Inder Mal Jain & ANR Vs. Union of
India & Ors [1983] INSC 197 (8 December 1983)
DESAI, D.A.
DESAI, D.A.
MISRA, R.B. (J) MISRA RANGNATH
CITATION: 1984 AIR 415 1984 SCR (1)1016 1984
SCC (1) 361 1983 SCALE (2)923
ACT:
The Indian Railways Act, 1890-Sec. 114A-Validity
of- Whether ultra-vires Art. 19(1) (g) of Constitution of India.
The Railway Tourist Agent Rules,
1980-Validity of- Conditions prescribed for becoming authorised agent-Whether
arbitrary, unreasonable and irrelevant-Whether the Rules ultra vires the Act
and Art. 19(1) (g) of the Constitution.
HEADNOTE:
The petitioners who claimed to be carrying on
the business as railway travel agents and rendering service to the travelling
public in booking II class seats and berths in various passenger trains,
challenged the validity of sec. 114A of the Indian Railways Act, 1890 as being
ultra-vires Art. 19(1) (g) of the Constitution and also the validity of the
Railway Tourist Agent Rules, 1980 as ultra-vires the Act, and Art. 19(1) (g) of
the Constitution on the ground that the Rules and the Act placed unreasonable
restrictions on the petitioners' right to carry on their lawful business
guaranteed by Art. 19(1) (g) of the Constitution. The petitioners argued that
the conditions of eligibility prescribed in the Rules for obtaining status of
authorised agents in their cumulative effect were impossible of compliance and
were so deliberately drawn up as to help and encourage wealthy commercial
heavy-weights to obtain recognition simultaneously denying the same opportunity
to persons like the petitioners who cater to the needs of the common man. The
petitioners urged that railways earn bulk of their revenue from second class
travelling passengers and they were the most neglected and to such needy
persons, petitioners were affording some respite from standing in queues for
hours, to be jostled out by shutting the ticket window in their face. It was
also stated that the court should be realistic in taking note of the prevailing
corruption in booking railway tickets which would be further accentuated if
every intending passenger had to stand in the queue for hours and return
empty-handed.
Dismissing the petitions, but directing the
Railway Board to prepare an appropriate scheme,
HELD: If a privilege is granted to do a
certain thing, it would be open to prescribe conditions for enjoying the
privilege. The railway administration alone should ordinarily sell its tickets.
Sec. 66 of the Act enables the administration to appoint authorised agents for
sale of tickets. These authorised agents must of necessity fulfil certain
criteria. The criteria appear to 1017 have been devised with an eye on
extending facility to foreign travellers as well as the financial viability to
secure against failure to pay for tickets sold by recognised agents. With this
end in view, the conditions for minimum financial guarantee and having a Money
Changer's licence and other allied conditions were prescribed. Intendment
underlying the scheme of setting up authorised agents is not only to check sharp
practices, curb fleecing of gullible passengers, but render efficient service.
The Rules ensure fulfillment of the intendment underlying the impugned
provisions. Viewed from this angle, the conditions are neither irrelevant nor
arbitrary. It is stated by the respondents that as many as 17 agents have been
given the status of authorised railways tourist agents in Delhi alone.
This is not controverted. Therefore, the
conditions are capable of being complied with. Failure or inability of some of
the petitioners to comply with them would not be sufficient to reject them as
unreasonable, arbitrary or irrelevant. The conditions are reasonable and are
conducive to the objects sought to be achieved. [1022 A-E] Ramana Dayaram
Shetty v. The International Airport Authority of India and Ors. [1979] 3 S.C.R.
1014 and M/s Kasturilal Lakshmi Reddy and Ors. v. State of Jammu and Kashmir
and Anr., [1980] 4 S.C.C. 1 referred to.
