# THE VISAKHAPATNAM PORT TRUST v. M/S. RAM BAHADUR THAKUR PVT. LTD

- **Citation:** [1997] 1 S.C.R. 1080
- **Court:** Supreme Court of India
- **Decided:** 1997-02-10
- **Case number:** Civil Appeal Nos. 3972-74 A of 1993
- **Bench:** Dr. A.S. Anand, S.B. Majmudar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-visakhapatnam-port-trust-v-m-s-ram-bahadur-thakur-pvt-ltd-15163
- **Pages:** 32

## Headnote

Major Port Tmsts Ac4 1963 : Sections 52 to 54.
Scale of rates-For trans-shipment and shipping of goods-Fixing
C of--By Board of Tmstees-Handling charges for manganese ore at Rs. 35 per
MT approved by Central Government under S. 53--Rate included tramportation of stocked ore from the plots within the Port to ships by narrow gauge
railway line at the cost of the Board-On representation by the shippers,
remission of Rs. 5 per MT granted by Board-Subsequently, Board by its
resolution introduced revised system under which stocked ore was to be
D transported to the wharf by employing shippers' own dumpers and loaders
and loadingwith their sling~sting na"ow gauge railway jystem dispensed
with-Rs 30 per MT was fixed as consolidated handling charges under the
new system-Held : Scale of rates depended upon conditions under which
services were rendered by the Board to shippers-New system replaced old
E system and, there/ ore, for enforcement of the same prior sanction by Central
Government under S. 52 was sine qua non-It could not be treated as a
scheme of remission under S. 53.
Sections 53 and 54-Scale of rates-For services rendered by Board to
shippers-Fixed by Board and sanctioned by Central Government-Held :
)
F Board empowered to grant exemption/remission under S. SJ-Central
,
Government empowered to modify or cancel the sanctioned rate--Board and
Central Government to exercise their respective powers independent of each
other.
-
Sections 52 and 54-Scale of rates for trans-shipment of goods-ExistG ing rates approved by Central Government under S. 52 and remitted by
Board-Subsequently, revised by Board by introducing an entirely new system-However, Central Government gave sanction to new system a few years
late,._-lfeld : during the intemgnum i.e., from the date of introduction of the
new system Jill the date of its sanction, the pre-existing rate would continu~Subject to resolving of objections raised-Although such rates were
H disputed, the High Court emd in holding that there was no effective scale of rates.
1080
VISAKHAPATANAMPORTlRUSfv.RAMBAHADURTIIAKURPVf.LTD.
1081
~
Sections 52 and 54-Scale of rates-For servi.ces rendered by Board for A
trans-shipment .of goods-Modification or cancellation of existing scale of
rates--Concemed parties raised objections that existing scale of rates were
unreasonable, excessive or lacking in quid pro quo-Held: Such parties could
file representations and Central Government could consider their representations--ln appropriate cases, Central Government could give hearing to
B
affected parties before taking decision regarding modification or cancel/adon-Objections and suggestions of the Board too had to be considered under
-
S. 54 proviso-Hence, when aggrieved parties filed writ petition before High
-.,,
Court raising such objections, the High Court was justified in directing Central
Government to give hearing to the parties' objections.
Administrative Law :
c
Natural justice-Audi alteram partem-flearing-Held : Not required
to be given to affected parties by a legislative action or action of a delegated
legislative authority imposing any tax, fee or charges-However if statute
obliged the Government to consider modification or cancellation of existing D
scale of rates iii public interest court could direct Government to their
representation-Once such representations were moved, Government must
consider them and in appropriate case give personal hearing to affected
..
parties.
·-
Constitution of India 1950 : Article 226.
E
Writ petition-Maintainability of-Alternative remedy-Held : Where
highly disputed question off act arose for decision, civil suit instead of writ
-l
petition would be the appropriate action :
I "
The respondents were dealers in manganese ore. They eiported F
manganese ore through the Minerals and Metals Trading Corporation of
India. For exporting the said ore they required the senices of the
appellant's Port through which their manganese ore was loaded in the ships
'
for export. The

## Text

_Characters 0–39,983 of 81,898. This is a partial read: ask again with offset=39983 for what follows._

A
B
THE VISAKHAPATNAM PORT TRUST
v.
M/S. RAM BAHADUR THAKUR PVT. LTD.
FEBRUARY 10, 1997
[DR. A.S. ANAND AND S.B. MAJMUDAR, JJ.]
Major Port Tmsts Ac4 1963 : Sections 52 to 54.
