The Visakhapatnam Port Trust & ANR Vs. M/S Ram Bahadur Thakur Pvt. Ltd. [1997]
INSC 144 (10 February 1997)
A.S.
ANAND, S.B. MAJUMUDAR S.B. Majmudar,
J.
ACT:
HEAD NOTE:
These
three civil appeals on grant of special leave to appeal under Article 136 of
the Constitution of India bring in challenge a common judgment and order
rendered by a Division Bench o the High Court of Andhra Pradesh dismissing two
writ appeals moved by the appellant The Vishkahapatnam Port Trust and its
Traffic Manager, and allowing one writ petition moved by the respondent-writ
petitioner against the present appellants. The said common judgment and order
dated 1st October 1992 are assailed by the appellants on
diverse grounds which will be highlighted in latter part of this judgment. The
main grievance of the appellants centers round the question of levying of
appropriate handling charges from various shippers who seek to export manganese
ore from the wharves of the appellant's Port. In order to appreciate this
grievance it is necessary to note a few relevant introductory facts.
The
respondents in these appeals were the original writ petitioners before the High
Court. They are dealers in manganese ore. The export manganese ore through the
Minerals and Metals Trading Corporation of India. For exporting the said ore they naturally require the services of
appellant no.1's Port through which their manganese ore is loaded in the ships
for export. The appellant-Por for that purpose offers various services and
facilities to such shippers The appellant-Port maintains different yards in its
premises.
One
such yard is known as `Eastern Yard' which is divided into several plots of
varying extent between 100 square meters and 600 square meters. These plots are
leased out by the Port Trust authorities to different shippers. The writ
petitioners are the lessees of a few plots. They are at a distance of about 200
meters to 1500 meters from the wharf.
These
plots are connected by broad gauge railway lines on one side and narrow gauge
railway lines on the other side.
The
ore is transported to the plots on the broad gauge railway line and is
transported to ships by narrow gauge railway line. The shippers can also
transport the ore to their respective plots by road using dumpers or lorries.
The handling of ore from the plots to the ships was previously undertaken by
the Port authorities. The entire operation consisted of:
(a)
Loading of ore into the skips by the port labour;
(b)
Transport of ore from the plots to the vessels utilising the internal narrow
gauge railway system belonging to the port.
(c)
Transferring the ore from the skips to the ships hold, utilising the port labour.
Under
Section 48, 49 and 50 of the Major Port Trusts Act, 1963 (for short `the Act'),
the Board of Trustees enabled to charge for the services rendered by the Board.
In exercise of the powers conferred under Section 48 and 49 of the Act, the
Board periodically notifies the scales of rates and conditions and the handling
charges for the manganese ore for the said operation were fixed at the rate of Rs.
35/- per thousand kilograms for one metric ton. These handling charges were
inclusive of equipment hire charges.
The
May 1986 the writ petitioners received a circular from the Traffic Manager of
the Port stating that the then existing N.G. system would not be available and
that the revised system would come into force on or around 20th May 1986. The
consequence of the abolition was that the shippers were required to employ
their own dumpers and loaders o transport the ore from the dump area to the
wharf and load the ore on to the ships utilising their slings. No port labour
or other personnel and equipment of the port might be required or utilised as
the entire operation would be carried out by the shipper. On 10th June 1986 the Traffic Manager of the Port
issued a circular notifying that a provisional consolidated handling charge of Rs.
30/- per Metric Ton for handling export of manganese ore in the new system,
would be levied. Consequently the previous handling charges of Rs. 35/- were
substituted by Rs. 30/- per M.T.
According
to the writ petitioners this levy of charges of Rs. 30/- per M.T. under the new
system of handling of manganese ore at the appellant-Port was unreasonable and
excessive. They made several representations in this connection. According to
the writ petitioners for transporting manganese ore from the plots and putting
it on board the ship the shippers will have to incur approximately Rs. 37/- per
M.T. and the Port authorities collect Rs. 30/- per M.T. after withdrawal of the
services by them. Under these circumstances two writ petitions were filed by
respondents in Civil Appeals Nos. 3972 and 3973 of 1993 before the High Court.
They were Writ Petition Nos. 8891 and 14503 of 1986. These writ petitions were
heard by a learned Single Judge of the High Court after hearing the parties
came to the conclusion that for substituting the new scale of handling charges
for manganese ore for the earlier existing scale of Rs. 35/- per M.T. when the
Port was providing its own labour and narrow gauge railway line siding for
transporting the ore from dumping yard to the wharf, the procedure required by
Section 52 of the Act was not followed by the appellant-Port and hence the new
scale of rates could not effectively the pressed in service by the Board
against the writ petitioners. So far as the contention of the writ petitioners
that the levy of Rs. 30/- per M.T. under the new system of handling of
manganese ore pursuant to the impugned circulars dated 19th May 1986, 10th June
1986, and 18th July 1986 and resolution dated 26th June 1986 was excessive and
unreasonable was concerned, the learned Single June observed that it was not
for the Court to work out the details minutely to find out the actual cost
incurred for the service and then decide at what rate the handling charges
should be collected by the Port and that the Central Government will have to
consider all these aspects while granting sanction to the new scale of handling
charges under Section 52 of the Act. Accordingly the impugned circulars and
Resolution of 1986 were quashed and writ petitions were allowed. The appellants
herein filed writ appeals against the aforesaid order of the learned Single
Judge being Writ Appeals Nos. 1379 and 1380 of 1987 before the High Court. Said
two writ appeals along with the companion Writ Petition No. 17407 of 1987 were
heard by a Division Bench of the High Court which by the impugned common
judgment and order confirmed the decision of the learned Single Judge and
dismissed the writ appeals.
