WP(C) 5369/2008 BEFORE HON’BLE MR.JUSTICE P.K.MUSAHARY JUDGMENT AND ORDER (CAV) Heard Mr. G.N.Sahewalla, learned Sr. counsel assisted by Md. Aslam, le arned counsel appearing for the petitioner . Also heard Mr. U.K.Nair, learned S. C, Railways appearing for the Respondents. 2. The petitioner is a private Limited Company incorporated under the Compan y Act,1956 having its registered office at Kolkata . It deals in supply of Bambo o to various paper mills. The petitioners submits that the Railway has been issu ing various circulars from time to time granting concession for the traffic of bamboo carried from North Eastern India.The Railway as a matter of policy, has b een allowing concessional rates for the rakes which go in the direction where r equirement of wagons are high. A circular being No. 25/06 was issued allowing 5 0% new traffic concession. Such concession was granted to North East from vario us parts of India and those wagons are going back empty to the places where dema nd is more. The N.F. Railway receives loaded rakes but due to non availability of goods in the rakes, empty rakes move out without load and bamboo is one of s uch item which is normally available in N.F.Railway for loading and bamboo is c harged under the lowest class of LR-4 which is not eligible for empty flow direc tion concession. With a view to send loaded rakes, instead of empty rakes , to a void the loss to the Railway, the petitioner submitted a letter to the Responden t No. 3 on 22.12.07 stating that, if 35% concession in the rakes is allowed, the petitioner is agreeable to guarantee at least 25 minimum rakes to the various p aper mills mentioned in the said letter.It was respondend by the respondent No. 3 by saying that the petitioner’s proposal would be examined by the Railway Boa rd if the petitioner is ready to load at least 4 rakes in a month i.e.48 rakes in a year and an assurance to that effect is also received. Subsequently the Ra ilway Board issued a Rates Circular No. 8/2008 whereby incentive scheme for the additional empty flow direction issued earlier in the circular No. 25/07 was am ended and introduced a new scheme. However, in spite of agreeing to the proposa l given by the respondent No. 3 no circular was issued accepting the petitioner’ s proposal. The petitioner, therefore, intimated by its letter dated 22.4.08 ad dressed to the respondent No. 3 that due to non issuance of concession , the pet itioner is suffering and requesting him to look into the matter early. 3. In response to petitioner’s aforesaid letter , the Railway Board issued circular No. 25/08 allowing 40 % concessional rates on incremental traffic as a freight incentive scheme in respect of destination under empty flow direction . But in this policy also concession of empty flow direction is no granted to th e traffic below classification No. LR-2 as the bamboo falls under classification No. LR 4 for which no empty flow direction is available for this traffic. The petitioner then issued a letter on 20.6.08 to respondent No. 4 informing that t he petitioner has already loaded 7 rakes from Basugaon to different paper mills in India . It was clarified and communicated in the said letter that the petiti oner as well as its associate concern M/S TCG Traders shall load 48 rakes in a year if substantial concession is provided for bamboo traffic. It resulted into issuance of circular No. 41/08 dated 13.8.08 by the Railway Board granting 25 % freight concession ( rebates ) on Normal Tariff Rates ( for short NTR ) on bamboo traffic booked from NF Railway in empty flow direction in favour of the petitioner and other 2 bamboo suppliers subject to various terms and conditions. After issuance of the aforesaid rates circular No. 41/08, the petitioner start ed loading various rakes of bamboo from 2 Railway Stations , namely, Basugaon an d Gossaigaon Hat but to the surprise of the petitioner , the respondent No. 3 i ssued a letter dated 20.10.08 addressed to the petitioner and other 2 bamboo sup pliers stating that the rail users who are eligible for concession under the sa id rate circular but who did not offer any loading in the corresponding period o f previous year , would be eligible to 50% discount for prescribed rates. 