Modi Cement Ltd. & Another v. Union Of India & Others

M.C. Jain, J.

1. Rule DB.

2. In this writ petition, the petitioner has challenged the legality and validity of the Agreement dated 19.1.1987, whereunder the petitioners bad agreed to bear the cost of the TXR staff. According to the petitioners, the petitioners were forced to give an unconditional acceptance of the Railway Standard Agreement Form, according to which they were required to bear the cost of TXR staff posted at petitioner No. 1s siding at Bhatapara station. That stipulation in the Agreement was contrary to the specific written instructions of the Railway Board. The petitioners case is that the petitioners are not bound by the stipulation in the Agreement in view of the Circular of the Railway Board dated 1.12.1986 which supersedes the earlier Circulars dated 28.1.1985 and 13.4.1981. The petitioners executed the Agreement as they were not aware of the Circular dated 1.12.1986. The petitioners have therefore, prayed that it may be declared that clause 3(vi) of the Railway Board Circular No. 85/WI/SP/45 dated 1.12.1986 is applicable to the petitioner No. 1 and that overrides the Agreement dated 19.1.1987 and the agreement contrary to the aforesaid circular be declared null and void and the respondents be directed not to recover any money on account of cost of the TXR staff in terms of the Agreement and whatever costs have already been paid by the petitioner, the same be refunded to the petitioners.

3. The respondents case is that the TXR staff has been provided for examination and certification at the petitioners premises and the work of the said staff is confined only to the petitioners siding and they are not doing any other work. It is the further case of the respondent that M/s Modi Cement Siding is not connected with any Railway Siding where from the examination, certification and repairs of both the inward and outward wagons of the siding can be carried out as per extant system of end-to-end traffic operation and for which M/s Modi Cement is required and agreed to pay the charges for the TXR staff necessary for the siding in terms of Boards circulars. The TXRs staff is provided for the convenience of M/s Modi Cement for loading/unloading of cement and the party has to bear the cost of the TXR staff irrespective of the level of loading/unloading of traffic, as stipulated in Boards letter dated 13.4.1981 According to the respondents, the petitioners case is covered under clause (ii) of Circular dated 13.4.1981.

4. It may be stated originally, the petitioners case was that the traffic level is less than 2 rakes per day but this case has been given up and the level of traffic may be taken to be 2 rakes per day.

5. Three circulars of the Railway Board are material as the entire case is based on the question as to whether the petitioners case is covered under clause (ii) of Circular dated 13.4.1981 or it is covered under the Circular dated 1.12.86 according to which, there would be apportionment of costs as is mentioned in Circular dated 21.1.1985. The relevant portion of the Circular dated 13.4.1981 (Annexure R-3) runs as under:

It has now been decided that these instructions will not be applicable where the railways are to necessarily incur extra expenditure in train examination and wagon repairs over and above what would normally be done and which they would not have normally incurred otherwise in such cases 100% cost of railway staff posted for trains examination and all other expenses incurred in examination, certification, repairs, etc. should be recovered from the users of the sidings, as in the following instances:

(i) ...................................................

(ii) Where train examining staff are not required for examination and certification, which would normally be done in railways premises and for customers convenience if examination and certification is done at the customers premises by railway staff, the cost of such staff, an example of this type is the certification of loading and securing of steel consignments in the steel plants where Rlys train examination staff are posted in the various mills, for the convenience of steel plants.

6. The next circular is dated 28.1.1985. In this circular, this matter was considered as to how and in what manner the question of recovery of cost of siding is to be dealt with. The relevant part of the circular is as under :

In cases where carriage and wagon facilities are essentially required to be provided a party of Private/Assisted Siding, taking into consideration the volume of traffic and pattern of operation, the capital expenditure on construction of sick lines/trains examination lines (other than on recoverable permanent way material), and cost of staff quarters should be borne by the siding owner, while the railway should bear the cost of tools and plants, consumable stores, cost of recoverable permanent way materials and recurring expenditure on staff involved in normal examination and repairs to rolling stock. In exceptional cases enlisted in Boards letter No. 77[M(N)/ 951/36, dated 13.4.1981 the siding owners shall bear all the expenses for examination, certification, repairs, etc. including staff costs.

