# SUPREME COURT REPOR'FS [1959) RAIGARH JUTE MILLS LTD v. EASTERN RAILWAY AND ANOTHER

- **Citation:** [1959] 1 S.C.R. 236
- **Court:** Supreme Court of India
- **Decided:** 1959
- **Case number:** Civil Appeal No. 231of1954
- **Bench:** S. R. DAS c. J, Venkatarama Aiyar, s. K. DAS, Gajendragadkar, Vivian Bose
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/supreme-court-repor-fs-1959-raigarh-jute-mills-ltd-v-eastern-railway-and-another-1591
- **Pages:** 14

## Headnote

Railway Rates~Freight charges-Complaint of u11duc pri!-
ference-Unreasonable and excessive rates-Competitive trajftcIndian Railways Act, r890 (9 of I890), ss. 28, 4r .
•
The appellant company owned jute mills situated in Raigarh
in the State of Madhya Pradesh, and it had to bring raw material
from many railway booking stations outside the State as there
was no other means of transport both for bringing jute to the
mills and for carrying the finished products to ports for exl'ort to
foreign countries; the jute mills in West Bengal and Madras had
facilities for direct shipment of their goods without carriage by
rail to the ports, and so the prices of the products of the ll'ppellant conld not be brought down to the competitive level for the
purposes of export out of, or sale in, India.
Th.e appellant filed
a complaint before the Railway !<ates Tribunal under s. 41 of the
Indian Railways Act, 1890, on the allegations that the Railway
administration had contravened the provisions of s. 28 of the Act
in that it had offered special rates for certain stations in its zone
to Kanpur which were cheaper than those that were charged
between Raigarh and some other railway stations, and that the
c!larges levied for the freight of the appellant's goods were unreasonable and excessive.
The Tribunal found that competition
between the goods of the Kanpur mills and the appellant's £Oods
had not been alleged or proved in the present case :
Held, that the mere fact rtiat the goods of the Kanpur mills
are transported at more favourable rates would not attract the
provisions of s. 28 of the Act, unless there is competition between
the goods of the Kanpur mills and the appellant's goods, and
undue preference has been sho,vn by the railway administration
to•the appellant's competitor.
•
Nitshill and Lesmahagow Coal Company v. The Caledonian,.,,'
Rail1~ay Company, (1874) II Railway an<l Canal Traffic Cases, 39,
Denaby Main Colliery Company v. Manchester, Sheffield and
Lincolnshire Rail'lllay Company, [1886] II App. Cas. 97, Lancashire
Patent Fuel Company Limited v. London and North-Western Railway Company, (1904) XII Railway and Canal Traffic Cases, 77
and Lever Brothers, Limited v. Midland "Railway Cumpany, (1909)
XIII Railway and Canal Traffic Cases, 301, relied on.
<,
Held. further, that in considering the question as l;o tLe
~
reasonableness of the railway freight the relevant factors would
mainly be the working costs of the railway a~ministration and
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s.c.R.
~UPREME COURT REPORTS
237
other material circumstances, and neither the geographical location of the appellant on account of which it has to incur additional
expenses of transport, nor the cost incurred in producing the jute
goods nor the commodity prices prevailing in the market, have.
any relevance.

## Text

JI.larch a4.
, ,
236
SUPREME COURT REPOR'FS
[1959)
RAIGARH JUTE MILLS LTD.
v.
EASTERN RAILWAY AND ANOTHER
(S. R. DAS c. J., VENKATARAMA AIYAR, s. K. DAS,
GAJENDRAGADKAR and VIVIAN BOSE JJ.)
Railway Rates~Freight charges-Complaint of u11duc pri!-
ference-Unreasonable and excessive rates-Competitive trajftcIndian Railways Act, r890 (9 of I890), ss. 28, 4r .