4. The petitioner claims that an agreement was already signed with the Railw ay in the month of September,2008 but the petitioner was surprised to receive a letter dated 23.10.08 from the respondent No. 4 asking it to supply non judicia l stamp paper of Rs. 50/- for execution of an agreement in respect of concessio nal rate of bamboo w.e.f. 23.8.08 to 22.3.09. The petitioner, therefore, issued a letter dated 7.11.08 addressed to the Senior Commercial Manager (FM), N,.F.Ra ilway, Maligaon requesting him to send the copy of the agreement at the earliest , if the same was not sent already to the petitioner. Subsequently, the Directo r, Traffic Commercial ( Rates) Railway Board issued a letter dated 29.9.08 clari fying that bamboo merchant other than 3 merchants mentioned in the Board’s lette r dated 31.8.08 are not eligible for availing concession under the provision of circular No. 41/08. It was further clarified that rail users who are e ligible for concession under Rates Circular No. 41/08 but who did not offer any loading in the corresponding period of previous year would be eligible for get ting 50% discount of the prescribed rates. It is this letter dated 29.9.08 ( Ann exure- XIII) as well as letter dated 20.10.08 (Annexure-VII ) which are under c hallenge in this writ proceedings. 5. Mr. G.N.Sahewalla, learned Sr. counsel for the petitioner submits that wh ile granting 20 % freight concession on bamboo traffic, there is no mention in t he circular No. 41/08 dated 13.8.08 that for new traffic concession would be 10% . Similarly in the circular No. 25/08 dated 13.6.06 , no where it is stipulated that the new traffic will be allowed 50% of the prescribed concession. Secondly it is submitted that the respondents after executing agreement in terms of 20% concessional freight rate as per circular No. 41/08, the respondents cannot int roduce a new condition to the effect that new traffic would be entitled to on ly 50% of the concession granted by the circular No. 41/08. The learned Sr. cou nsel, contends that the petitioner, being an eligible beneficiary contacted the paper mills and supplied them rakes with 20 % freight concession and many of th e rakes were loaded prior to 23.10.2006 and as such the decision of the Railway authorities that new traffic 50% concession would be available as communicated v ide impugned letter dated 20.10.08 is absolutely illegal and against the promise made by the respondents. Thirdly, it has been submitted that the respondents by executing agreement in te rms of 20% concessional freight rate as per circular No. 41/08 cannot introduce and say that new condition with new traffic would be entitled to only 50% and a s such, the impugned letters dated 29.9.08 and 20.10.08 putting a new condition are absolutely illegal, arbitrary and void and they are liable to be set aside and quashed. 6. Mr. U,K,Nair, learned S.C, Railway, on the basis of an affidavit-in oppos ition filed by the respondent Nos. 1,2,3 and 4 submits that :- (i) There was no promise held out to the petitioner firm in regard to rates of concession or condition attached thereto in the communication dated 26.12.07 ; (ii) 20% freight concession on NTR on bamboo traffic from N.F.Rai lway in empty flow direction was granted in respect of incremental traffic only and the condition is stipulated in the Rates Circular No. 41/2008 inasmuch as n o agreement was executed by the Railway with the petitioner. The petitioner subm itted a copy of agreement signed only by it but it was not signed by any comp etent authority of the Railway Administration and hence it cannot be considered as an agreement : (iii) In the Rates Circular No. 25/08 dated 13.6.08 no provision has been made for allowing concession on bamboo traffic and the 50% concession grant ed vide letter dated 28.9.08 was a measure adopted by the authorities to grant some benefit to the petitioner firm and as per the terms and conditions stipulat ed in circular No. 41/08, the petitioner is not entitled to any concession on fr eight as extended therein in absence of any loading performance during correspo nding period of the previous year ; more so when there is no promise made by t he respondent authorities to the petitioner firm ; (iv) The petitioner firm having no loading performance during the cor responding period of previous year, is not eligible for 20% concession extended under circular No. 41/08 and as such, there is no scope for the petitioner firm to supply bamboo to paper mills at 20% concession of the freight rate as per t he said circular; (v) The bamboo traffic is not covered under Rates circular No. 25/08 whe reas the rates Circular No. 41/08 is applicable only on fulfillment of the condi tions prescribed therein and the petitioner firm having not fulfilled the said c onditions is not entitled to concession on freight extended under circular No. 4 1/08. 