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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVILAPPELLATE JURISDICTION

CIVIL APPEAL No. 6905 OF 2005

M/S. S.K.L. CO. .….. APPELLANT

Vs.

CHIEF COMMERCIAL OFFICER & ORS. .….. RESPONDENTS

J U D G M E N T

VIKRAMAJIT SEN,J.

1 This Appeal assails the Judgment dated 15.7.2004 of the High Court of

Karnataka in Writ Appeal Nos. 5722-5723 of 2001 setting aside the judgment of

the learned Single Judge dated 25.7.2001 who had allowed both the Writ

Petitions and quashed the impugned Notification, holding that the awarding of

contract of lease of FSLR and VP is bad in law. The factual matrix of the

present case is that in pursuance of the budget speech of the Hon’ble Minister

for Railways in the year 1999-2000, the Respondents issued a tender notice no.

3/2000-2001 (hereinafter referred to as ‘impugned notice’) on 19.6.2000,

inviting sealed tenders from traders and other interested parties for leasing of

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Front Second class Luggage Rake of 4 or 8 tons and Ventilated Parcel Van of 18

tons capacity on the Broad Gauge on payment of lump sum rate for loading of

parcels by certain trains for a period of two years.

2 The first compartment, immediately after the engine, is known as Front

Second Class Luggage Rake (FSLR) and each FSLR consist of four different

sections. The first section is meant for carrying goods/parcels of 4 tons

capacity, followed by the section known as the ‘Brake Van’ which is occupied

only by the guard. The third section is for carrying unreserved passengers, and

the last section is again a luggage compartment with a capacity of 4 tons.

Similarly, the last compartment in each train is known as Rear Second Class

Luggage Rake (RSLR), which also consists of four sections similar to the

FSLR. Further, if there is excess demand, a Ventilated Parcel Van (VP) is added

to the train after reducing, if necessary, a passenger compartment so as not to

exceed the maximum hauling capacity of the engine. The VP is meant

exclusively for the purpose of carrying parcels and its normal capacity is 18

tons. The Respondents had noticed that in some trains, most of the time, the

luggage capacity available in FSLR and RSLR was not being fully utilized

resulting in loss of revenue. In view of this, as a matter of policy, it was decided

by the Government of India to lease the luggage space in FSLR to traders and

other interested persons after inviting tenders from them.

3 FSLR of Train no. 2627 Bangalore- New Delhi- Karnataka Express

(Daily) [hereinafter ‘Karnataka Express’] was leased for a period of two years at

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Rs. 19,800/- per 4 metric ton space per day. The lease was given on 24.7.2000

in favour of a company known as BIC Logistic Limited, in pursuance to a

tender issued by the Respondents. The lessees agreed to pay for the two spaces

each of 4 tons at that rate aggregating to Rs. 39,600/- per 8 tons per day. The

Appellant filed Writ Petition No. 27568 of 2000 before the High Court of

Karnataka, challenging the impugned notice. The Appellant is engaged in

trading of grapes who contended that as a result of the Respondents leasing out

the FSLR in the Karnataka Express, the Appellant was denied the facility of

transporting grapes from Bangalore to New Delhi at the rates specified in the

Coaching Tariff no. 24 Part III (Rates for Parcels & Luggage Traffic), which

came into effect on 1.4.2000. Another trader of grapes filed Writ Petition No.

37150 of 2000 before the High Court of Karnataka on 27.11.2000 seeking to

restrain the Respondent- Railways from charging any tariff other than that

specified in Coaching Tariff No.24 Part III. The learned Single Judge by

common Judgment dated 25.7.2001 allowed both the Writ Petitions and quashed

the impugned notification, holding that the awarding of contract of lease of

FSLR and VP is bad in law. Aggrieved by the decision of the learned Single

Judge, the Respondents preferred two appeals.

4 Before the Division Bench, the Respondents contended that the learned

Single Judge erred in holding that the authority of the Respondents to lease the

carrying capacity in the trains is only in accordance with Section 30 and 32 of

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the Indian Railways Act, 1989 (for brevity the ‘Act’) which, for convenience,

are reproduced below:

30. (1) The Central Government may, from time to time, by

general or special order fix, for the carriage of passengers and

goods, rates for the whole or any part of the railway and different

rates may be fixed for different classes of goods and specify in

such order the conditions subject to which such rates shall apply.

