TaxTMI 
TaxTMI 
2014 (9) TMI 1242
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....Petition No. 13271 of 2011 was treated as the leading Writ Petition by the learned Single Judge, Writ Appeal No. 917 of 2014 arising out of Writ Petition No. 13271 of 2011 is being treated as the leading Writ Appeal. Reference of pleadings in W.A. No. 917 of 2014 shall suffice in deciding all the Writ Appeals. The appellants hereinafter are referred to as the Writ Petitioners and the respondents as the respective respondents arrayed in the Writ Petitions. The challenge in all the Writ Petitions was to the penal demurrage charges as notified by the respondents for the period from 2nd May 2011 to 31st July, 2011, rate Circular No. 74 of 2005 as modified by the rate Circular dated 17.01.2008 including the consequential orders. 3. The facts giving rise to Writ Petitions are: The petitioners in (W.P(C) No. 13271 of 2011) are the companies engaged in manufacture and sale of cements. Consignments of cements brought to the Goods sheds of Nileshwar, Valapattanam, Vadakara, Kallai West Hill, Tirur and Palakkad junction in railway wagons are unloaded by workers registered with the Kerala Headload Workers Board. The working hours of various Goods Sheds are from 6.00 a.m. to 10.00 p.m. For u....
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....issue a writ in the nature of mandamus or other appropriate writ or order restraining respondents 2 to 12 from levying penal demurrage charges beyond Rs. 100/- per wagon of the Indian Railways and the Container Corporation of Indian in the absence of any fixation or alteration of rates by the first respondent as enjoined in Sections 30 and 31 of the Indian Railways Act. (iii)(a) to issue a writ in the nature of certiorari or other appropriate order quashing Exhibits P11 and P12. (iv) to issue a writ in the nature of mandamus or other appropriate writ or order directing respondents 2 to 12 to refrain from levying wharfage charges in respect of consignments which remain uncleared in the wagons. (v) to grant such other relief's as may be prayed for and to which this Hon'ble Court may deem just and necessary in the facts and circumstances of the case". Counter affidavit as well as counter affidavit to the amended Writ Petition were filed on behalf of the respondents to which reply affidavit has also been filed by the petitioners. 5. The arguments in the Writ Appeals have been led by Shri George Jacob. We have also heard Shri K.....
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....overnment to the Officers of the Railway is without jurisdiction. The maxim "delegatus non potest delegare" has been relied on to support the above submissions. (viii) It is further submitted that even though the rate Circular authorizes the powers to be exercised by the CCM, COM and DRM, the notices and orders for imposing increased charges have been issued by the Goods Sheds Officers, Station Masters and other Railway Officers who have no authority to do so. (ix) It is submitted that rate Circular, Ext. P1 was not notified in the Gazette nor has been published in any other manner. The rate Circular having not been notified and published, the said Circular cannot be utilized for imposing increased penal charges on the petitioners. (x) It is submitted that although normal working hours in Good Sheds is 6.00 a.m. to 10.00 p.m. but the workers in the State of Kerala works only from 8.30 a.m. to 5.30 p.m. The workers being not available to work from 6.00 a.m. to 10.00 p.m., it is not the fault of petitioners in not uploading the wagons within the free time allowed. Goods Sheds are the scheme covered area under the Kerala Headload Workers Act under which the petitioners are compelled t....
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....implement increased penal rate and orders and notices issued by the Chief Commercial Superintendent of Goods Sheds and Station Masters have been issued after decision was taken by the competent authority. It is submitted that original files of the Railway containing the decision were placed before the learned Single Judge which clearly proved that the decision to impose penal rate of demurrage was taken by the CCM, COM and DRM and consequential actions were taken thereafter. It is submitted that rate Circulars are not required to be published in the Gazette of India nor any provision in the Act or Rules required that. It is submitted that rate Circular has been published in the Railway Web Site and is affixed on the notice board at all level including every Goods Sheds. It is submitted that each of the petitioners were well aware of the rate Circular since demurrage charges were increased by rate Circular, Ext. P11 and have been implemented by the Railway authorities from 29.12.2005 and petitioners have been making payment of demurrage charges under the said rate Circular. It is submitted that before imposing penal rate of demurrage charges 48 hours' advance notice as required ....