Companion
writ petition was also allowed. The Division Bench noted that the handling
charges of Rs. 30/- per M.T. with respect to manganese ore and other ores in
the light of the fresh system came to be later on sanctioned by the Central
Government under Section 52 of the Act and they came in force with effect from 12th February 1992. Therefore, the controversy
survived regarding the appropriate handling charges for manganese ores for the
period from 20th May 1986 to 12th February 1992 and for that period the Central
Government, while exercising its powers under Section 52 of the Act, was
required to consider the question regarding fixing of appropriate handling
charges after giving notice to the writ petitioners and hearing their
objections, if any. It was further directed that whatever payments were made by
the writ petitioners during the pendency of the writ appeals and writ petition
before the High Court at the rate of Rs. 20/- per M.T. in respect of
consignments of manganese ore would be subject to the final adjustment to be
made in the light of the decision of the Central Government.
Rival
contentions At the time of final hearing of these appeals Shri Vinod Bobde,
learned senior counsel appearing for the appellants vehemently submitted that
the Division Bench of the High Court had ex facie erred in law in taking the
view that the rates of handling charges for manganese ore as fixed by the
Board's impugned resolution dated 26th June 1986 were required to be sanctioned
by the Central Government under Section 52 of the Act and without such prior
sanction they could not operate. It was submitted that the earlier sanctioned
rate under Section 52 was Rs. 35/- per M.T. which held the field from 1st January 1984 and this scale of rates was duly
published by the appellant-Port.
That
thereafter on two occasions the appellant-Port gave remission to alleviate the
hardship of the shippers exporting manganese ore by utilising the services
offered by the appellant-Port. That one such remission was given by the Board
in its meeting No. 7 of 1984-85 held on 30th October 1984. That was the remission of Rs. 5/-
per M.T. of manganese ore brought by dumpers to Visakhapatnam Port and exported therefrom. This
remission was to be given on the basis of the certificate issued by the Dock Labour
Board.
Thus
remission was a conditional remission. It was admittedly under Section 53 of
the Act. That subsequently when the facility of utilisation of narrow gauge
railway line on the premises of the Board was withdrawn the Board by the
impugned resolution dated 26th June 1986 gave a fresh remission of Rs. 5/- per
M.T. from the sanctioned rate of Rs. 35/- per M.T. by making it unconditional.
Consequently even the impugned resolution dated 26th June 1986 also remained
within the forecorners of Section 53 of the Act and that the High Court was in
error in taking the view that these impugned circulars sought to introduce a
new scale of rates which required prior sanction of the Central Government
under Section 52 of the Act.
It was
next contended by Shri Bobde that even assuming that the impugned resolution
sought to bring into force new scale of rates in the light of the changed
system of services made available by the Board for shipment of the manganese
ore, and that such new scale of rates without prior sanction of the Central
Government was ineffective during the relevant period from 20th May 1986 to
12th February 1992, then as a logical corollary it should have been held by the
High Court that the earlier existing handling rate of Rs. 35/- per M.T.
remained operative as it would not get substituted by any effective new rate of
handling charges of manganese ore and the writ petitioners would be liable to
pay the handling charges for the aforesaid relevant period at the rate of Rs.
35/- per M.T.
It was
next contended by Shri Bobde that if the writ petitioners had any grievance
about the alleged excessive handling charges or that there was no quid pro quo
between these rates on the one hand and the services rendered by the Board on
the other and if the High Court found that highly disputed questions of fact
arose, for resolution of this dispute, the write petitioners should have been
relegated to the remedy of civil suit. In any case, according to Shri Bobde,
Section 54 of the Act could have been pressed in service in such an eventuality
and the writ petitioners could have been relegated to the remedy of
representation before the Central Government in this connection. Shri Bobde
also submitted that even if Section 54 was to be invoked for fixation of
appropriate rates which is a delegated legislative function, there was no
question of giving any hearing to the objectors-writ petitioners and
consequently the direction of the Division Bench about the issuing of notices
to the writ petitioners and hearing their objections was clearly misconceived.
On the
other hand Shri R.F. Nariman, learned senior counsel for the respondents,
submitted that the old scale of rates for handling of manganese ore levied by
the appellant- Board from 1st January 1984 was fixed in the light of the type
of services then rendered by the Board and the infrastructural facilities made
available by the Board to the shippers in these days. That under the previous
system the Port authorities handled the ore from the plots to the ships by utilising
the port labour and the internal railway system belonging to the Port and for
the entire operation handling charges were levied at the rate of Rs. 35/- per
M.T. That under the new system sought to be introduced from June 1986 onwards
transportation of ore was to be the responsibility of the shippers who had to
employ their own labour. Under these circumstances when the Board fixed scale
of rates at Rs. 30/- per M.T. and when the earlier infrastructural facilities
and the benefit of utilisation of internal railway system earlier available to
the shippers were withdrawn, the said rate of Rs. 30/- per M.T. would obviously
become a new scale of rates interlinked with the changed system of conditions
for handling manganese ore from June 1986 onwards and consequently prior
sanction of such new rates in the light of the new system was a condition
precedent under Section 52 of the Act for making this new scale of rates
effective. However Shri Nariman, learned senior counsel fairly stated that the
Board no doubt has powers under Section 53 of the Act to grant exemption or
remission of existing rates of charges in special cases as contemplated by
Section 53 and in such an eventuality previous sanction of the Central
Government may not be necessary. But on the peculiar facts and circumstances of
the case the High Court rightly held that the impugned rates of handling
charges sought to be introduced by the resolution of 26th June 1986 did require previous sanction of
the Central Government under Section 52 of the Act.