7. After this circular, a fresh circular was issued by the Railway Board on 1.12.1986. The relevant clause of that Circular is sub-clause (vi) of clause-3, which is reproduced as under :

Regular facilities for carriage and wagon examinations in the siding premised should be planned only if the level of loading/unloading from the siding is expected to be two or more rakes per day. As per apportionment of the cost it should be as per Boards letter No. 84/WI/SP/24 dt. 28.1.1985. However, this will not apply to sidings dealing with POL and other hazardous .commodities and those exceptional cases enlisted in Boards letter No. 77M(N)//951/36 dated 13.4.81 where these facilities would be provided in any case and the siding owner shall bear all the expenses for examination, certification, repairs, etc. including staff costs. In some cases where traffic level is less than two rakes per 3 day and some minor facilities for carriage and wagon examination inside the siding promises are, considered essential they will be justified and provided at railway cost.

8. Mr. Harish Salve, learned counsel for the petitioners submitted that according to the Circular dated 28.1.1985, only the capital expenditure is to be borne by the private siding owner and the Railway is required to bear the costs of tools and plants, consumable stores, costs of recoverable permanent material and recurring expenditure on staff involved in normal examination and repairs of rolling stock. The earlier circular dated 13.4.1981 was clarified by this circular and even by the latter circular dated 1.12.1986, the same position has been maintained with regard to the apportionment between the private siding owner and the Railways. The aforesaid 1986 circular provided that regular facilities for carriage and wagon examinations in the siding premises should be planned only if the level of loading/unloading from the siding is expected to be two or more rakes per day. It is further provided that as for apportionment of the cost, it should be as per Boards letter dated 28.1.1985. So, according to Mr. Salve, apportionment has to be done as per the circular dated 28.1.1985. He contended that the circular dated 13.4.1981 will have no application unless there are special circumstances like the private siding owner is engaged in movement of hazardous materials or the siding may be having sharp steeps or some such like situations.

9. It may be stated that in the circular dated 13.4.1981, what is provided that as per the existing circular dated 9.8.1967, the train examination was to be done by the Railways at its own cost in all cases. But that matter was further considered and it was decided that earlier instructions will not be applicable where the railways are to necessarily incur extra expenditure in train examination and wagon repairs over and above that would normally be done. It is further provided that all other expenses incurred in examination, certification, repairs, etc. should be recovered from the users of the sidings and three instances .have been specifically cited. The second instance is quoted above, according to which, where train examining staff is not required for examination and certification which would normally be done in railways premises, and for customers convenience if examination and certification is done at the customers premises by railway staff, the cost of such staff has to be borne by the user of the siding. The question is whether these specific exceptions in circular dated 13.4.1981 have been specifically excepted from the operation of the subsequent circulars dated 28.1.85 and 13.1.1986. We find in both the subsequent circulars an exception for the instances as enlisted in circular dated 13.4.1981. It would appear from the circular dated 28.1.1985 as to how it is excepted. It is provided in that circular that in exceptional cases enlisted in Boards letter dated 13.4.1981, siding owner shall bear all expenses for examination, certification, repairs, etc., including the staff cost. It would be clear from it that out of the three instances which have been enlisted in the circular dated 13.4.81, the present case is covered by instance No. (ii) enlisted therein. Similar is the position in circular dated 1.12.86. That also makes an exception for the cases enlisted in the Boards letter dated 13 4.1981. It is stated in the circular that it will not apply to sidings dealing with POL and other hazardous commodities and those exceptional cases enlisted in Boards letter dated 13 4.81. In the present case, according to this circular, the siding owner shall bear ail the expenses for examination, certification, repairs, etc. including staff costs. So, in our opinion, from reading of the three circulars together, it would appear that where the situation as is given in instance second exists, then, the entire cost of examination, certification, repairs, etc. including the staff costs would be borne by the siding owner. The second instance is an exception to the general rule or criteria laid down in the second circular and in the third circular of the years 1985 and 1986.

10. In the above view of the matter, in our opinion, the Agreement dated 19.1.1987 does not in any way contravene or is repugnant to the Railway Boards circulars referred to above and thus, it is not liable to be declared null and void.

11. Counsel for the respondent has raised objections regarding territorial jurisdiction as well as that the matter falls within the domain of contract. As we have heard the matter on merits, we do not think it necessary to deal with the aforesaid preliminary objections.

12. In the light of what we have considered on merits, we find no merit in this writ petition. This writ petition is, therefore, dismissed with no orders as to costs.