(2) The Central Government may, by a like order, fix the rates of

any other charges incidental to or connected with such carriage

including demurrage and wharfage for the whole or any part of the

railway and specify in the order the conditions subject to which

such rates shall apply.

31. The Central Government shall have power to—

(a) classify or reclassify any commodity for the purpose of

determining the rates to be charged for the carriage of such

commodities; and

(b) increase or reduce the class rates and other charges.

32. Notwithstanding anything contained in this Chapter, a railway

administration may, in respect of the carriage of any commodity

and subject to such conditions as may be specified,—

(a) quote a station to station rate;

(b) increase or reduce or cancel, after due notice in the manner

determined by the Central Government, a station to station

rate, not being a station to station rate introduced in

compliance with an order made by the Tribunal;

(c) withdraw, alter or amend the conditions attached to a station to

station rate, other than conditions introduced in compliance

with an order made by the Tribunal; and

(d) charge any lump sum rate.

5 The Respondents contended that the learned Single Judge failed to

understand the objective and purpose with which the available parcel space in

FSLR and VP was being sought to be exploited. The Respondents stated that it

aimed to benefit by getting maximum rate without affecting the interests of the

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general public, for whom there was still adequate provision of space available

in every train. The Respondents further stated that in pursuance of an order of

the High Court dated 28.1.2002, an affidavit had been filed by the Respondents

which would allay any apprehension of the Appellant, with respect to it being

inconvenienced in transporting its commodities. The Respondents will not

hesitate to consider adding another wagon to meet the needs of the general

public. Finally, the Respondents contended that there was no express provision

permitting them to give the wagon on lease, however, au contraire, neither was

there any provision under the Act which prohibited the Respondents from doing

so. The Appellant while supporting the order of the learned Single Judge, placed

reliance on Section 70 and 71 of the Act, which is being provided for the

facility of reference.

70. A railway administration shall not make or give any undue or

unreasonable preference or advantage to, or in favour of, any

particular person or any particular description of traffic in the

carriage of goods.

71. (1) The Central Government may, if it is of the opinion that it is

necessary in the public interest so to do, by general or special

order, direct any railway administration—

(a) to give special facilities for, or preference to, the carriage of

such, goods or class of goods consigned by or to the Central

Government or the Government of any State or of such other

goods or class of goods;

(b) to carry any goods or class of goods by such route or routes and

at such rates;

(c) to restrict or refuse acceptance of such goods or class of goods

at or to such station for carriage, as may be specified in the order.

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(2) Any order made under sub-section (1) shall cease to have effect

after the expiration of a period of one year from the date of such

order, but may, by a like order, be renewed from time to time for

such period not exceeding one year at a time as may be specified in

the order.

(3) Notwithstanding anything contained in this Act, every railway

administration shall be bound to comply with any order given

under sub-section (1) and any action taken by a railway

administration in pursuance of any such order shall not be deemed

to be a contravention of section 70.

6 The Appellant contended that Section 70 was an implied restriction on the

Respondents capacity to call for such tenders. The only exception to Section 70

is Section 71, which can be exercised only on the discretion of the Central

Government, for the purpose of public interest. The Appellant contended that by

inviting such tenders, no public interest was being served and instead has led to

the creation of a monopoly in favour of one person with respect to the mode of

transportation, which in turn was detrimental to public interest. Extending the

line of argument on Section 71, the Appellant contended that the Central

Government had not issued any special or general order, enabling the

Respondents to give special or preferential facility in the carriage of goods to

anyone who offers the highest lump sum rate. The Appellant submitted that the

content of the affidavit filed by the Respondent ran counter to the impugned

Notification. As a result, the assurance sought to be given by means of an

affidavit appeared to be an imaginary one. Finally, the Appellant submitted that

the contractors are charging an exorbitant rate of Rs.8 per kg for transporting

the consignment, whereas the Railways were charging only Rs.2.38 per kg for

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the transport of perishables from Bangalore to Delhi. This power to revise the

tariff rates was bestowed exclusively on the Central Government under Section

32, and thus its delegation to a third party by entering into a lease agreement is

in contravention of the statutory provisions.