Scale of rates-For trans-shipment and shipping of goods-Fixing
C of--By Board of Tmstees-Handling charges for manganese ore at Rs. 35 per
MT approved by Central Government under S. 53--Rate included tramportation of stocked ore from the plots within the Port to ships by narrow gauge
railway line at the cost of the Board-On representation by the shippers,
remission of Rs. 5 per MT granted by Board-Subsequently, Board by its
resolution introduced revised system under which stocked ore was to be
D transported to the wharf by employing shippers' own dumpers and loaders
and loadingwith their sling~sting na"ow gauge railway jystem dispensed
with-Rs 30 per MT was fixed as consolidated handling charges under the
new system-Held : Scale of rates depended upon conditions under which
services were rendered by the Board to shippers-New system replaced old
E system and, there/ ore, for enforcement of the same prior sanction by Central
Government under S. 52 was sine qua non-It could not be treated as a
scheme of remission under S. 53.
Sections 53 and 54-Scale of rates-For services rendered by Board to
shippers-Fixed by Board and sanctioned by Central Government-Held :
)
F Board empowered to grant exemption/remission under S. SJ-Central
,
Government empowered to modify or cancel the sanctioned rate--Board and
Central Government to exercise their respective powers independent of each
other.
-
Sections 52 and 54-Scale of rates for trans-shipment of goods-ExistG ing rates approved by Central Government under S. 52 and remitted by
Board-Subsequently, revised by Board by introducing an entirely new system-However, Central Government gave sanction to new system a few years
late,._-lfeld : during the intemgnum i.e., from the date of introduction of the
new system Jill the date of its sanction, the pre-existing rate would continu~Subject to resolving of objections raised-Although such rates were
H disputed, the High Court emd in holding that there was no effective scale of rates.
1080
VISAKHAPATANAMPORTlRUSfv.RAMBAHADURTIIAKURPVf.LTD.
1081
~
Sections 52 and 54-Scale of rates-For servi.ces rendered by Board for A
trans-shipment .of goods-Modification or cancellation of existing scale of
rates--Concemed parties raised objections that existing scale of rates were
unreasonable, excessive or lacking in quid pro quo-Held: Such parties could
file representations and Central Government could consider their representations--ln appropriate cases, Central Government could give hearing to
B
affected parties before taking decision regarding modification or cancel/adon-Objections and suggestions of the Board too had to be considered under
-
S. 54 proviso-Hence, when aggrieved parties filed writ petition before High
-.,,
Court raising such objections, the High Court was justified in directing Central
Government to give hearing to the parties' objections.
Administrative Law :
c
Natural justice-Audi alteram partem-flearing-Held : Not required
to be given to affected parties by a legislative action or action of a delegated
legislative authority imposing any tax, fee or charges-However if statute
obliged the Government to consider modification or cancellation of existing D
scale of rates iii public interest court could direct Government to their
representation-Once such representations were moved, Government must
consider them and in appropriate case give personal hearing to affected
..
parties.
·-
Constitution of India 1950 : Article 226.
E
Writ petition-Maintainability of-Alternative remedy-Held : Where
highly disputed question off act arose for decision, civil suit instead of writ
-l
petition would be the appropriate action :
I "
The respondents were dealers in manganese ore. They eiported F
manganese ore through the Minerals and Metals Trading Corporation of
India. For exporting the said ore they required the senices of the
appellant's Port through which their manganese ore was loaded in the ships
'
for export. The appellant- Port Trust for that purpose offered various
,.,
services and facilities to such shippers. The appellant-Port Trust main· G
tained different yards in its premises. One such yard was divided into
several plots, which were leased out by the Port Trust authorities to
'y
different shippers. The respondent were the lessees of a few plots. Broad
'
gauge railway lines on one-side and narrow gauge railwaf lines on the other
side connected these plots. The manganese ore was being transported to the
plots situated within the limits of the Port by broad gauge railway line and H
1082
SUPREME COURT REPORTS
[1997] 1 S.C.R.
A from those plots the stored manganese ore was being carried to the ships
~
for its outward journey in the course of the export by being transported in
skips drawn by a small engine of the narrow gauge railway line. Handling
of ore from the plots to the ships was done entirely by the Port authorities
at their own cost for which they used to charge handling charges at Rs. 35
B per MT of manganese ore. This rate and the conditions under which
handling services were then offered by the Board of Trustees were duly
sanctioned by the Central Government under Section 52 of the Major Port
I
,-
Trusts Act, 1963. Despite the continuance of this system of handling
""
service offered by the Board, a representation was made to the Board by
the shippers of the manganese ore to the effect that this consolidated rate
c of handling charges of Rs. 35 per MT of manganese ore was excessive. This
representation was partly accepted by the Board. It was resolved by the
Board to approve under Section 53 of the Act, a remission of Rs. 5 per MT
of manganese ore brought by dumpers to the appellant's Port and exported, on the basis of the Central issued by the Dock Labour Board. Thus,
D the effective and operative rate of handling charges of manganese ore
~
became Rs. 30 per MT subject to the concerned shipper producing the
requisite certificate issued by the Dock Labour Board. This remission was
a conditional remission. The aforesaid remitted rate of handling charges
continued till the Traffic Manager of the appellant-Port Trust by a circular
informed all concerned that a new system of handling manganese ore
..
