*THE HONOURABLE SRI JUSTICE L.NARASIMHA REDDY + Second Appeal No.224 of 2003 %24.07.2009 #C.Raghunandan. ..Appellant Vs. $ K.Nageswar Rao and others. ..Respondents. !Counsel for the appellant : Sri Suresh Shiv Sagar ^Counsel for the Respondents : Sri K.V.Satyanarayana <Gist : >Head Note: ?Cases Referred: THE HON’BLE MR JUSTICE L. NARASIMHA REDDY Writ Petition No.24866 of 2007 JUDGMENT: The Food Corporation of India, the 2nd respondent herein, faced the problem of shortage of storage facility for foodgrains. In the year 2002, it evolved a scheme of “Grameena Bandharan Yojana”. Under that scheme, the Central Warehousing Corporation and the respective State Warehousing Corporations were permitted to construct godowns, either by themselves, or through private investors. The 2nd respondent assumed the occupancy in godowns for a stipulated period. Some of the locations were identified for construction of godowns, with the facility of railway siding. In the State of Andhra Pradesh, seven places were identified for this purpose and one such place is ‘Navabpalem’, near Tadepalligudem, West Godavari District. The petitioners were accorded permission to construct a godown with railway siding at Navabpalem. The 2nd respondent has an arrangement with the A.P. State Warehousing Corporation, the 3rd respondent, and the latter, in turn, entered into agreement with the petitioners. Guarantee utilization of godowns for seven years was given and the petitioners have chosen the option of payment of fixed rents at the rate of Rs.2/-, per square feet, per month. The petitioners state that the godowns became operational, almost within the stipulated time, though there was some delay in providing the railway siding. It is stated that, in addition to entering into the contract for payment of storage charges, the 3rd respondent, at the instance of the 2nd respondent, insisted on the petitioners and other godown owners, to enter into handling and transport contracts by offering certain incentives. The handling charges include those, for loading or unloading the other related activities. The transport contract is for transporting the foodgrains from the nearest railway yard to the godown and vice versa. Such contracts are specific only for the godowns that do not have the facility of railway siding i.e., road fed godowns. Transport charges, at an agreed rate, were to be paid for the distance between the godowns and the railway goods shed, per each ton of material. The petitioners contend that respondents 2 and 3 have saved almost Rs.2.3 lakhs for each “rake” of goods train with the capacity of 2,400 tonnes, in respect of godowns with railway siding, in comparison to road fed godowns and in spite of the same, they are not paying the track maintenance and other charges levied by the railways. A representation was made to the Union of India, the 1st respondent herein by the petitioners, in this regard. Through a communication, dated 09.07.2007, the 1st respondent refused to accede to the request of the petitioners, as regards issuance of directions to respondents 2 and 3 to pay the transport charges on par with road fed godowns. Hence, this Writ Petition. The petitioners seek the relief of declaration, that the proceedings, dated 09.07.2007, issued by the respondents are illegal, arbitrary and unconstitutional, and pray for directions to the respondents to pay the maintenance charges as well as half of the amount saved by the 2nd respondent, by utilization of railway siding. A counter-affidavit, and additional counter-affidavit are field by the 2nd respondent. An objection is raised, as to the maintainability of the Writ Petition. It is stated that the relationship between the parties is governed by the agreements, and as such, a Writ Petition is not maintainable. The terms and conditions that govern the relationship between the petitioners and the respondents are mentioned. It is stated that the construction of railway siding is part of a construction of godown and that the respondents are not under obligation to pay additional charges. Sri M.P.Chandramouli, learned counsel for the petitioners, submits that the 2nd respondent has fixed unit storage charges for all the godowns, whether they have the facility of railway siding or not, and that the respondents are not justified in denying the transport charges or their equivalent to the owners of godowns with railway siding, on par with road fed godown. According to the learned counsel, the petitioners incurred Rs.3.00 crores for arranging the railway siding and they are also required to pay the recurring charges towards maintenance etc., to the railways. He contends that when the respondents are saving huge amounts towards handling and transport charges, in case of rail fed godowns, there is no justification for them in denying the charges. Learned counsel submits that in respect of such godowns in various parts of the country, the 2nd respondent is paying transport charges and such a facility is denied to the petitioners. The Writ Petition is contested mainly by the Food Corporation of India. Sri B.Anjaneyulu, learned Standing Counsel for the 2nd respondent, submits that there is no privity of contract between the petitioners and his client, and as such, the writ petition is not maintainable. He contends that the petitioners have an agreement with the 3rd respondent and except that the 2nd respondent utilized the facility through the 3rd respondent, there is no other relation with the petitioners. He further submits that there is a change in the policy and terms and conditions in the recent past and the petitioners cannot compare themselves with the agencies that constructed godowns long ago. Learned Standing Counsel for the 3rd respondent has adopted the arguments advanced by Sri B.Anjaneyulu. Learned counsel for the petitioners and learned counsel for the respondents have relied upon certain decided cases. Before the matter is dealt with on merits, the objection raised by the respondents, as to the maintainability of the writ petition, needs to be considered. It is no doubt true that, time and again the Supreme Court and this Court held that the writ petitions under Article 226 of the Constitution of India cannot be entertained for adjudication of disputes, which are contractual in nature. However, the activities undertaken by the statutory agencies stand on a different footing. The 2nd respondent is the creation of a statute and it partakes the character of the State. Further, the adjudication is not in respect of individual terms of contract. It is mostly about the treatment being accorded by the 2nd respondent to the petitioners, in comparison with the other similarly situated persons or agencies. In State of Bihar v. Jain Plastics and Chemicals Limited[1], the Supreme Court held that, when disputed questions, or rival claims, as regards breach of contract, are raised, the parties have to avail the remedy of filing a