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Citation Codes
Neutral Citations
1993 INSC 391
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Section 36 of the Act
  • Section 36(b) of the Railways Act 24 of 1989
  • Section 195 of the Code of Criminal Procedure, 1973
  • Code of Civil Procedure, 1908
  • Under Sunday Entertainments Act, 1932
  • Section 38 of the Act
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Cites
Cited by
Citation Codes
Neutral Citations
1993 INSC 391
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Section 36 of the Act
  • Section 36(b) of the Railways Act 24 of 1989
  • Section 195 of the Code of Criminal Procedure, 1973
  • Code of Civil Procedure, 1908
  • Under Sunday Entertainments Act, 1932
  • Section 38 of the Act
Smart Summary

Factual and Procedural Background

The appellant, an aluminium manufacturer, transports Bauxite from its mines at Amarkantak (District Sahdol, Madhya Pradesh) to its works at Renukoot. Originally the ore was carried by rail over a 714 km route (Pandra Road → Katni-Murwara → Singrauli → Renukoot). After a new Katni-Murwara-Balli-Singrauli line was commissioned, the actual distance fell to 568 km, yet the Railways continued to levy freight calculated on the longer 714 km distance and later raised the rate from Rs 13.75 to Rs 16.57 per quintal per km.

Contending that the continued levy on an “inflated” distance was unreasonable, the appellant filed a complaint on 10 March 1987 under Section 36(b) of the Railways Act, 1989 before the Railway Rates Tribunal, seeking a declaration of unreasonableness and a direction to charge freight on the true 568 km distance. On 3 March 1992 the Tribunal allowed the complaint, declared the levy unreasonable, and ordered the Railways to charge freight on the actual distance, but limited the relief to prospective effect (from the date of its order). The Railways did not challenge that order. Dissatisfied with the prospective limitation, the appellant invoked the Supreme Court’s special-leave jurisdiction, asking that relief be made operative from the date of the complaint.

Legal Issues Presented

  1. Whether the Railway Rates Tribunal erred in limiting the benefit of its declaratory order to the date of judgment rather than granting relief from the date of the complaint.

Arguments of the Parties

Appellant's Arguments

  • Once the Tribunal found the freight levy on the inflated 714 km distance unreasonable, it was bound to grant relief from the complaint date (10 March 1987).
  • The delay in adjudication was attributable to the Railways’ failure to keep the Tribunal duly constituted between 11 November 1987 and 18 May 1991; the appellant should not suffer for this administrative lapse.
  • Lack of proof of “hurt” is irrelevant when the levy itself is found unreasonable.
  • Reliance was placed on Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation (1947 2 All ER 680) to emphasise that discretionary power must be exercised reasonably and on relevant considerations.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation (1947) 2 All ER 680 Discretionary powers must be exercised within the bounds of reasonableness, taking account of relevant factors and excluding irrelevant ones. The Court used the decision to explain that, like an administrative authority, the Tribunal’s discretion in moulding relief is not absolute but must be exercised on sound judicial principles; where so exercised, higher courts will not interfere.

Court's Reasoning and Analysis

The Supreme Court began by examining Sections 36 and 38 of the Railways Act, noting that the Tribunal possesses powers analogous to a civil court, including the authority to pass “such interim and final orders as the circumstances may require.” Drawing on Order VII Rule 7 and Order II Rule 2 of the Code of Civil Procedure, the Court underlined that declaratory relief is inherently discretionary; a claimant is not entitled to it as of right.

Clarifying the scope of discretion, the Court distinguished between rights that arise automatically upon proof of a cause of action and ancillary or equitable relief that depends on judicial discretion. The Tribunal’s power to mould remedies—granting or refusing retrospective effect—falls into the latter category. The Court emphasised that rigidly mandating relief from the complaint date would itself be arbitrary and contrary to the discretionary framework envisaged by the statute.

The delay caused by the absence of a Tribunal quorum was characterised as an “inevitable incident of adjudication,” not a wrongful act warranting automatic retrospective compensation. The Court found no evidence that the Tribunal ignored relevant considerations or took into account irrelevant ones; rather, it balanced justice, equity, and good conscience and decided that relief should begin from the judgment date.

Given this lawful and reasonable exercise of discretion, the Supreme Court declined to interfere under Article 136 of the Constitution.

Holding and Implications

APPEAL DISMISSED.

The Tribunal’s order stands: the Railways must charge freight on the actual 568 km distance, but only from 3 March 1992 onward. The decision confirms that the Railway Rates Tribunal retains broad discretion to mould equitable relief, including its temporal reach, and such discretion will not be disturbed in the absence of illegality or manifest unreasonableness. No broader precedent was set beyond affirming the Tribunal’s discretionary authority in similar tariff disputes.

