Allahabad High Court
Century Textile And Industries Limited ... vs Union Of India (Uoi) Through Secretary ... on 5 February, 2007
Equivalent citations: AIR 2007 (NOC) 1277 (ALL.) = 2007 (2) ALJ 601 (DB), 2007 (2) ALL LJ 601, 2007 A I H C 1630, (2007) 67 ALL LR 221
Bench: R.P. Misra, Shishir Kumar
JUDGMENT
R.P. Misra and Shishir Kumar, JJ.
1. The present writ petition has been filed for quashing the orders dated 7.8.2006 passed by the respondent No. 4 (Annexure 14 to the writ petition) and orders dated 23,8.2005, 2.9.2005, 24.11.2005 and 30.11.2005 passed by respondent No. 5 (Annexures 4, 5, 8 and 9 to the writ petition). Further prayer in the nature of mandamus commanding the respondents not to implement the impugned orders and not to proceed for recovering the amount against the petitioners in pursuance thereof. Further a writ in the nature of mandamus commanding the respondent No. 4 to refund the amount of Rs. 11,39,358,00 along with reasonable interest to the petitioner which was paid by the petitioner by the Bank Draft dated 17.5.2006 along with application dated 5.6.2006.
2. The fact arising out of the present writ petition are that the petitioner No. 1 is a company registered and incorporated under Companies Act having its registered office at Mumbai where the petitioner No. 2 and is its Branch (Unit) situated at Ghanshyamdham al Kua and is discharging work of petitioner No. 2. The petitioner No. 2 was consignee as defined in Para 2 (8) of the Railways Act, 1989 (hereinafter referred to as Act) and the respondents Nos. 7 and 8 were consignors as defined under Section 2(10) of the said Act for the Commodity of coal which were booked ex Ray siding KDH siding (Khalari) Railway Station in the East Central Railway to destination of Railway Lal Kua in the North Eastern Railway, District Nainital. Previously railways (punitive charges for over-loading of wagons) Rules 1990 were framed under Section 87 of the Railway Act which were amended in the year 2004 and further amended in the year 2005. All the consignment were booked between the period 29.9.2004 to 20.8.2005 in installments. Before the consignments started from stations where they were booked. The Railway authorities concerned were of the view that there was over loading therefore they had adjusted and included the charges of over-loading at the originating station itself according to Rules so framed under Rule 3 referred above. It may be further submitted that consignment consisted of 39 racks (each rack containing 57 to 59 wagons) whereas another consignment consisted of only one rake. In the said lodging/consignment railway authority had adjusted /levied an extra amount besides chargeable freight. The description of the consignment giving details of the chargeable freight and change by way of penalty for overloading is fully described. A copy of the same has been filed as Annexure 2 to the writ petition.
3. The railway administration had prepared railway receipt for each rack separately, which are 40 in numbers. The details of which is in chart referred to above. Since whatever was the alleged extra loading charges were already recovered by the railway administration at the starting point namely booking stations of Ray-Siding KDH Siding Khalari and therefore there was no hindrance in delivering the consignments. After about six months of delivery of the last consignment a notice dated 23.8.2005 and 2.9.2005 were given by the railway administration for payment of alleged punitive changes for over-loading for 39 rakes. Similar notices dated 24.11.2005 and 30.11.2005 were also given to the petitioners concerning 40th rake. The petitioners submitted their reply dated 29.8.2005 and 2.9.2005. A demand notice was issued by respondent No. 5 regarding 39 rakes covered under the aforesaid notice. When no orders were passed on the reply/representation submitted by the petitioner No. 2, instead administration was pressing for recofery, the petitioner was compelled to file Writ Petition No. 1034 of 2005 (M/B) in Uttaranchal High Court against notices dated 23.8.2005 and 2.9.2005. Similarly another writ petition was filed by the petitioner as Writ Petition No. 1396 of 2005 (M/B) and the interim order was granted. Both the writ petitions were consolidated and decided vide its order dated 28.4.2006 with a direction to file a representation within a period of six weeks along with the bank draft of equal amount to the normal charges. The operative portion of the judgment is being quoted below:
6. We, therefore, direct that on the petitioners submitting a representation within a period of six weeks from today to the competent authority of Railways along with a Bank Draft of the amount equal to the normal charges for the quantity found over loaded in the wagons as mentioned in the Annexures filed along with the writ petitions, the competent authority shall consider the petitioners' representation in accordance with law by passing a speaking order within a period of one month from the filling of the representation with the Bank Draft. The petitioners shall be free to take all permissible grounds in their representation.