7 In its reply, the Respondents contended that Section 70 of the Act stated

that the Railway Administration shall not give any undue or unreasonable

preference. It was submitted that the Respondent-Railways, by inviting tenders

pursuant to a policy decision will not amount to giving any undue or

unreasonable preference to one competitor over another. Further, it was

submitted that even in the absence of Section 70, the Railway Administration

being an Authority postulated by Article 12 of the Constitution, could not have

discriminated between similarly placed parties, as that would tantamount to a

violation of Article 14 of the Constitution.

8 The Division Bench of the High Court opined that the impugned

Notification was not issued under Section 30 and 31 of the Act, but instead was

a product of a policy decision of the Government of India which aimed to

augment the earnings of the Respondent-Railways by leasing the FSLR and VP

in different trains. The Respondent-Railways are run as a commercial

undertaking, and its administration cannot be prevented from taking steps to

increase its revenue, as long as they are not detrimental to the interest of the

general public. It was held that the action of inviting tenders could not be

quashed as being opposed to Section 30 and 31. The High Court observed that

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to prove that Section 70 had been violated, the Appellant had to establish that

undue preference had been given to one over another, and as the Appellant

failed to provide any cogent evidence to that effect, this contention was

dismissed. The apprehension of the Appellant was that due to the leasing out of

space to a third party, there was less than adequate space for the general public,

and that, as a result they would have no choice but to approach the third party

and pay any rate that he may quote. The High Court observed that this

apprehension of the Appellant had been allayed by the affidavit filed by the

Respondents wherein they had stated that if the need arises they would ordain

more space for the parcel service. Thus, the High Court allowed the appeals.

However, with the intention of safeguarding the interest of the general public, it

also issued directions to the Respondent to incorporate certain Regulatory

checks on the unbridled power of the lessee. The checks were meant to be in the

form of an upper limit on the tariff that could be charged by the contractors for

different trains. Aggrieved by the decision of the High Court, the Appellant has

filed the present appeal.

9 The arguments of the learned Counsel for the Appellant are fourfold.

Firstly, Babu Verghese v. Bar Council of Kerala, (1999) 3 SCC 422 reiterates

that if the manner of taking a particular action is prescribed under a statute, that

action must be undertaken and performed in that manner or not at all; as there is

no provision under the statute to lease out space to a third party, the

Respondents are hit by the said principle. Secondly, the decision of the

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Respondent-Railways to lease the parcel space in favour of a particular

individual amounted to an unreasonable preference being given to that

individual and therefore violated Section 70 (supra). Thirdly, the learned

counsel relied on the maxim delegatus non potest delegare and submitted that

under Sections 30 to 32, the power to fix the tariff rate is conferred only on the

Central Government and the Respondent-Railways. Thus, by further delegating

their authority, they violate the established legal principle that a delegatee

cannot sub-delegate. Finally, the learned Counsel for the Appellant elaborated

on the role of the Railways as a social vehicle, by citing the case of Viklad Coal

Merchant v. Union of India, (1984) 1 SCC 619, the relevant paragraph reads

thus:

13. Re Ground 1: Railway is a common carrier and being State

owned it is subject not only to the provisions of the Act but also the

fundamental rights guaranteed by Part III of the Constitution.

However much before the advent of the Constitution when

different railways were owned by incorporated companies, Section

28 of the Act precluded the different railway administrations from

granting undue preference to any particular person or any

particular traffic or to any particular railway administration, or

subject anyone to any undue or unreasonable prejudice or

disadvantage in the matter of transport of goods or passengers.

Railway being a State monopoly, to checkmate its monopolistic

power in the larger public interest it has to be subjected to

regulatory measures. Simultaneously it became necessary to arm

Central Government with power to direct railway administration to

give preference in the matter of transport of the goods of the

Government, Central or State or specified goods to meet the

demands of various regions as well as needs of Government.

