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TMI Blog1983 (10) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... terim order in each matter is hereby vacated. In the matters which are listed as ready, the petitioner shall pay cost to the respondents in one set in each petition and there will be no order to costs in the matters which are shown as unready. Reasons will follow. Here are the reasons. The petitioners, in this group of petitions, under Art. 32 of the Constitution are coal-merchants, who, according to them, have been denied the use of the railways for transport of coal from various coalfields and way-side stations to their destinations by the illegal and unconstitutional action of the railway administration. Constitutional conundrum invoked by them is the alleged violation of Art. 14 in that while certain transporters of coal have been accorded priority in the matter of transport of coal such as the Central and the State Governments and the sponsored and recommended transporters, the petitioners who are coal merchants were denied equality of opportunity in the matter of transport of coal by railway. Their further grievance is that total prohibition of booking and transport of coal as requested by petitioners, by the railway administration, an instrumentality of the State e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r wheels and motor cars but not open for outward booking of coal, coal shale, lignite, patent fuel, shoft coke and hard coke in wagon loads.' The Railway Administrations are hereby directed to decide and notify the names of stations to which this new provisions would apply and advise the General Secretary, I.R.C.A. accordingly. The General Secretary I.R.C.A. On receipt of the advice from the Railway Administrations should arrange to issue the necessary corrections, to the alphabetical list of Railway Stations. Sd/- P.N Kalra, Dy. Director, Traffic (Rates) Rly. Board, New Delhi, dated Ist April 72/12 Chaitra 64 This is one of the impugned orders in these petitions. The abbreviation IRCA used in the impugned order means Indian Railway Conference Association ('IRCA' of short). The IRCA has compiled and issued an alphabetic list of All India Railway Stations and by a suitable abbreviation as shown against the name of each railway station indication is given about the facilities for traffic both goods and passenger available at different stations. As per the impugned order when abbreviation 'GX' is appended to any railway station it would inter-alia m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... name in the indent Booking of slack coal was wholly stopped as per a phone call dated April 9, 1981. Petitioners further contend that Union of India, Ministry of Railways has issued Preferential Traffic Schedule in exercise of power conferred by sec. 27A of the Indian Railways Act, 1890 ('Act' for short). This Preferential Traffic Schedule provides for preferential treatment in transport of goods from various stations. It provides five inter se priorities A to E. Different kinds of coal falls under priority 'C' (III) which reads as under: (iii) Coal from collieries in accordance with commodity quotas laid down from time to time for/certain types of coal and/or in accordance with programmes and movements sponsored or recommended by the Coal Controller and/or any Committee appointed by him and/or the State Governments and/or other recommending authorities and accepted by the/Railway Administrations and/or Director, Movement (Railways), Calcutta, and in accordance with the Zonal Scheme applicable to each field and the principles of transport rationalisation in force from time to time. A list of sponsoring authorities authorised to sponsor coal movements in this item ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hts may be noticed. Indian Railway net-work serve 7000 railway stations, scores of divisions and 9 zones. In such an extensive net- work, all kinds of facilities by their very nature cannot be provided at all stations, nor can all kinds of traffic be lifted and moved from all stations. The Railways, have therefore to plan and rationalise movement of various commodities from various loading points to various destinations and in various directions. It is said that till recently coal was the primary source of energy. It being an important commodity it has to be accorded such high priority being the primary source of energy, that a senior officer called Director, Movement (Railways) is posted with headquarters at Calcutta and he controls and co-ordinates all movements of coal by rail. As far back as 1945, the Govt of India by its resolution No. Coal 119 (1) dated December 4, 1945 appointed a Committee called the Indian Coalfields Committee which submitted its report in 1946. Amongst various other recommendations, the Committee suggested that in view of the shortage of transport, it is imperative that increased attention be given to zonal distribution of coal. If further notices that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gramme of various collieries, it links the requirements of various consuming units to different individual coal-fields, and this linkage is reviewed from time to time as the situation may necessitate. The availability