E would be introduced by the appellant•Port Trust. It recited that under the
revised system, the stocked ore will be transported to the wharf by employment by the shippers of dumpers and loaders and loading with net slings
dispensing with the existing narrow gauge system. This was followed by
t
another circular issued by the Traffic Manager of the appellant-Port Trust
F notifying that a provisional consolidated handling charges of Rs. 30 per
MT for handling export of manganese ore etc. in the new system would be
levied. This provisional rate was placed before the Board, which by its
resolution approved the collection of consolidated handling charges of Rs.
30 per MT for handling manganese ore shipment in the new system. This
,,
G
Resolution clearly indicated that the Board resolved to levy fresh handling
charges of Rs. 30 per MT in the light of the new system of offering such
services meaning thereby that the aforesaid rate of handling charges of
manganese ore would be levied by the Board despite withdrawal of the
v'
facility of narrow gauge railway line for the shippers.
H
Respondent challenged the Resolution by filing a writ petition before
J
! .
VISAKHAPATANAM PORT TRUST v. RAM BAHADUR THAKUR Pvr. LTD.
1083
the High Court. A Single Judge quashed the Resolution and circulars and A
allowed the writ petition. The Division Bench confirmed the decision of the
Single Judge. It was held by the High Court that the High Court that the
handling charges of Rs. 30. per MT with respect to manganese ore and
other ores in the light of the fresh system, could not be effectively pressed
into service by the Board as procedure under Section 52 of the Act had not
been followed. But the same was later on sanctioned by the Central
Government under Section 52 of the Act. Therefore, the controversy
survived regarding the appropriate handling charges for manganese or for
the relevant period i.e., from the date of introduction of the new system till
the date of its sanction by the Central Government and for that period the
Central Government, while exercising it powers under Section 52 of the
Act, was required to consider the question regarding fixing of appropriate
handling charges after giving notice to the writ petitioners and hearing
their objections, if any. It was further directed that whatever payments
were made by the writ petitioners during the pendency of the writ appeals
B
c
and writ petition before the High Court at the rate of Rs. 20 per MT in D
respect of consignments of manganese ore would be subject to the final
adjustment to be made in the light of the decision of the Central Govern·
ment.
The following questions arose before this Court for determination.
1. Whether the impugned circulars and the impugned resolution of
the Board amount to remission of the then existing rates of handling
charges for manganese ore covered by Section 53 of the Act or whether
these rates require period sanction of the Central Government under
Section 52 of the Act before they could become effective.
2. Whether the impugned rates of handling charges were unreasonable, excessive and based on no proper quid pro quo between the
services rendered by the Board and the charges levied by the Board for
such services.
3. Whether there was any effective scale of rates for handling man·
ganese ore at the premises of the appellant-Port during the relevant period
i.e., from the date of introduction of the new system till its sanction by the
Central Government.
.
E
F
G
4. Whether the directions issued in the Impugned judgment to the H
"
1084
SUPREME COURT REPORTS
[1997] 1 S.C.R.
A Central Government for issuing notices to the writ petit.ioners and for
hearing their objections before fixing handling charges for the relevant
period are justified in law.
B
·Dismissing the appeal, this Court
HELD : 1.1. The relevant provisions of the Major Port Trusts Act,
1963 show that whenever any seal.es of rates for trans-shipment and
shipping of goods within the limits of the major port are to be fixed by the
concerned Board of Trustees such scales of rates can be fixed in the light
of the conditions under which such concerned services are offered by the
C Board to the shippers. Therefore, the given scheme of conditions in the
light of which scales of rates by way of handling charges are fixed by the
Board ·had a direct impact on the fixation of such scales of rates. Such
scales of rates are not fixed in vacuum but in connection with the nature
of the conditions, under which such services areoffered by the Board to the
D concerned consumers of such services, namely, the shippers. When such
scales of rates in the light of a given set of conditions for offering handling
services are fixed by the Board they cannot come into force unless such
scales of rates and the set of conditions for offering such services get prior
sanction of the Central Government as enjoined by Section 52 of the Act.