•
The appellant company owned jute mills situated in Raigarh
in the State of Madhya Pradesh, and it had to bring raw material
from many railway booking stations outside the State as there
was no other means of transport both for bringing jute to the
mills and for carrying the finished products to ports for exl'ort to
foreign countries; the jute mills in West Bengal and Madras had
facilities for direct shipment of their goods without carriage by
rail to the ports, and so the prices of the products of the ll'ppellant conld not be brought down to the competitive level for the
purposes of export out of, or sale in, India.
Th.e appellant filed
a complaint before the Railway !<ates Tribunal under s. 41 of the
Indian Railways Act, 1890, on the allegations that the Railway
administration had contravened the provisions of s. 28 of the Act
in that it had offered special rates for certain stations in its zone
to Kanpur which were cheaper than those that were charged
between Raigarh and some other railway stations, and that the
c!larges levied for the freight of the appellant's goods were unreasonable and excessive.
The Tribunal found that competition
between the goods of the Kanpur mills and the appellant's £Oods
had not been alleged or proved in the present case :
Held, that the mere fact rtiat the goods of the Kanpur mills
are transported at more favourable rates would not attract the
provisions of s. 28 of the Act, unless there is competition between
the goods of the Kanpur mills and the appellant's goods, and
undue preference has been sho,vn by the railway administration
to•the appellant's competitor.
•
Nitshill and Lesmahagow Coal Company v. The Caledonian,.,,'
Rail1~ay Company, (1874) II Railway an<l Canal Traffic Cases, 39,
Denaby Main Colliery Company v. Manchester, Sheffield and
Lincolnshire Rail'lllay Company, [1886] II App. Cas. 97, Lancashire
Patent Fuel Company Limited v. London and North-Western Railway Company, (1904) XII Railway and Canal Traffic Cases, 77
and Lever Brothers, Limited v. Midland "Railway Cumpany, (1909)
XIII Railway and Canal Traffic Cases, 301, relied on.
<,
Held. further, that in considering the question as l;o tLe
~
reasonableness of the railway freight the relevant factors would
mainly be the working costs of the railway a~ministration and
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s.c.R.
~UPREME COURT REPORTS
237
other material circumstances, and neither the geographical location of the appellant on account of which it has to incur additional
expenses of transport, nor the cost incurred in producing the jute
goods nor the commodity prices prevailing in the market, have.
any relevance.
CIVIL APPELLATE JURISDICTION: Civil Appeal No.
231of1954.
•
Appeal by special leave from the judgment and
order dated August 17, 1953, of the Railway Rates
Tribunal at Madras.in Complaint Case No. 5 of 1952.
S. '0. Isaacs and R. O. Prasad, for the appellant.
H. N. Sanyal, Additional Solicitor-General of India;
H.J. Umrigar and R.H. Dhebar, for the respondents.
1958. March 24.
The J 1,1dgment of the Court was
delivered by
Raigarl• jute
Mills ftd.
v.·
Easterr• Railway
G AJENDRAGADKAR J .-This is an appeal by special Gajendragadka• J.
leave against the order passed by the Railway Rates
Tribunal, hereinafter called the tribunal, at Madras
dismissing the appellant's complaint under s. 41 of the
Indian Railways Act (9 of 1890), to be described hereinafter as the Act.. The appellant, Raigarh Jute Mills
Ltd., is a limited company owning jute mills which are
situated in Raigarh .in. Madhya Pradesh. For the I1roduction of jute goods, the appellant has to bring raw
material, viz., jute from many railway booking stations
outside the State of l\fadhy~ Pradesh and there is no
other means of transport except by rail both for bringing jute to the mills and for carrying the finished pro"
ducts to ports for export to foreign' countries.
In its
complaint, the appellant has alleged that the raih1,ay
administration had contravened the provisions of s. 28
. of the Act and also that the charges levied by the
' railway administration for the freight of the appellant's
goods were unreasonable and excessive..