of wagons is an integral part of this linkage programme. After specifying these facts, it is averred that this annual allotment drawn in advance cannot be disturbed by casual indent for transporting coal. It is further averred that the railway is a carrier which has to chop its own priority programmes keeping in view the public interest of rushing various commodities to different parts of the country. If in the process some individuals may not get a change to transport their commodities, the action of the railway administration is neither violative of Art. 14 or 19 (1) (g) of the Constitution. There are some averments in the counter-affidavit casting some doubt about the trade carried on by the petitioners but we consider the same irrelevant for the purpose of disposing of these petitions. A number of learned counsel addressed the Court on different facets of almost the same identical contentions. We would, however, only deal with the basic contentions raised in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iption, of traffic, in any respect whatsoever, or subject any particular person or railway administration or any particular description of traffic to any undue or unreasonable prejudice or disadvantage in any respect whatsoever. In exercise of the power conferred by Sec. 27A Central Govt. issued Preferential Traffic Schedule directing that all railway administrations shall give special facilities for or preference to the transport of goods or class of goods specified in the Schedule to the order. Amongst Priority 'A' to 'E' there is inter se priority and when under one Priority various goods or class of goods are clubbed together they have inter se priority amongst themselves. Coal falls under Priority 'C'. Coal has to be moved from collieries in accordance with commodity quotas laid down from time to time for certain types of coal and/or in accordance with programmes and movements sponsored or recommended by the Coal Controller and/or any Committee appointed by him and/or the State Governments and/or other recommending authorities and accepted by the Railway administrations and/or Director, Movement (Railways), Calcutta and in accordance with the Zonal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods for speedy completion of the projects. By 1950, Constitution became operative. Art. 14 loomed larged so that unless a specific power was taken for serving larger public interest, the railways, an instrumentality of the State would be guilty of violating Article 14 if it did not afford the same facility for transport of goods by individuals against the state requirements as also priority requirements. In order to arm the Central Govt. with power to give directions for according special facilities, or preferential treatment in transport of goods or class of goods consigned to the Central Govt. or the Govt. of any State or of such other goods or class of goods as may be specified in the order, Sec. 27A was introduced in the Act. It also conferred power on the Central Govt. to give directions for the same purpose of carrying goods or class of goods by such route or routes and at such rates as may be specified in the order. The life of an order giving such facilities or preferential treatment was to be initially for a period of 6 months but it can be renewed from time to time. Sec. 28 prohibited giving of undue or unreasonable advantage or preference by the railway administration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iate' in respect of Personnel, Vehicles and Stores, Military Special trains and immediate operational demands. Demands of the Military have been accorded the highest priority for the security of the nation. Priority 'B' includes foodgrains, fertilisers, edible groundnut cake, Iron and Steel etc. Next to national security hunger has been given priority. Priority 'C' includes inter alia coal from collieries. Coal has till recently been the primary source of energy and yet it receives its place in Priority 'C'. Energy thus gets Priority 'C'. Priority 'D' includes raw materials and finished product from Asbestos Cement Industry, Cotton seed, foodstuffs such/pulses, fresh dates, perishable commodities subject to quota etc. Priorities 'E' is practically a residuary clause which again involves coal from collieries is accordance with the targets laid down from time to time from the different fields and in accordance with the zonal scheme applicable to each field and the principle of transport rationalisation already in force but not falling within Priority 'C' (iii). In the backdrop of this legal position, we may now turn to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contentions seriatim. Re Ground 1: Railway is a common carrier and being State owned it is subject not only to the provisions of the Act but also the fundamental rights guaranteed by Part III of the Constitution. However much before the advent of the Constitution when different Railways were owned by incorporated companies, Sec. 28 of the Act precluded the different railway administrations from granting undue preference to any particular person or any particular traffic or to any particular railway administration, or subject anyone to any undue or unreasonable prejudice or disadvantage in the matter of transport of goods or passengers. Railway being a Stale monopoly, to checkmate its monopolistic power in the larger public interest it has to be subjected to regulatory measures. Simultaneously it became necessary to arm Central Government with power to direct railway administrative to give preference in the matter of transport of the goods of the Government, Central or State or specified goods to meet the demands of various regions as well as needs of Government. Intention was to classify government in a class by itself for the purpose of Art. 14. To meet the challenge of Art. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r unreasonable preference or advantage to, or in favour of, any particular person or railway administration, or any particular description of traffic, in any respect whatsoever, or subject any particular person or railway administration or any particular description of traffic to any undue or unreasonable prejudice or disadvantage in any respect whatsoever. To repeat railway being a State monopoly undertaking, it had to be statutorily controlled from abusing its monopolistic character by prohibiting it from giving any undue or unreasonable preference or advantage or acting in any manner which would evidence undue or unreasonable prejudice or disadvantage in any respect whatsoever. Equality guaranteed be Art. 14 is translated into statutory provision in Sec. 28. A State monopoly like the railway administration cannot be trusted to act fairly and that is the object underlying Sec. 28. If everyone was to get equal facility for transport of his goods by railway without anyone claiming priority or anyone having power to grant preference or special facility, in an emergency this equal opportunity would create a havoc. Therefore on the other hand, the Central Government to meet the needs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and/or in accordance with the programmes and movements sponsored or recommended by the Coal Controller and/or any Committee appointed by him; (iii) or it is sponsored or recommended by the State Government and/or other recommending authorities and accepted by the Railway Administrations; (iv) or it is sponsored or recommended by Director, Movement (Railways), Calcutta: (v) and it must be in accordance with the Zonal Scheme applicable to each field and the principles of transport rationalisation in force from time to time. In order to comply with the preconditions for eligibility under Priority 'C', a list of sponsoring authority authorised to sponsor coal movements is drawn up and is set out in Annexure 'B' to the Preferential Traffic Schedule. These general conditions are further subject to Notes A to E. Why such an exhaustive and detailed provision is made is not difficult to answer? Coal forms 32% of the total transport of goods handled by the Railways. On an average, more than 10,000 wagons will have to be allotted daily for transport of coal Coal being a primary source of energy used by heavy industries, electricity generating plants, steel plants as also cooki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arring some tiny dots which may become visible only by a magnifying glass, the entire railway network is nationalised and the railway is a department of the Union of India. It is therefore, indisputably a State monopoly. A monopoly unless kept within bounds may prove to be a menace. Therefore, regulatory measures are necessary to prevent the abuse of monopolistic power. The reasons which led to the enactment of the Monopolies and Restrictive Trade Practices Act may have to be kept in view even while keeping a watch over the activities of a State monopoly. But there is a constitutional check on the State monopoly, namely, it being State within the meaning of Art. 12 of the Constitution, all its actions will have to conform to the fundamental rights enshrined in Part III of the Constitution. Part III provides a positive and healthy check on the railway administration. Sec, 28 of the Act seeks to achieve the same result which on the advent of the Constitution, Art. 14 would achieve. Sec. 28 undoubtedly prohibits railway administration from giving any undue preference by arbitrarily picking and choosing some out of those seeking to use its services and facilities. But Sec. 28 is subjec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isfy fixed goals which subserve needs of the public at large. For this additional reason the contention of the petitioners that they are similarly situated with those set out in Priority 'C' (iii) cannot be entertained. Classification of those covered by Priority 'C' and the present petitioners is founded on intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group and the differentia has a rational relation to the object sought to be achieved by the impugned orders. Those falling within Priority 'C' (iii) would form a class by themselves and the petitioners clearly stand out of the group and for reasons herein stated petitioners could not be said to be similarly situated with those grouped together in Priority 'C' (iii). Re Gr. 2: It was next contended that the impugned orders dated April 1, 1972, December 31, 1980 and April 11, 1981 in their cumulative effect have imposed a