by the Act.
Section 29 of the Act lays down how rates are to
be ~xed. Under s" 29(1), the Central qovernment is empowered,
by 0 eneral or special order, to fix maximum and minimum rates
226
SUPREME COURT REPORTS
[1967] 3 S.<..R.
for the whole or any part of a railway, and prescribe the conditions in which such rates will apply. Under sub-s. (2), the Ceniral
Government is empowered, by a like order, to fix the rates of
any other charges for the whole or any part of a railway and to
prescribe the condition in which such rates of charges are to
apply. It was urged that the charges now in dispute will not be
charges covered by s. 29(1) or s. 29(2) of the Act, and, on the
same basis, they will not be charges covered by s. 41 ( 1 )(b) or
s. 41 (I )(c) of the Act.
We are unable to accept this submission made on behalf of
the Railway. It is correct that s. 29(1) of the Act will apply to
rates of charges for carrying goods from station to station over
the railway itself, in such a case, the Central Government can fix
the maximum and minimum rates, whereas the actual rates to be
charged can be fixed by the Railway Administration itself. If any
person has a grievance that the rate being charged by the Railway
is excessive, he can complain to the Tribunal, and the complaint
would be covered by the provisions of s. 41(l)(b) of the Act. This
charge for carriage of goods over the. railway or part of a railway
is the only charge in respect of goods which can be the subjectmatter of a complaint under s. 41(1)(b) of the Act. The language
of s. 4l(l)(b), by itself, excludes its applicability to passenger fares.
Charges are often made by the Railway for wharfage and demurrage, but the jurisdiction of the Tribunal to deal with the fixation
of these charges is expressly taken away bys. 45(l)(b) of the Act.
Consequently, it appears that, in respect of a commodity carried
by a railway over its own railway lines, the only charge that the
Railway can levy, and which can be the subject-matter of a com•
plaint under s. 41(1)(b), will be the charge for carriage of the
commodity between two stations and it would be in respect of the
discharge by the Railway of its statutory duty of carrying goods
between stations maintained by it. There does not appear to be
any other statutory duty in respect of which any other charge
could be levied by the Railway, and, consequently, if the interpretation sought to be put on behalf of the Railway is accepted,
the result would be that s. 29(2) will become ineffective and redundant, because there would be no other charges in respect of
which fixation of rates by the Central Government would be required.
Similarly, the provision contained in s. 41(1)(c) would
also be redundant, as there would be no other charges in respect
of which a complaint could be filed under this provision. It is
clear that a complaint under s. 41(1)(b) relates to fixation of a rate
relating to charges mentioned in s. 29(1), while s. 41(1)\c) relat~
to a complaint in re:rpect of any other charge mentioned m
s. 29(2). It appears to us, in these circumstances, that the expression "any other charge" used in s. 29(2) and s. 4 l(l)(c) cannot be
given the narrow me:aning of covering a charge in respect of the
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statutory duty of the Railway so as to exclude charges made or
levied by the Railway for all other services. In this connection,
the language used in clauses (b) and (c) of s. 41(1) is significant.
Section 41(1)(b), as has been mentioned earlier, covers a complaint in respect of a charge for carriage of any commodity between two stations at a rate which is unreasonable, while s. 41(1)
(c) relates to the levy of any other charge which is unreasonable.
The expression "any other charge" in clause (c) must, therefore,
cover charges which are not included in clause (b).
Clause (b)
specifically mentions charges for carriage of a commodity between two stations, and, hence, the expression "any other charge"
in clause (c) must necessarily include within it a charge for carriage of any commodity between places other than two stations.
