UNION OF INDIA versus WEST COAST PAPER MILLS LTD.

Citation: [1971] 2 S.C.R. 594 · Decided: 14-10-1970 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Dismissed

Judgment (excerpt)

594 
UNION OF INDIA 
v. 
WEST COAST PAPER MILLS LTD. 
October 14, 1970 
(J. C. SHAH AND A. N. GROVER, JJ.] 
Indian Railway A.ct, 1890, s. 24-Railway Rates Tribunal constituted 
under s, 24-Jurisdiction of Tribunal 
under s. 41(1)(b)-Subject to 
limitatlons in ss. 29 & 42-Tribimal can give relief if he rates between two 
stations are unreasonable and. discriminatdry and thereby in contravention 
of s. 28. 
The respondent coinpany had a factory which was situated in Dandeli 
at the terminus of· Alnawar-Dandeli branch of the southern Railway. It 
used the branch line for transporting coal, limestone etc. required for its 
manufactt1ring activities and also its manufactured products. Initially 
the Railways were levyirig freight on this branch line at "common rates" 
for all commodities on "a weight basis". On representations made by the 
users of this branch line, the Indian Railways substituted, with effect from 
February I, 1964, the "standard telescopic class rates". In charging the 
goods freight, however, the actual distance of the branch line was multi-
plied by three. The company filed a complaint before the Railway Rates 
Tribunal and challenged as "unjust, unreasonable and discriminatory" the 
method of levy of freight on goods traffic. The company claimed that the 
levy of rates offended the provisions .of s. 28 of the Indian Railways Act, 
1890, and that the existing rates were per se unreasonable The company 
claimed a . deeiaration that the rates between he tsations specified in the 
complaint were unreasonable and a llirection to the Railway to levy with 
effect from the date of the complaint standard rates and charges for the 
traffic on the branch line without "inflating the distance". The Union di 
India as representing the Southern Railway defended the complaint and 
contended that the rates were reasonable,. that they were not discrimina-
tery, and since they were fixed by· order of the Central Government the 
Tribunal was precluded from 
questioning 
the legality 
and 
propriety 
thereof. The .Tribunal held that the rates in question were in contraven-
tion of s. · 28 of the Act being unreasonable and discriminatory. It further 
held that it had jurisdiction under s. 41 (1) (b) 
of the Indian Railways 
Act to consider the complaint. . By special leave appeal against the deci-
sion of the Tribunalwa s filed by the Union of India in this Court. The 
Court had to consider the question of the. Tribunal's jurisdiction under 
s. 41 (I) (b) in the light of R. 63 of Goods Tariff No. 28, Rule 69 of 
Goods Tariff No. 29 and ss. 29 and 42 of the Railways Act. 
HELD : Rules 63 of Goods Tariff No. 28 and 67 of Goods Tariff No. 
29 refer to "station-to-station" rates. 
In s. 4f(l) (b) the expression used 
·is not 'station~to-station rates but a rate between two stations which is 
unreasonable. There is nothing in the rul.es which even indirectly affects 
the jurisdiction of the Tribunal to determine whether the rates for carriage 
of certain specified commodities between the two stations are unreason-
able. [601 E] 
The Tribunal is invested with the authority subj.Ct to tire limitations 
contained in s. 29(3) and s. 42 to entertain a complaint and to give re-
life n respect of rates which are found to be unreasonable between two 
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UNION v .. WEST COAST PAPER MILLS (Shah, /,) 
59 5 
stations. The complaint made by the company in the present case did 
not seek intervention of the Tribunal in matters which may be raised only 
for decision to the Central Government by s. 29 and s. 42 of the Act, 
and the Tribunal had not given any relief in contravention of these pro-
visions. The Tribunal had merely declared that the chargeable rate di 
freight determined by multiplying by three the distance over which the 
goods were transported, for specific commodities, was in contravention of 
·s. 28 of the Indian .Railways Act. The relief thus granted by the Tribunal 
was within its jurisdiction. [601 G] 
The· view expressed by one of the members of the Tribunal that even 
if the Tribunal holds that the rates between · two stations in respect of a 
specific commodity are unreasonable, it cannot make a declaration to that 
effect, must be rejected. Such a view would deprive the Tribunal of its 
power 10 give formal shape to its view. [602 A-BJ 
C1v1L A.PPELLATE JURISDICTION : Civil Appeal No. 1742 of 
1966. 
Appeal by special leave from the judgmertt and order dated 
April 18, 1966 of 

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