Case: Union Of India Vs.  Modi Industries Ltd.

29 will cover a revision of rates made by the railway authority in terms of a contract but the matter seems to stand concluded by the decision of this court in Union of India v. The Indian Sugar Mills Association, Calcutta, (1967) 3 SCR 2l9=(AIR 1968 SC 22 ) according to which it is immaterial that the charges being levied by the railway administration arise as a result of a voluntary agreement. The real difficulties in the way of the appellant are two fold; firstly, if any question arises about the validity of a clause of a contract that will be entertainable by a civil court. As laid down in Raichand Amulakh Shah v. Union of India, (1964) 5 SCR 148 (AIR l964 SC 1268) the Railways Tribunal has no jurisdiction to decide whether the rules empowering the railway administration to levy a particular charge are ultra vires or whether the railway administration collected amounts in excess of the charges which it can legally levy under a rule. In Upper Doab Sugar Mills Ltd. v. Shahdara (Delhi) Saharanpur Light Rly. Co. Ltd. (1963) 2 SCR 333 at p. 342 = (AIR 1963 SC 217 ) two main points arose; one was whether the Railway Tribunal had jurisdiction to entertain the complaint as regards the reasonableness of the rates prior to the institution of the complaint and the other was whether it had jurisdiction to grant refund for the aforesaid period. This is what was said by Das Gupta J.,: The words charging in cl. (b) and levying in cl. (c) were used in the one and the same sense. We find it impossible to agree however that they were used to include collecting. It appears to be clear that if the intention of the legislature was to give the Tribunal jurisdiction over complaints in connection with charges already made the legislature would have used the words has charged and charging and would not merely say is charging. Special jurisdiction of such a nature would be given clearly and the very fact that the words has charged have not been used is sufficient ground for thinking that it was not the legislatures intention to give the Tribunal jurisdiction over complaints in connection with charges made in the past. In our opinion, the words is charging in cl. (b) and is levying in cl. (c) must be construed to mean is demanding a price at the present time for services to be rendered. Coming to the facts of the present case it is apparent that one of the main questions involved was whether cl. 23 of the contract between the parties was not void because it contravened S. 29 of the Indian Contract Act. Another question which had to be investigated was whether a proper notice regarding the enhancement of rates had been given in accordance with the terms of the said agreement. From the facts which have been started it appears that the rates were being revised and actually enhanced the rates but then the matter was kept pending and there was exchange of correspondence and discussion between the parties from time to time. No effort was made to enforce the demand made in the various letters and the plaintiff was allowed to make payments according to the rates originally agreed. It was only in May 1957 that the plaintiff was really threatened to make payment of the outstanding amount calculated at the revised rates on pain of the supply of wagons being stopped and the agreement being determined. It is somewhat surprising that in September 1955 the rates which were revised were very much less than those which were demanded for the prior period. The position thus remained in a flexible state and there is a good deal of substance in the submission on behalf of the plaintiff-respondent that a complaint was not filed under S. 41 of the Act because the rates which were being paid and actually accepted were the same as the contractual rates and not the revised or enhanced rates. According to the decisions of this court referred to before it was hardly open to the plaintiff to file a complaint with regard to the reasonableness or otherwise of the rates and charges which had already become due and payable. The plaintiff had no grievance whatsoever with regard to the charges which had been fixed with effect from April 1, 1956 by means of the letter dated September 29, 1955 and therefore there was no question of its filing a complaint with regard to those charges. Its grievance was confined only to the amount which was being demanded on the basis of the revised enhanced rates between the period December 1, 1949 and March 1, 1956. If that amount had actually been realised by the railway authorities the plaintiff could only file a suit for its refund and could not have laid a complaint under Section 41 of the Act before the Railway Tribunal. By analogy the plaintiff could not have filed a complaint with regard to past dues as the Railway Tribunal could not have given any relief in respect thereof following the law laid down by this court. In this view of the matter apart from other questions involving the validity of clause 23 of the agreement as also of the notice or intimation of enhancement of rates on the ground of non-compliance with its terms the suit could not be held barred under S. 26 of the Act and the civil court could grant the relief claimed. 9. We have not been shown any serious infirmity in the reasoning of the High Court by which it arrived at the conclusion that the question of reasonableness of the charges, keeping in mind the facts of this case, was justiciable. Nor has any justification been shown for reopening the concurrent finding of the two courts below that the rates which were demanded for the period in question were unreasonable. The suit was thus rightly decreed.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]Coming to the facts of the present case it is apparent that one of the main questions involved was whether cl. 23 of the contract between the parties was not void because it contravened S. 29 of the Indian Contract Act. Another question which had to be investigated was whether a proper notice regarding the enhancement of rates had been given in accordance with the terms of the said agreement. From the facts which have been started it appears that the rates were being revised and actually enhanced the rates but then the matter was kept pending and there was exchange of correspondence and discussion between the parties from time to time. No effort was made to enforce the demand made in the various letters and the plaintiff was allowed to make payments according to the rates originally agreed. It was only in May 1957 that the plaintiff was really threatened to make payment of the outstanding amount calculated at the revised rates on pain of the supply of wagons being stopped and the agreement being determined. It is somewhat surprising that in September 1955 the rates which were revised were very much less than those which were demanded for the prior period. The position thus remained in a flexible state and there is a good deal of substance in the submission on behalf of the plaintiff-respondent that a complaint was not filed under S. 41 of the Act because the rates which were being paid and actually accepted were the same as the contractual rates and not the revised or enhanced rates. According to the decisions of this court referred to before it was hardly open to the plaintiff to file a complaint with regard to the reasonableness or otherwise of the rates and charges which had already become due and payable. The plaintiff had no grievance whatsoever with regard to the charges which had been fixed with effect from April 1, 1956 by means of the letter dated September 29, 1955 and therefore there was no question of its filing a complaint with regard to those charges. Its grievance was confined only to the amount which was being demanded on the basis of the revised enhanced rates between the period December 1, 1949 and March 1, 1956. If that amount had actually been realised by the railway authorities the plaintiff could only file a suit for its refund and could not have laid a complaint under Section 41 of the Act before the Railway Tribunal. By analogy the plaintiff could not have filed a complaint with regard to past dues as the Railway Tribunal could not have given any relief in respect thereof following the law laid down by this court. In this view of the matter apart from other questions involving the validity of clause 23 of the agreement as also of the notice or intimation of enhancement of rates on the ground of non-compliance with its terms the suit could not be held barred under S. 26 of the Act and the civil court could grant the relief claimed9. We have not been shown any serious infirmity in the reasoning of the High Court by which it arrived at the conclusion that the question of reasonableness of the charges, keeping in mind the facts of this case, was justiciable. Nor has any justification been shown for reopening the concurrent finding of the two courts below that the rates which were demanded for the period in question were unreasonable. The suit was thus rightly decreed.