Holding

The Tribunal’s discretionary power under Section 38(2) of the Railways Act, 1989 to grant relief from the date of its order is valid and was not exercised arbitrarily.

Summary

Hindalco Industries Ltd. complained that the Indian Railways continued to levy freight charges based on an inflated distance of 714 km even after a new line reduced the actual distance to 568 km. The company filed a complaint under Section 36(b) of the Railways Act, 1989 seeking a declaration that the rates were unreasonable and a direction to charge on the actual distance. The Railway Rate Tribunal held the levy unreasonable and ordered charges based on the actual distance, but limited the relief to be effective from the date of its order, not from the date of the complaint. Hindalco appealed, arguing that the Tribunal should have granted relief from the complaint date, citing the Tribunal’s lack of quorum and the delay in adjudication as relevant factors. The Supreme Court held that under Section 38(2) the Tribunal has discretionary power to determine the date from which relief is granted, and that the delay in constituting the Tribunal does not compel an earlier date of relief; the Tribunal’s exercise of discretion was not arbitrary. Consequently, the appeal was dismissed.

Issues considered

Whether the Railway Rate Tribunal erred in granting relief from the date of its order rather than from the date of the complaint under Section 38(2) of the Railways Act, 1989.
Whether the delay in constituting a proper quorum of the Tribunal and the consequent adjudicatory delay is a relevant circumstance to mandate relief from an earlier date.
Whether the absence of proof of actual hurt to the appellant is a relevant factor to deny relief.
Whether the Tribunal’s discretionary exercise is subject to the Wednesbury principle of reasonableness.

Legislation cited

Code of Civil Procedure, 1908s. Order II Rule 2, s. Order VII Rule 7
Code of Criminal Procedure, 1973s. 195
Railways Act, 1989s. 36(b), s. 38(2)

Subjects

Railway freight ratesDiscretionary reliefTribunal jurisdictionSection 38Relief from date of orderAdjudicatory delayWednesbury principleRailways Act 1989

Judgment

A HINDALCO INDUSTRlES LTD.
v.
UNiON OF INDIA AND ORS.

DECEMBER 16, 1993
B
[K. RAMASWAMY AND G.N. RAY, JJ.]

Railways Act, 1989-Section 38(2)-Discretionary relief-Railwajl' Rate
Iribunal gtanting relief from date of its order-Not from date of com-
C plaint-Validity of-Absence of corum in the Tribunal-Non-filling up ofposts
of Chairman or Member-Delay in adfudication-Whether a relevant cir-
cumstance for granting relief from earlier date-Anciliary relief-Discretion of
Tribunal to grant.

The appellant-company, manufacturl~g Aluminum metal and its
D semis; was consigning raw material used IJy it from one of its min~s for
carriage. Jo another place. The consignment was being carried by the r_
railway ro.u.!_e covering a,hmger distance of 714 km. Though the distance
was subsequently rtduced to 568 kms. by the consignment being carried
by a different route, after a new railway line was laid, the freight charges
for physical distance of 714 kms. continued to be charge. The rate was Rs.
E 13.75 per quintal per km., which was later increased to Rs. 16_.57 per
-- guintal per km. Therefore, the appellant laid a claim under Section 36{b)
bf the Railways Act, 1989, seeking a declaration that the rates charged on
an inflated dista~ce of 714 kms. was wholly unjustified and unreasonable
and for a direction to the Railways to charge reasonable rates on the basis
F of the actual distance of 568 kms.
The respondent-Railway justified the levy of the freight charges at
7H km. distance.