In the present case, the shunting engine charge and the siding
charge are both being levied by the Railway for carrying goods
from the railway to sidings not forming part of the railway. In
bringing goods from other stations to Riga station on Jines 1, 2
or 5, the railway would only be carrying the goods between stations. It is only thereafter, when the wagons are shunted by the
railway to Jines 3 and 4 or over Jines 6 and 7 to the factory of
the Company, that the railway will be carrying goods between
a station and another place or between two different places which
cannot either of them be described as stations. This charge for
carriage of the commodity in the context in which the expression
"any other charge" is used in s. 29(2) and s. 41(1)(c), must be
covered by this expression. It appears to us to be immaterial that
the charge being levied by the Railway for taking the wagons to
the assisted sidings or to the factory of the Comeany arises only
as a result of a voluntary agreement by the Railway which the
Railway, at its option, might have refused to enter into. It is
correct that the Railway was not bound to agree to carry the
goods of the Company to the assisted siding or to. the factory of
the Company; but .it seems to us that, once the Railway did, in
fact, agree and decide to charge the Company for it, the Railway
became bound to make the charge in accordance with s. 29 (2) of
the Act. If a rate of charge is prescribed by the Central Governmen.t _under s. 2~(2) for such voluntary service and the person
rece1vmg the service feels aggrieved, he can complain to the Tribunal ~nder s. 41(1)(c) of the Act and have the reasonable rate
determmed. Even if no rate is prescribed by the Central Government under s. 29(2) and the Rai!way levies such a charge, it will
be competent for the person aggrieved to file the complaint against
the rate ~f charge ~fore the Tribunal under s. 4l(l)(c).
In !his connec!Ion, it was urged by learned counsel that the
expre~s10n "any ~ther charge" should not be given a very wide
m~anmg and he cited before us instances of various other charges
bemg made by the Railway, such as charges for advertisement on
LS Sup. C. I./67-2
228
SUPREME COURT REPORTS
(1967] 3 S.C.R.
railway premises, catering charges, retiring room charges and
time-table charges, to urge that at least these charges would not
be covered by the expression "any other charge" in s. 41(1)(c) of
the Act. It seems that, in this case, it is not at all necessary for
us to examine whether charges of this nature mentioned by learned
counsel will or will not be covered by the expres~ion "any other
charge". In fact, we do not think it to be advisable that we should
try to define the full scope of the expression "any other charge"
in this case. It is enough to hold for the purposes of this case
that at least the charges for carriage of goods from parts of the
railway to points or places, not forming part of the railway, will
certainly be covered by the expression "any other charge" used in
s. 4l(l)(c), so that the complaint in the present case was competently entertained by the Tribunal.
This view that we have arrived at is in line with the principles
laid down in England as noted in Halsbury's Laws of England,
2nd Edn., Vol. 27, in paras 434 and 436 at p. 196. In para
434, the principle noted is that "loading and unloading, covering
and uncovering. in classes 7 to 21, though performed at the private
siding, are services otherwise provided for in the standard charges,
and the company must charge for these either the standard or an
exceptional rate.
And where the Railway Rates Tribunal have
by order fixed charges for serviees not included in conveyance
and terminals, as long as the order stands unchallenged the company may only exact the charges fixed by the Tribunal and not
what the company thinks are reasonable charges". Then; in para
436, it is said : "So, even when the carriage charges are paid by
a siding owner who has entered into an express agreement to pay
a fixed or ascertainable sum for the private siding services, he may
still refer the matter to the Railway Rates Tribunal ...... The
Tribunal may consider from a business point of view what is the
money value of the services rendered or they may ascertain the
total cost of .the services over a year and divide it by the number
of. tons carried during the same period to give an addition to the
tonnage rate". These principles clearly indicate that the Railway
Rates Tribunal is competent to determine the reasonableness of
charges for services by a railway even on private sidings.
The
same principle is incorporated in s. 41(1)(c) of the Act in India
by empowering a complainant to complain to the Tnounal, if any
charges, other than a charge for carriage of commodity between
stations, is found to be unreasonable. The preliminary legal objection raised on behalf of the Railway was, therefore, rightly rejected l>y the Tribunal.
On the second question, we find that, in the pleadings. taken
before the Tribunal, the Railway did not in so many words specifically raise the issue that, before proceeding to examine the reaA
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sonableness of the rates demanded by the Railway, the Company
should be called upon to show that those rates were unreasonable,
though the issues, which wefe ·framed both· with :i:egard to the
siding charges as well as the shunting engine chllfges, were couched in languagy enquiring whether the rates •demanded by the
Railway were unreasonable.
It appears that, in the. complaint,
the Company. had mentioned figures 1 on !lie basis of which the
Company requested-the Tribunal tQ .hold lhat these charges were
unreasonable.' In respect of'-the· shunting engine charges, the
pleading was that· the Railway had been charging the Company at
a rate'of Rs. 18/- per hour for the years 1956-57 to 1:958-59 and
had, then, suddenly r_aised the charges to Rs. 28/ • per hour :withr
out any justification.