It was
next contended by Shri Nariman that no fault could be found with the direction
of the High Court in requiring the Central Government to consider the
objections of the writ petitioners against the proposed fixation of rates by
the Board under the new system on the ground that they were excessive and
unreasonable and it was for the Central Government to take an informed decision
in the matter and that obviously cannot prejudice the appellant- Board. In this
connection it was submitted by the learned senior counsel for the respondents
that by an order dated 10th August 1993 this Court while granting special leave
to appeal against the impugned judgment and order of the High Court had
directed the respondents to pay the charges at the rate of Rs. 30/- per M.T. from
June 1986 onwards and accordingly the respondents have paid the balance amounts
of disputed handling charges all throughout from June 1986 onwards till 11th
February 1992. That in the same order this Court had directed that if
ultimately the appellants fail in appeal the amount that is recovered by them
from the respondents will be paid by them with interest as may be fixed by this
Court. However learned senior counsel Shri Nariman fairly stated that in case
this Court is inclined to uphold the order of the High Court, if the Central
Government is directed to resolve this controversy between the parties within a
fixed period then the payments made by the respondents pursuant to the interim
order of this Court dated 10th August 1993 may be made subject to the decision
of the Central Government and the rights and obligations of respective parties
to this litigation may be directed to be worked out in the light of the said
decision of the Central Government. He however added a rider to his submission
that in case according to the decision of the Central Government the
respondents become entitled to refund of any amount this Court may fix
appropriate rate of interest to be paid by the appellant-Board to the
respondents on such amounts.
Points
for determination.
In the
light of the aforesaid rival contentions the following points arise for our
determination:
1.
Whether the impugned circulars dated 19th May 1986, 10th June 1986 and 18th
July 1986 and the impugned resolution of the Board dated 26th June 1986 amount
to remission of the then existing rates of handling charges for manganese ore
covered by Section 53 of the Act of whether these rates require prior sanction
of the Central Government under Section 52 of the Act before they could become
effective.
2.
Whether the impugned rates of handling charges were unreasonable, excessive and
based on no proper quid pro quo between the services rendered by the Board and
the charges levied by the Board for such services.
3.
Whether there was any effective scale of rates for handling manganese ore at
the premises of the appellant-Port during the relevant period from 20th May 1986 to 12th February 1992.
4.
Whether the directions issued in the impugned judgment, to the Central
Government for issuing notices to the writ petitioners and for hearing their
objections before fixing handling charges for the period from 20th May 1986 to 12th February 1992 are justified in law.
We
will deal with these points seriatim.
Point
No. 1 In order to appreciate the controversy concerning this point it is
necessary to have a look at the relevant provisions of the Act.As per Section 1
sub-section (3), the Act in the first instance was to apply to major ports of Cochin, Kandla and Vishakhapatnam. Appellant No. 1 is one such Port.
This port which is a major port has to have a Board of Trustees duly
constituted as per Section 3 of the Act. Various statutory duties are enjoined
on the Board by the Act. Section 42 of the Act deals with `performance services
by Board of other person'. Sub-section (1) thereof lays down that a Board shall
have power to undertake certain services. The relevant services which are
required to be undertaken by the Board are indicated in clauses (a). (b) and
(d) of Section 42(1) which read as under:
"(a)
landing, shipping or transhipping passengers and goods between vessels in the
port and the wharves, piers, quays or docks belonging to or in the possession
of the Board;
(b) receiving,
removing, shifting, transporting, storing or delivering goods brought within
the Board's premises;
(c)
... ... ... ...
(d)
receiving and delivering, transporting and booking and despatching goods
originating in the vessels in the port and intended for carriage by the neighbouring
railways, or vice versa, as a railway administration under the Indian Railways
Act, 1890 (9 of 1890); and (e) ... ... ... ..." Chapter VI of the Act
deals with `Imposition and recovery of rates at ports'. We may refer to the
relevant provisions of the said Chapter which have a direct bearing on the
controversy posed for out consideration. As per Section 48 sub-section (1)
every Board shall from time to time frame a scale of rates at which, and a
statement of the conditions under which, any of the services specified in the
clauses to this sub-section shall be performed by itself or any person authorised
under section 42 at or in relation to the port or port approaches. Sub-section
(1)(b) and (1)(e) of Section 48 of the Act are relevant in this connection.
They
read as under:
"48.(1)(b).
landing and shipping of passengers or goods from or to such vessels to or from
any wharf, quay, jetty, pier, dock, berth, mooring, stage or erection, land or
building in the possession or occupation of the Board or at any place within
the limits of the port or port approaches;
(c)
... ... ... ...
(d)
... ... ... ...
(e) any
other service in respect of vessels, passengers or goods, excepting the
services in respect of vessels for which fees are chargeable under the Indian
Ports Act." A conjoint reading of Section 42(1) shows that the Board has
to frame a scale of rates at which and a statement of conditions under which
the concerned services are made available at the major port by the Board
concerned. It, therefore, becomes clear that the scale of rates for brans-
shipment of goods to and from vessels in the port or port approaches and for
landing and shipping of goods from or to such vessels from any wharf, quay,
jetty, pier, dock etc.
within
the premises of the port, has a direct linkage with the conditions under which
such services are rendered.
Consequently,
the scale of rates for such services which are to be offered by the Board of a
major port to the concerned shippers has to be ascertained or fixed in the
light of the type of conditions subject to which such services are offered.
We may
now turn to the other relevant provisions of this Chapter. They consist of
Section 52, 53 and 54 which deserve to be extracted in extenso as under:
52.
