1987 (10) TMI 369 - SC - Indian Laws

Supreme Court Upholds Railway Board's Decision on Concessional Rates and Dangerous Commodities

The Supreme Court dismissed the appeal, concurring with the Tribunal's findings. It held that the Railway Board was not bound by the concessional rate ... - Issues Involved:1. Whether the Railway Board was bound to give the concessional rate offered to the company under Ex. C5 dated November 5, 1966Rs.2. Whether the rate charged for the carriage of Naptha between Bajuva and Dadhevi is unreasonableRs.3. Whether the Railways are showing undue preference or advantage in respect of other traffic and contravening the provisions of Section 28 of the Railways ActRs.Summary:Issue 1: Concessional Rate under Ex. C5The Tribunal held that the Railway Board was not bound by the concessional rate offered in Ex. C5 because the letter explicitly stated that the rate was subject to review when the traffic actually began to move. The Tribunal found that the assurance in Ex. C5 was not the primary reason for setting up the factory at Kota and that the withdrawal of the concessional rate did not adversely affect the company. The Supreme Court agreed with this conclusion, noting that the representation in Ex. C5 was not clear and unqualified, and thus, no promissory estoppel could arise.Issue 2: Reasonableness of the Rate ChargedThe Tribunal found that the rate charged for the carriage of Naptha was not unreasonable. The onus to prove the unreasonableness of the rate rested on the company, which it failed to discharge. The Supreme Court upheld this finding, stating that even if the Railways earned surplus income, it did not make the rate per se unreasonable. The Railways, being a commercial undertaking, are not obligated to pass on extra earnings to customers. The Court also noted that Naptha, classified as a dangerous commodity, required special precautions and tank wagons, justifying the higher rate compared to crude oil.Issue 3: Undue Preference or AdvantageThe Tribunal held that there was no evidence to support the claim that the Railways were showing undue preference or advantage in contravention of Section 28 of the Railways Act. The Supreme Court agreed, citing the principle that a party must establish preference between itself and its competitors to claim undue preference. The Court found no reason to disagree with the Tribunal's conclusion that the Railways were not contravening Section 28.Conclusion:The Supreme Court dismissed the appeal, agreeing with the Tribunal's conclusions on all issues. The Court emphasized that the doctrine of promissory estoppel could not be invoked as the representation in Ex. C5 was not clear and unqualified. The rate charged for Naptha was found to be reasonable, and no undue preference was shown by the Railways. The appeal was dismissed with no order as to costs.