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....tee of the power to fix the rate can further delegate the power to fix rate to any other authority, i.e. including the CCM, COM and DRM? 5. Whether the rate Circular, Ext. P11 sub delegates the power to fix the rate of demurrage charge on CCM, COM and DRM? 6. Whether the rate Circular Ext. P11 cannot be enforced having not been published in the Gazette of India or by any other accepted mode? 7. Whether due to the provisions of the Kerala Head Load Workers Act restricting the right of employer in a scheme covered area to engage only registered head load workers the Railway Administration cannot demand penal demurrage charges from the petitioners? 8. Whether increased demurrage charges are not leviable to be charged due to lack of amenities in the various Railway Goods Sheds? 9. Whether levy of increased/penal charges have been made by Station Masters, Goods Shed Superintendents and other Officers of the Railway Administration and the notices Exts. P4 to P10 are illegal and unenforceable? 10. Before we proceed to consider the respective submissions of learned counsel for the parties and the issues as noted ....
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.... 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. Power to classify commodities or alter rates.-The Central Government shall have power to- (a) classify or re-classify 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. Power of railway administration to charge certain rates.- 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 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 ....
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.... rates may be fixed for different classes of goods and specify in such order the conditions subject to which such rate shall apply. Rate Circular No. 74 of 2004 has been filed as Ext. P11. It is useful to note the heading of the Circular and the subject which is noted as below: "Rates Circular No. 74 of 2005 Government of India Ministry of Railways Railway Board No. TC-I/2005/201/2 New Delhi, Dt. 19.12.2005 General Manager (Commercial) General Manager (Operating) All Indian Railways Sub: Free time and rates of demurrage, wharfage & stacking charges. .................... " The Circular was signed by the Joint Director, Traffic Commercial (Rates), Railway Board. A perusal of the heading of the Circular indicates that the said Circular is by the Government of India, Ministry of Railway. Learned counsel for the Railway has submitted and it has also been pleaded in the counter affidavit that Ministry of Railways is nothing but Railway Board and the Chairman of the Railway Board is the Principal Secretary of the Ministry of Railways. In paragraph 4 of the counter to the amended Wri....
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....: "3(8) Central Government shall,- (a) in relation to anything done before the commencement of the Constitution, mean the Governor General or the Governor General in Council, as the case may be, and shall include,- (i) in relation to functions entrusted under sub-section (1) of section 124 of the Government of India Act, 1935, to the Government of a Province, the Provincial Government acting within the scope of the authority given to it under that sub-section; and (ii) in relation to the administration of a Chief Commissioner's Province, the Chief Commissioner acting within the scope of the authority given to him under sub-section (3) of Section 94 of the said Act; and (b) in relation to anything done or to be done after the commencement of the Constitution, mean the President; and shall include,- (i) in relation to functions entrusted under clause (1) of article 258 of the Constitution to the Government of a State, the State Government acting within the scope of the authority given to it under that clause; (ii) in relation to the administration of a Part C state (before the....
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....t for the present case. 18. Power under the Act, 1890 of the Central Government was admittedly invested to the Railway Board under the Act, 1905. Act, 1905 is still in force by virtue of Article 372 of the Constitution of India. 19. Various amendments made in Act, 1905 from time to time even after enforcement of the Constitution indicates that the said Act is still in force. Under Act, 1905, power of the Central Government was invested with the Railway Board regarding fixation of rate under Sec. 29. Section 29 of Act, 1890 is almost similar to the power of the Central Government given in Sec. 30 of Act, 1989. It is not disputed by the learned counsel for the petitioners that the power of the Central Government could have been exercised by the Railway Board under Act, 1890. Whether only due to enactment of Act, 1989 the Railway Board is denuded to exercise the power of Central Government is the question which has to be answered. We do not find any such indication in the provisions of Act, 1989 which may indicate that the power of the Central Government which was being exercised by the Railway Bord cannot be exercised by the Railway Board. With regard to the powers under Act, 1....
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....e the rate Circular on merits. 20. In view of the forgoing discussion we are of the considered opinion that rate Circular, Ext. P11 issued is to be treated as the Circular issued by the Central Government and cannot be held to be beyond jurisdiction of Sec. 30 or violative of Sec. 30 of Act 1989. Issues 1 to 3 are decided accordingly. 21. Issue Nos. 4 and 5 being inter related are being taken together. The submission of learned counsel for the writ petitioners, as noted above, is that the Central Government, having been delegated power to fix rates under Section 30 of the Indian Railway Act, 1989, cannot further delegate power to fix penal rate/increased rate of demurrage charges to CCM, COM and DRM. The submission is that the delegatee is incompetent to further delegate its legislative power. The maxim "delegatus non protest delegare" has been pressed into service. Thus, the contention is that there is sub-delegation of power under Section 30 of the Central Government which not having been contemplated by Act, 1989, action taken to increase penal rate is without jurisdiction. Before we advert to a scheme as delineated under Section 30 of Act, 1989, it is necessary to conside....