Intention was to classify Government in a class by itself for the

purpose of Article.

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14. To meet the challenge of Article 19(1)(g) the Central

Government was armed with power to accord priority in transport

of goods in larger public interest. Soon after the advent of the

Constitution, to arm the Central Government with requisite power

to direct the railway administration to give special facilities for or

preference to the transport of any such goods or class of goods

consigned to the Central Government or to the Government of any

State or such other goods or class of goods as may be specified in

the order, Section 27-A was introduced in the Act which enabled it

by a general or special order to direct the railway administration to

grant special facilities for or preference to the transport of goods.

Such a general or special order can be issued by the Central

Government if in its opinion it is necessary in the public interest to

do so. Now indisputably the goods consigned to the Central

Government or to Government of any State must obviously have a

priority over what we may loosely describe as private transporters,

because it is well-settled that the Central or the State Government

is in a class by itself. This view is founded on the assumption that

all activities of the State are in public interest in the sense that they

are either undertaken on behalf of the public or that the loss or gain

arising from them falls upon the public. The goods consigned to

the Central or the State Government are, unless shown to the

contrary necessarily to be used to carry on governmental activity

undertaken for the benefit of public or to subserve some public

interest and which may as well include the efficient administration

of the governmental agencies. Section 27-A also confers power to

direct any railway administration to give special facilities for or

preference to the transport of goods or a class of goods as may be

specified in a general or special order that may be issued in this

behalf. The Central Government is better equipped to know what

class of goods are required to be sent to any particular area

expeditiously to meet some shortage, or for national security or to

meet an emergency or any natural or man-made catastrophe so as

to accord special treatment in the matter of transport. Section 28

can be said to some extent to be a corollary to Section 27-A

inasmuch as the railway administration on its own is prohibited

from giving undue or unreasonable preference or advantage to, or

in favour of, any particular person or railway administration, or

any particular description of traffic, in any respect whatsoever, or

subject any particular person or railway administration or any

particular description of traffic to any undue or unreasonable

prejudice or disadvantage in any respect whatsoever. To repeat

railway being a State monopoly undertaking, it had to be

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statutorily controlled from abusing its monopolistic character by

prohibiting it from giving any undue or unreasonable preference or

advantage or acting in any manner which would evidence undue or

unreasonable prejudice or disadvantage in any respect whatsoever.

Equality guaranteed by Article 14 is translated into statutory

provision in Section 28. A State monopoly like the railway

administration cannot be trusted to act fairly and that is the object

underlying Section 28. If everyone was to get equal facility for

transport of his goods by railway without anyone claiming priority

or anyone having power to grant preference or special facility, in

an emergency this equal opportunity would create a havoc.

Therefore on the other hand, the Central Government to meet the

needs of the country arising in any eventuality can give directions

for giving special facilities for or preference to the transport of

goods or any class of goods. In the absence of power such as

conferred by Section 27-A, floods, droughts, national security

requirements, unscrupulous hoarders, artificial shortages, materials

for national projects in a country of the dimensions of India cannot

be effectively and adequately tackled. This is the genesis of the

power conferred by Section 27-A.

The judgment discusses the Indian Railways Act, 1890 in which, Sections 27

and 28 correspond to Section 70 and 71 of the present Act. To further buttress

his final submission on the role of the Railways, the learned Counsel for the

Appellant also cited P. Nalla Thampy Thera v. Union of India, (1983) 4 SCC

598, the relevant paragraph has been provided below:

25. We have said earlier that the Railways are a public utility

service run on monopoly basis. Since it is a public utility, there is

no justification to run it merely as a commercial venture with a

view to making profits. We do not know — at any rate it does not

fall for consideration here — if a monopoly based public utility

should ever be a commercial venture geared to support the general

revenue of the State but there is not an iota of hesitation in us to

say that the common man’s mode of transport closely connected

with the free play of his fundamental right should not be. We agree

that the Union Government should be free to collect the entire

operational cost which would include the interest on the capital

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outlay out of the national exchequer. Small marginal profits cannot

be ruled out. The massive operation will require a margin of

adjustment and, therefore, marginal profits should be admissible.