7. The interim orders passed in the above writ petitions shall stand vacated after a period of three months or the date of the decision on the representation, which ever is earlier.
8. With the above order, the writ petitions stand disposed of.
4. In pursuance of the judgment and order passed by the High Court the petitioners submit a representation dated 5.6.2006 along with a Bank Draft dated 17.5.2005 for a sum of Rs. 11,39,358.00. The respondent No. 4 has passed an order-dated 17.8.2006 communicated by the respondent No. 5 by order dated 11.8.2006 and the same was served upon the petitioner on 17.8.2006. Aggrieved by the aforesaid order, the petitioner has approached this Court.
5. The notices were issued by order dated 13.3.2006 and this Court had directed to file a counter affidavit. As the counter and rejoinder affidavits have already been exchanged the matter is being decided finally with the consent of parties.
6. It has been submitted on behalf of the petitioners that the order dated 7.8.2006 is an ex-parte order without affording an opportunity to the petitioners, as such, is violative of principle of natural justice and the points raised in the representation filed by the petitioners has not been considered. The respondent No. 4 has not only refused to consider the relevant provision of Act, 2005 but has omitted to take into consideration the relevant provision. The respondent No. 4 has also not applied his mind to the representations submitted by the petitioner and has passed the impugned order in an highly arbitrary manner without application of mind to the real controversy involved in this case. The notices were purported to be based on the re-weighing although no re weighing had been carried out nor the petitioners were informed of any over loading when consignment was delivered to them. It has been contended on behalf of the petitioners that the impugned order dated 7.8.2006 suffers from non-application of mind in as much as neither the reply of the petitioners has been considered nor any reason has been recorded before rejecting the claim of the petitioners. In view of the aforesaid fact, the learned Counsel for the petitioners submit that the order impugned is liable to be quashed only on this ground alone.
7. A counter affidavit has been filed on behalf of the respondents and it has been submitted on behalf of the respondents that the question involved in the present ease is regarding the entitlement of railways for charging punitive charges of loading of excess Coal in the wagons beyond there permissible carrying capacity as a result of which a punitive charge amounting to Rs. 1,09,031,198.00 has been levied against the petitioners. The learned Counsel for the respondents has shown certain provisions of the Railway Act like 64, 65 and 73 regarding punitive charges for over loading a wagon. Sections 73 and 78 are being quoted below:
73. Punitive charge for overloading a wagon Where a person loads goods in a wagon beyond Us permissible carrying capacity as exhibited under Sub-section (2) or Sub-section (3) or notified under Sub-section (4) or Section 72, a railway administration may, in addition to the freight and other charges recover from the consignor, the consignee or the endorsee, as the case may be, charges by way of penalty at such rates, as may be prescribed, before the delivery of the goods:
Provided that it shall be lawful for the railway administration to unload the goods loaded beyond the capacity of the wagon, if detected at the forwarding station or at any place before the destination station and to recover the cost of such unloading and any charge for the detention of any wagon on this account.
78. Power to measure, weight, etc. Notwithstanding anything contained in the railway receipt, the railway administration may, before the delivery of the consignment, have the right to-
(i) re-measure, re-weigh or re-classify any consignment;
(ii) re-calculate the freight and other charges; and
(iii) correct any other error or collect any amount that may have been omitted to be charged.