The Railway Rate Tribunal held that the continued levy on freight
G rate for ~e movement of complainant's traffic for a distance of 714 km.
by infltg the dista~ce between two particular Railway Stations by 55%
was un sonable; a?d t.he respondent should levy the freight charges for
the co plainant's traffic on the basis of the actual distance only. This I
relief was granted from the date of order, though the· appellant sought
H relief from the date of the complaint.
964
- HINDALCO v. U.0.1. 965

In the appeal filed before this Courts, on behalf of the appellant· A
company it was contended that the Tribunal having found that the imposi·
tion of rate on th'e inflated distance being unreasonable, ought to have
granted th~ relief from the date. of the complaint, that it was admitted by
the Railways that the corum to decide the complaint was not filled by
appoi.nting ~ither the Chairman or the Member of the Tribunal from B
November 11, 1987 to May 18,1991, resulting in delay in adjudication; and
that the finding that there was no proof of h~rt was n.:it relevant cir·
cumstance to deny relief to the appellant.

Dismissing the appeal, this Court

HELD : 1.1. The Railway Rate Tribunal, while holding that the
c
continued levy of freight rate on the consignment at the old distance of 714
km. was •mreasonable, and directing the Railway to charge the freight on
the basis of the actual distance of 568 kms. only, granted the relief from
the date of judgment. It being a discretionary relief and the Railways Act, .
1989 having left that discretion to the Tribunal, it felt that it would be just D
give relief from the date of judgment to meet the ends of justice. The
appellant is not, as of right entitled to the reliet 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 E
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. [970-C·F] ·
F
1.2. Undoubtedly there was delay in constitution of the proper corum
of the Tribunal, to discharge its function under the Act and thereafter,
there was 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 i_tself is not a ground to grant or. G
ought to be granted the relief asked for. Nevertheless, if 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. [970·B·C]

Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation,
(1947] 2 All England Reports, 680, referred to. H
966 SUPREME COURT REPORTS [1993) SUPP. 3 S.C.R.

A CIVIL APPELLATE JURISDICTION : Civil Appeal No. 7452 of
1993.

From the Judgment and Order dated 3.3.92 of the Railway Rates
Tribunal in complaint No. 1 of 1987.

B K.K. Venugopal, Ms. Bina Gupta and Ms. Monika Mohil for the
Appellant.

V.C. Mahajan, C.V.S. Rao, Hemant Sharma and V.K. Verma for the
Respondents.
c The Judgment of the Court was delivered by

K. RAMASWAMY, J. Special leave granted.

The appellant company manufactures Aluminium metal and its
D semis. The principal raw material is Bauxite. The appellant has its Bauxite
mines at Amarkantak, District Sahdoi in Madhya Pradesh. It consign the
one at Pandra Road for carriage to Renukoot siding through the railway
route via Khatni • Murwara-Singrauli covering South Eastern Railway from
Pandra Road to Khatni • Murwara of a distance of 217 km.; Central
E Railway Khatni • Murwara to Singrauli 407 km. and Eastern Railway via
Singrauli to Renukoot 90 km.; in total 714 km. Later, Khatni Murwara to
Balli, a new Railway line was laid connecting Singrauli. The Bauxite ore
was being carried from Pandra Road via Khatni • 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
F 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 rated was at 55%. The appellant, there-
fore, laid the complaint under s.36(b) of the Railways Act 24 of 1989, for
short, the Act', seeking :
G (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 ;
I
(ii) to direct the railways to charge reasonable rates on the basis of
H the actual distance of 568 km.; and
HINDALCOv. U.0.1. [RAMASWAMY,J.) 967

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

Though the respondent-railway justified the levy of the freight char-
ges 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
B
movement of complainant's traffic in Bauxite from the Pandra Road to
Renukoot for a distance of 714 km. by inflating the distance between
Khatni 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 C
the main relief, filed this appeal seeking the relief from the date of the
complaint, namely 10, 1987.

Mr. K.K. Venugopal, learned senior Counsel for the appellant con-
tended that the Tribunal having found that the imposition of rate on the D
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 E
the appellant. He placed strong reliance on Associated Provincial Picture
Houses Ltd. v. Wednesbury Corporation, (1947) 2 All England Reports, 680.