Once the approved conditions under which sanctioned scales of rates
E become effective under Section 52 for offering services_by the Board remain
the same and yet some remission or exemption needs to be granted by the
Board in special cases aller following the procedure of Section 53, it is not
required to apply to the Central Government for prior sanction of such
remission or exemption. [1098-G-H, 1099-A·D]
F
1.2. Section 54 of the Act shows that once scale of rates in the light
of the aJiproved and existing conditions under which the concerned ser·
vices are offered by the Board are sanctioned by the Central Government
and if it is brought to the notice of the Central Government that it is
necessary in the public interest to modify or cancel such sanctioned rates
G then the Central Government in exercise of its power under Section 54(1)
may pass appropriate orders modifying or cancelling the sanctioned
operative rates in public interest. This is a power vested in the Central
Government, which is independent of the power of remission or exemption
of rates and charges available to the Board under Section 53. The Board
H under Section 53 and the Central Government under Section 54 can
-
l '
VISAKHAP ATANAMPORT TRUST v. RAM BAHADUR THAKUR PVT. Lill.
1085
...,._
independently of each other exercise these respective powers within the A
parameters of the provisions of Sections 53 and 54 of the Act. (1099-E-F]
1.3. The remission granted by the Board was in the light of the then
existing conditions of infrastructural facilities made available by the Board
to the concerned shippers who had to bear the burden of this rate. The
B
Board was perfectly justified in exercising its powers under Section 53 of
the Act in granting the said remission for a class of goods, namely man-
-
ganese ore. But at the stage of latter Resolution there was no occasion for
"'
the Board to reduce further the said rate of Rs. 30 per MT in the light of
the very same earlier existing system of handling of manganese ore. The
entire earlier existing system of handling manganese ore was given a go-by c
and a new system was sought to be introduced as expressly mentioned in
the circulars. The moment the new system of handling of manganese ore
got introduced any fixation of handling charges of manganese ore in the
wake of introduction of such a new system of handling of manganese ore
exports would necessarily clothe the new rate with the characteristics of
being freshly settled handling charges. Therefore, the exercise of the Board D
undertaken as per Resolution required, for its efficacy, the prior sanction
of the Central Government as enjoined by Section 52. Admittedly, that was
not done by the Board The fixation of an appropriate scale of rates chargeable from the concerned shippers who are now to be offered a different
_,
and a truncated type of infrastructural facilities, would call fot an exercise E
to be undertaken subject to the requirements of Section 52 and would go
out of the sweep of Section 53 as it would not amount to remission of
eiisting rates of handling charges having a nexus with the erstwhile and
"'
unchanged system of infrastructural facilities which no longer remainl~d
>
available to support such a remitted rate of handling charges. The very
foundation on which the earlier handling rates operated was knocked off F
and entirely a new foundation of infrastructural facilities of services came
into being. Any handling rates fixed in connection with such a new founda·
tion of handling-service-infrastructure necessarily would assume the fo1·m
of a new scale of rates. [1103-C-H, 1104-A]
1.4. The Division Bench of the High Court was justified in taking the G
o!
view that the impugned Resolution seeking to bring into effect new rates
""
of handling charges in the ~ight of entirely new system of services then
offered by the Board required prior sanction of the Central Government
under Section 52 of the Act and could not be treated to be representing a
scheme of remission as envisaged by Section 53 of the Act. [1105-F -G]
H
1086
SUPREME COURT REPORTS
[1997] l S.C.R.
A
2.l. The question whether the scales of handling charges sought to
be levied from the respondents for handling their manganese ore during
the relevant period were just, fair and legal or not was justifiably left by
the High Court to be decided by the Central Government instead of
deciding it itself. Under the scheme of the Act itself the Central GovernB ment is the ultimate authority for deciding about the propriety and justness of the' scales of rates of services to be rendered to the shippers by the
Board of the concerned Ports governed by the Act. In the light of this
statutory scheme, therefore, the reasonableness of the settled scales of
charges for hamlling goods as tried to be recovered by the Board under
the Act could be validly made the subject-matter of scrutiny of the Central
C Government by aggrieved parties by invoking the Central Government's
powers under Section 54 of the Act. When the writ petitioners raised the
contention about the excessiveness and unreasonableness of the scale of
rates of handling charges of manganese ore sought to be recovered from
them by the Board and when such contention required scrutiny of relevant
D evidence which may be led on the point, the High Court was perfectly
justified in leaving that question to be decided by the Central Government.
It will be for the Central Government to decide this question and to pass
appropriate directions in this connection which would be binding on the
appellant-Port Trust. [1106-E-H]
E
2.2. If it was felt by the High Court that highly disputed questions of
fact arose for its decision, the \\Tit petitioners could have been relegated to
the remedy by way of civil suit where the matter could have been thrashed
out on proper evidence. However, that was not the only alternative remedy
to which the Court could have releg;ited the writ petitioners. Under the
F · scheme of the Act Parliament in its wisdom has entrusted the task of
monitoring and regulating the scales of rates and statements of conditions
under which .various services are offered by the Board under the Act to the
shippers, to the apex authority of the Central Government. [1106-B-C]
3. Although the new scale of rates for handling charges of manganese
G ore pursuant to the Board's Resolution was without prior sanction of the
Central Government under Section 52 of the Act yet as a consequence of
the said finding it would not necessarily follow that no other effective scale
of r;ites for handling manganese ore would be left in the field. The earlier
scale of rates as sanctioned by the Central Government was already
H. remitted tl;ough conditionally by the appellant-Port Trust itself Resolu-
·-
)._
•
·-
VlSAKHAPATANAMPORTTRUSTv.RAMBAHADURTHAKURPVT.Lm.