According to
the appellant, the Assam Railway (now North-Eastern
Railway) offered special rates for jute from certain stations in its zone to ~anpur and the basis of these rates
was cheaper than that of the rates charged between
Raigarh and some other stations on the East Indian
Railway and the Bengal-Nagpur Railway (now the
Eastern Railway). Both the EasternRaihvay and the
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SUPREME COURT .REPORTS
[1959]
'958
North-Eastern Railway are State Railways and as
Raigaylf Jut'
such it was not open to either of them to mete out
Mills Ltd.
differential treatment. The appellant further contend0v.
ed that the other jute mills in West Bengal and
Eastern Railway Madras had facilities for direct shipment of their goods
. --
without carriage by rail to the ports, whereas, in the
Ga1endyagadkaY J. case of the appellant, the railways charged freight up
and down in respect of the entire traffic of the appel- •
!ant ; inevitably the prices of the products of the
appellant could not be brought down to the competitive level for the purposes of export out of, or sale in,
India. The appellant annexed to its complaint tables
of goods rates of the two railways and urged that the
unusual increase in the rates charged to the appella11t
was telling very heavily on the appellant as compared
to other mills. According to the appellant;'. the freight
rates should be on the basis prevailing in the year 1949
as the maket had gone down to the level existing in:
that year. The appellant's ccmplaint therefore prayed
that, since the prevailing rates were unreasonable and
excessive, the tribunal should issue directions for the
introduction of fair and reasonable rates.
'
•
When the complaint was first filed, both the East
Indian Railway with its headquarters at Calcutta and
the Bengal-Na.gpur Railway with its headquarters at
Kidderpore were impleaded as respondents. Subsequently, the railways were reorganized and the complaint was then suitably amended with the result that
the Eastern Railway with its headquarters at Calcutta
was substituted , for both the original respondents.
La~er on, the Union of India was impleaded as respondent 2 to the complaint.
Both the respondents denied the allegations niade
in the complaint. It was alleged on their behalf that '
the existing tariff rates for the movement of jute were
reasonable and ii.ot excessive. It was also alleged by
the respondents that, beyond drawing attention to
special rates which applied to traffic from certain
stations on the Assam Railway section of the NorthEastern I~ailway to Kanpur, the appellant had,not
submitted concrete evidence, facts or figures to make
out even a prima facie case that the pr~wailing tariff
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s.:c,R.
SUPREME COURT R.EPORTS
239
rates for jute were unreasonable.
·The reE;p6ndents'
case was that ·the fact that the appellant's mill was
f
·
d
R"igarh jute
situated ·far away rom the port an
as such had to
Mills Ltd.
incur additional cost had no relevance or bearing on
v. •
the. case made out in the complaint and the same Eastern Railway
cannot be treated as a ground for consideration of any
.
-
special rates. The Union of India has specificallyGa;endmgadkar J.·
•raised the additional plea that even after reorganization
the two railways in quespion were separate entities and
were working i11 the.different regions having more or
less divergent· local conditions, ·and so they did 1iot
constitute one railway
administration within. ·the
meaning of the .Act and s. 28 was therefore inapplicable.
On · these contentions four principal . issues were
framed by the tribunal. All the three members of the
tri~unal found that the freight rates for the transport
of jute to Kanpur from certain stations in the Katihar
section of the N orth-Easterll' Railway were lower than
those for its transport to Raigarh. ·In ·fact this position was conceded before the tribunal. On the questfon
as to whether the disparity in the said rates amounted
to " undue " preference Ul).der s. 28 . of the Act, the
members of the tribunal took different views. . The
President Mr. Lokur and Mr. Roy,· member, were of.
the opinion• that the two railways constituted one
railway administratim. They thought that it was just
and equitable to hold that, ~lthough a railway admini:.
stration may· mean a manager,-yet in this case it also
meant the Government.
They were, however, . not
satisfied that the . disparity in the· rates· justified the
appellant's complaint about ''undue" prefere:r\ce.
