JAGJIT COTTON TEXTILE MILLS v. CHIEF COMMERCIAL SUPERINTENDENT N.R & Ors.

Permissibility of-Consignees raised a plea in rejoinder that they had to pay 'penal charges' on account of defective weighbridges and not on accou/1/ of extra load-No such plea raised either in the High Court or in the SLP Held: Such a plea not permilled to be raised for the first time in Supreme Court in rejoinder to SLP. B Article I 36-P/eadings-New plea-Raising. of-In additional affidavit-Permissibility of-Consignees raised a plea in additional affidavit that when they did not pay the 'penal charges' the Railways diverted a certain number of rakes belonging to the consignees and not only adjusted the penal freight but also realised interest-No such plea raised in the High C Court or in SLP-Held: Such a plea not permilled to be raised for the first time in Supreme Court in an additional affidavit. Words and Phrases : "Maximum carrying capacity" and "normal carrying capacity"- D Meaning of-Jn the context of S.53 of the Railways Act, 1890. "A person" and "other charges"-Meaning of-In the context ofS.55(/) of the Railways Act, 1890. "Other payment"-Meaning of-Jn the context ofS.3(13) of the Railways E Act, 1890. "Permissible carrying capacity"-Meaning of-In the context of R. 161-A of the Indian Rm/ways Conference Association Rules. "As the case may be "-Meaning of-Jn the context of Ss. 7 3 and 7 4 of F the Railways Act, 1989. "Liabilities "-Meaning of-Jn the context of S. 7 4 of the Railways Act, 1989. "Other charges "-Meaning of-In the context of S.83 of the Railways Act, 1989. The appellanUpetitioners were all consignees of coal from the collieries. The respondent-Railways had recovered 'penal charges' relating to overloading of coal in goods wagons beyond the 'permissible carrying capacity' of each wagon from the consignees under Rule 161-A ofthe Indian Railway Conference Association (IRCA) Rules framed under the Railways Act, 1890 (Old Act) and the Railways Ao:t, 1989 (New Act) The appellants/petitioners H G ' r 4-. ,... , ... 1068 SUPREME COURT REPORTS (1998] 2 S.C.R. A filed a writ petition before the High Court challenging the aforesaid recovery of 'penal charges', which has dismissed. On behalf of the appellants/petitioners it was contended that Rule 161- A of the IRCA Rules was inconsistent with Section 53 of the 1890 Act and hence ultra vires of the 1890 Act; that Rule 161-A was traceable to the rule- B making power under Section 47(l)(g) and was limited by the punishment provided in Section 47(2) r·ead with Section 93 of the 1890 Act; that, therefore, no penalty under Rule 161-A could be imposed; that Rule 161-A was not published in the Gazette as required by Section 47(3); that Rule 161-A was in Part I (V ol.l) of the IRCA Rules and that only Partl (Vol. 2) was issued c under the authority of the Central Government as stated on the cover page of the IRCA Rules and, therefore, Rule 161-A was not protected by the 1890 Act that Rule 161-A was not protected by the 1890 Act; that Rule 161-A was excluded by Rules 6 and 29 of the Eastern Railway Coal Tariff Rules; that the "delinquent" in respect of overloading of wagons was the consignor and not the consignee and, therefore, Rule 161-A or Section 73 of the 1989 Act D were violative of Article 14; that the appellants had to pay 'penal charges' on account of defective weigh bridges and not on account of extra load; and that when the appellants did not pay the 'penal charges' the respondent diverted a certain number of rakes belonging to the appellant and not only adjusted the penal freight but also realised interest. E F On behalf of the respondent-Railways it was contended that the contract between the collieries and the appellants-consignees was not merely Free on Rail (FOR) contract but Free Along Side (FAS) contract and the title of the goods passed to the consignees and therefore, the respective rights and liabilities should be decided on that basis. Dismissing the appeal, this Court HELD : I. While Section 53(1) of the Railways Act, 1989 prohibits overloading in excess of the maximum carrying capacity, Rule 161-A of the Indian Railway Conference Association (IRCA) Rules permits loading beyond G the permissible carrying capacity and the charging therefor. Obviously the contention is based upon a misconception of equating the permissible carrying capacity with the maximum carrying capacity. 11083-E]

2.1. Section 29(1) of the 1989 Act states that the Central Government may fix maximum and minimum charges. Under Section 3(13) of the 1989 H Act, 'rate' is defined as including "any fare, charge or other payment for .... y " 'y b " ' - J.C.T MILLS v. CHIEF COMMER. SUPERINTENDENT \069 the carriage of any passenger, animals or goods". It has, therefore, to be held A that 'other payment' could be by way of a penal charge as levied by Rule 161- A of the !RCA Rules. 11084-FI