This sudden enhancementdrom .Rs. 18/,-
to RS. 28/-' per hour in, th« )'ear.il 959-60> was ~ged.to··be unreasonable. In the case" of siding• charges, the pleading [was that
the"Cpmpany- had be~n paying earlier.a fi,xed._sum of~· 212/-
per year, while, ·dftet'the enhancetiieht bY, the-.'ilotice dated 8th
February, ,1958, the charges were 'So fixed that the burden orr·the
Comp.any rose to· amounts in the ·next t!Jtee years varying between
·Rs. 7,752/- to Rs. 9,676/-. 'AC'Cording to'the Company,.thus,:the
siding· charges· were fixed in such a manner that1•.after ·enhance'
nl.en't, 'the· charges payable became 10· tc1"80 times ·the charges
qrigin~lly"payabl&'. under the agr~~ment of 193 3.
These figures
g!vpn on behalf of the· c!ornpany. ·did,· p)'ima· 'fdcie, indicate, that
tlie 'rates fixed and demande'll, which were ·challenged ·in· the com•
plaint, were unreasonable. Further, the new rate of Re. If.•. pep
wagon was, per se ,1,1nreasoni1ble inasmuch as"lhe cost incqrretl
by the 'Railway on 'shunting the wagons could not be in ·proportion to the n'Umber of wagons shfinted 'and 'C'oaltl' not, in any case;
be ss>' high as'.'io j~tlf}'. t~\s rati:'.even i_n cases -~hen ·:r'large .num.
ber of wagohs were sliunted togeth~r IO one ·sIOgle shunt, :Conl
s~uently, it was_ ~bnip~ten~1or the 'Fribunar tb cal~U'pon•the parl!cs to...adduce evidence 'and fo c!'eterinine ·V?hlit woul11 be the reason~ole_ ~11~e.s 'ac~~rdjpg to the T,ilbun~I' iis~lf. -'!;hat being the
factual pO~ltI?n, we cannot n9Ja·th'at, the T{!biinal confmitted~any
'error ·in Jl'oing liito the evidence given ofr·behalf o~ the Railway
antj. arriving at the! reasonable rates, after a full cbiisid,erlitiorr•of
that e'vfdence arid" the evidence- tendered 'on beqalf bf the C61ii.-
pal)y.'
J~· is' to' be noi7d that thb- ne~~s~rJ'.'fac_t.s· fqt· ~~teiminifi~
what expenses the ~a1lway must be mcurrmg•m order to render
the services for -"'.his:1t1t11~y ~ere geman,di'!g}:h;tr?es,~t.th~ impμ,g~
e:J rates
wer'e IO ,the specij\I k!:1owl~cj~e',o'f11he .Ra1lway;a,uth'~m;
!ICs only and, ~onsequeptly, whep~ subs~que~9Y the Tribunal eX3:,
min~d' tl\is ,qil~S't,io11,; it .Proceede~1riglitiy ]ri x;af~lil)y scrutiriisin'l!
th,e ,ev1~~nce _fe{laer~cl on bpf<alf .of .tll~'Rai!way. •1
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_Qh thc.~er~s, it aP,pea~· tP. us· that; so' far a's the shllllting
engme char&e$ are concerned,. the deciSiqn ,given by theLTriblIOal
230
SUPREME COURT REPORTS
[1967] 3 S.C.R.
for arriving at the figure of Rs. 20/- per hour as the cost incurred
~y 0e . Railway does not suffer from any such error as would
3ustify mterference by us.
The Tribunal took into consideration
the figures, provided by the Railway, of expenditure incurred per
hour on the running of all types of engines, and noticed the fact
that the cost in the case of shunting engines must be lower due to
the inferior quality of coal consumed in them, when compared
with the coal consumed in engines attached to passenger trains or
even engines pulling the regular goods trains. It also took into
account the fact that the calculation was based on the assumption
that a shunting engine would be running, on an average, @ 5
miles an hour for 12 hours a day, while, when calculating depreciation, the documents provided by the Railway itself showed
that the average run of a shunting engine was calculated at 90
miles a day. The basis of a run of 60 miles a day of the shunting
engine adopted by the Railway for calculating shunting charges
could not, therefore, be accepted as correct. There was also the
circumstance that, in making the calculation, certain expenses had
been included which were in no way connected with shunting
<Operations, such as expenses on ticket checking staff. Taking
these circumstances into account on the one side, and keeping in
view on the other side the fact that, in the year 1959-60, there
must have been a rise in the cost of running the shunting engine.