Prior sanction of Central Government to rates and conditions.
-
Every scale of rates and every statement of conditions framed by a Board under
the foregoing provisions of this Chapter shall be submitted to the Central
Government for sanction and shall have effect when so sanctioned and published
by the Board in the Official Gazette.
53.
Exemption from, and remission of, rates or charges. - A Board may, in special
cases and for reasons to be recorded in writing, exempt either wholly or
partially any goods or vessels or payment of any rate or of any charge leviable
in respect thereof according to any scale in force under this Act or remit the
whole or any portion of such rate or charge so levied.
54.
Power of Central Government to require modification or cancellation of rates. -
(1) Whenever the Central Government considers it necessary in the public
interest so to do, it may, by order in writing together with a statement of
reasons therefor, direct any Board to cancel any of the scales in force or
modify the same, within such period as that Government may specify in the
order.
(2) If
any Board against whom a direction is made under sub-section (1) fails or
neglects to comply with such direction within the specified period, the Central
Government may cancel any of such scales or make such modifications therein as
it may think fit;
Provided
that before so cancelling or modifying any scale the Central Government shall
consider any objection or suggestion which may be made by the Board during the
specified period.
(3)
When in pursuance of this section any of the scales has been cancelled or
modified, such cancellation or modification shall be published by the Central
Government in the Official Gazette and shall thereupon have effect
accordingly." A mere look at the aforesaid provisions shows that whenever
any scales of rates for trans-shipment and shipping of goods within the limits
of the major port are to be fixed by the concerned Board, such scales of rates
can be fixed in the light of the conditions under which such concerned services
are offered by the Board to the shippers.
Therefore,
the given scheme of conditions in the light of which scales of rates by way of
handling charges are fixed by the Board has a direct impact on the fixation of
such scales of rates. In other words such scales of rates are not fixed in
vacuum but in connection with the nature of the conditions under which such
services are offered by the Board to the concerned consumers of such services,
namely, the shippers. When such scales of rates in the light of a given set of
conditions for offering handling services are fixed by the Board they cannot come
into force unless such scales of rates and the set of conditions for offering
such services get prior sanction of the Central Government as enjoined by
Section 52 of the Act. So far as Section 53 is concerned, it confers power on
the Board in special cases to give exemption or remission from such fixed and
current rates as may have received prior sanction of the Central Government
under Section 52 meaning thereby that once the Central Government has
sanctioned rates and conditions under which such rates are to be imposed by a
Board as laid down by Section 52, if the concerned Board in special cases wants
to give any exemption or remission for handling any goods or vessels or class
of goods or class of vessels from payment of such fixed rates or charges it can
do so under Section 53 of the Act. This postulates that once the approved
conditions under which sanctioned scales of rates become effective under
Section 52 for offering services by the Board remain the same and yet some
remission or exemption needs to be granted by the Board in special cases after
following the procedure of Section 53, it is not required to apply to the
Central Government for prior sanction of such remission or exemption. So far as
Section 54 is concerned, it shows that once scales of rates in the light of the
approved and existing conditions under which the concerned services are offered
by the Board are sanctioned by the Central Government and if it is brought to
the notice of the Central Government that it is necessary in the public
interest to modify or cancel such sanctioned rates then the Central Government
in exercise of its power under Section 54(1) may pass appropriate orders
modifying or cancelling the sanctioned operative rates in public interest. This
is a power vested in the Central Government which is independent of the power
of remission or exemption of rates and charges available to the Board under
Section 53. The Board under Section 53 and the Central Government under Section
54 can independently of each other exercise these respective powers within the
parameters of the provisions of Section 53 and 54 of the Act.
It is
in the light of the aforesaid statutory scheme that the moot question posed for
our consideration on this first point for determination has to be answered
keeping in view the background facts governing this controversy. It is not in
dispute between the parties that from 1st January 1984 the handling charges for manganese
ore levied by the appellant Board were fixed at Rs. 35/- per M.T. This rate was
duly sanctioned by the Central Government under Section 52 of the Act. At the
time when the aforesaid rate was fixed the manganese ore was being transported
to the plots situated within the limits of the Port by broad gauge railway line
and from those plots the stored manganese ore was being carried to the ships
for its outward journey in the course of the export by being transported in
skips dawn by small engine on the narrow gauge railway line. Handling of ore
from the plots to the ships was done entirely by the Port authorities at their
own cost for which they used to charge handling charges at Rs. 35/- per M.T.
The operation consisted principally of three activities noted earlier. It was
this system of transporting of manganese ore within the precincts of the Port
that formed the basis for fixation of the rate of handling charges at Rs. 35/-
per M.T. of manganese ore. This rate and the conditions under which handling
services were then offered by the Board as already noticed were duly sanctioned
by the Central Government under Section 52 of the Act. Despite the continuance
of this system of handling services offered by the Board from 1st January 1984,
a representation was made to the Board in the closing months of 1984 by the
shippers of the manganese ore to the effect that this consolidated rate of
handling charges of Rs. 35/- per M.T. of manganese ore was excessive as for
unloading operation from the wagons, Dock Labour was being engaged and that in
the process of exporting manganese ore at the lowest economic cost some of the
exporters started bringing manganese ore to visakhapatnam Port by dumpers. The
Dock Labour Board during 1984 resolved to levy Rs. 12.50 per M.T. towards Dock Labour
Board Charges for manganese ore brought by dumpers to Visakhapatnam Port by the concerned shippers. Therefore, it was represented by
the shippers to the Board that in addition to Rs. 35/- per M.T. which they had
to pay by way of handling charges to the Board they were also required to pay Rs.