2.2. Again Section 54(1) states that the railway administration may impose conditions not inconsistent with the Act or with any general rules made thereunder, "with respect to the receiving, forwarding or delivery of any animal or goods." It has, therefore, to be held that one such 'condition' could be by directing the penal charges to be collected before delivering the goods. Thus both Sections 29(1) and 54(1) protect Rule 161-A. 11084-G] B

2.3. It is true that the cover page of IRCA Rules states that only Rules c in Part I (Vol. 2) are issued under the authority of the Central Government and not the rules in Part I (Vol. I) and Rule 161-A is no doubt contained in Part 1 (Vol. I) However, the said Rule 161-A was issued by the Railway Board in the Ministry of Railways, Government of India, and communicated to all General Managers in the Railways and all Non-Government Railways (including Port Trust Railways). 11085-A-B] D

2.4. The notification of the Government of India (No. 14-21, No. 81) dated 24-3-1905 published under Section 2 of the Indian Railway Board Act, 1905 and issued in the name of the Governor-General shows that the Railway Board was invested with powers of the Central Government under various E Sections including SectiOR 54 of the 1989 Act. Again Notification (No. TRC/ 1079/69/11) dated 8-10-1969 issued by the Central Government under Section 2 of the Indian Railway Board Act, 1905 delegates to the Railways Board the powers under Section 21.> of the old Act of 1890 (published in Gazette on 18- 10-1969) of the Central Government.11085-C-D] F

2.5. The effect of the above delegation is that Rule 161-A of IRCA Rules, Part 1 (V-01.1)--Which is traceable to Section 29 or Section 54 of the 1989 Act-is clearly issued by the Railway Board as per its lctte.t dated 7.5.1981 in exercise of powers delegated to it by the Central Government. In other words, thoui:h it may be true from the cover page of IRCA Rules that Part 1 (Vol. 2) alooe is issued under authority of Central Government, it is established that Rule 161-A Part 1 (Vol. 1) has the authority of the Railway Board, the delegate of the Central Government. Therefore, the contentions of the appellants/petitioners that Rule 161-A is traceable to Section 47(1)(g), that the Rule is not published in the Gazette as required by Section 47(4) and that only fine or penalty as stated in Section 47(2) or H G ' ,f , -f t- I 1070 SCPREME COURT REPORTS [1998] 2 S.C.R. A Section 93 of the old Act could be imposed, are wholly unsupportable. (1085-F-GI

3.1. Penal charges under Rule 161-A of the !RCA Rules (or under Section 73 of the Railways Act, 1989) are leviable only for exceeding the "permissible carrying capacity". The significance of these words, to a large B extent, is explained by the Statement of Objects and Reasons of the 1954 Amendment of the 1890 Act. Section 16 of the 1890 Act (and Section 27 of the 1989 Act) deals with the use of rolling stock. What design or type of rolling stock is to be used is to be decided by the Central Government, Ministry of Railways (Railway Board) in consultation with its Research and Design Organisation. The maximum gross weight bearing on the axles is C determined by the Commissioner of Railway Safety, when granting permission under Section 16 of the old Act (Section 27 of the new Act). The Railways submit to the CQmmissioner the complete design particulars indicating the 'gross weight' and the 'gross weight bearing on each axle'. The 'gross wtight' for which sanction is given by the Commissioner of Railway Safety on behalf of the Central Government, is the maximum and can in no case be D exceeded by any executive order of the Railway Board, without reference to the &mmissioner. On the other hand, the 'normal' or 'marked' carrying capacity determined by the Railway Administration under Section 53(2) is subject to the maximum referred to in Section 53(1). The normal carrying capacity specified in Section 53(2) can be varied by the Railway Administration in exercise of powers granted under Section 53(4) (inserted by the 1954 E Amendment) but subject again to the maximum limited by Section 53(1) as stated in the proviso below Section 53( 4). Any variation of the normal capacity as permitted by Section 53(4) is "subject to such conditions as it ( the Central Government) may think fit to impose" and even these conditions cannot override the limits prescribed under Section 53(1). (1082-B-Gf F