suit. To the same effect the judgment of the Supreme Court in Food Corporation of India v. Harmesh Chand[2]. On the other hand, slightly different view, may be having regard to the facts of the case, was taken by the Supreme Court in ABL International Limited v. Export Credit Guarantee Corporation of India Limited[3]. Without going deep into the purport of various precedents, this much can be said that when the complaint of a citizen is against a State or its agency and the grievance is referable to Article 14 or other similar provisions of the Constitution of India, the mere fact that there existed a contract between the parties does not make much difference. As long as the facts are not disputed, the High Court can certainly examine the matter, with reference to broad principles. There is no direct contract between the petitioners, on the one hand, and the 2nd respondent, on the other hand. It is not in dispute that the goods that are stored in the godowns of the petitioners belong to the 2nd respondent, and except that the 3rd respondent acts as an intermediary, the 2nd respondent alone decides, the rates at which the charges are to be paid and the manner in which the contract is to be operated. The 3rd respondent has no independent role in the matter of fixation or method of payment of charges. When the godowns were constructed with the private participation, most important aspect was the guarantee for occupation and utilization of the godowns for a period of seven years by the 2nd respondent. Two types of rates were stipulated, viz., variable rates to start with Rs.1.50 ps., per square feet, per month, and a fixed rate of Rs.2/-, per square feet, per month. The petitioners opted for the second one and there is no dispute in relation thereto. The activity of handling and transport came to be entrusted to the petitioners and similarly situated persons, at a later point of time. The principal mode of transport of foodgrains by the 2nd respondent is through railways. The foodgrains would be transported up to the nearest goods shed. The stock is unloaded from the goods train, to the platforms, or to the storage facilities, if any, in the railway yard. Thereafter, it is loaded into the trucks and transported to the godowns, by road. In certain cases, the unloading from the train can be straight away into the trucks. The same process is repeated, in case the stock stored in such godowns is to be transported to other places through trains. This process comprises of at least, two unloadings and one loading as between the goods shed and the godowns. The charges for handling i.e., loading and unloading and other related activities, are paid. Transport charges per tonne, per kilometer, on the other hand, are payable separately. In contrast, if the godowns have the facility of railway siding, the goods train would straight away come to the complex of godowns and the stock would be unloaded directly from the wagons into the godowns. Similarly, when it is to be transported from the godown, it is straight away loaded into the wagons. The necessity to pay transport charges and at least for one loading and one unloading are obviated. The petitioners chose to construct godowns with railway siding. There was some delay in arranging for the railway siding and without waiting for it, the godowns were made functional. The petitioners were paid handling and transport charges on par with the owners of other godowns, which do not have the facility of railway siding. However, they are denied the transport charges, after they completed the construction of railway siding. If the petitioners are not placed under any obligation, for the arrival and departure of goods trains up to their godowns or for maintenance of the bit of rail track, there may be some justification for the respondents in denying transport charges to the petitioners. Various invoices, through which the petitioners are levied siding and shunting charges by the South Central Railway, are placed before this Court. It is categorically stated by the petitioners that the railways are charging them amounts towards maintenance of track and arrival and departure of trains whenever the goods are transported. The assertion made by the petitioners, that the respondents are saving up to Rs.2,30,000/- per rake of 2,400 metric tonne, on account of availing the facility of railway siding; is not denied. The petitioners have also placed before this Court, copies of the invoices, through which the 2nd respondent paid shunting or maintenance charges to godowns, having the facility of railway siding. They include copies of sanction orders, dated 23.03.1994, 02.09.1995 and 30.01.1998, through which the Assistant Manager (Movement) FCI, Gurudaspur, released payment of Rs.15,58,076/- “siding maintenance charges levied by railways”, in respect of the godowns owned by the Central Warehousing Corporation, at Patankot. Though the 2nd respondent contends that there is a difference between the terms and conditions applicable to the godowns for which the railway maintenance charges were paid, and the one, constructed by the petitioners, nothing substantial is pointed out. In the absence of the same, the respondents cannot be permitted to discriminate between the owners or individuals, that have constructed the godowns, with same facilities in the matter of payment of railway shunting and siding charges. It is not as if the respondents are required to incur any additional expenditure towards payment of shunting and maintenance charges, levied by the railways. Even if that is paid, they would stand to substantial benefit, since the charges for transporting the food grains by road, which are very high, are saved. The averment of the petitioners that a major chunk of the rent earned as storage charges is required to be paid to the railways, and that they are not left with maintenance charges, let alone any income from the godowns, cannot be overlooked. Their expectation of some return, from a facility created by incurring expenditure of three crores, is legitimate, by any standard. Viewed from any angle, the action of the respondents in denying the maintenance charges for the railway siding and shunting charges from the date of filing the writ petition cannot be sustained in law. However, the request of the petitioners to require the respondents 2 and 3, to part with half of the amount, saved by utilizing railway siding; cannot be acceded to. Hence, the Writ Petition is partly allowed, directing that the respondents 2 and 3 shall reimburse to the petitioners, the charges levied against them by the South Central Railway, towards the maintenance of railway siding and shunting charges, on submission of the required proof, with effect from 01.01.2008. There shall be no order as to costs. _____________________ L. NARASIMHA REDDY, J. Dt.27-01-2010. Note: L.R. copy to be marked. GJ [1] AIR 2002 SC 206 [2] 2006(7) Supreme 3 [3] (2004) 3 SCC 553