That is why they rejected the appellant's grievance
' that the railway administration had contravened the
provisions of s.•28 of the Act. Mr. Subbarao, the third
member of the tribunal, was inclined t~ take the view·
that, though the final. control of both the railways may•
be with the Government or ·its representative, viz., the
Railway Board, the actual· management of the differ~
ent zones was with the respective managers, and so
the
0two railways in question cannot be said to•constitute one railWJ!.Y a<;lministration.
Proceeding· to deal
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SUPREME COURT REPORTil
[1959]
z958
with the appellant's complaint on this basis, Mr.
Raiga•h 1,.1,
Snbbarao rejected its argument of " nndue " preference
•
Mills Ltd.
on the ground that s. 28 was inapplicable in the pre-
•'·
sent case. In the result, the issue about " undue"
Eastern Railway preference was held again.st the appellant by all the
members of the tribunal. In regard to the appellant's
Gaj•ndrngadkar J. case that the increase in the freight for the transport
of jute to Raigarh was unreasonable and excessive, the•
President Mr. Lokur and Mr. Subbarao found that the
plea had not been proved by an]; evidence. On the
other hand, Mr. Roy made a finding in favour of the
appellant and held that the rates in question were
shown to be unreasonable and excessive. Since the
majority decision, however, was against the appellant
on this point, the appellant's complaint was dismissed.
It is against this order of the tribunal dismissing its
complaint that the appellant has come to this Cd\J.rt
in appeal by special leave.
•
' ,
Before dealing with the merits of the contentions
raised by the appellant, it wonld be convenient to
refer briefly to the provisions of the Act in regard to
the constitution of the tribunal as they were in operation at the mtiterial time. Section 26 bars jurisdiction
of ,ordinary courts in regard to acts or omissions of
the railway administration specified in the section.
Section 34 deals with the constitution of the Railway
Rates Tribunal. According to this section, the tribu. ·
nal consists of a
Presiden~ and two other members
appointed by the Central Government. The tribunal
had to decide the complaint filed before it with the aid
of a panel of assessors as prescribed under s. 35 of the
Ac~ Section 46 lays down that the decision of the
tribunal shall be by the majority of the memhers
sitting and shall be final.
It is obvious that this '
provision about the finality of the tribunal's decision
cannot affect this Court's jurisdiction under Art. 136
of the Constitution .
. Let us now set out the matei:ial provisions of the
Act on which the appellant's complaint is founded.
Section 28 provides :
" A railway administration shall not make or give
any undue or unreasonable preferen:e or :i-dvantage to,
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S.C.R.
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froPREME COURT REPORTS
241
or in favour of, any particular person or railway
administration, or any particular description of traffic,
Raigarh jute
in any respect whatsoever, or subject any particular
Mills i;ta.
..
person or railway administration or any particular
v.
description of traffic to any undue or unreasonable pre- Eastern Railway
judice or disadvantage in any respect w:hatsoever."
. --
A breach of the provisions of s. 28 by the railwayGa;endragadkr~r f.
"administration may give rise to a complaint under
s. 41 (1) (a).
This section provides for complaints
against a railway 41dministration on five different
grounds enumerated in els. (a) to (e) and it requires ·
that the tribunal' to which such complaints may be
made shall hear and decide them in accordance with
the provisions of ch. V. In the present case, we are
concerned with els. (a), (b) and (c) of s. 41, sub-s. (1).
Clause (a) covers cases of alleged contravention of the
provisions of s. 28; cl. (b) deals with cases where it is
alleged that the administration is charging station to
station rates or wagon-load rates.which are unreasonable; and cl. (c) deals with cases where the railway
administration is levying charges which are unreasonable.
Then s. 41, sub-s. (2) (i) lays down that, as soon
as it is shown that the railway administration charges
one trader or class of traders or the traders of a.ny
local area lower rates for the same or similar goods
than it charges to other traders or class of traders or
to the traders in another local area, the burden of
proving that such lower cnarge does not amount to
"undue" preference shall lie on the railway administration; and s. 41 (2) (ii) lays down that, in deciding
the question of" undue" preference, the tribunal may,
in addition to any other considerations affecting the
case, take into consideration whether such lower charge
'
is necessary in the interest of the public. The decision
of the questions raised by the appellant before us will
depend upon the scope and the effect or the provi&ions
contained in ss. 28 and 41.of the Act.