1087
tion. Thus from the date of Resolution the effective scale of rates for A
".;l,.
handling charges of manganese ore remained Rs. 30 per MT. It is this rate
,,
which must be treated to have continued during the interregnum period.
.Of course even this remitted rate of Rs. 30 per MT in the light of the
\\ithdrawn infrastructural facility of narrow gauge railway line, which in
its turn had shifted the burden of transport charges of manganese ore B
from plots to the wharf on the shoulders of the shippers, resulted in
lopsided rate and whether it, therefore, became unreasonable or not and
by then whether it was backed up by proper quid pro quo or not would
...,
remain a burning and moot question which bas to be resolved by the
"'
appropriate authority under the Act. All the same it could not have
assumed by High Court in the impugned judgment that during the,relevant c
period there was no effective scale of rates for handling manganese ore at
all. To that extent it must be held that the Division Bench was in error
when it persuaded itself to hold that view. The said finding of the High
Court is, therefore, set aside. [1107-E-H, 1108-A-C]
D
~:
4. There is no question of invocation of principles of natural justice
or hearing the affected parties when legislative action is brought on the
anvil of scrutiny or for that matter even an action of a delegated legislative
authority is brought in challenge. A legislative exercise or exercise by a
subor'dinate legislative agency imposing any tax or fee or charges would E
not require the effected parties to be beard before such charges of impost
are levied. But this may be relevant at the stage of Section 52 of the Act
wherein the scales of rates and statements of conditions framed by the
Board are put up for prior sanction of the Central Government. However,
the said situation would. not prevail when a grievance is made by the
_.
concerned aggrieved parties who submit that the sanctioned scales of rates
F
-·
which are prevalent and operative required modification or cancellation
in public interest as they are unreasonable, excessive or, wholly or partly,
lack the back up of quid pro quo. The Central Government being an
impe(sonal body function far away from the places where the major ports
and other ports are situated it would be obvious that relevant facts for G
invoking exercise if its powers under Section 54 of the Act will have to be
brought to the notice of the Central Government and that can be d'one only
by aggrieved interested parties by way of re11resentations. Filing of such
'-.,..
representations before the Central Government by the concerned aggrieved parties, therefore, cannot be said to be contra-indicated by Section
54(1). Once such representations are moved it will be the statutory obligaH
1088
SUPREME COURT REPORTS
[1997) 1 S.C.R.
A tion of the Central Government to consider the said representations and
for effective discharge of its power-cum-duty entrusted to it under Section
54(1) it may be opeu to the Central Government in appropriate cases to
even permit the aggrieved parties representationists to be heard in person,
if so thought fit, and thereafter if the Central Government thinks it fit to
B make appropriate modification or cancellation of the settled and sanctioned scale of rates of handling charges as leviable by the concerned
Boards it can proceed under Sections 52 and 54 of the Act calling upon
the Board to effect such modifications or cancellations and in the process
it has to consider the objections or suggestions of the concerned Boards
as laid down by the proviso to Section 54(1). If .before effecting such
C cancellations or modifications in the scale of rates the concerned Boards
have to be heard, if found necessary, or their objections are to be con-•
sidered there is no reason why the aggrieved parties who move the Central
Government invoking its powers under Section 54(1) should not be considered by the Central Government. Of course it has to be left to the
D Central Government as to how to consider such objections. But it cannot
be said that if a competent court gives a direction in an appropriate case
to the Central Government to give notice to the objectors, call for their
objections and to consider the same such a direction would be dehors the
scope and ambit of Section 54 of the Act. It must, therefore, be held that
the directions issued by the Division Bench of the High Court in the
E impugned judgment can be effectively sustained under Section 54 of the
Act, if not under Section 52 thereof. (1108-E-G, 1109-D-H, 1110-A-B]
5. The appropriate authority in the Central Government is directed
to decide the question regarding scale of rates for the relevant period after
F issuing notice to the writ petitioners and considering their objections, if
any, and also after considering the objections, if any, raised by the Board
in this connection. The said exercise should be completed by the appropriate authority in the Central Government within a period of four
months. If it is found that the appellant-port Trust is liable to refund any
excess amount of handling charges to the respondents as collected by it
G from the respondents during the relevant period, it will be bound to refund
the same within a period of eight weeks from the date of decision of the
Central Government with interest at the rate of 12% per annum from the
date of payment of the excess amount of handling charges by the respondents to the Board till the actual refund thereof by the Board to be
H respondent-writ petitioners. (1110-F, 1111-B-C]
>· ..
t
i
\
....