7. From the pleadings of the parties and the materials placed on record, I f ind that the petitioner made correspondences with the Railway authorities for us e of rakes in empty flow direction at some freight concession ( rebate ). The pr oposal made by the petitioner was examined by the respondent authorities resulti ng into issuance of Rates circular No. 41/2008 dated 13.8.2008 in regard to fr eight concession on bamboo traffic originating from N.F.Railway . The said circ ular was issued with the sanction of the Central Govt.The relevant terms and con ditions are incorporated in Clause 1.0 of the said circular which are reproduc ed below :- Rates Circular No. 41 of 2008 Government of India ( Bharat Sarkar) Ministry of Railways ( Rail Mantralaya) Railway Board, New-Delhi 13.08.2008. No. CR/1618/2006/18 The Chief Commercial Manager, Northeast Frontier Railway,Maligaon,Guwahati. Sub:- Freight concession on Bamboo traffic originating from NF Railway. 1.0. Sanction of the Central Government is hereby accorded to grant 20 % ( twenty percent ) freight concession( rebate) on NTR on Bamboo traffic booked fr om NF Railway in empty flow direction by M/S. Rahul Enterprises, M/S Bharat Bamb oo & Timber Suppliers and M/S Kalpataru Agroforest Enterprises (P), subject to following ter ms and conditions. i. Over all loading of Bamboo traffic from NF Railway during the per iod of validity of these instructions must exceed NFR’s total loading figures f or the corresponding period of previous year both in terms of number of rakes as also in terms of total revenue from Bamboo traffic . ii. Loading of each customer during the period of validity of these i nstructions must exceed his loading figures of the corresponding period of previ ous year both in terms of number of rakes as also in terms of revenue. iii. Concession will be admissible on incremental traffic accounted in terms of rakes. iv. Concession will be admissible on traffic moved only in covered wago ns. v. Destination will be stations falling in empty flow direction as not ified vide Annexure 1 of Rates Circular No. 25 of 2008, and as amended from time to time. vi. No other freight concession will be admissible on this traffic exce pt 6 % ( six) percent concession admissible on traffic booked from NE Region. vii. Concession will be given on freight rate derived after grant of frei ght concession of 6 % admissible for traffic booked from NE Region vid Rates Ci rcular No. 80 of 2007. viii. All other applicable chages will be leviable . ix. Concession will be given as refund after the fulfillment of all ter ms and conditions . & & & & & & & & & & & & & Sd/ N.K.parsuramka, Director, Traffic Comml.( Rates) Railway Board, New-Delhi . It is found that there is a specific mention of concession which is admissible on incremental traffic accounted in terms of rakes. There is however, no mentio n about the loading performance but if one has to explain the phrase increme ntal traffic accounted in terms of rakes he has to see whether party concer ned has been using the Railway rakes and whether the use of rakes is in increas ing trend and whether there is an increasing demand for the rakes. Supposing during a period, for some reasons, a party is not achieving any load performan ce i.e. failure in his performance and he needs no more rakes or needs less rak es than he used in the previous year, he cannot be provided with the same conc ession. There must be increase in the use of rakes in the corresponding previou s period to avail the benefit under circular No. 41/08. 8. As per provision under circular No. 41/08 , a party has to satisfy that it has an improved loading performance, in other words, it has an increasing d emand for rakes. Whoever can satisfy the authority concerned in this regard ,he is entitled to get the benefit of 20 % freight concession. The respondent author ity in paragraph 14 of its counter affidavit states that the petitioner firm having no loading performance during the corresponding period of previous year was clearly not eligible to the 20% concession extended vide Rates Circular N o. 41/08.As such, there existed no scope for the petitioner firm to undertake to supply bamboo to paper mills at 20% concession of the freight rate as per t he said circular. . This statement/ allegation against the petitioner has not be en denied by filing any rejoinder and as such, it has remained uncontroverted . If the allegation is found uncontroverted, it can be accepted as correct as per the decision of the Apex Court in Naseem Bano, Vs. State of U.P, reported in A IR 1993 SC 2592 , which has been followed in several cases . Improvement in per formance in using the rail rakes is the main criteria for availing freight con cession by a party. The petitioner party has made no attempt to show its impro vement in using the rail rakes. It appears that the petitioner firm is trying t o be a beneficiary of the circular No. 41/08 interpreting that the benefit ca n be claimed by new traffic users irrespective to their performance. 