10Per contra, learned Senior Counsel for the Respondents contended that

the Appellant has only challenged the impugned Notification. However, the

impugned notification was only an extension of what was envisaged in the

policy of the Government, and that the Appellant erred by not challenging the

said policy decision of the Government. The learned Counsel relied on Article

73 of the Constitution and submitted that the Central Government had full

power to deal with the property of the Respondent-Railways in any manner it

found appropriate or beneficial. Further, it was contended that the onus to prove

unreasonableness was on the Appellant. This contention was supplemented with

the case of DCM v. Union of India (1988) 1 SCC 86, the relevant portion has

been reproduced below:

12. The relevant provisions of the Railways Act, 1890, which have

a material bearing on the question are these:

Section 41 provides for filing complaints against Railway

Administration. The section provides as follows, so far as it is

material:

“41. (1) Any complaint that a railway administration

(a) is contravening the provisions of Section 28 or

(b) is charging for the carriage of any commodity between two

stations a rate which is unreasonable, or

(c) ** *

may be made to the Tribunal and the Tribunal shall hear and decide

any such complaint in accordance with the provisions of this

chapter.”

Section 28 provides:

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28. A Railway administration shall not make or give any undue or

unreasonable preference or advantage to, or in favour of, any

particular person or railway administration, or any particular

description of traffic, in any respect whatsoever, or subject any

particular person or railway administration or any particular

description of traffic to any undue or unreasonable prejudice or

disadvantage in any respect whatsoever.

13. The third question formulated by us relates to the contravention

of Section 28 of the Railways Act. The scope of this section has

been considered by this Court in Rajgarh Jute Mills Ltd. v. Eastern

Railway. There it was observed that a party who complains against

the railway administration that the provisions of Section 28 have

been contravened must establish that there has been preference

between himself and his goods on the one hand and his competitor

and his goods on the other. Gajendragadkar, J. (as he then was)

observed:

“Section 28 is obviously based on the principle that the power

derived from the monopoly of railway carriage must be used in a

fair and just manner in respect of all persons and all descriptions of

traffic passing over the railway area. In other words, equal charges

should normally be levied against persons or goods of the same or

similar kinds passing over the same or similar area of the railway

lines and under the same or similar circumstances; but this rule

does not mean that, if the railway administration charges 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 Section 28. All cases of unequal rates 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.”

14. In the light of these principles, the Tribunal considering the

material on record held that there is no evidence produced by the

company to justify any grievance under Section 28. We see no

reason to disagree with this conclusion. It is, in our opinion,

perfectly justified. In fact Mr K.K. Jain learned Counsel for the

appellant also did not seriously dispute the correctness of that

finding recorded by the Tribunal.

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15. We may now turn to the second question. Mr K.K. Jain urged

that the rate charged by the Railway Administration is per se

unreasonable. Here again the onus to prove the alleged

unreasonableness of the freight rests on the company. It is for the

company to establish that the rate charged by the Railway

Administration for the carriage of Naptha is unreasonable. Of

course, this onus could be discharged by relying upon the material

produced by the Railways. Mr Jain, therefore, relied upon a

statement Exhibit C-46 in support of his case. Exhibit C-46 is a

statement of surplus “working cost” in respect of carriage of

Naptha from Bajuva to Dadhevi. It is, in our opinion, not necessary

to analyse the statement. Even assuming that the Railways are

earning some surplus income after deducting the operation cost

that by itself is no ground to hold that the freight charged is per se

unreasonable. It must be borne in mind that the Railways are run as

a commercial undertaking and at the same time it being an

instrumentality of the State, should serve the national interest as

well. There is however, no obligation on the Railways to pass on

the extra amount realised by the carriage of goods to customers.

Nor it is necessary to share the profit with the commuters. As Mr

Barua learned Counsel for the Railways said that in the case of

commodities of national needs such as foodgrains, crude oil etc., it

may be necessary for the Railways to charge below the operation

cost. To offset such a loss the Railways may charge higher freight

for certain other classified commodities. Therefore, it seems to us,

that the cost of operation cannot by itself be the basis for judging

the reasonableness of the rate charged.