Section 28 is obv'iously based on the principle that
the power derived from the monopoly of railway
cari;iage must be used in a· fair and just manner in
respect of all persons and all descriptions of traffic
31
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SUPREME COURT REPOR'.rn
'[1959]
I958
passing over the railway area. In other words, equal
charges shpuld normally be levied against persons or
Raigarh Jute
bcroods of the same or similar kinds IJassing over the
ll-lills Ltd.
v.
same or similar area of the railway lines and under the
Eastem Railway same or similar circumstances; but this rule does not
mean that, if the railway administration charges
Gajendragadkar J. unequal rates in respect of the same or similar class of
goods travelling over the same or similar areas, the
inequality of rates necessarily attracts the provisions
of s. 28.
All cases of unequal rat"8 cannot necessarily
be treated as cases of preference because the very
concept of preference postulates competition between
the person or traffic receiving preference and the person or traffic suffering prejudice in consequence. It is
only as between competitors in the same trade
that a complaint . of preference can be made. by
one in reference to the · other.
If there is no
such competition then no complaint of preference
can be made even
though the charges
levied
,.
against similar goods may not be equal. It may
be possible to assume that there is competition
between similar commodities put on the market in the
same area for domestic consumption; but no such
competition can be assumed between traffic of goods
for export and traiffic of similar goods for home consumption. It is only when goods or persons can be
said to be pari passu that a question of preference
arises and so it is where the competition between two
persons or classes of goods is either admitted or proved
}
that the question of the application of s. 28 would ever
•
a.rtse.
Then a,gain, even as between competing goods
or persons, it would not be enough to prove mere.preference to attract the provisions of s. 28, for theoreti-
·
cally every case of preference may not necessarily be a '
case of "undlle" preference.
It is only when the
tribunal is satisfied that the railway administration
has shown "undue" preference in favour of a particular class of goods that a complaint can be successfully
entertained under s. 41 (1) (a).
The position under
s. 28 _thus appears to be clear.
Whoever complains
~
against the railway administration that the provisions
of s. 28 have been contravened must .establish that
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S.C.R.
~UPREME COURT REPORTS
243
there has been preference between himself and his
i958
goods on the one hand and his competitor and his goods
on the other·; and where it appears to the tribunal that
R;~f1~;h/e;
1
"
such preference is" undue" preference, the complainv.
ant would be entitled to adequate relief under s. 41 (1) Eastem Railway
(a) of the Act.
.
.
It is true that, while enqui:l:'ing into the complaint Ga;endragadkar J.
•made under s. 41, as soon as the complainant sh"bws
inequality of rates and proves that the competing
goods are charged loos than his own, the onus shifts on
to the railway administration to prove that such lower
charge does not amount to "undue " preference. The
initial burden to prove preference is on the complainant; but when: the said burden is discharged by the
proof of unequal rates as between the complainant
and his competitor, it is for the railway administration to prove that the preference is not "undue". In
the absence of satisfactory evidence adduced by the
railway administration· in justification of unequal
rates, the tribunal may hold that the unequal rates
complained against by ·the complainant amounts to
" undue " preference. If, on the other hand, the
railway administration leads evidence to show justification for the inequality of the rates, then notwithstanding the existence of unequal rates, the tribunal
need not necessarily find that the administration has
contravened the provisions of s. 28, because it is
only where "undue" preference by the administration
is shown that it can be said to have contravened the
said section. In considering the question as to whether
~
the alleged preference amounts to " undue " preference
or not, the tribunal may also be entitled to consider
whet'her the lower charge levied by the administration
"in respect of the competing class of goods was necessary in the interest of the public. That is the result
of the provisions of s. 41, sub-s. (2)(i) arid (ii).
