TaxTMI 
TaxTMI 
TaxTMI 
2012 (2) TMI 503
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.... 2(h) of the Act. The petitioner also raised an objection to the maintainability of proceedings before the Commission by contending that an arbitration agreement existed between respondent No. 2 and the petitioner and, consequently, the proceedings before the Commission could not proceed and were liable to be referred to arbitration under Section 8 of the Arbitration & Conciliation Act, 1996. This objection too has been rejected by the Commission. 2. Respondent No. 2 approached the Commission under Section 19(1) of the Act, complaining against the Ministry of Railways and the Container Corporation of India (CONCOR), inter alia, alleging contravention of Section 4 of the Act. It is the case of respondent No. 2 that as per the Public Private Partnership (PPP) policy of the Indian Railways and the Permission for Operators to Move Container Trains on Indian Railways Rules, 2006 (CTO rules) a Model Concession Agreement was entered into between the Ministry of Railways and the parent company of the informant respondent No. 2 on 09.05.2008 for operating container trains over rail network in India for domestic traffic as well as for export & import traffic. According to the informant, it ....
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....o relied upon Section 60 of the Act which gives overriding effect to the provisions of the Act and over other laws. Section 62 of the Act provides that the provisions of the Act are in addition to, and not in derogation of, the provisions of any other law. The Commission by relying upon the aforesaid provisions of the Act also disposed of the plea raised by the petitioner regarding the exclusion of the jurisdiction of the Commission founded upon the provisions of the Railways Act, 1989. 7. The Commission thereafter considered the petitioner's submissions with regard to the definition of the expression 'enterprise' contained in Section 2(h) of the Act and the submission that the petitioner is not an 'enterprise' as it is performing a sovereign function in running the Railways. While doing so, the Commission has relied upon the Supreme Court decisions in Bangalore Water Supply and Sewerage Board Vs. A. Rajappa, (1978) 2 SCC 213; N. Nagendra Rao & Co. Vs. State of A.P., (1994) 6 SCC 205; and Common Cause Vs. Union of India, (1999) 6 SCC 667. It was held that the petitioner cannot be said to be performing a sovereign function. It is a Government Department engaged ....
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....n under the arbitration agreement. 10. On the other hand, Dr. Singhvi, learned senior counsel for the respondent No. 2, who appears on caveat, firstly, submits that the present petition is an abuse of the process of this Court inasmuch, as, the impugned order was passed as early as 03.05.2011. Thereafter the Director General was called upon to make a report. The petitioner participated in the investigation proceedings conducted by the Director General till November 2011, when the Director General came up with a detailed investigation report running into about 9,000 pages on 01.11.2011. On 13.12.2011, the hearing took place before the Commission. On 24.01.2012, the petitioner sought time to put in a reply. The Commission has now fixed the dates for final hearing on 28.02.2012 & 29.02.2012. It is at this stage that the petitioner has filed the present petition to stall the hearing before the Commission. He submits that the petitioner could have approached this Court soon after passing of the order dated 03.05.2011, but it has chosen not to do the same. He argues that the petitioner cannot, at this stage, seek to stall the final hearing before the Commission. 11. He further submits ....
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....ection 3 of the Consumer Protection Act in Fair Air Engineers (P) Ltd. Vs. N.K. Modi, (1996) 6 SCC 385, by observing as follows: "It is seen that Section 3 envisages that the provisions of the Act are in addition to and are not in derogation of any other law in force. It is true, as rightly contended by Shri Suri, that the words „in derogation of the provisions of any other law for the time being in force‟ would be given proper meaning and effect and if the compliant is not stayed and the parties are not relegated to the arbitration, the Act purports to operate in derogation of the provisions of the Arbitration Act. Prima facie, the contention appears to be plausible but on construction and conspectus of the provisions of the Act we think that the contention is not well founded. Parliament is aware of the provisions of the Arbitration Act and the Contract Act, 1872 and the consequential remedy available under Section 9 of the Code of Civil Procedure i.e. to avail of right of civil action in a competent court of civil jurisdiction. Nonetheless, the Act provides the additional remedy." 16. Fair Air Engineers (supra) has also been referred to and relied upon by the Supre....
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....position of dominance or that its agreement with respondent No. 2 is not in contravention of the provisions of Section 3(1) of the Act. 18. Section 2(h) of the Act defines the expression 'enterprise' in the following manner: "2(h) "enterprise" means a person or a department of the Government who or which is, or has been, engaged in any activity, relating to the production, storage, supply, distribution, acquisition or control of articles or goods, or the provision of services, of any kind, or in investment, or in the business of acquiring, holding, underwriting or dealing with shares, debentures or other securities of any other body corporate, either directly or through one or more of its units or divisions or subsidiaries, whether such unit or division or subsidiary is located at the same place where the enterprise is located or at a different place or at different places, but does not include any activity of the Government relatable to the sovereign functions of the Government including all activities carried on by the departments of the Central Government dealing with atomic energy, currency, defence and space." 19. It is not the petitioner's contention that it is....
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....activity of the State as a sovereign body. Paragraphs 10 & 11 from this decision read as follows: "10. The fact that the Government runs the railways for providing quick and cheap transport for the people and goods and for strategic reasons will not convert what amounts to carrying on of a business into an activity of the State as a sovereign body. 11. Article 298 of the Constitution provides that the executive power of the Union and of each State shall extend to the carrying on of any trade or business and cl. (6) of Art. 19 provides that nothing in sub-clause (g) of clause (1) of that Article shall prevent the State from making any law relating to the carrying on by the State or by a corporation owned-or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise. These provisions clearly indicate that the State can carry on business and can even exclude citizens completely or partially from carrying on that business. Running of railways is a business. That is not denied. Private companies and individuals carried on the business of running railways, prior to the State taking them over. The only qu....
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....tenance of law and order but it extends to regulating and controlling the activities of people in almost every sphere - educational, commercial, social, economic and political etc. It further observed that demarcating line between sovereign and non-sovereign powers for which no rational basis survives has largely disappeared. And thus, the court observed that barring functions such as administration of justice, maintenance of law and order and repression of crime etc. which are among the primary and inalienable functions of a constitutional government, the State cannot claim any immunity. 28. Recently, the Supreme Court in Common Cause v. Union of India, (1999) 6 SCC 667 also quoted with approval its aforesaid view on the issue. 29. From the analysis of case law on the question as to what constitutes "sovereign" or "non-sovereign" function, it appears that the courts have taken a very narrow view of the term "sovereign function" by confining the same to strict constitutional functions of the three wings of the State. Welfare activities, commercial activities and economic adventures have been kept outside the purview of the term "sovereign functions". 30. In the premises, it is h....