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    Hindalco Industries Ltd. v. Union Of India And Others

    K. Ramaswamy, J.— Special leave granted.

    2. The appellant-company manufactures Aluminium metal and its semis. The principal raw material is Bauxite. The appellant has its Bauxite mines at Amarkantak, District Sahdol in Madhya Pradesh. It consigns the ore at Pandra Road for carriage to Renukoot siding through the railway route via Katni-Murwara-Singrauli covering South Eastern Railway from Pandra Road to Katni-Murwara, a distance of 217 km; Central Railway Katni-Murwara to Singrauli 407 km and Eastern Railway via Singrauli to Renukoot 90 km; in total 714 km. Later, Katni-Murwara to Balli, a new railway line was laid connecting Singrauli. The Bauxite ore was being carried from Pandra Road via Katni-Murwara-Balli-Singrauli to Renukoot railway siding. The distance though was reduced to 568 km the freight charges for physical distance of 714 km at the rate of Rs 13.75 per quintal per km was continued to be charged and later was increased to Rs 16.57 per quintal per km with effect from December 1, 1986, the consequential inflated rate was at 55%. The appellant, therefore, laid the complaint under Section 36(b) of the Railways Act 24 of 1989, for short ‘the Act’, seeking:

    (i) to declare that the rates at present charged for Bauxite from Pandra Road to Renukoot on an inflated distance of 714 km is wholly unjust and unreasonable;

    (ii) to direct the Railways to charge reasonable rates on the basis of the actual distance of 568 km; and

    (iii) to give such other relevant relief as the Tribunal deems fit in the circumstances of the case.

    3. Though the respondent-Railways justified the levy of the freight charges at 714 km distance the Railway Rate Tribunal by its judgment dated March 3, 1992 declared that, “the continued levy on freight rate for the movement of complainant's traffic in Bauxite from Pandra Road to Renukoot for a distance of 714 km by inflating the distance between Katni and Singrauli by 55% is unreasonable; and the respondent shall levy the freight charges for the complainant's traffic on the basis of the actual distance only. This order will take effect from the date of the order”. The respondent allowed the order to become final. The appellant, though had the main relief, filed this appeal seeking the relief from the date of the complaint, namely March 10, 1987.

    4. Mr K.K Venugopal, learned senior counsel for the appellant contended that the Tribunal having found that the imposition of rate on the inflated distance being unreasonable, ought to have granted the relief from the date of the complaint. It is admitted by the Railways that the corum to decide the complaint was not filled by appointing either the Chairman or the Member of the Tribunal from November 11, 1987 to May 18, 1991 and the resultant delay in adjudication. The finding that there is no proof of hurt by the appellant is not a relevant circumstance to deny the relief to the appellant. He placed strong reliance on Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn. (1947) 2 All ER 680

    5. The question, therefore, is whether the Railway Rate Tribunal has committed any error of law in confining the relief only from the date of the judgment. Section 36 of the Act provides that, “[a]ny complaint that a railway administration — (a) … (b) is charging for the carriage of any commodity between two stations a rate which is unreasonable; or (c) is levying any other charge which is unreasonable, may be made to the Tribunal, and the Tribunal shall hear and decide any such complaint in accordance with the provisions of this Chapter”. Section 38 confers on the Tribunal that it “shall have the powers of a civil court under the Code of Civil Procedure, 1908” for the purposes of taking evidence on oath, enforcing the attendance of witnesses, etc. including the power to review and shall be deemed to be a civil court for all purposes of Section 195 of the Code of Criminal Procedure, 1973. The Tribunal “shall also have the power to pass such interim and final orders as the circumstances may require, including orders for the payment of costs”.

    6. It is seen that the appellant sought for declaratory relief that the rates being charged are “wholly unjust and unreasonable” and for a direction to the railways to charge “reasonable rates” on the basis of actual distance of 568 km together with other consequential relief. It is to be remembered that the relief otherwise cognizable by civil court of competent jurisdiction under Section 9 of the CPC has been statutorily conferred on the Railway Rates Tribunal with powers of a civil court to decide the claims under the Act. Order VII Rule 7 CPC provides that every plaint shall state specifically the relief which the plaintiff claims either simply or in the alternative, and it shall not be necessary to ask for general or other relief which may always be given as the court may “think just” to the same extent as if it had been asked for, and the same rule shall apply to any relief claimed by the defendant in his written statement. Order II Rule 2 enjoins to claim the relief in respect of a cause of action and under clause (3) of Order II Rule 2, if he omits to seek the relief, except with the leave of the court, he shall be precluded thereafter for any relief so omitted.