In this connection we may refer to some of the
English decisions to which our attention was invited.
In Lever Brothers, Limited v. Midland Railway Oompany.(1), it was held that the railway was not called
upon to justify the disparity of rates on which the
(1) (1909) XIII.~ailway and Canal Traffic Cases, 301.
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SUPREME COURT HEPORTg
[1959]
complaint by Lever Brothers, Limited, was based
because the applicants had failed to establish that
Jlaigarh Jule
Mills Ltd.
Messrs. J. W. & Sons, Limited, in respect of whom the
• v.
lower rate was charged, were the competitors of the
Eastern llaitway applicants.
Heferring to the fact that the rates
.
-
charged to the two respective companies were different,
Ga1e,,drngadkar J. Vaughan Williams L. J. observed that ho did not
think that the difference in rates itself constituted any •
undue preference by the Midland Railway Company
'
)
•
of Watsons as competitors of llevers.
One of the
reasons why the complaint made by Lever Brothers,
Limited, failed was that it was not shown that Messrs.
J. W. & Sons, Limited, were competitors of Lever
Brothers, Limited, and that eliminated the application
of s. 27 (1) of the Hailway and Canal Traffic Act of
1888.
Similarly in Lancashire Patent Fuel Company
Limited v. London and North- Western Railway C~m
pany (1), it was held that no competition existed
between coal carried for shipment and that carried
for the trader and so the application made on the '·
ground of undue preference was incompetent. It was
proved in this case that the applicant's slack was
carried by the railway companies at a higher rate
th:i,n that for slack carried for shipment ; but the complaint based on this unequal charges was rejected on
the ground that " it cannot be said that the slack
carried by the railway companies for the applicants
ever comes into competitibn with the slack which is
carried by t)l.e railway companies for ordinary ship-
. ment ". On 'the other hand, in The Nitshill and Lesmahagow Coal Company v. The Oaledonian Railway
Company (2), it was held that the railway administration had shown undue pqiference because it "was
proved that the goods unequally charged were com- '
mercially and substantially of the same description
and there was "competition between them. Whether
or not the goods were commercially and substantially
of the same description was the point in issue between
the parties ; but the complainant's case was accepted
and it was found that, on the whole, the two artjcles
•
(1) (1904) XII Railway and Canal Traffic Cases, 77, 79.
(2} (1874) II Railway and Canal Traffic Cases, 39, -\5·
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S.C.R.
SUPREME COURT REPORTS
245
were substantially of the same description "and cannot but be regarded as competitive and that there
Raigarh Jut~
ought not to be any· difference in the rates at which
Mills Ltd.
they are carried ". This decision shows that if unequal
v. '
Eastern Railway
rates are charged for the' carriage of similar or same
•
goods travelling over similar or same areas, then the Gajendragadkar J·
inference- as to "undue" preference can be drawn un-
'less the preference alleged is otherwise shown to be
justified by valid reasons. In Denaby Main Colliery
Company v. Manchester, She.ffield, and Lincolnshire
Railway Company (1), the Earl of Selborne, in his
speech, observed that he did not think it possible to
hold (looking at the context in which the material
words stand) that " the mere fact of inequality in
the rate of charge when' unequal distances are traversed can constitute a preference inconsistent with
them". .Jt may be pointed out incidentally that the
provisions of s. 2 of the Railway and Canal Traffic Act,
1854 (17 .& 18 Viet. c. 31) are substantially similar to
the provisions of s: 28 in our Act. Thus it is clear on
these authorities that a complaint made under
s. 4l(l)(a) can succeed only if it is shown that prefer~
ence has been shown by the railway administration to,
the complainant's .competitor and the administration
has failed to adduce evidence in justification of the
said preference. . It will no.w be necessary to consider
the merits of the appellant's case in the light of this
legal position.