Sec. 114A of the Act merely prescribes
punishment for unauthorisedly carrying on of business of procuring and
supplying railway tickets. If sec. 66 envisages appointment of authorised
agents obviously anything to the contrary would be contravention of sec. 66 and
if it is made punishable under sec. 114A of the Act, the section would not be
ultra vires the Constitution. [1023F] An agency has to be devised to cater to
the needs of class II passengers, which can render service in this behalf. The
agency has to be subjected to strict control and regulatory measures. May be,
that the petitioners were abusing their activities and were guilty of some
sharp practices. It cannot be said that all of them were of the same class, and
it also should not be forgotten that their activities were facilitated by their
counter parts in the booking-office. It can be safely said that to some extent,
it was a joint venture. Therefore. merely dismissing these petitions would be
further adding to the miseries of the travelling public. The Railway Board is
therefore directed to prepare a scheme for recognising travel agents catering
to the needs of the class II passengers with sufficient control over their
activities and put the same before this Court within three months from today.
[1024F-H]
ORIGINAL JURISDICTION : Writ Petitions No.
8200-01/83, 4386-90/82, 4298-4308/82 and 3762/82.
(Under Article 32 of the Constitution.) Anis
Shayarwardy and C. P. Pandey for the Petitioners in WPs. 8200-01/83.
S. S. Khanduja and Yaspal Dhingra for the
Petitioners in WPs. 4386-90/82.
1018 P. Govindan Nair and Altaf Ahmed for the
Petitioners in WPs. 4298-4308/82.
Shankar Ghosh, B. P. Maheshwari and B. P.
Singh for the Petitioners in WP. 3762/82.
V. C. Mahajan, R. N. Poddar, Ms. Halida
Khatun and Ms. A. Shubhashini for the Respondents.
The Judgment of the Court was delivered by
DESAI, J. Petitioners in this group of petitions under Art. 32 of the
Constitution claimed to be carrying on the business as railway travel agents.
One of the petitions in this group is filed by an association styled as
Travellers Service Agents Association (Regd.). The member of the Association
also claimed to carry on business as railway travel agents. Petitioners and the
members of the Association claim to be engaged in the business of travel agents
over a decade and a half and according to them they are rendering useful
service to the travelling public in booking seats and berths in various
passenger trains.
According to them they ordinarily cater to
the needs of middle-class and lower-middle class passenger-the common
man-travelling by second class in the railways who cannot afford to wait for
long hours standing in queues at railway stations and yet cannot afford to
avail of the services of the railway tourist agents who generally cater to the
needs of the wealthy elite of the society. Petitioners complain that the
railway administration encourage wealthy and influential railway tourist agents
by sacrificing the interest of the railway travel agents like the petitioners
and that thereby the railway administration is depriving the large lower middle
class travellers from availing of the services of the petitioners which is
available at a cheap price of roughly Rs. 8 per ticket. According to the
petitioners, the business carried on by them is a lawful one but since the
introduction of Sec. 114A in the Indian Railways Act, 1890 (`Act' for short)
they are being harassed, tortured and mulcted by the railway administration.
They aver that unreasonable restriction are placed on their right to carry on
their lawful business guaranteed by Art. 19(1) (g) of the Constitution by the
rules framed by the Central Government under Sec. 47 of the Act styled as
Railways Tourist Agent Rules, 1980 (`Rules' for short) which are ultra-vires
the Act as also ultra-vires Art. 19(1) (g) and they are hounded out of their
lawful business. Petitioners accordingly contend that not only the Rules but
also Sec. 114A which came into 1019 force on May 11, 1982 by which in the
absence of recognition, if the petitioners carry on their business they are
liable to be prosecuted and sentenced to suffer imprisonment are ultra-vires
Art. 19(1) (g) of the Constitution.
