1997 (2) TMI 589 - SC - Indian Laws

Supreme Court affirms port rates ruling, requires govt review. Refunds possible for excess payments.

The Visakhapatnam Port Trust & Anr Versus M/s Ram Bahadur Thakur Pvt. Ltd.

The Visakhapatnam Port Trust & Anr Versus M/s Ram Bahadur Thakur Pvt. Ltd. - 1997 AIR 1057, 1997 (1) SCR 1080, 1997 (4) SCC 582, 1997 (2) JT 599, 1997 (2) ... Issues Involved1. Legality of the impugned circulars and resolution regarding remission or new rates under Section 53 or Section 52 of the Major Port Trusts Act, 1963.2. Reasonableness and excessiveness of the handling charges.3. Existence of an effective scale of rates for handling manganese ore during the period from 20th May 1986 to 12th February 1992.4. Justification of the High Court's direction to the Central Government for issuing notices and hearing objections before fixing handling charges.Issue-wise Detailed Analysis1. Legality of the Impugned Circulars and ResolutionThe appellants challenged the High Court's decision that the impugned circulars and resolution required prior sanction from the Central Government under Section 52 of the Major Port Trusts Act, 1963. The appellants contended that the revised rate of Rs. 30 per M.T. was a remission under Section 53, not a new rate requiring sanction. However, the Court found that the revised rate was introduced in the context of a new system of handling services, which constituted a new scale of rates necessitating prior sanction under Section 52. The Court concluded that the Board's actions required prior Central Government approval, which was not obtained, thus rendering the new rates ineffective.2. Reasonableness and Excessiveness of the Handling ChargesThe writ petitioners argued that the handling charges of Rs. 30 per M.T. were unreasonable and excessive. The Court noted that it was not within its purview to determine the exact cost of services and the appropriate rate. Instead, it held that the Central Government is the competent authority to scrutinize the reasonableness of the rates under Sections 52 and 54 of the Act. The High Court's decision to leave this determination to the Central Government was upheld, affirming that the Central Government should consider the objections and make an informed decision on the matter.3. Existence of an Effective Scale of RatesThe High Court had assumed that no effective scale of rates existed during the period from 20th May 1986 to 12th February 1992. The Supreme Court disagreed, stating that the remitted rate of Rs. 30 per M.T., effective from 30th October 1984, continued during this period despite the withdrawal of certain infrastructural facilities. The Court clarified that the rate of Rs. 30 per M.T. remained operative, but its reasonableness in light of the changed conditions needed to be assessed by the Central Government.4. Justification of High Court's Direction to the Central GovernmentThe appellants argued that the High Court's direction for the Central Government to issue notices and hear objections was unnecessary. The Supreme Court held that while legislative actions generally do not require hearings, the Central Government's role under Section 54 involves considering public interest and objections from affected parties. Thus, the High Court's direction was justified and could be sustained under Section 54, allowing the Central Government to consider objections before making any modifications or cancellations to the rates.ConclusionThe Supreme Court upheld the High Court's decision with a modification. It affirmed that the impugned rates required prior sanction under Section 52, the reasonableness of the rates should be determined by the Central Government, and the remitted rate of Rs. 30 per M.T. was effective during the disputed period. The Court directed the Central Government to decide on the appropriate rates within four months, considering objections from all parties. Any excess amounts paid by the respondents would be refunded with interest if determined by the Central Government. The appeals were dismissed with no order as to costs.