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....; Barium Chemicals Ltd. v. Company Law Board (AIR 1967 SC 295), SCR at p.330 and Sahni Silk Mills (P) Ltd. v. ESI Corpn. [(1994)5 SCC 346], SCC at pp. 350-351)" 25. The above judgment explains the scope and ambit of the maxim "delegatus non potest delegare". 26. The same principles were laid down by the Apex Court in Sahni Silk Mills (P) Ltd. and another v. Employees' State Insurance Corporation [ (1994)5 SCC 346]. Following was laid down in paragraphs 5 to 9: "5. The courts are normally rigorous in requiring the power to be exercised by the persons or the bodies authorised by the statutes. It is essential that the delegated power should be exercised by the authority upon whom it is conferred and by no one else. At the same time, in the present administrative set-up extreme judicial aversion to delegation cannot be carried to an extreme. A public authority is at liberty to employ agents to exercise its powers. That is why in many statutes, delegation is authorised either expressly or impliedly. Due to the enormous rise in the nature of the activities to be handled by statutory authorities, the maximum delegatus non potest delegare is not being applied speci....
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.... 9. In the case of Harishankar Bagla v. State of M.P., while examining the scope of Section 4 of the Essential Supplies (Temporary Powers) Act, 1946 it was said: "Section 4 of the Act was attacked on the ground that it empowers the Central Government to delegate its own power to make orders under Section 3 to any officer or authority subordinate to it or the Provincial Government or to any officer or authority subordinate to the Provincial Government as specified in the direction given by the Central Government. In other words, the delegate has been authorized to further delegate its power in respect of the exercise of the powers of Section 3. Mr. Umrigar contended that it was for the Legislature itself to specify the particular authorities or officers who could exercise power under Section 3 and it was not open to the Legislature to empower the Central Government to say what officer or authority could exercise the power. Reference in this connection was made to two decisions of the Supreme Court of the United States of America-Panama Refining Co. v. Ryan and Schechter v. United States. In both these cases it was held that so long as the policy is....
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....ven to the CCM, COM and DRM to fix penal rates i.e., progressively increasing rate subject to maximum six times of the prevalent rate, which is nothing but delegation of legislative power. 30. As noted above, Section 30(1) of the Act, 1989 empowers the Government to fix the rates as well as specify in such order the conditions to which such rates shall apply. Paragraph 3.3 of the rate circular contemplates that rates of demurrage charge have been fixed which can be imposed at progressively increasing rate subject to maximum six times. Paragraph 3.3 contains conditions for imposing the demurrage at progressively increasing rates. Paragraph 3.3 further provides that the above penal demurrage rate should be implemented only after giving wide publicity and due notice of 48 hours and should be applicable for the notified period. Paragraph 3.3 is thus not a provision delegating power on the designated authority to fix rates, rather the said paragraph gives power to implement the rate, which may be upto the maximum of six times of the prevalent rate. Said power is to be exercised in case of excessive congestion at any terminal. The second line of the paragraph, which specifically menti....
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....ment before our brother Jagadish Sahai was misunderstood and that he did not mean to contend that there was excessive delegation of powers by the Central Electricity Board to the State Government. His argument was, and in any case now is, that Rule 48 conferred no power upon the State Government to make rules regarding the grant and cancellation of a licence and that it could not confer any such power because delegatus non potest delegare. Rule 48 certainly conferred upon the State Government the power of granting a licence and this power included the power to cancel a licence already granted vide S. 21 of the General Clauses Act. The rule did not expressly authorise it to make rules for its own guidance in the matter of granting and cancelling licences but this fact did not prevent its doing so. Any authority upon whom a power is conferred is competent to make rules for its own guidance in the exercise of it. The authority conferring the power may make rules governing its exercise; if it has done so, the rules made by the authority should not clash with any of them and must be in conformity with them. If it has not done so, the authority is free to make any rules. O....