9. Whether the interpretation sought to be applied by the petition is corr ect or not can be examined by a reading of the circular No. 41/09 with impugned letters dated 29.9.08 and 30.10.08. The letter dated 29.9.08, as it appears the refrom , was issued in reply to the clarification sought by the Chief Commercial Manager, N.F.Railway,Guwahati who enquired (i) whether bamboo merchant other than those mentioned in the letter are eligible for concessional benefit or not ; (ii) if a firm has not loaded any bamboo during the corresponding period of previous year, will they be entitled to get the facility of the freight concessi on or not. The said important quarries were examined and it was clarified that the bamboo merchant other than the three parties mentioned in the letter No. TCR /1616/2006/18 dated 13.08.08 (Rates) Circular No. 41/08 are not eligible for ava iling the concession. It was also clarified that the rail users, who are elig ible for concession under RC No. 41/08 but did not offer any loading in the corr esponding period of previous year, would be eligible for getting 50% discount of the prescribed rates .The impugned letter dated 20.10.2008 addressed to 3 fir ms including the petitioner is quoted below :- NORTHEAST FRONTIER RAILWAY Office of the Chief Commercial Manager/Rates, Maligaon, Guwahati-11. No.C/486/RT/Concession/Bamboo Dated 20.10.2008 To M/S Rahul Enterprises, 40 Strand Road , Fourth Floor, Room No. 4,Kolkata- 700001 M/S Bharat Bamboo & Timber Suppliers, Main Road , Bongaigaon, 783380. M/S Kalpataru Agroforest Enterprises (P) Ltd.Room No.22, Stepens House, 2nd Flo or, 4 E,B.B.D.Bagh, Kolkata,700001. Sub:-Concession on Bamboo Traffic under Freight Incentive Scheme. Ref:- Railway Board Circular No. TCR/1618/2006/18 DT. 13.08.08. Sir, In reference to the above, it is to inform you that 20 % freigh t concession on Bamboo traffic has been granted for three parties, i.e. M/S Rah ul Enterprises, M/S Bharat Bamboo & Timber Suppliers and M/S Kalpataru Agrofores t Enterprises under RC No. 410f 2008. It has been clarified that Bamboo Merchan t other than the three parties mentioned above are not eligible for availing con cession under Rate Circular No. 41 of 2008 but did not offer any loading in the corresponding period of previous year, would be eligible from granting 50% disco unt of the prescribed rates. Sd/SC.Barman . Sr. Commercial Manager/Rates For Chief Commercial Manager/Rates 10. The benefit of 25% freight concession ( rebate) on NTR on bamboo traffic was admittedly granted exclusively for 3 firms only including the petitioner. Th e said benefit cannot be extended to other new railway traffic users . There is no scope for extending the said benefit to new railway traffic users. The freig ht concession is subject to improvement in performance of the said 3 firms inclu ding the petitioner in using the railway traffic. It is not necessary to provide in many words that the freight concession benefit would be made available to the petitioner and other 2 firms , even if they fail to show improvement in the ir performance. It is implicit in the language used in circular No.41/08 and th e clarification given in the impugned letter dated 20.9.08 . 11. The circular No. 41/08 and the impugned letters dated 29.9.08 and 20.10. 08 are self-explanatory and they speak for themselves. The petitioner, in my co nsidered view , can claim the benefit of the aforesaid circular No. 41/08 at any time showing its performance during the corresponding period of previous year. There is no scope to interpret the circular in question as well as impugned lett ers in other way. There is also no ground for interference with the aforesaid c ircular in question and the impugned letters in other way. The petitioner may ap proach the authority concerned for extending the aforesaid freight concession by filing a representation with performance report in using railway traffic/rakes during the corresponding period of previous year, if so advised, and the Railway authority concerned shall consider the petitioner’s case as per their eligibili ty and in terms of the aforesaid circular No. 41/08. 12. This writ petition stands disposed of with the aforesaid observations and directions.