THE HON'BLE SMT. JUSTICE T.MEENA KUMARI and THE HON'BLE SRI JUSTICE SANJAY KUMAR WRIT APPEAL NO.1143 OF 2009 Date: 11.2.2010 Between: Cement Corporation of India Ltd. Tandur Unit, Tandur, R.R. District. ..... Appellant AND South Central Railway, Secunderabad. ...Respondents THE HON'BLE SMT. JUSTICE T.MEENA KUMARI and THE HON'BLE SRI JUSTICE SANJAY KUMAR WRIT APPEAL NO.1143 OF 2009 JUDGMENT: (Per Hon’ble Smt. Justice T. Meena Kumari) The present writ appeal is directed against the order dated 20.8.2009 of the learned single judge made in Writ Petition No. 11599 of 2009, whereby and whereunder the learned single judge dismissed the writ petition filed by the appellant-Corporation. The facts in brief are that the appellant Corporation filed the aforementioned writ petition before the learned single judge seeking a Mandamus declaring the action of the respondents in issuing the proceedings bearing No. T/143/C/520, dated 15.5.2009 converting the private railway siding of the appellant into a railway line as illegal arbitrary and contrary to the agreement dated 25.11.1985 and also against the provisions of the Sick Industrial Companies (Special Provision) Act, 1985. It is the case of the appellant that it is a company owned by the Central Government and that one of its factories is situated at Tandur, R.R. District. Since its factory is situated at a distance of 12 kms., from Tandur Railway Station, the South Central Railway has permitted the appellant to have a railway siding from Tandur Railway Station to the factory premises of the appellant for the purpose of transportation of raw material as well as the finished produce in railway wagons subject to deposit of certain amount. According to the appellant, an extent of Acs. 166.36 was purchased by it for the purpose of laying the railway siding and except an extent of 106 meters of the railway siding situated nearby Tandur Station, which belonged to the railways, the rest of the railway siding belonged to it. It also entered into an agreement with the railways for maintenance of the railway siding according to which the appellant has to bear the total cost of maintenance and operation of the Railway siding. Accordingly, the appellant has been making use of the railway siding for transportation of the raw material as well as its finished products for the past 24 years. While things stood thus, the Indian Cements Limited, a Public Limited Company has taken over a cement factory belonging to M/s. Visaka Cement Industries Limited and requested the appellant to permit them to take a branch line through the railway siding of the appellant in order to connect their factory with the Tandur Railway Station. However, as the negotiations could not be materialised, the railways had nominated an Arbitrator for finalizing the modalities for sharing rental of the capital cost and maintenance charges for sharing a portion of the existing railway siding. In the meantime, it appears, through letter dated 23.1.2006, the railways also permitted M/s. Visaka Cement Industries Ltd., to take a railway siding over the appellant’s railway line. The appellant then informed the railways that such permission cannot be granted without the prior approval of the BIFR due to the pendency of proceedings in case No. 501 of 1996. However, without taking into consideration the said representation of the appellant, railways has granted permission to M/s. Visakha Cement Industries to take a railway siding from the existing line. In view of the same, the appellant requested the railways to adequately compensate it before granting any such permission. In spite of repeated representations, the railways did not consider their claim for compensation and in the meantime, the railways started executing work for the purpose of laying branch line from its factory to the railway siding of the appellant. The appellant, then filed O.S. No. 702 of 2006 before the Court of the District Judge, Ranga Reddy. Subsequently an arbitrator was appointed to resolve the said dispute and the Arbitrator passed an Award on 29.4.2007 fixing the tollage charges to be paid by M/s. Visaka Cement Industries Limited to the appellant and incorporating further conditions to enable laying of a branch railway siding by the said company. It appears, an agreement was also entered into between the appellants and M/s. India Cements Ltd., to that effect on 5.2.2008 followed by a supplementary agreement dated 26.9.2008; that as per the said agreement M/s. Indian Cements Ltd., has to pay Rs. 10.43 lakhs every month on quarterly basis. A security deposit of Rs. 31.29 lakhs was also to be kept with the appellant and the maintenance of the railway siding would be done by the appellant. While so, the 2nd respondent issued the proceedings dated 15.5.2009, impugned in the writ petition, converting a portion of the appellant’s railway siding lead line from the take off point at Tandur station yard i.e., from K.M.0/0 upto K.M. 10 into a railway line and making it clear that the said portion would be worked for public traffic henceforth, in lieu of which the appellant would be allowed facilities for their traffic without any maintenance cost. Challenging those proceedings, the appellant filed the aforementioned writ petition. Learned counsel for the appellant has contended before the learned single judge stating that though Clauses 20 and 23 of the Agreement empowers the Railway Administration for such conversion of the Railway siding, such conversion has to be preceded by a notice, apart from payment of costs. Since in the instant case, as no such notice was issued to the appellant, the impugned order was illegal and arbitrary. It was further contended that as per Section 22 of Sick Industrial Companies(Special Provisions)Act, 1985 the properties of the appellant, which is a sick unit in respect of which the scheme sanctioned by BIFR as modified by AAIFR is under implementation, cannot be effected in any manner by anybody without the prior consent of the BIFR and that as no such consent was obtained by the respondents before issuing the impugned proceedings, the impugned order is liable to be set aside. They also denied the contention of the respondents that the conversion is required for public use as false and baseless. While denying the allegations, the respondents-railways filed their counter affidavit before the learned single judge stating that the impugned action was contrary to the terms and conditions of the agreement. They