3.2. The words "permissible carrying capacity" which occur in Rule 161-A of the IRCA Rules and Section 73 of the new Act are concerned, the said words obviously refer to the 'average carrying capacity' mentioned in Section 53(2) (Section 72(2) of the new Act) or such enhanced permissible limits of carrying capacity as may be fixed under Section 53(4) of the old Act (or Section 72(4) of the new Act). This view is clearly strengthened by G the definition of "permissible carrying capacity" in Rule 2(d) of the Railways (Punitive charges for overloading of wagons Rules, 1990. This permissible carrying cannot exceed the upper limits prescribed by the Commissioner of Railway Safety under Section 53(1) ofold Act (Section 72 (l) of the new Act.) [1082-H; 1083-C] H Johari 's Commentary on Railways Act, (1989) 1991 Edu. pp. 124, 241 .- ... J.C.T MILLS v. CHIEF COMMER. SUPERINTENDENT 1071 and 242, referred to. A

4. Rule 6 of Eastern Railway Coal Tariff Rules, Part I carries the heading 'charges payable in respect of the overloading of coal'. It deals with the charges for unloading the excess coal and re-loading the same and the demurrage charge payable therefor. Therefore, it is clear that the Rule does not cover penal charges for overloading coal beyond the permissible limits B and cannot be said to exclude Rule 161-A. It is true that Rule 29 of the Coal Tariff deals with coal but Rule 161-A also deals exclusively with coal and was specifically introduced to deal with overloding coal beyond the permissible carrying capacity. Rule 29 deals with loading beyond the maximum weight prescribed by Section 53(1), while Rule 161-A deals with penal charges for loading in excess of the permissible carrying capacity as stated in Section C 53(2) and Section 53(4). Rule 29 was introduced to clarify that for carriage of the excess coal the rate to be charged is the normal rate. The Rule was not intended to deal with the penal charge. Further, Rule 161-A contains a non-obstante clause, which would, in any event, override Rules 6 and 29 of the Coal Tariff even if they are to cover the same field. Therefore, it has to be held that Rule 161-A is neither excluded by Rule 6 nor by Rule 29 of the D Coal Tariff. [1086-B-C; E-FJ

5.1. Section 73 of the Railways Act, 1989 gives power to the Railways to levy and collect the penal charges from the consignor, consignee or the endorsee, as the case may be, if the goods are overloaded beyond the 'permissible carrying capacity'. The words 'as the case may be' occurring in Sections 73 and 74 have also to be explained. The 'consignor' shall be E liable for the penal charge even at the stage of delivery of goods at the destination if he has booked the goods for 'selr. The 'endorsee' will be liable if the delivery is applied for at the destination by the endorsee. The 'consignee' will be liable if the delivery is applied for at the destination by the consignee.

5.2. Further, under Section 74, once the railway receipt is delivered to the consignee, not only the rights of the consignor but also the liabilities of the consignor pass on to the consignee. The word 'liability' in Section 74 includes the liability of the consignor to pay the penal charges under Section 73 in respect of the overloaded goods covered by the railway receipt. [1090-B) F

6.1. Rule 161-A is in two parts. The first part prohibits the 'consignors' from exceeding the permissible carrying capacity of the wagon. The second part speaks of discovery of the overweight at the booking point or en route or at the destination and recovery of the penal charge therefor for the entire distance from the booking point to the destination. The rule-making authority must be deemed to have been aware that title in the goods might have passed H [1090-D[ G 1072 SUPREME COURT REPORTS [1998] 2 S.C.R. A to the consignees in several cases after the loading or after the weighment and the before the actual delivery of the goods to the consignee such as where the railway receipt is delivered to the consignee against the receipt of price. The second part of Rule 161-A is quite wide and unrestricted and can be created as permitting recovery of the penal charges from the consignor B or consignee or the endorsee, as the case may be, though these words are not expressly used in Rule 161-A. That is how the Railway becomes entitled to recover the penal charges from the consignee also even under the old Act. (1091-C-D)

6.2. Section 73 of the new Act and Rule 161-A of the old Rules permit loading in excess of the permissible carrying capacity without any penal C charge, now up to a limit of 2 tonnes. (Earlier it was up to 1 tonne). What is now subjected to a penal charge, is the excess over and above the permissible level above stated which is always b.elow the maximum limit,. This levy under Section 73 of the new Act and the old Rule 161-A is intended for dual purposes-one is to see that the gross weight at the axles is not unduly heavy D so that accidents on account of the axles breaking down could be prevented. The other reason behind the collection is that, inasmuch as the wagon has carried such excess load up to the destination point at the other end, the replacement cost of the coaches, engines or rails or of repairs to the bridges be covered. The extra rate is a higher rate i.e. something like a surcharge for the excess load, to meet the said expense. Therefore, no principle of E 'deliquency' is ingrained in this levy as in the case of breach of civil obligations under FERA or Customs act or Employees Provident Fund Act. Obviously the Railway Board has kept these aspects in mind while collecting these charges. There is, therefore, no violation of Article 14 and the collection is neither arbitrary nor unreasonable. (1092-E-H) F G