12.50 per M.T. by way of handling charges to the Dock Labour, thus making them
out of pocket to the tune of Rs. 47.50 per M.T. Consequently, from the
sanctioned and operative handling charges of Rs. 35/- per M.T. as levied by the
Board from the shippers of manganese ore a remission of Rs. 12.50 per M.T. was
sought. It is this representation which was partly accepted by the Board by its
resolution dated 30th
October 1984 on Agenda
Item No. 161. It was resolved by the Board to approve under Section 53 of the
Act, a remission of Rs. 5/- per M.T. of manganese ore brought by dumpers to Visakhapatnam Port and exported, on the basis of the Certificate issued by the
Dock Labour Board. In the light of the aforesaid resolution of the Board it
becomes clear that though the sanctioned rates or charges for handling of
manganese ore were Rs. 35/- per M.T., by remission of Rs. 5/- per M.T. given by
the Board in exercise of its statutory powers under Section 53, the effective
and operative rate of handling charges of manganese ore became Rs. 30/- per
M.T.
subject
to the concerned shipper producing the requisite certificate issued by the Dock
Labour Board. Shri Bobde, learned senior counsel for the appellants was,
therefore, right when he submitted that this remission was a conditional
remission. Nonetheless it cannot be doubted that it was a remission given by
the Board from the existing and operative sanctioned handling charges for
manganese ore.
Thus
from 30th October 1984 onwards the effective handling rates for manganese ore,
so far as the appellant-Board is concerned, became Rs. 30/- per M.T. in the
light of the then existing conditions of services offered by the Board, namely,
making available to the shippers who wanted to utilise handling services of the
Board the use of the skips drawn by small engine on the narrow gauge railway
line from the siding of the plots upto the wharf and transferring the ore from
the skips to the ship's holding utilising the Port Labour.
The
aforesaid remitted rate of handling charges continued upto middle of 1986 when
the impugned circular and the Resolution saw the light of the day. It is
necessary to have a look at these circulars for appreciating their correct
scope and ambit. The Traffic Manager of the appellant-Port by circular dated 19th May 1986 informed all concerned that a new
system of handling manganese ore will be introduced by the appellant-Trust. It
recited that under revised system, the stocked ore will be transported to the
wharf by employment by the shippers of dumpers and loaders and loading with net
slings dispensing with the existing narrow gauge system. This new system was to
come into force after completion of loading of manganese ore on the expected
vessel on or around 20th May 1986 and the manganese ore shippers were requested
to note that narrow gauge system would not be available thereafter. This was
followed by another circular dated 10th June 1986 issued by the Traffic Manager
of the appellant-Trust notifying that a provisional consolidated handling
charges of Rs. 30/- per M.T. for handling export of manganese ore etc. in the
new system would be levied. It is obvious that this circular referred to the
rate of notified consolidated handling charges as provisional because it had to
be approved by the Board. It is this provisional rate which was placed for consideration
of the Board of Trustees in its meeting dated 26th June 1986. Agenda Item No. 19 which was placed for consideration of
the Board recited as follows:
"AGENDA
ITEM NO. 19: Manganese Ore Shipment - Collection of handling charges in respect
of DHL Workers in the new system of handling Manganese Ore Exports." The
Resolution of the Board stated that it approved the collection of consolidated
handling charges of Rs. 30/- per M.T. only for handling Manganese Ore Shipment
in the new system. This Resolution clearly indicates that the Board resolved to
levy fresh handling charges of Rs. 30/- per M.T. in the light of the new system
of offering such services meaning thereby that the aforesaid rate of handling
charges of manganese ore would be levied by the Board despite withdrawal of the
facility of narrow gauge railway line for the shippers. In other words
thenceforward the shippers had to carry at their own cost the dumped manganese
ore from the plots to the wharf by employing their own dumpers and modes of
transport. Thus the very system of offering of handling services by the Board
underwent a sea-change as per the Resolution of 26th June 1986. Of course the rate remained Rs. 30/- per M.T. which was
already holding the field prior to the said Resolution on account of the
remission of 30th
October 1984 as noted
earlier. But though the rate of handling services apparently remained the same,
when viewed in the light of the then existing infrastructural facilities of
narrow gauge railway line being available to the shippers it now became
operative as a new rate in the light of entirely a new system of shipment
services offered by the Board for handling of manganese ore at its port. Thus
in substance the rate fixed by the Board as per its Resolution dated 26th June
1986 by way of handling charges of manganese ore became a new scale of rates in
the light of new set of infrastructural services offered by the Board. In the
light of this Resolution the Traffic Manger issued the impugned consequential
circular dated 18th June 1986 by which it was notified that the provisional
consolidated handling charges of Rs. 30/- per M.T. only for handling export of
Manganese Ore etc. in the new system communicated vide its office circular
cited, was the final rate. A conjoint reading of the circulars dated 19th May
1986, 10th June 1986 and 18th July 1986 and the Resolution dated 26th June 1986
leaves no room for doubt that from 21st of May 1986 entirely a new system for
handling the manganese ore at the Port came into existence and in that light a
new handling rate for manganese ore was being fixed by the Board. Once that
happened Section 52 of the Act directly got attracted because the scale of
rates at Rs. 30/- per M.T. having a direct nexus with the statement of new
conditions for offering handling services by the Board was sought to be got
implemented by the Board. Hence prior sanction of the Central Government became
a must for such new impost. The submission of Shri Bobde, learned senior
counsel for the appellants that even at this stage the Board sought to give a
remission from the existing sanctioned scale of rates, that is, Rs. 35/- per
M.T. as was current from 1st January 1984, cannot be accepted for the simple