A comprehensive counter-affidavit was filed
both in Writ Petition No. 3762/82 and Writ Petition Nos. 8200- 8201/83 by one
Vijay Kumar, Joint Director, Traffic Commercial (G) I in the Ministry of
Railways. Broadly stated, the respondents contend that even before the
insertion of Sec. 114A by the Indian Railways (Amendment Act, 1982, Secs. 70
and 114 of the Act prohibited transfer of a ticket or travel on a transferred
ticket as also sale of a ticket or purchase thereof from anyone other than a
railway servant or agent authorised by the railway administration in this
behalf. Referring to the clandestine business carried on by the petitioners, it
is stated in the counter-affidavit as under :
"It is submitted that unauthorised
persons like the petitioners were, however, taking advantage of (i) the absence
of any specific provision in the law prohibiting the carrying on of business in
purchase and supply of rail tickets and (ii) of the fact that law does not
require the intending passenger to personally or physically present himself as
the booking counter for purchase of ticket for his journey, were and are
purchasing tickets generally in fictitious names and thereby cornering reserved
accommodation and compelling genuine passengers to turn to them for purchase of
reserved tickets (booked in fictitious names) at heavy premia. These
unauthorised persons thus make huge profits but the passengers who were found
travelling on transferred tickets had to pay heavy penalties and undergo
prosecutions. The unauthorised agents from whom these tickets were purchased
invariably remainded untraced. It is to deal with this situation that the
impuged law (S. 114A) was considered necessary." A further contention was
raised that if the petitioners want to carry on their business as travel agents
they must comply with the Rules framed by the Central Government under Sec. 47
of the Act and on being recognised under the Rules they would be entitled to
carry on their business and therefore it is idle to contend that an embargo has
been placed on the business carried on by the petitioners. It was 1020
contended that it had become necessary to save the travelling public from the
unlawful activities of persons carrying on business as railway travel agents
and that regulatory rules have to be framed and it cannot be said that these
rules impose any unreasonable restriction on the petitioners' right to carry on
their business. Qua Sec. 114A, it was stated that on receipt of persistent
complaints from the public regarding black marketing in reservations by
unauthorised travel agents and other persons. it was decided to provide a
suitable check on their activities. A penal provision was enacted providing
that the carrying on business of procuring and supplying tickets or reserved
accommodation for journey by train unless so authorised by railway
administration would constitute an offence and the same would be punishable.
That is the genesis of the introduction of Sec. 114A in the Act.
Mr. Shanker Ghosh, who led on behalf of the
petitioners followed by Mr. Govindan Nayar could not seriously contend that
either the Rules or Sec. 114A were ultra vires the Act or the Constitution. The
Rules were framed in exercise of the power conferred on the Central Government
by Sec. 47 which provides that the Central Government shall make general rules
consistent with the Act for the purposes set out in various clauses, the last
clause being `generally' for regulating the travelling upon, and the use,
working and management of the railway.' Sec. 66 of the Act provides that every
person desirous of travelling on a railway, shall, upon payment of his fare, be
supplied with a ticket by a railway servant or an agent authorised by the
railway administration in this behalf, specifying the class of carriage for
which, and the place from and the place to which, the fare' has been paid, and
the amount of the fare.
Travelling without a proper ticket is an
offence punishable under Sec. 113 of the Act. The railway administration is
therefore under an obligation to make arrangement for sale of tickets and Sec.
66 enables it either to make arrangement to sell tickets on its own or through
or by an agent authorised by the railway administration in this behalf. If Sec.
66 enables the railway administration to appoint authorised agent for sale of
tickets obviously it was necessary for the Central Government to prescribe by
rules, the conditions of eligibility, lay down criteria and guidelines for
appointment of authorised railway agents, enjoying power to sell tickets which
the railway administration would be bound to honour. With this end in view, the
Central Government framed the Rules.