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....o, even if the Central Electricity Board had conferred upon the State Government the power to make rules regarding the grant and cancellation of licences it would have been conferment of a new power and not of its own power. What the maxim means is that the power that is delegated to a person cannot be sub-delegated by him to a third person. The Central Electricity Board itself created the system of licencing electrical contractors and could confer upon the State Government the power of granting and cancelling licences and also the power of making rules for the grant and cancellation of licences. In this view we receive support from Amaravathi Motor Transport Co. v. State of Andhra, AIR 1956 Andh 232 in which Subha Rao, C.J., as he then was, and Satyanarayana Raju, J. held that Rule 134-A of the Madras Vehicles Rules made by the State Government empowering the Transport Board to delegate certain functions to its Secretary was valid." 33. As observed above, the powers in the rate circular given to CCM, COM and DRM are not sub-delegation of any power of fixing rate, rather rate circular provides for conditions for implementing the rates fixed by the Central Governme....
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....be framed in a manner which will act both as an incentive and as a compulsion for the expeditious removal of the goods from the transit area. Following was laid down in paragraph 28. "28. There is a fundamental aspect of the fixation of rates which the High Court has overlooked. What is the object and purpose of the rates which the Board charges to the importer? Port Trusts do not do the business of warehousing goods and the rates which the Board charges for storage of goods are not levied as a means of collecting revenue. The Board is under a statutory obligation to render services of various kinds and those services have to be rendered not for the personal benefit of this or that importer but in the larger national interests. Congestion in the ports affects the free movement of ships and of essential goods. The scale of rates has therefore to be framed in a manner which will act both as an incentive and as a compulsion for the expeditious removal of the goods from the transit area. Ships, like wagons, have to be kept moving and that can happen only if there is pressure on the importer to remove the goods from the Board's premises with the utmost expedition. The....
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....re thus only statutory authorities, which have been indicated in the delegated legislation, i.e., rate circular who are to implement the rate circular as per the conditions therein. Thus, the power given to the above authorities is a statutory power to be exercised on conditions as enumerated in rate circular and is not sub-delegation of any of legislative power of the Central Government under Section 30 of the Act, 1989. Thus, we do not find any substance in the submission of learned counsel for the writ petitioners that there is sub-delegation of legislative power in favour of CCM, COM and DRM. 35. Now we come to the 6th issue, i.e., with regard to consequence of non publication of rate circular in the Gazette. There cannot be any dispute with the proposition that in case a statutory provision requires publication of delegated legislation in Gazette, non publication in the Gazette shall make the delegated legislation unenforceable. Learned counsel for the appellant placed reliance on B.K. Srinivasan and others v. State of Karnataka and others [(1987)1 SCC 658]. The Apex Court in the said case held that where the parent statute prescribes the mode of publication or promulgation....
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....e Act, 1989 provides that "Central Government may, from time to time, by general or special order fix,....". Fixation of the rate is to be done by general or special order. Parent statute does not prescribe any mode for publication of the above general or special order. The rate circular by which rate has been fixed also does not prescribe publication by any particular mode. It has been submitted on behalf of the respondents that circular has been published in the Railway Website, respective railway offices, all relevant railway establishments and terminal stations. We, thus, do not find any force in the submission of learned counsel for the writ petitioners that due to non publication of rate circular in the Gazette, the said circular is unenforceable. Paragraph 3.3 of the rate circular dated 19.12.2005 itself contemplates for wide publicity before implementation of penal demurrage rate in following manner:- "..... This penal demurrage rates should be implemented only after giving wide publicity and due notice of 48 hours and should be applicable for the notified period." 37. The petitioners in the Writ Petitions are aggrieved by the penal demurrage charges which....
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.... penal demurrage charges, he is at liberty to move an application for waiver. Paragraph 1104 also empowers a consignee/consignor to prefer an appeal to higher authorities. 40. Thus, the submission of learned counsel for the writ petitioners that on account of operation of Headload Workers Act in the State of Kerala, penal demurrage charges should not be imposed, cannot be accepted. 41. Now we come to Issue No. 8. The contention of appellant's counsel is that due to lack of amenities, loading and unloading workers of the writ petitioners are unable to perform their duties efficiently and it is incumbent on the authorities to provide for amenities. The learned Single Judge has gone into the said submission and after noticing the pleadings made on behalf of the Railways, had found that on the basis of said submission the challenge to penal demurrage charges cannot be upheld. In the counter affidavit filed in the Writ Petitions, the respondents have pleaded that amenities have been provided for. We are of the view that on this ground also challenge to rate circular cannot be upheld. 42. Now we come to the last submission raised by learned counsel for the writ petitioners t....