8. The learned Counsel for the respondents have also pointed out the para 1740 of the Indian Railway Commercial Manual Vol-II year 1991. In support of the aforesaid contention it has been submitted that in case weighment at intermediate stations, the result should also be advised telegraphically to the destination station and the Traffic Accounts Officer if it entails recovery of the undercharge. At the siding of the Coal India Ltd. from where the consignments were loaded there is no weigh bridge of the railway, therefore, the aforesaid consignments were weigh bridge of the railway which is at Chaneti which is about 6 to 7 kilometers from Bareilly junction. When the consignments were weighted at railway weigh bridge then over-loading was found in the consignments more than the permissible carrying capacity. The notices were given to the petitioners for punitive charges along with the list of reweighment advise of the railway station Chaneti which has been duly received by the petitioners. The Hon'ble Uttaranchal High Court had directed the petitioners to file a representation within a period of six weeks before the competent authority along with a Draft amounting to equal normal charges for the quantity over loaded in the wagon as mentioned. The competent authority has considered the representation of the petitioners and had passed an order that they have to pay the punitive charges. Only question of punitive charges has been left by the High Court to be decided by the competent authority. There is no illegality in the order dated 7.8.2006 and the petitioner is liable to pay the amount of Rs. 1,09,37,198.00.
9. The counsel for the respondents have also relied upon the judgment of the Apex Court Jagjit Cotton Textiles Mills v. Chief Commercial Superintendent Northern Railway and Ors. and has submitted that the Apex Court while interpreting Section 53(1)(2) and (4) and Section 60 of 1998 and Section 72 of 1989 Act considered and punitive charges for over loading of wagons. Rules 1990 has also been considered regarding "maximum carrying capacity" "normal carrying capacity" "permissible carrying capacity". In support of the aforesaid judgment the learned Counsel for the respondents submits that the petitioner is liable for payment of punitive charges.
10. We have considered the rival submission made on behalf of the parties and have perused the impugned order and find that after stating a short fact the respondent No. 5 has only mentioned that after hearing the petitioners and mentioning the relevant provision, which authorized or give the power of punitive charges arrived at conclusion that defence of the petitioners is far from truth and without merits. Apart from mentioning the relevant provision like 78, 73 which gives power to the railway authorities for charging punitive charges for over loading wagons, power to measure weight extra and punitive charges for over-loading, no other discretion has been made by the respondent No. 5 in the impugned order. The learned Counsel for the respondents is not able to defend and place any argument in defence of the same regarding non assigning any reason and fixing the liability for the purposes of charging the punitive charge. It is well settled that an order having civil consequences even though passed by administrative authority must contain reasons so as to unable the aggrieved party to challenge the reasoning of the administrative authority because in writ jurisdiction it is the reasoning which has to be decided. In the absence of reasons no foundation can be laid by the petitioners and only argument remains is that the order is based upon non-application of mind.
11. In case of S.N. Mukherjee v. Union of India reported in A.I.R. 1984 the Apex Court has already held as follows:
In view of the expanding horizon of the principles of natural justice, the requirement to record reason an be regarded as one of the principles of natural justice which govern exercise of power by administrative authorities. The rules of natural justice are not embodied rules. The extent of their application depends upon the particular statutory framework where under jurisdiction has been conferred on the administrative authority. With regard to the exercise of a particular power by an administrative authority including exercise of judicial or quasi-judicial functions the legislature, while conferring the said power, may feel that it would not be in the larger public interest that the reasons for the order passed by the administrative authority be recorded in the order and be communicated to the aggrieved party and it may dispense with such a requirement. It may do so by making an express provision to that effect. Such an exclusion can also arise by necessary implication from the nature of the subject matter, the scheme and the provisions of the enactment. The public interest under lying such a provision would outweigh the salutary purpose served by the requirement to record the reasons. The said requirement cannot, therefore, be insisted upon in such a case. Therefore except in cases where the requirement has been disposed with expressly or by necessary implications, an administrative authority exercising judicial or quasi-judicial functions is required to record the reasons for its decision.