1021 The Rules prescrible conditions and
criteria for appointment as a railway tourist agent. Briefly stated, they are:
1) that the intending agent must possess a trade licence from the competent
authority to carry on the business of a tourist agent in India; 2) must be
financially sound and should possess the latest Income-tax Clearance
Certificate (I.T.C.C.) from the Income-tax Authority of India; 3) such an
intending agent should have minimum paid-up capital of not less than rupees one
Lakh to treat him as financially sound; 4) he should have obtained recognition
to act as a travel agent from the Government; 5) he should have been carrying
on the business of a travel agent for a minimum period of one year; 6) he
should possess a Money Changer's licence from a competent authority to deal
with and handle the foreign exchange in India; 7) he must have an office and
the premises properly maintained with adequate conveniences at a central place
in the city so as to accommodate the visit of sufficient number of customers
and to provide them with the reasonable conveniences. The question is whether
the criteria or conditions for eligibility for recognition as authorised
railway tourist agent prescribed in the Rules are irrelevant or arbitrary. It
was contended that the requirements amongst others that such a person must have
a minimum paid-up capital of not less than rupees one Lakh, and that he must be
carrying on the business as a travel Agent for a minimum period of one year and
that he should possess a Money Changer's licence were considered so irrelevant
by this Court that while granting interim relief of Oct. 8, 1982, interim
injunction was granted restraining the railway administration from enforcing
these conditions.
The question is whether any or all of these
conditions individually or collectively are so irrelevant to the object sought
to be achieved by the Rules or are such as would smack or arbitrariness ? The
argument was that these conditions were so deliberately drawn up as to help and
encourage wealthy commercial heavy-weights to obtain recognition simultaneously
denying the same opportunity to persons like the petitioners who cater to the
needs of the common man.
If what has been stated in the
counter-affidavit filed on behalf of the railway administration that the
petitioners or atleast some of them were guilty of cornering reserved
accommodation and thereby compelling genuine passengers to turn to them for
purchase of reserved tickets booked in fictitious names at high premia, it was
absolutely necessary to cheque these illegal activities permitting exploitation
of the harassed travelling public. If a privilege is 1022 granted to do a
certain thing, it would be open to prescribe conditions for enjoying the
privilege. The railway administration alone should ordinarily sell its tickets.
Sec. 66 enables the administration to appoint
authorised agents for sale of tickets. These authorised agents must of
necessity fulfill certain criteria. The criteria appear to have been devised
with an eye on extending facility to foreign travelers as well as the financial
viability to secure against failure to pay for tickets sold by recognised
agents. With this end in view, the conditions for minimum financial guarantee
and having a Money Changer's licence and other allied conditions were
prescribed. The long-term view appears to be that those seeking service of
tourist agents, must get a comprehensive service at one place, such as railway
tickets, foreign exchange conversion, exertise about the business, easy access
and legitimacy in business and indisputably the conditions extracted above
assure the same.
Intendment underlying the scheme of setting
up authorised agents is not only to check sharp practices, curb fleecing of
gullible passengers, but render efficient service. The Rules ensure fulfillment
of the intendment underlying the impugned provisions. Viewed from this angle,
the conditions are neither irrelevant nor arbitrary. It may be that the
petitioners may not be able to fulfil the same, but that by itself cannot
render them unreasonable. The conditions are reasonable and are conducive to the
objects sought to be achieved. Failure or inability of some of the petitioners
to comply with them would not be sufficient to reject them as unreasonable,
arbitrary or irrelevant.
In this connection, however, Mr. Govindan
Nayar relied upon Ramana Dayaram Shetty v. The International Airport Authority
of India and Ors.(1) wherein it is observed that' in a welfare state, the
government activities have expanded so wide that licences are required before
one can engage in many kinds of business or work and the power to give licence
means power to withhold them and this gives control to the Government or to the
agents of the Government or many people It was further observed that many
individuals and many more businesses enjoy largest in the form of Government contracts
and that the Government cannot give or withhold largess arbitrary discretion or
at its sweet will. Even, in the matter of Governmental largess, it was stated
that the Government cannot act arbitrarily.' We fail to see how this
observation would be of any assistance in this case.