also contended that the writ petition itself was not maintainable as Clause 34 of the agreement provides for Arbitration. Since the impugned order is not a termination, no such prior notice was required as contended by the appellant. The learned single judge having heard the learned counsel for the parties and having perused the material on record, dismissed the writ petition through the order impugned in this appeal. Hence, the present writ appeal. Learned counsel for the appellant has reiterated the very same contentions which were urged before the learned single judge. However, the learned Standing Counsel for the Railways while drawing our attention to the proceedings bearing No. T/143/C/520, dated 15.5.2009 of the Chief Traffic Planning Manager issued in connection with the taking over and modification of existing Cement Corporation of India/Tandur (CCI) Siding lead line served by Tandur station upto KM 10.00, would contend that the appellant was informed about the proposed conversion of the lead line as long back as in the year 2006 and the appellant cannot contend that no notice was served on it before the impugned proceedings were issued. The relevant portion reads thus: “ ORDER Now in terms of the provisions contained in clause 19, 19(a), 19(b) 20(a) and 23 o the siding agreement between M/s. Cement Corporation of India, Tandur The General manager South Central Railway has ordered that the portion of the CCI siding lead line from the take off point at Tandur station yard, i.e. from KM 0/0 upto KM 10 will hence forth be converted into a railway line and the said portion of the siding will be worked for public traffic, and in lieu of the portion of the siding so taken over and worked for public traffic, M/s. CCI will be allowed facilities for their traffic equivalent and more without any maintenance cost, OHE cost or upgradation cost for the converted portion thereof as mentioned above.” On a perusal of the aforesaid proceedings, it is quite clear that the railways have converted a portion of the siding lead line into a railway line for public traffic. Further, as per clauses 19 and 20 of the Agreement, the railways is empowered to use the siding for the purpose of the railway administration free of charge; that it can also convert the entire portion of the said siding or part thereof into railway siding. The record also reveals that a notice proposing such conversion had in fact been served on the appellant on 11.10.2006 stating that Clause 19(a) of the Agreement enables the Railways to take over siding lead line in public interest free of cost. It was also informed to the appellant that the Railways are shifting the take off point from mid section of Tandur station yard and maintenance will not be on CCI account for the portion upto KM 9/8-9 which is treated as the common portion to carry the Railway revenue earning traffic as well as to eliminate any safety hazards to the public at large. Even prior to this, a series of letters were written by the railways on 25.1.2006,24.8.2006 and on 27.9.2006 informing the above said decision and emphasizing that the provision of railway connectivity was operationally essential. Admittedly, the learned single judge while taking into consideration the aforesaid letters addressed by the Railways informing the appellant about their intention to convert a portion of the siding in question for public traffic, held that the appellant was put on notice about the intention of the railways to shift the take off point from mid-section to Tandur station yard as long back as on 11.10.2006 and in such circumstances, she rejected the contention of the appellant that it was not put on notice before issuance of the impugned proceedings. In so far as the other contention of the appellant that the respondents have committed breach of Section 22 of the SICA in not obtaining prior consent is concerned, since the impugned action is only a modification of the facility which was granted to the appellant, the learned single judge rightly held that no such prior permission was necessary and on that ground also, she declined to interfere with the impugned proceedings dated 15.5.2009. Having heard the learned counsel for the parties and having gone through the order of the learned single judge, we do not find any reason to interfere with the well considered order of the learned single judge. However, at this stage, learned Standing Counsel for the Railways tried to contend that in spite of collecting tollage of Rs 10.43 lakhs per month from M/s. Indian Cements Ltd., the appellant has failed to maintain the railway track in good condition and failed to strengthen the track structure in order to handle the traffic and is thus forcing the railways to incur heavy losses. He further stated that as per Clause 8(i) of the siding agreement “the applicant will at their own cost and expenses in all ends and to the satisfaction of the railway administration and if required by railway administration under the supervision, maintain in good order and repair the said portion of the siding” and when the appellant failed to maintain the track in good condition, notices were served on the appellant and while keeping the interest of the public at large, the railways had undertaken conversion of the siding in question. On the other hand, Sri V. Srinivas, learned counsel appearing on behalf of the appellant, while drawing our attention to para 3 of the reply affidavit filed by the appellants, has stated that the appellant is taking all steps for maintaining the track in good condition. He further stated that the appellant also procured 10,000 concrete sleepers, which will be laid for strengthening the track; that out of 10,000 concrete sleepers, 5,000 sleepers have already been laid and the remaining sleepers will be laid in a time bound manner and requested that if some time is granted to it, it would complete the entire work. In view of the aforesaid statement of the learned counsel for the appellant, we feel it appropriate to grant four months time to the appellant to complete the entire repair work. We also make it clear that if the appellant fails to complete the entire repair work within the time stipulated above, the respondents-Railway authorities are at liberty to proceed against the appellant in accordance with law. The writ appeal is accordingly disposed of. No costs. ___________________ T.MEENA KUMARI,J Date: 11th February, 2010 _________________ SANJAY KUMAR,J pnb