V!SAKHAP ATANAM PORT1RUST '· RAM BAHADUR THAKUR PVT. LTD. [S.B. MAJMUDAR. J.J 1089
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 3972-74 A
of 1993.
From the Judgment and Order dated 1.10.92 of the Andhra Pradesh
High Court in W.A. Nos. 1379, 1380 an 17407 of 1987.
Vinod Bobde, C.K. Sasi and Kailash Vasudev for the Appellants.
B
M.N. Krishnamani, Jitender Mahapatra, Praveen Kumar Singh and
T.V. Ratnam for the Respondent No. 1.
R.F. Nariman, P.H. Parekh and Ms. Bina Madhavan for the Respondents.
C
The Judgment of the Court was delivered by
S.B. MAJMUDAR, J, : These three civil appeals on grant of special
leave to appeal under Article 136 of the Constitution of India bring in
chall~nge a common judgment and order rendered by a Division Bench of D
the High Court of Andhra Pradesh dismissing two writ appeals moved by
the appellant. The Vishakhapatnam Port Trust and its Traffic Manager,
and a~lowing one writ petition moved by the respondent-writ petitioner
against the present appellants. The said common judgment and order
dated 1st October 1992 are assailed by the appellants on diverse grounds E
which will be highlighted in latter part of this judgment.The main grievance
of the appellants centers round the question of levying of appropriate
handling charges from various shippers who seek to export manganese ore
from the wharves of the appellant's Port. In order to appreciate this
grievance it is necessary to note a few relevant introductory facts.
F
The respondents in these appeals were the original writ petitioners
before the High Court. They are dealers in manganese ore. They export
manganese ore through the Minerals and Metals Trading Corporation of
India. For exporting the said ore they naturally require the services of
appellant No. l's Port through which their manganese ore is loaded in the
ships for export. The appellant-Port for that purpose offers various services G
and facilities to such shippers. The appellant-Port maintains different yards
in its premises. One such yard is known as 'Eastern Yard' which is divided
into several plots of varying e:xient between 100 square meters and 600
square meters. These plots are leased out by the Port Trust authorities to
different shippers. The writ petitioners are the lessees of a few plots. They H
1090
SUPREME COURT REPORTS
[1997] 1 S.C.R.
A are at a distance of about 200 meters to 1500 meters from the wharf. These
plots are connected by broad gauge railway lines on one side and narrow
gauge railway lines on the other side. The ore is transported to the plots
on the broad gauge railway line and is transported to ships by narrow gauge
railway line. The shippers can also transport the ore to their respective 1
B plots by road using dumpers or lorries. The handling of ore from the plots
to the ships was previously undertaken by the Port authorities. The entire
operation consisted of :
c
(a) Loading of ore into the skips by the port labour;
(b) Transport of ore from the plots to the vessels utilising the internal
narrow gauge railway system belonging to the port.
( c) Transferring the ore from the skips to the ships hold, utilising
the port labour.
D Under Sections 48, 49 and 50 of the Major Port Trusts Act, 1963 (for short
....
. 'the Act'), the Board of Trustees is enabled to charge for the services
'-
rendered by the Board. In exercise of the powers conferred under Sections
48 and 49 of the Act, the Board periodically notifies the scales of rates and
conditions and the handling charges for the manganese ore for the said
E operation were fixed at the rate of Rs. 35 per thousand kilograms for-one
metric. ton. These handling charges were inclusive of equipment hire
charges. In May 1986 the writ petitioners received a circular from the
Traffic Manager of the Port stating that the then existing N.G. system
would not be available and that the revised system would come into force
F on or around 20th May 1986. The consequences of the· abolition was that
_.•
the shippers were required to employ their own dumpers and loaders to
~
transport the ore from the dump area to the wharf and load the ore on to
the ships utilising their slings. No port labour or other personnel and
equipment of the port might be required or utilised as the entire operation
would be carried out by the shipper. On 10th June 1986 the Traffic .
G Manager of the .Port issued a circular notifying that a provisional consolidated handling charge of Rs. 30 per Metric Ton for handling export of
manganese ore in the new system, would be levied. Consequently the
previous handling charges of Rs 35 were substituted by Rs. 30 per M.T.
According to the writ petitioners this levy of charges of Rs. 30 per M.T.