11The Learned Senior Counsel submitted that the Appellant had failed to

furnish any evidence to justify his claim that the Respondents had acted in an

unreasonable manner by favouring one person over another.

12We have carefully considered all the arguments addressed before us. We

do not find any force in the contention of the Appellant on the applicability of

the Taylor vs. Taylor principle applied by this Court in most recently in Hussein

Ghadially vs. State of Gujarat (2014) 8 SCC 425. In the instant case the statute

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does not prescribe any particular manner in which the wagons are to be leased.

On the issue of Section 70 and 71, we are in agreement with the contention of

the Respondent, that the onus to prove that there has been a violation of the said

section is on the Appellant, who failed to adduce any evidence to establish that

the Respondent – Railways had given undue preference in favour of any person.

This is especially so in light of the fact that the lease was given after an auction

process. The Division Bench directed the Railway Administration that when

calling for tenders, it should fix the outer limit or the upper limit of rates

chargeable by the contractor for different trains. This ensures a regulatory

check upon the unbridled power of the contractor in fixing the tariff rates while

accepting the parcel service of the third parties. This direction has attained

finality so far as the Respondents are concerned inasmuch as they have failed to

challenge them by filing an appeal. As far back as on 5.8.2015 we had brought

this state of affairs to the notice of the learned Senior Counsel for the

Respondents. A challenge to this direction could have been made in any legally

known manner to rectify the position. This is sought to be salvaged by learned

Senior Counsel by relying on certain observations of a coordinate Bench in

Nalakath Sainuddin v. Koorikadan Sulaiman 2002 (6) SCC 1. However, the

question which has to be addressed by us is whether or not the Respondent is “a

person aggrieved” by the impugned Judgment. In our opinion, we are not

confronted by multiple possibilities on this aspect other than that the

Respondents are persons aggrieved in view of the explicit direction of the

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Division Bench in the impugned Judgment extracted above. What we have

before us is not an instance of the Respondents earning an entirely favourable

Judgment, even though some of the arguments proffered by them may not have

found favour with the Court. The settled position in law as is evident from a

proper perusal of Nalakath is that even though several points pressed by the

victor of a litigation may have been viewed with favour, and the Respondent

may have succeeded only one or some, if the matter is taken by the vanquished

party to the portals of a superior forum, the victor may still press all the points

argued by it earlier. The Judgments of the High Courts which have been

analysed by this Court in Nalakath do not go to the extent, as they clearly

cannot, that a critical direction which is unfavourable to the Respondent can be

assailed even in the absence of filing a cross or a separate appeal. A holistic

reading of the impugned Judgment discloses that this direction was not given en

passant or casually in that in the penultimate paragraph of the impugned

Judgment the Division Bench emphasised that although they were allowing two

writ appeals, they were at pains to reiterate that the success of the Respondents

was subject to compliance with the aforementioned directions which we entirely

affirm.

13Instead of complying with the directions a futile effort has been made by

the Respondents to dilute them, nay render nugatory by a side wind in terms of

the additional affidavit dated 3.9.2015 a perusal of which makes it abundantly

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clear that it should have assailed the directions in the impugned Judgment.

These asseverations, inter alia, are as follows:

“That it is respectfully submitted that fixing of outer/upper limit cannot

be done by Railways for the reasons listed as follows:

(i)The contracts for leasing parcel space of the Brakevans is an

activity which comes under earnings contract in which price is not

regulated by Railways.

(ii)The parcel leasing policy is introduced to maximize revenue

through parcel traffic and to avoid underutilization of Parcel space

available in each train.

(iii)The leaseholder takes the parcel space of the Brakevans after going

through the competitive bids and he also incurs expenses towards

ancillary services provided to his customers.

(iv)The leaseholder cannot charge exorbitant rates because there are

alternative trains for the public in which in which parcel space is

held by other lease holders as well as Railway. The customers can

move their cargo either by road or by air. Thus in effect, these rates

are actually market determined rates and no leaseholder can

increase it beyond a point that traffic can bear in view of presence

of other competing modes i.e. trucks flights and other trains

wherein both leased and departmental parcel portions are available.