total ban on the transport of coal offered by the petitioners by the Railways and thereby imposed an unreasonable restriction on their fundamental freedom to carry on their trade guaranteed by Art. 19(1)(g) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the wayside stations because each empty wagon at wayside station is accounted for in the daily supply of wagons approximately 10,000 for transport of coal from colliery siding to various destinations in the country. It may be as the petitioners contend that a loaded wagon may reach a wayside station and is unloaded but the counter- affidavit shows that each such empty wagon is accounted for, a year in advance towards supply of more than 10,000 wagons daily to the colliery sidings for transport of coal. And this pre-planning cannot be disturbed by excluding such wagons from the calculations about available wagons and hand it over to the petitioners. There is a further difficulty in making available wagons to the petitioners. Every small wayside station is not equipped with necessary equipment for loading of coal. Therefore, if the law of demand and supply, and non-availability of facility for loading coal in small at wayside stations result in not making available wagons to the petitioners because of pre-planning and priority it cannot be said that there has been a total ban on the transport of coal offered by the petitioners by the railways, which would violate the fundamental free ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merchants scattered over various parts in India and now they complain that they are unable to transport coal because the Railways have so arranged its priorities in the matter of transport of coal that the petitioners would never be able to obtain a single wagon for transport of their coal. Prima facie it appears that the petitioners' business or trade as coal merchant is in no way interfered with by the railways by not being able to provide transport facility. Let it not be forgotten that the railway is not the only means of transport. There are other means of transport by which the coal can be transported by the petitioners to their respective place where they carry on their business as the coal merchants. Even assuming that the direct impact of the policy laid down by the railway administration pursuant to the orders of the Central Government under Sec. 27A results in denial of allotment of wagon to the petitioners, the restriction will none-the-less be reasonable because petitioners are not wholly denied the allotment of wagons. A developing country with mixed economy and economic planning have certain targets to achieve. These targets are planned in advance and the econ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ject this submission. Annexure 'B' to Preferential Traffic Schedule sets out the list of sponsoring authorities. It is a long list but a bare perusal of it is sufficient to show at a glance that Central and State Governments as well as highly placed Central and State Government Officers have been appointed as sponsoring authority in respect of coal required by different area and industries. Again in various States various sponsoring authorities have been set up by State Government. Power is conferred on these sponsoring authorities to sponsor persons who would be accorded priority in transport of coal. These responsible persons and bodies set up in each State as sponsoring authority are expected to act in a responsible manner keeping in view the demands of the area and the industry, for coal in each State. It is therefore idle to contend that setting up of sponsoring or recommending authority in Priority C(iii) of the Preferential Traffic Schedule is ultra vires Sec. 27A of the Act. Re Gr. 5: It was next contended that the Order No. To (g) 1510/71 dated April 1,1972 introducing of abbreviation 'GX' and appending it to all railway stations has resulted in every su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le. Petitioners are equally Subject to this planning and regulated movement. It cannot be tinkered with. To give effect to this planned movement abbreviation 'GX' is devised and appended to all the railway stations informing the transporters that the station is not open for transport of coal in wagon loads. Coal in smalls can be offered for transport that is what the petitioners do not desire. All regulatory measures discussed in detail hereinbefore clearly indicate that transport of coal is scientifically planned and devised in advance. All the impugned orders are made or effective implementation of the planned movement of coal. If consistent with this planning, the railways have stopped booking of coal in wagon load from wayside station, it cannot be said that this action has imposed such an unreasonable restriction on the fundamental freedom of the petitioners to carry on their trade as to be violative of Art. 19(1) (g). We cannot part with this judgment without recording our uninhibited appreciation of thorough study of the knotty issues, research and analysis of historical background, and scientific and painstaking presentation of the facts and issues of law involve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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