The recording of reasons by an administrative authority serves a salutary purpose, namely, it excludes chances of arbitrariness and assures a degree of fairness in the process of decision-making. The said purpose would apply equally to all decisions and its application cannot be confined to decisions which are subject to appeal, revision or judicial review. Therefore, the requirement that reasons be recorded should govern the decisions of an administrative authority exercising quasi-judicial functions irrespective of the fact whether the decision is subject to appeal, revision or judicial review. It is however not required that the reasons should be as elaborate as in the decision of a Court of law. The extent and nature of the reasons would depend on particular facts and circumstances. What is necessary is that the reasons are clear and explicitly so as to indicate that the authority has been due consideration to the points in controversy. The need for recording of reasons is greater in a case where the order is passed at the original stage. The appellate or revisional authority, if it affirms such an order, need not give separate reasons if the appellate or revisional authority agrees with the reasons contained in the order under challenge.
In the case of Maharashtra State Board of Secondary and Higher Secondary Education v. K.S. Gandhi and Ors. the Apex Court has held as under:
The reasons are harbinger between the mind of the maker of the order to the controversy in question and the decision or conclusion arrived at. They also exclude the chances to reach arbitrary, whimsical or capricious decision or conclusion. The reasons assure an Inbuilt support to the conclusion/decision reached. When an order affects the right of a citizen or a person, irrespective of the fact whether it is a quasi-judicial or administrative order, and unless the rule expressly or by necessary implication excludes recording of reasons, it is implicit that the principles of natural justice or fair play require recording of germane and precise relevant reasons as a part of fair procedure. In an administrative decision, its order/decision itself may not contain reasons. It may not be the requirment of the rules, but a the least, the record should disclose reasons. It may not be like a judgment. The extent and nature of the reasons would depend on particular facts and circumstances. What is necessary is that the reasons are clear and explicitly so as to indicate that the authority has given due consideration to the points in controversy. The need for recording of reasons is greater in a case where the order is passed at the original stage. The appellate or revisional authority, of it affirms such an order, need not give separate reasons. If the appellate or revisional authority disagrees, the reasons must be contained in the order under challenge. The recording of reasons is also an assurance that the authority concerned consciously applied its mind to the facts on record. It also aids the appellate or revisional authority or the supervisory jurisdiction of the High Court under Article 226 or the appellate jurisdiction of the Supreme Court under Article 136 to see whether the authority concerned acted fairly and justly to mete out justice to the aggrieved person.
In the case of Mahabir Prasad Santosh Kumar v. State of U.P. and Ors. , the Apex Court has held as under:
The High Court in rejecting the petition filed by the appellants has observed that the District Magistrate in considering the explanation of the appellants had "considered all the materials " and also that "the State Government in considering the appeal had considered all the materials ". We have, however, nothing on the record to show what materials if any were considered by the District Magistrate and the State Government. The High Court has also observed that Clause 7 of the Sugar Dealers ' Licensing Order does not require ''the State Government to pass a reasoned order. All that is required is w give an aggrieved person an opportunity of being heard. " We are of the view that the High court erred in so holding. The appellants have a right not only to have an opportunity to make a representation, but they are entitled to have their representation considered by an Authority unconcerned with the dispute and to be given information which would show the decision was reached on the merits and not on considerations of policy or expency. This is a clear implication of the nature of the jurisdiction exercised by the appellate authority; it is not required to be expressly mentioned in the statute. There is nothing on the record which shows that the representation made by the appellants was even considered. The fact that Clause 7 of the Sugar Dealers' Licensing Order to which the High Court has referred does not "require the State Government to pass a reasoned order" is wholly irrelevant. The nature of the proceeding requires that the State Government must given adequate reasons which disclose that an attempt was made to reach a conclusion according to law and justice.
12. In view of the aforesaid discussion and respectfully following the decision of the Apex Court, we are of the view that the order passed by the respondent No. 5 suffers from non application of mind and is therefore, set aside. Therefore, it will be open to the respondents to pass fresh reasoned order after considering the points raised in the representation after affording an opportunity to the petitioner in accordance with law.
13. The writ petition is accordingly allowed. The impugned order dated 7.8.2006 passed by the respondent No. 5 is hereby quashed with a liberty to pass fresh orders according to law.
14. There Shall be no order as to costs.