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(v)The leaseholder takes the responsibility for safe custody of goods

entrusted to him and compensates for any loss or damages on his

own during transit.

(vi)If the charges levied by the leaseholder are high then there is every

chance for the customers to move the traffic by road or air. Hence,

the leaseholder is constrained to keep the rates low after ensuring

his marginal profit.

(vii)Since introduction of Parcel Leasing Policy in the year 1991 and

till date, except for this petition there is no other case pending

before any of the Hon’ble Court with regard to fixation of

outer/upper limit.

(viii)Parcel Leasing Policy is well patronized among the merchant

community and running successfully for the last 25 years all over

India and all the parties viz., the merchant community, leaseholder

and Railways are benefited by this scheme.”

14The Appeal before us can be disposed of by us without any further

complaint or grievance by the Appellant, by directing the Respondents to fix the

outer or upper limit of rates chargeable by contractors for different trains. We

say this for the simple reason that the Respondents are bound to follow and

implement the ethos and parameters set by the Railways Act. The learned

Single Judge had followed and applied decisions of this Court when called upon

to interpret different sections of the Act. Over a quarter of a century ago it has

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been emphasised that the Railways enjoy a monopolistic character, the

justification of corollary of which would be the fulfilment and attainment of

public interest. The Railway Budget, presented each year, is studied threadbare

with special interest and emphasis on what the Central Government hopes to

achieve in the coming year, and the most prominent and predominant feature

whereof is the advancement of social interests. That the intendment behind a

statue can be metamorphosed or diluted by Parliament but not by a sub-delegate

has been unequivocally reiterated by this Court. Avinder Singh v. State of

Punjab 1979 (1) SCC 137 enunciates that the Legislature cannot efface itself; it

cannot delegate the plenary or essential legislative function; and even if there is

delegation, the delegate must function under its supervision otherwise “if the

delegate is free to switch policy it may be usurpation of legislative power

itself”. In Agricultural Market Committee v. Shalimar Chemical Works Ltd.

(1997) 5 SCC 516 we have restated that “the legislature cannot abdicate

essential legislative function in favour of another. Power to make subsidiary

legislation may be entrusted by the legislature to another body of its choice but

the legislature should, before delegating, enunciate either expressly or by

implication, the policy and the principles for the guidance of the delegates”. In

applying this dicta, it seems to us that if a shift from the Railways being a social

vehicle to it being essentially a milch cow towards was intended, that mutation

was only within the province of Parliament. This is especially so keeping in

perspective the observations made by this Court in P. Nalla Thampy Thera and

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Viklad Coal Merchant. In saying so, we do not intend, even a whit, to

interfere with the right of the executive to formulate policy, but while doing so

the Rubicon dividing the power of the principal and the delegate or

sub-delegatee should not be ignored.

15Railway tariff no doubt has to be realistic and keep pace with time and if

the State so perceives, need not be a losing financial proposition. While it may

be both pragmatic and sagacious to auction FSLR & VP it can be done with an

objective of gathering the optimum revenue. It has not been contended before

us nor is any material available disclosing that the tariff itself has been increased

by adherence to the statutory procedure.

16We are, however, unable to accept the argument articulated on behalf of

the Appellant that the Respondents are not entitled or empowered to auction the

space for a particular period. It may do so provided the auction contractor

adheres to the prescribed tariff. We permit a period of three months to the

Respondents to comply with the impugned Judgment of the Division Bench.

17The Appeal is accordingly disposed of in these terms. The Respondents

are directed to ensure that the successful tenderer, in our case, Respondent No.4,

does not charge carriage prices in excess of those prescribed by the Respondents

in Coaching Tariff No. 24 Part III. It will be seen that this direction is not

drastically different to that contained in the impugned Judgment since the

fixation of “the outer limit or the upper limit of rates chargeable by the

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contractor” would have been carried out by complying with a procedure

envisaged by law. The Judgment of the Division Bench is upheld, but to this

extent only.

…………………………J

[VIKRAMAJIT SEN]

…………………………J

[SHIVA KIRTI SINGH]

New Delhi;

December 29, 2015.