·
'
The application made by the appellant does not in
terms allege any "undue" preference at all. Mr. Isaacs,
for the appellant, conceded that the application had
not been happily worded; but his comment was that
the 'pleadings of both the parties are far from satis-
,
factory.
That no doubt is true; but if the appellant wanted t.o make out a case a~ainst the rail"
way administration under s. 4l(l)(a), it was necessary that he should have set up a specific case
of "undue" prefereooe. 'The application does allege
that the mills at Kanpur are able to carry raw
jute, at a lower rate but there is no allegation that
between the goods of the Kanpur mills and the goods
(1) (1$86) II A.pp. Cas. 97, u4.
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246
SUPREME COURT REPORTg
[1959]
'958
of the appellant there is any competition in the
llaiga•k Jute
market. On the other hand, tho application refers to
Milts Ltd.
the advantage enjoyed by the jute mills in 'Vest
·v.
Bengal and Madras O\rer the ap1)ella11t.
Readi11g tl1e
Ea,.,,.,, Railway complaint filed by the appellant as a whole, it would
'iiaje>1dragadkar J. appear that the complaint by necessary implication
refers to the competition between the goods of West
Bengal and Madras mills on the one hand and the ap- •
pellant's goods on the other. The appellant no doubt
also avers that the rate charged lor the transport of
the goods are unreasonable and excessive but that is
another part of the. complaint which· we will consider
separately ... It would, therefore, be difficult to accept
Mr. Isaac's argument that the appellant's complaint
should be read as including an allegation about competition between the appellant and the Kanpur mills.
If no such allegation has been made by the appellant
in his complaint, it would not be fair to criticise the
respondents for not denying the existence of any such
competition.
But apart from this technical difficulty, the appellant cannot even refer to any evidence on which it
would be possible to base a conclusion as to the com.
petition between the goods produced by tho Kanpur
mills and the appellant's goods.
Mr. Isaacs has taken
us through the evidence of Amritlal Bannerjee, Mustafi and Paul; but we have not been able to see any
statement made by any •of these witnesses which
would show that there was a competition between the
J
two sets of goods.
On the other hand, such meagre
evidence as is available on the record would seem to
suggest that the goods produced by the Kanpur mills
arc sent to local markets for domestic consumption
and do not enter the field of competition with the ap- '·
pellant's goods at all. That presumably is the reason
why the appellant could not allege any competition between its goods and the goods of the Kanpur mills and
none of the witnesses could speak to it. Mr. Isaacs wa.s
thus constrained to refer to the statement (R-18) filed
by the respondents for the purposes of showing tlmt
the appellant's goods travelled to some centres in India ..
which may be covered by the goods of. the Kanpur
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SUPREME COURT REPORTS
247
mills. In our opinion, this is an argument of desperation and it cannot help the appellant. One of the
Raigarh jute
questions which was apparently raised before the
Mills l.Jd.
tribunal was in respect of the volume of traffic and it
v.
is in connection with this particular part of the dispute Eastern Railway
that relevant statements were prepared by the respondents and filed before the tribunal. It would, we think, Gajendragad!w J.
be unreasonable to make use of some of the statements contained in these documents for the purpose of
deciding whether th~appellant's goods and the goods
produced by the Kanpur mills enter into competition
in the markets in India. If the appellant had attempted to lead evidence on this point the respondents
would naturally have had an opportunity to rebut
that evidence. It is too late now to make out a case
of this alleged competition and seek to prove it by
stray statements contained in the document filed by
the respondents before the tribunal for a wholly different purpose. That being the position of the evidence on
the record we have no difficulty in accepting the view
of the tribunal that competition between the goods of
the Kanpur mills and the appellant's goods has not
been alleged or proved in the present proceedings. If
that be the true position, then the mere fact that the
goods of the Kanpur mills are transported at more
favourable rates W<?Uld not attract the provisions of
s. 28 of the Act.
.
The next question which remains to be considered
is whether the .appellant has proved that the rates
charged by the administration in respect of the goods
transported by the appellant are per se unreasonable.