reason that the Board had already given remission of Rs. 5/- per M.T. to the
shippers of manganese ore subject to the condition laid down by the Resolution
of the Board dated 30th October 1984 with effect from that day. That remission
was in the light of the then existing conditions of infrastructural facilities
made available by the Board to the concerned shippers who had to bear the
burden of this rate. The Board was perfectly justified in exercising its powers
under Section 53 of the Act in granting the said remission for a class of
goods, namely, manganese ore. But at the stage of latter Resolution dated 26th June 1986 there was no occasion for the Board
to reduce further the said rate of Rs. 30/- per M.T. in the light of the very
same earlier existing system of handling of manganese ore. The entire earlier
existing system of handling manganese ore was given a go-by and a new system
was sought to be introduced as expressly mentioned in the circulars of 19th May 1986 and 10th June 1986 in the light of which the Board Resolution dated 26th June 1986 saw the light of the day. The
moment new system of handling of manganese ore got introduced any fixation of
handling charges of manganese ore in the wake of introduction of such a new
system of handling of manganese ore exports would necessarily clothe the new
rate with the characteristics of being freshly settled handling charges. Once
this conclusion is reached the exercise of the Board undertaken as per
Resolution dated 26th
June 1986 required,
for its efficacy, the prior sanction of the Central Government as enjoined by
Section 52. Admittedly, that was not done by the Board. The fixation of an
appropriate scale of rates chargeable from the concerned shippers who are now
to be offered a different and a truncated type of infrastructural facilities,
would call for an exercise to be undertaken subject to the requirements of
Section 52 and would go out of the sweep of Section 53 as it would not amount
to remission of existing rates of handling charges having a nexus with the
erstwhile and unchanged system of infrastructural facilities which no longer
remained available to support such a remitted rate of handling charges. In
other words the very foundation on which the earlier handling rates operated
was knocked off and entirely a new foundation of infrastructural facilities of
services came into being. Any handling rates fixed in connection with such a
new foundation of handling-services- infrastructure necessarily would assume
the form of a new scale of rates. Shri Bobde's submission flies in the face of
the express recitals found in the impugned circulars of 1986 in the light of
which the impugned Resolution of the Board dated 26th June 1986 as passed. The scope and ambit of the Resolution of 26th June 1986 can be better highlighted as under:
When
the effective rate of handling charges was Rs. 30/- per M.T. prior to May 1986,
the shippers were given facility to carry their load of dumped manganese ore
from plots to wharf by utilising narrow gauge railway line belonging to the
Port authorities. This facility was made available by the Board at its own
cost. If value of this infrastructural facility for carrying dumped ore from
plots to wharf which was at a distance of 200 meters to 1500 meters f the
concerned plots, is approximately taken at Rs. 6/- per M.T., the burden of
handling charges at the aforesaid rate would work out as under:
Total
burden of handling charges to be borne by the shippers would then be Rs. 30/-
per M.T. Out of this amount Rs. 6/- per M.T. would be spent by the Board for
providing the facility of narrow gauge railway line. Only balance of Rs. 24/-
per M.T. would be available for being credited to the coffers of the Board as
real handling charges recovered from the concerned shippers. Thus in substance Rs.
24/- per M.T. would be the real handling charges benefit of which would be
available to the Board.
However,
after May 1986 when the narrow gauge railway line facility was withdrawn and
the shippers had to spend for carrying dumped ore from plots to wharf and once Rs.
30/- per M.T. was still being charged by the Board as handling charges, the
shippers in fact would be out of pocket to the tune of Rs. 36/- per M.T. by way
of handling charges as Rs. 30/- per M.T. net would be collected from them by
the Board and in addition thereto the shippers would be spending an amount at
the rate of Rs. 6/- per M.T. by way of transport charges for carrying the
dumped ore from the plots to the wharf as that much earlier benefit would now
be lost to the shippers. Consequently, the Board would now collect by way of
real handling charges a net amount of Rs. 30/- per M.T. instead of the earlier
real scale of rates of Rs. 24/- per M.T. Thus in essence and substance the
scale of rates of handling charges would go up from Rs. 24/- per M.T. to Rs.
30/- per M.T. for being made available to the Board and that would get credited
to the coffers of the Board. This effect of the new scheme of handling charges
introduced by the Board by the impugned Resolution, therefore, cannot be said
to be amounting to a mere remission from the erstwhile earlier existing scales
of handling charges. It is a misnomer to suggest that still the Board can be
said to have given a remission and not a hike in the scale of handling charges
by introducing new system of transporting of ore within its premises. Nor can
it be said with any justification that the Board was not required to get this
new scale of handling charges which included a real hike in the charges,
sanctioned by the Central Government under Section 52 of the Act. In fact from
1992 the Board itself had got the new system of handling charges and the scales
of charges, in absence of narrow gauge railway line facility which had stood
withdrawn from the suppliers, sanctioned by the Central Government under
Section 52 of the Act. If that is so, it is axiomatic that it should have got
the changed scales of rates of handling charges in the light of the new system
of handling services introduced from May 1986 also sanctioned by the Central
Government.
We,
therefore, find that the Division Bench of the High Court was justified in
taking the view that the imugned Resolution dated 26th June 1986 seeking to
bring into effect new rates of handling charges in the light of entirely new
system of services then offered by the Board required prior sanction of the
Central Government under Section 52 of the Act and could not be treated to be
representing a scheme of remission as envisaged by Section 53 of the Act. Point
No. 1 is answered accordingly.