as compared with the rate which was fixed in the year 1956-57.
the Tribunal estimated that a reasonable rate for the shunting
engine charges will Rs. 20.00 per hour. We do not think that
the principles adopted by the Tribunal are in any way incorrect
or suffer from any such error as would justify our examining the
whole evidence considered by the Tribunal for ourselves and making fresh detailed calculations in order to find out whether this
figure of Rs. 20 per hour arrived at by the Tribunal should be
varied to some extent. In these circumstances, we do not think
it necessary to discuss in detail the evidence given by the Railway
which was placed before us by learned counsel for the Railway
to challenge the finding arrived at by the Tribunal. The finding
of fact recorded by the Tribunal does not suffer from any such
error as could induce us to go into this question as a regular
Court of fact.
Consequently. we think that the figure of Rs. 20 I -
per hour arrived at by the Tribunal, as representing the cost of
the Railway for running the shunting engine must be accepted.
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There is. however. one aspect which the Tribunal seems to have
lost sight of. According to the admitted case of th~ parties, th~re
is no obligation on the Railway to render the servtce o~ carrymg
the wagons of the Company from lines 3 and 4 to therr fact~ ff
premises. nor is there any obligation to bring back the empties
or wagons loaded with outward (raffic goods from the Compmifs
yard to the railway station. In fact, the Company bad an engme
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UNION v. SUGAR MILLS ASSOCN. (Bhargava, J.)
231
of its own for a number of years and a second engine was purchased by the Company in the year 1962. Apart from carrying
out these operations itself by the use of these engines, the Co1!1pany also, on occasions, had the wagons hand-shunted. The Railway undertook the work only on occasions when the ComPl!11y
made a specific request to the Railway to do so. In thus agreemg
to undertake the work, the Railway voluntarily entered into transactions with the Company partly to assist the Company and
partly with the object of expanding its commercial activities. In
fact, the charges were levied by the Railway, because the Railway is run as a commercial undertaking for the purpose of earning profits and, consequently, the Tribunal, in fixing the reasonable rate for shunting charges, should have taken into account the
profit-making motive of the Railway also and should not have confined the charges to the actual cost incurred by the Railway in
rendering this service.
We think that, in these circumstances,
there is full justification for increasing the rate chargeable for
rendering the service of shunting the wagons from lines 3 and 4
to the yard of the Company over its private lines and it should be
fixed at Rs. 22/- per hour, giving a margin to the Railway of
10% over its actual cost.
On the merits of the rate fixed by the Tribunal for the siding
charges, we find that the criterion adopted by the Tribunal is not
justified.
As has been mentioned earlier, the case of the Company was that the fixed contribution of Rs. 709/8/- per half-year,
or Rs. 1,419/- per year represented the consolidated charges in
lieu of the Company's paying separately for interest on, and cost
of maintenance of, the permanent way, points and crossings and
interlocking connected therewith and for freight on the traffic over
the siding, and that a sum of Rs. 603/7nP per half-year, or
Rs. l,206/14nP per year out of this consolidated amount represented charges in respect of other items, besides the freight on the
traffic over the siding.
It was on this basis that the Complll8J
pleaded in the complaint that the freight on the traffic over lhe
siding under the agreement amounted to Rs. 212/. per year only.
We, however, find that, in the complaint, this break-up of
Rs. 1,419/: was not specifically pleaded. The pleading was that,
by. the notice dated 8th February, 1958, the Railway had itself
levied the charge in respect of interest on and cost of maintenance
of, the permanent way, points and crossings and interlocking connected therewith at Rs. 603/7 nP per half-year, and that Rs. 212/-
per year "".a~ the origina~ charge in respect of freight on the traffic
over the s1dmg. How this figure of Rs. 212/- was arrived at was
!lot specifically indi~ated in the pleadings. The result was that,
in the counter-pleadings put forward by the Railway no specific
pleas were taken challenging the correctness of the bre'.ik-up of the
sum of Rs.