H under the new system of handling of manganese ore at the appellant-Port
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V!SAKHAPATANAM PORTTRUSTv. RAM BA HAD UR 11-IAKURPVJ'. LTD. (S.B. M.AJMUDAR, J.J 1091
was unreasonable and excessive. They made several representations in this A
~-
connection. According to the Writ Petitioners for transporting manganese
(
ore form the plots and putting it on board the ship the shippers will have
~
to incur approximately Rs. 37 per M.T. and the Port authorities collect
Rs. 30 per M.T. after withdrawal of the services by them. Under these
circumstances two writ petitions were filed by respondents in Civil ApB
peals Nos. 3972 and 3973 of 1993 before the High Court. They were writ
petition Nos. 8891 and 14503 of 1986. These writ petitions were heard by
-
a learned Single Judge of the High Court who after hearing the parties
""
came to the conclusion that for substituting the new scale of handling
charges for manganese ore for the earlier existing scale of Rs. 35 per M.T. c
when the Port was providing its own labour and narrow gauge railway line
siding for transporting the ore from dumping yard to the wharf, the
procedure required by Section 52 ·of the Act was not followed by the
appellant-Port and hence the new scale of rates could not effectively be
pressed in service by the Board against the writ petitioners. So far as the D
contention of the writ petitioners that t1'e levy of Rs. 30 per M.T. under
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the new system of handling of manganese ore pursuant to the impugned
circulars dated _19th May 1986, 10th June 1986, and 18th July 1986 and
resolution dated 26th June 1986 was excessive and unreasonable was
concerned, the learned Single Judge observed that it was not for the Court E
to work out the details minutely to find out the actual cost incurred for
the service and then decide at what rate the handling charges should be
collected by the Port and that the Central Government will have to
consider all these aspects while granting sanction to the new scale of
handling charges under Section 52 of the Act. Accordingly the impugned
F
'
circulars and resolution of 1986 were quashed and writ ::Petitions were
..
allowed. The appellants herein filed writ appeals against the aforesaid
order of the learned Single Judge being Writ Appeal Nos. 1379 and 1380
of 1987 before the High Court. Said two writ appeals along with the
companion Writ Petition No. 17407 of 1987 were heard by a Division
Bench of the High Court which by the impugned common judgment and G
order confirmed the decision of the learned Single Judge and dismissed
the writ appeals .. Companion writ petition was also allowed. The Division
Bench noted that the handling charges of Rs. 30 per M.T. with respect to
"-,-·-
manganese ore and other ores in the light of the fresh system came to
be later on sanctioned by the Central Government under Section 52 of H
1092
SUPREME COURT REPORTS
[1997] 1 S.C.R.
A the Act and they came in force with effect from 12th February 1992.
Therefore, the controversy survived regarding the appropriate handling
charges for manganese ores for the period from 20th May 1986 to 12th
February 1992 and for that period the Central Government, while exercising its power under Section 52 of the Act, was required to consider the
B question regarding fixing of appropriate handling charges after giving
notice to the writ petitioners and hearing their objections, if any. It was
further directed that whatever payments were made by the writ petitioners
during the pendency of the writ appeals and writ petition before the High
Court at the rate of Rs. 20 per M.T. in respect of consignments of
C manganese ore would be subject to the final adjustment to be made in the
light of the decision of the Central Government.
Rival contentions
At the time of final hearing of these appeals Shri Vinod Bobde,
D learned senior counsel appearing for the appellants vehemently submitted
that the Division Bench of the High Court had ex f acie erred in law in
taking the view that the rates of handling charges for manganese ore as
fixed by the Board's impugned resolution dated 26th June 1986 were
required to be sanctioned by the Central Government under Section 52 of
the Act and without such prior sanction they could not operate. It was
E submitted that the earlier sanctioned rate under Section 52 was Rs. 35 per
M.T. which held the field from 1st January 1984 and this scale of rates was
duly published by the appellant-Port. That thereafter on two occasions the
appellant- Port gave remission to alleviate the hardship of the shippers
exporting manganese ore by utilising the services offered by the appellantF Port. That one such remission was given by the Board in its meeting No. 7
of 1984-85 held on 30th October 1984. That was the remission of Rs. 5 per
M.T. of manganese ore brought by dumpers to Visakhapatnam Port and
exported therefrom. This remission was to be given on the basis of the
certificate issued by the Dock Labour Board. Thus this remission was a
conditional remission. It was admittedly under Section 53 of the Act. That
G subsequently when the facility of utilisation of narrow gauge railway line
on the premises of the Board was withdrawn the Board by the impugned
resolution dated 26th June 1986 gave a fresh remission of Rs. 5 per M.T.
from the sanctioned rate of Rs. 35 per M.T. by making it unconditional.
Consequently even the impugned resolution dated 26th June 1986 also
H remained within the four corners of Section 53 of the Act and that the High
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...
VISAKHAPATANAM PORTTRUSTv. RAM BAHADUR THAKUR PVT. LTD. (S.B. MAJMUDAR, l.] 1093
Court was in error in taking the view that these impugned circulars sought A
to introduce a new scale of rates which required prior sanction of the
Central Government under Section 52 of the Act.