Point
No. 2 So far as this grievance of the writ petitioners is concerned, the learned
Single Judge took the view that it was not for the court to go into the
minutest details about the value of the services rendered by the Board and its
exact co-relation with the rate of the handling charges sought to be recovered
by the Board for offering these services. Shri Bobde, learned senior counsel
for the appellants, was right when he contended that if it was felt by the
Court that highly disputed questions of fact arose for its decision the writ
petitioners could have been relegated to the remedy by way of a civil suit
where matter could have been thrashed out on proper evidence. However that was
not the only alternative remedy to which writ petitioners could have been
relegated by the Court. Under the scheme of the Act it appears clear that the Parliament
in its wisdom has entrusted the task of monitoring and regulating the scales of
rates and statements of conditions under which various services are offered by
the Board under the Act to the shippers, to the apex authority of the Central
Government. The scales of rates and statements of conditions framed by the
Board in rendering these services have to get prior sanction of the Central
Government before they become effective. Even that apart the Central Government
in public interest may direct the Board to suitably modify or cancel such rates
in exercise of its powers under Section 54 and if the directions of the Central
Government are not followed by the Board the Central Government itself can
cancel such rates or may make such modifications therein as it may think fit
after considering the objections of the Boards concerned. These statutory
powers entrusted by the Parliament to the Central Government both under
Sections 52 and 54 of the Act leaves no room for doubt that under the scheme of
the Act itself the Central Government is the ultimate authority for deciding
about the propriety and justness of the scales of rates of services to be
rendered to the shippers by the Board of the concerned Ports governed by the
Act. In the light of this statutory scheme, therefore, the reasonableness of
the settled scales of charges for handling goods as tried to be recovered by
the Board under the Act could be validly made the subject- matter of scrutiny
of the Central Government by aggrieved parties by invoking the Central
Government's powers under Section 54 of the Act. When the writ petitioners
raised the contention about the excessiveness and unreasonableness of the scale
of rates of handling charges of manganese ore sought to be recovered from them
by the Board and when such contention required scrutiny of relevant evidence
which may be led on the point the High Court was perfectly justified in leaving
that question to be decided by the Central Government. It is obvious that it
will be for the Central Government to decide this question and to pass
appropriate directions in this connection which would be binding on the
appellant-Board. In short the question whether the scales of handling charges
sought to be levied from the respondents for handling their manganese ore
during the relevant period between 20th May 1986 and 12th February 1992 were
just, fair and legal or not was justifiably left by the High Court to be
decided by the Central Government instead of deciding it itself. Point No. 2 is
answered accordingly.
Point
No. 3 In this connection, it was vehemently urged by learned senior counsel Shri
Bobde for the appellants that the Division Bench in the impugned judgment had
wrongly assumed that once it was held that the impugned scale of rates sought
to be introduced by the Board as per its Resolution dated 26th June 1986 was
ineffective in the absence of prior sanction from the Central Government under
Section 52 of the Act, there was a hiatus or a vacuum during the period between
20th May 1986 and 12th February 1992 and during that time there was no
effective scale of handling charges at all which could have been charged by the
Board from the concerned shippers of manganese ore. To that extent Shri Bobde's
contention is well sustained. While answering Point No. 1 we have already held
agreeing with the High Court that the new scale of rates for handling charges
of manganese ore pursuant to the Board's Resolution dated 26th June 1986 was
ineffective without prior sanction of the Central Government under Section 52
of the Act. But as a consequence of the said finding it would not necessarily
follow that no other effective scale of rates for handling manganese ore would
be left in the field. Of course the extreme contention of Shri Bobde that the
earlier scale of rates which was in force from 1st January 1984, namely, Rs.
35/- per M.T. of manganese ore would remain operative during this period cannot
be accepted. The reason is obvious. As already noticed, the earlier effective
scale of rates as sanctioned by the Central Government which was operative from
1st January 1984 being Rs. 35/- per M.T. was already remitted though
conditionally by the appellant-Board itself by its Resolution dated 30th
October 1984. Thus from 30th October 1984 the effective scale of rates for handling
charges of manganese ore remained Rs. 30/- per M.T. It is this rate which must
be treated to have continued during the interregnum period from 20th May 1986
till 12th February 1992. Of course even this remitted rate of Rs. 30/- per
M.T., from 20th May 1986 onwards had operated in absence of the availability of
infrastructural facility of narrow gauge railway line which had stood withdrawn
by the Board from the shippers. Consequently, whether the said existing
remitted rate of Rs. 30/- per M.T. from 20th May 1986 in the light of the
withdrawn infrastructural facility of narrow gauge railway line, which in is
turn had shifted the burden of transport charges of manganese ore from plots to
the wharf on the shoulders of the shippers, resulted in a lopsided rate and
whether it, therefore, became unreasonable or not and by then whether it was
backed up by proper quid pro quo or not would remain a burning and moot
question which had to be resolved by the appropriate authority under the Act.
All the same it could not have been assumed by the High Court in the impugned
judgment that during the relevant period from 20th May 1986 to 12th February
1992 there was no effective scale of rates for handling manganese ore at all.
To that extent it must be held that the Division Bench was in error when it
persuaded itself to hold that view. The said finding of the High Court is,
therefore, set aside. Point No. 3 is answered accordingly. This takes us to
consideration of the last point for determination.