    7. It is settled law that it is no longer necessary to specifically ask for general or other relief apart from the specific relief asked for. Such a relief may always be given to the same extent as if it has been asked for provided that it is not inconsistent with that specific claim which the case raised by the pleadings. The court must have regard for all the relief and look at the substance of the matter and not its forms. It is equally settled law that grant of declaring relief is always one of discretion and the court is not bound to grant the relief merely because it is lawful to do so. Based on the facts and circumstances the court may on sound and reasonable judicial principles grant such declaration as the facts and circumstances may so warrant. Exercise of discretion is not arbitrary. If the relief asked for is as of right, something is included in his cause of action and if he establishes his cause of action, the court perhaps has been left with no discretion to refuse the same. But when it is not as of right, then it is one of the exercise of discretion by the court. In that event the court may in given circumstances grant which includes ‘may refuse’ the relief. It is one of exercising judicious discretion by the court. Same consideration would apply to the causes under the Act and the Tribunal has such discretion. The Tribunal, while keeping justice, equity and good conscience at the back of its mind, may when compelling equities of the case oblige them, shape the relief consistent with the facts and circumstances established in the given cause of action. Any uniform rigid rule, if be laid, it itself turns out to be arbitrary. If the Tribunal thinks just, relevant and germane, after taking all the facts and circumstances into consideration, would mould the relief, in exercising its discretionary power and equally would avoid injustice. Likewise when the right to remedy under the Act itself arises on the presence or absence of certain basic facts, at the time of granting relief, may either grant the relief or refuse to grant the same. It would be one of just and equitable exercise of the discretion in moulding the ancillary relief. It is not as of right. In Associated Provincial Picture Houses Ltd. case Under Sunday Entertainments Act, 1932, the licensing authority while granting permission to exhibit cinematographs, imposed certain conditions, prohibiting the children under age of 15 years to be admitted in the theatre. It was challenged as being arbitrary. Dealing with the discretionary power of the licensing authority, the Court of Appeal held that the law recognised certain principles on which discretion must be exercised but within the four corners of those principles. The discretion is not absolute one. The exercise of such a discretion must be a real exercise of the discretion. If in any statute conferring the jurisdiction, there are to be found, expressly or by implication, matters to which the authorities exercising the discretion ought to have regard, then, in exercising the discretion, they must have regard to those matters. Conversely, if the nature of the subject-matter and the general interpretation of the Act make it clear that certain matters would not be germane to the matter in question, they must disregard those matters. Expressions have been used in cases where the powers of local authorities came to be considered relating to the sort of thing that may give rise to interference by the court. Bad faith, dishonesty — those, of course, stand by themselves, unreasonableness, attention given to extraneous circumstances, disregard of public policy, and things like that have all been referred to as being matters which are relevant for consideration. The discretion must be exercised reasonably. A person entrusted with a discretion must direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to the matter that he has to consider. If he does not obey those rules, he may truly be said to be acting unreasonably.

    8. There lies a distinction between the administrative authorities exercising discretionary jurisdiction and the court or the quasi-judicial Tribunal deciding the lis. In the latter case discretion has been given to the court or the Tribunal to mould the ancillary relief. The discretion is to be exercised with circumspection consistent with justice, equity and good conscience, keeping always the given facts and circumstances of the case.

    9. Undoubtedly there was delay in constitution of the proper corum of the Tribunal, to discharge its function under the Act and thereafter there would be consequential delay in disposal of the cause. These cannot be characterised to be the court causing hurt to the litigant but of inevitable incidents of the adjudication and that by itself is not a ground to grant or ought to be granted the relief asked for. Nevertheless, if as stated earlier, the Tribunal feels that the relief may be just and equitable, it is always open to the Tribunal to grant it which includes power to refuse to grant the relief. In this case while holding that the continued levy of freight rate on Bauxite at old distance of 714 km is unreasonable and directed to charge the freight on the basis of the actual distance only, the Tribunal granted the relief from the date of the judgment. Therefore, it being a discretionary relief and the Act having left that discretion to the Tribunal, it appears to have felt that it would be just to give relief from the date of judgment to meet the ends of justice. The appellant is not, as of right, entitled to the relief. No doubt the statute postulates that the relief cannot be granted anterior to the date of the complaint. That does not mean that the Tribunal is always bound to grant relief from the date of the complaint. By operation of sub-section (2) of Section 38 the Tribunal has been invested with the discretion to grant such relief as is warranted. The Tribunal having thus exercised the discretion and limited the relief from the date of the judgment, it cannot be termed as illegal. It cannot also be held that it arbitrarily or unjustly exercised the discretion. Accordingly we do not find any compelling reasons warranting interference under Article 136. The appeal is dismissed, but without costs.

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    Hindalco Industries Ltd. v. Union Of India And Others
    (Dec 16, 1993)