It was next contended by Shri Bobde that even assuming that the
impugned resolution sought to bring into force new scale of rates in. the
light of the changed system of services made available by the Board for
shipment of the manganese ore, and that such new scale of rates without
prior sanction of the Central Government was ineffective during the
relevant period from 20th May 1986to12th February.1992, then as a logical
corollary it should have been held ·by the High Court that the earlier
existing handling rate of Rs. 35 per M.T. remained operative as it would
not get substituted by any effective new rate of handling charges of manganese ore and the writ petitioners would be liable to pay the handling
charges for the aforesaid relevant period at the rate of Rs. 35 per M.T.
B
c
It was p.ext contended by Shri Bobde that if the writ petitioners had D
any grievance about the alleged excessive handling charges or that there
was no quid pro quo between these rates on the one hand and the services
rendered by the Board oa the other and if the High Court found that highly
disputed questions of fact arose, for resolution of this dispute, the writ
petitioners should have bee{l relegated to the remedy of civil suit. In any
case, according to Shri Bobde, Section 54 of the Act could have been E
pressed in service in such an eventuality and the writ petitioners could have
been relegated to the remedy of representation before the Central Government in this connection. Shri Bobde also submitted that even if Section 54
was to be invoked fJXation of appropriate rates which is a delegated
legislative function, there was no question of giving any hearing to the
p
objectors-writ petitioners and consequently the direction of the Division
Bench about the issuing of notices to the writ petitioners and hearing their
objections was clearly misconceived.
On the other hand Shri R.F. Nariman, learned senior counsel for the
respondent, submitted that the old scale of rates for handling of manganese G
ore levied by the appellant-Board from 1st January 1984 was fJXed in the
light of the type of services then rendered by the Board and the infrastructural facilities made available by the Board to the shippers in those days.
That under the previous system the Port authorities handled the ore from·
the plots to the ships by utilising the port labour and the internal railway H
1094
SUPREME COURT REPORTS
[1997] 1 S.C.R.
A system belonging to the Port and for the entire operation handling charges
were levied at the rate of Rs. 35 per M.T. That under the new system
sought to be introduced from June 1986 onwards transportation of ore was
to be the responsibility of the shippers who had to employ their own labour.
Under these circumstances when the Board fixed scale of rates at Rs.
0
30
B per M.T. and when the earlier infrastructural facilities and the benefit of
utilisation of internal railway system earlier available to the shippers were
withdrawn, the said rate of Rs. 30 Per M.T. would obviously become a new
scale of rates interlinked with the changed system of conditions for handling manganese ore from June 1986 onwards and consequently prior
sanction of such new rates in the light of the new system was a condition
C precedent under Section 52 of the Act for making this new scale of rates
effective. However Shri Nariman, learned senior counsel fairly stated that
the Board no doubt has powers under Section 53 of the Act to grant
exemption or remission of existing rates of charges in special cases as
contemplated by Section 53 and in such an eventuality previous sanction
D of the Central Government may not be necessary. But on the peculiar facts
and circumstances of the case the High Court rightiy held that the impugned rates of handling charges sought to be introduced by the resolution of 26th June 1986 did require previous sanction of the Central
Government under Section 52 of the Act.
E
It was next contended by Shri Nariman that no fault could be found
with the direction of the High Court in requiring the Central Government
to consider the objections of the writ petitioners against the proposed
fixation of rates by the Board under the new system on the ground that
they w.ere excessive and unreasonable and it was for the Central GovernF ment to take an informed decision in the matter and that obviously cannot
prejudice the appellant-Board. In this connection it was submitted by the '
learned senior counsel for the respondents that by an order dated 10th
August 1993 this Court while granting special leave to appeal against the
impugned judgment and order of the High Court had directed the respondents to pay the charges at the rate of Rs. 30 per M.T. from June 1986
G onwards and accordingly the respondents have paid the balance amounts
of disputed handling charges all throughout from June 1986 onwards till
11th February 1992. That in the same order this Court had directed that if
ultimately the appellants fail in appeal the amount that is recovered by
them from the respondents will be paid by them with interest as may be
H fixed by this Court. However learned senior counsel Shri Nariman fairly
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I
VISAKHAPATANAM PORTlRUST ... RAM BAHADUR THAKUR PVT. LTD. [S.B. MAJMUDAR,J.) 1095
stated that in case this Court is inclined to uphold the order of the High A
Court, if the Central Government is directed to resolve this controversy
between the parties within a fixed period then the payments made by the
respondents pursuant to the interim order of this Court dated 10th August
1993 may be made subject to the decision of the Central Government and
the rights and obligations of respective parties to this litigation may be B
directed to be worked out in the light of the said decision of the Central
Government.