Point
No. 4 Shri Bobde, learned senior counsel for the appellants was right when he
contended that there is no question of invocation of principles of natural
justice or hearing the affected parties when legislative action is brought on
the anvil of scrutiny or for that matter even an action of a delegated
legislative authority is brought in challenge. It is axiomatic that a
legislative exercise or exercise by a subordinate legislative agency imposing
any tax or fee or charges would not require the affected parties to be heard
before such charges or impost are levied. But this argument of Shri Bobde may
be relevant at the stage of Section 52 of the Act wherein the scales of rates
and statements of conditions framed by the Board are put up for prior sanction
of the Central Government. However the said situation would not prevail when a
grievance is made by the concerned aggrieved parties who submit that the
sanctioned scales of rates which are prevalent and operative require
modification or cancellation in public interest as they are unreasonable,
excessive or, wholly or partly, lack the back up of guide pro quo. As and when
such grievances are made and are required to be examined by the Central
Government in exercise of its statutory powers and functions under Section 54
of the Act, if the Central Government gets convinced that in public interest
appropriate modifications or cancellation of rates are required to be made,
then it would be the statutory obligation of the Central Government to direct
the concerned Board accordingly and it will be equally the duty of the Board to
carry out such suggested modifications or cancellations as directed by the
Central Government. At that stage if the objections of aggrieved parties are
directed to be considered by the Central Government in public interest no fault
can be found with such a direction. Therefore, we find that the directions
issued by the Division Bench in the impugned judgment can be well sustained
under Section 54 of the Act by treating the objections raised by the writ petitioner
before the High Court as amounting to a request to get appropriate
modifications or cancellations of the scales of rates for handling manganese
ore at the appellant's Port in public interest. It is obvious that the Central
Government in exercise of its powers under Section 54 of the Act can undertake
the exercise enjoined by the said Section if it considers it necessary in
public interest so to do. Central Government being an impersonal body
functioning far away from the places where the major ports and other ports are
situated it would be obvious that relevant facts for invoking exercise of its
power under Section 54 of the Act will have to be brought to the notice of the
Central Government and that can be done only by aggrieved interested parties by
way of representations.
Filing
of such representations before the Central Government by the concerned
aggrieved parties, therefore, cannot be said to be contra-indicated by Section
54 sub-section (1).
Once
such representations are moved it will be the statutory obligation of the
Central Government to consider the said representations and for effective
discharge of its power- cum-duty entrusted to it under Section 54(1) it may be
open to the Central Government in appropriate cases to even permit the aggrieved
parties representationists to be heard in person, if so thought fit, and
thereafter if the Central Government thinks it fit to make appropriate
modification or cancellation of the settled and sanctioned scale of rates of
handling charges as leviable by the concerned Boards it can proceed under
Sections 52 and 54 of the Act calling upon the Board to effect such
modifications or cancellations and in the process it has t consider the
objections or suggestions of the concerned Boards as laid down by the proviso
to sub- section (2) of Section 54. If before effecting such cancellations or
modifications in the scale of rates the concerned Boards have to be heard, if
found necessary, or their objections are to be considered there is no reason
why the aggrieved parties who move the Central Government invoking its powers
under Section 54(1) should be treated as total strangers whose objections
should not be considered by the Central Government. Of course it has to be left
to the Central Government as to how to consider such objections.
But it
cannot be said that if a competent court gives a direction in an appropriate
case to the Central Government to give notice to the objectors, call for their
objections and to consider the same such a direction would be dehors the scope
and ambit of Section 54 of the Act. It must, therefore, be held that the
directions issued by the Division Bench of the High Court in the impugned
judgment can be effectively sustained under Section 54 of the Act, if not under
Section 52 thereof. Point No. 4 is, therefore, answered in the affirmative.
In the
light of out conclusions and findings on the aforesaid points for determination
we may take stock of the situation. The impugned decision rendered by the
Division Bench of the High Court and the ultimate directions issued therein
will have to be sustained subject to the rider that the High Court was not
justified in taking the view that during the period from 20th May 1986 to 12th
February 1992 there was no effective scale of rates for handling manganese ore.
The appeals, therefore, are liable to fail.
Now
remains the question as to what final directions should be issued in the light
of the interim order passed by this Court on 10th August 1993. As we are
confirming the order of the High Court directing the Central Government to
decide the question about the appropriate scale of rates of handling charges of
manganese ore at the Visakhapatnam Port during the period from 20th May 1986 to
12th February 1992 and as that direction has remained stayed for all these yrs,
we direct the appropriate authority in the Central Government to decide the
said question after issuing notice to the writ petitioners and considering
their objections, if any, and also after considering the objections, if any,
raised by the Board in this connection. Said exercise should be completed by
the appropriate authority in the Central Government within a period of four
months from the date of receipt of copy of this order at its end.
Respondent-writ petitioners were directed by an interim order of this Court
dated 10th August 1993 to pay the handling charges at the rate of Rs. 30/- per
M.T. from June 1986 onwards. We are told that for the entire period till 12th
February 1992 the respondents have paid up the balance of the amounts and the
balance of the handling charges accordingly. As the question about the charging
of appropriate scale of rates of handling charges is being left to be decided
by the Central Government by our present order, it would be in the interest of
justice to direct that though these appeals are being disposed of, the question
of refunding any amounts of excess handling charges paid by the respondents
during the aforesaid period is left to be decided in the light of the ultimate
decision of the Central Government on this question. It is obvious that in the
light of the decision of the Central Government if it is found that the
appellant- Board is liable to refund any excess amount of handling charges to
the respondents as collected by it from the respondents during the relevant
period, it will be bound to refund the same within a period of eight weeks from
the date of decision of the Central Government with interest at the rate of 12%
per annum from the date of payment of the excess amount of handling charges by
the respondents to the Board till the actual refund thereof by the Board to the
respondent-writ petitioners. The appeals are dismissed accordingly with no
order as to costs in the facts and circumstances of the case.
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