·On t~is point the appellant has led no evidence at all.
In its complaint it has no doubt averred that there
' has been an undue increase iri the freight charges
but no allegation is made as to why
0 and how the
actual charges are unreasonable. It appears that the
appellant is under a •disadvantage because its mills
are situated at Raiga"rh in Madhya Pradesh far away
from the shipping centres of transport and the coinpeti!ig mills in West Bengal and Madras are very near
the export centres: but the fact that by its geographical location the appellant has to incur additional
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248
SUPREME COURT REPOR'J1S
[1959]
'958
expenses of transport would not be relevant in
Raigarli Jute
considering the reasonableness of the freight charges.
Mills Ltd.
It is common ground that the freight charges are
v.
levied at the same rate by the railway administration
Eastetn Railway in respect of either raw jute or jute products against all
-
the mills.
There is no inequality of rates so far as the
Gaj,ndragadkar J. mills in this zone are concerned. The appellant appears to have argued'before the tribunal that the rates
of freight leviable by the railway administration
should have some relation to thelcosts incurred by the
appellant in producing the jute goods as well as the commodity prices prevailing in the market. This argument
has been rejected by the tribunal and we think rightly.
lt seems to us clear that the c.osts incurred by the appellant which are partly due to the appellant's geographical position can have no relevance whatever in
determining the reasonableness or otherwise of° the
railway freight charged by the railway administration.
Nor can the railway freight move up and down with
'
~l
the rise and fall of the commodity prices. In dealing
with the question about the reasonableness of the
railway freight, it would naturally be relevant to
consider mainly the working costs of the railway
administration and other material circumstances.
When a complaint is made against the railway adr
ministration under s. 4l(l)(b) or (c}, t~ onus to prove
the alleged unreasonableness of the frfilglit rests on
the complainant and if the complainant makes no
effort to discharge this onus his plea that the rates
are unreasonable must inevitably fail.
It appears that Mr. Roy, one of the members of the
tribunal, was inclined to take the view that the
special rates given to the Kanpur mills in Katihar
area should be regarded as normal and reasonable""
rates; and since the rates charged to the appellant,
were higher tlian the said rates, he held that the rates
charged against the appellant are unreasonable per se.
In our opinion, this view is entirely erroneous. The
rates charged to the Kanpur mills are admittedly
special rates. Whether or not these concessionv-1 or
special rates should have been granted to the Kanpur
mills is a matter with which the pre&l)nt enquiry is
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S.C.R.
SVPREME COURT REPORTS
249
not concerned. There may be reasons to justify the
said concessional rates; but it is plain that the special
Raigarh Jute
or concessional rates charged by the railway adminiMills Ltd.
stration in another zone cannot be treated as the
v.
,
sole basis for determining what_ rates should be Eastern Railway
charged by the railway administration in other zones
.
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d
d
h
h
11
.
Ga;endragadkar ].
an so we :o not see · ow t e appe ant can success-
,
fully challenge the majority finding of the tribunal
that the.rates charged against the appellant's goods
are not shown to be ljnreasonaqle per se. In the result
we must hold that the tribunal was justified in rejecting the complaint made by the appellant. The appeal
therefore· fails and must be ·dismissed with costs.
Before we part with this case, we w_ould like to mention two points which were sought to be argued before
us by the learned Additional Solicitor-General on behalf
of t1'.e respondents. He challenged the correctness
of the majority view of the tribunal that the two
railways operating in two different zones in question
constituted one railway administration within the
meaning of s. 3, sub-s. (6).
Alternatively: he argued
that, even if the two railw:ays were held to constitute
one railway administration and that the disparity in
charges amounted to the granting of " undue " preference to the Kanpur mills,' s. 46 of the Act was' a
complete answer to the complaint under s. 4l(l)(a).
Since we have held in favour of the respondents on
the points urged before us by Mr. Isaacs on behalf of
the appellant, we do not propose to deal with the
merits of these contentions.
Appeal dismissed.
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