The question, therefore, is whether the Railway Rate Tribunal has
committed any error of law ir1 confining the relief only from the date of F
the judgment. Se:ction 36 of the Act provides that, "any complaint that a
railway administration........... (b) is charging for the carriage of any com-
modity between two station a rate which is unreasonable; or (c) is levying
any other charge which is unreasonable, shall ht;ar and decide any such
complaint in accordance with the provisions of this Chapter." Section 38
confers on the Tribunal that "it shall have the power of a civil court under G
the Code of Civil Procedure, 1908" for the purpose 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 s.195 of
the Code of Criminal Procedure, 1973. The tribunal "also shall have the
power :to pass such interim and final orders as the circumstances may H
968 SUPREME COURT REPORTS [1993) SUPP. 3 S.C.R.

A require, including orders for the payment of costs."

It is seen that the appellant sought for declaratory relief that the rates
being charged are "wholly unjust and unreasonable" and for direction to
the railways to charge" reasonable rates" ori the basis of actual distance of
568 ktri. together with other consequential relief. It is to be remembered
B ·that the relief otherwise cognizable by civil court of competent jurisdiction
under s.9 of the C.P.C. 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, C.P.C. provides that every plaint shall state specifically ;

the relief which the plaintiff claims either simply or in the alternative, and
C 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
D 2, if he omits to seek the relief, except with the leave of the court, be shall
be precluded thereafter for any relief so omitted. '

It is settled law that it is no longer necessary to specially 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 bas been asked, for provided
E 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 declarating 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
F and circumstances the court may on sound and reasonable Judicial Prin-
ciples grant such declaration as the facts and circumstances may so war·
rant. Exercise of discretion is not arbitrary. If the relief ~ked 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
G 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
H when compelling equities of the case oblige them, shape the relief co~is·
t
HINDALCOv. U.0.1. [RAMASWAMY,J.] 969
"" tent with the facts and circumstances established in the given cause of A
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 avid 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
B
or refuse to grant the same. It would be one of just and equitable exercise
of the discretion in moulding the ancillary relief. If is not as of right. In
Associated Provincial Picture Houses Ltd.,s case (supra) under Sunday
Entertainments Act, 1932, the licensing authority while granting permission
• to exhibit cinematograhs, imposed certain conditions, prohibithig the c
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
licencing authority, the Court of Appeal held that the law recognised
certain principles on which discretion must be exercised but within the
forecomers of those principles. The discretion is not absolute one. The
D
~
exercise of such a discretion must be a real exercise of the discretion, if in
::·
any statute confefring the jurisdiction, there are to be found, expressly or
by implication, matters to whic~ the authorities exercising. the discretion
ought to have regard, then, in exercising the discretion, they m'!St 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 matte.rs E
would not be germane to t~e 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 ~ay give
rise to interference by the court. Bad faith, dishonesty - those, .of course,
-.1. stand by themselves unreasonableness attention given to extraneous cir-
F
cumstances, disregard to 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 discre-
tion 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 he has to consider. G
If he does not obey those rules, he may truly be. said to be acting un-
reasonably.
\
There lies a distinction hetween the administrative authorities exer-
cising.discretionary jurisdiction and the court or the quasi-judicial tribunal H
97b SUPREME COURT REPORTS (1993) SUPP. 3 S.C.R:··

A deciding the liss. In the latter case discretion has been given to the court
or the Tribunal to mould the ancilliary relief. The discretion is to be
exercised with circumspection consistent with justice, equity and good-
conscience, keeping always the given fact and circumstances of the case.

Undoubtedly there was delay in constitution of the proper Corum of
B 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 ~e 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,
i
C 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
D 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
E is always bound to grant relief from the date of the complaint. By operation
of sub-s.(2) of s.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 it as illegal. It cannot also be held that it arbitrarily or unjustly
exercised the discretion. Accordingly we do not find any compelling
F reasons warranting interference under Art. 136. The appeal is dismissed,
but without costs.

·N.P.V. Appeal dismissed.

I