Similarly, the decision in M/s Kasturilal
1023 Lakshmi Reddy and Others v. State of Jammu and Kasmir and Another(1) would
hardly be of any assistance. Sec. 66 enabled the railways to sell tickets
through authorised agents. The Central Government framed rules for obtaining
recognition as authorised agents and the Rules prescribed relevant conditions
for efficient working of a recognised agent. There is no question of
distributing Government largess in this case nor any arbitrariness in
Governmental action. The challenge to the Rules on the ground of arbitrariness
must fail.
One more contention may be noticed. It was
urged that the conditions of eligibility for obtaining status of authorised
agents in their cumulative effect were impossible of compliance with the result
that under the pretext of regulatory measures a total embargo is placed on the
business of the petitioners and therefore also the restrictions are
unreasonable. In the counter-affidavit it is stated that as many as seventeen
agents have been given the status of authorised railway tourist agents in Delhi
alone. This in not controverted. Therefore the conditions are capable of being
complied with. If the petitioners cannot afford to do the same, that would not render
conditions unreasonable. Apart from this, we are of the opinion that conditions
can be complied with.
The next attack was on the validity of Sec.
114A of the Act. Sec. 114A merely prescribes punishment for unauthorisedly
carrying on of business of procuring and supplying railway tickets. If Sec. 66
envisages appointment of authorised agents obviously anything to the contrary
would be contravention of Sec. 66 and if it is made punishable under Sec. 114A
of the Act, we fail to see how the section would be ultra vires the
Constitution. Therefore the contention must be negativated.
Both Mr. Shanker Ghosh and Mr. Govindan Nayar
strenuously contended that even if the Rules and Sec. 114A are not ultra vires
the 1024 Constitution, the provisions of the Rules are so designed as to help
big houses to carry on business as authorised tourist agent and they would
hardly be interested in catering to the needs of common man belonging to lower
middle-class passengers forming bulk of the travelling public, travelling by
second class and paradoxically contributing major share in railway revenues.
They also pointed out that going to the station half an hour before the
departure of the train, buy the ticket and enter the train, find a seat or
standing accommodation and perform the journey is a chapter in remote past. It
was urged with some vehemence and acerbity but with full justification that
railways earn bulk of their revenue from second-class travelling passengers and
they are the most neglected and to such needy persons, petitioners were
affording some respite from standing in queues for hours, to be jostled out by
the shutting the ticket window in their face. It was also stated that the Court
should be realistic in taking note of the prevailing corruption in booking railway-tickets
which would be further accentuated if every intending passenger has to stand in
the queue for hours and return empty-handed. By way of an additional limb to
this submission, it was submitted that if someone from a long distance wants to
come to Delhi and return the next day, how he is going to arrange for his
ticket. Could he ever think of going to Thomas Cook and agents of their ilk and
would he do his work for which he has come to Delhi or stand in a queue to
purchase the return ticket? We see considerable force in this submission. It is
a very realistic appraisal of the situation and we would not permit railway
administration, a monopoly, turning blind eye to this desperate situation. It
is said that comparatively it is easy to enter heaven than obtain a railway
ticket. Add to this malaise the misery of the people coming from outside having
no relations who can afford to waste their time to get the ticket. Therefore an
agency has to be devised to cater to the needs of class II passengers, which
can render service in this behalf. The agency has to be subjected to strict
control and regulatory measures. May be, that the petitioners were abusing
their activities and were guilty of some sharp practices. It cannot be said
that all of them were of the same class, and it also should not be forgotten
that their activities were facilitated by their counter- parts in the
booking-office. We can safely say that, to some extent, it was a joint venture.
Therefore merely dismissing these petitions would be further adding to the
miseries of the travelling public. We therefore direct the Railway Board to
prepare a scheme for recognising travel agents catering to the needs of class
II passengers with sufficient control over their activities and put the same
before this Court within three months from today.
With these observations, all the writ
petitions are dismissed with no order as to costs.
H.S.K. Petition dismissed.
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