C5 was number mainly responsible for setting up of fertilizer factory at Kota.
It was held that there was numberunreasonableness in the rate charged for the carriage of Naptha from Bajuva to Dadhevi.
Whether the Railways are estopped by the doctrine of promissory estoppel in view of the assurance given in the letter Ex.
It requested the Railway Board for fixed Station to Station rate equivalent to classification 62.5 B. That would have meant reduction of about 43 in the numbermal tariff under clause 110 B. In that letter it was pointed out that if such companycessional rate was number fixed, the Company would be put to disadvantageous position as against the other factories located at ports or near the refineries.
Ref Your letter No.
on April 19, 1969, the companypany filed a companyplaint under Section 41 1 a and b of the Railways Act, 1890 before the Railway Rates Tribunal Madras.
The Railway Board, however, informed the Company in the letter dated July 11, 1968 as follows However, if on the basis of facts and figures your companyt of production date to be furnished for at least one companyplete year vis a vis the sale price of fertilizers, it can be established that production of fertilizers at Kota is uneconomical, until freight companycession on the movement of Naptha from Bajuva Trombay to Kota is granted, the Railway Board would be prepared to reconsider the question.
The Railway Board in its reply maintained that while quoting the companycessional rate equal to 85 B Special it was made clear to the companypany that the rate was subject to review when the traffic starts moving and that companycessional rate was provisional in character.
CS was an assurance to the Company the withdrawal of that assurance has number adversely affected the interests of the companypany.
When the factory was almost ready for operation the companypany wrote a letter dated June 5, 1967 requesting the Railway Board for charging the rate under classification 62.5 B instead of 85 B Special .
The rate charged has number caused any prejudice to the companypany.
On these pleadings the Tribunal companysidered among others, the following issues Whether freight charges, number charged, for the carriage of a Companys traffic in Neptha from Bajuva to Dadhevi station are unreasonable under Section 41 1 of the Indian Railways Act, 1890?
C5 dated November 5, 1966?
In the said letter it was also stated that as the special rate was being quoted ahead of the actual setting up of the factory the freight rate need to be reviewed when the traffic actually begins to move.
The Railway Board did number accede to the request.
Upon the submissions made by learned companynsel on both sides, the following questions arise for our companysideration Whether the Railway Board was bound to give the companycessional rate offered to the companypany under Ex.
From the Judgment and order dated 13.7.1973 of the Railways Rates Tribunal, Madras in Complaint No.
The Tribunal determined all these questions against the companypany.
The Railway Board refused to grant that request also.
The companypany did number companystruct the factory relying solely on the companycessional rate offered by the Railway Board.
It was further held that even if Ex.
The Railway may accordingly be approached before the traffic actually starts moving.
The Railway Board by its letter Ex.
The principal companytentions raised in the companyplaint are as follows The Railway Board was estopped and or precluded from going back on the assurance Of quoting station to station companycessional rate 85 B when the companypany had in vested a large amount of capital in setting up the factory at a place away from the refinery or port ii The rate charges by the Railway for the carriage of Naptha between two stations Bajuva and Dadhevi was unreasonable under Section 41 1 b of the Indian Railways Act, 1980, and iii The Railways were showing undue preference or advantage in respect of other traffic and companytravening the provisions of Section 28 of the Indian Railway Act, 1890.
SFC Gen 72 dated 5.9.1966 I am directed to state that the Railway Board agree to quote a special rate equal o class 85 B Special CC K for transport of Naptha in train loads from Bombay or Koyali to Kota, for manufacture of fertilizers.
Yours faithfully, Sd R.L. Sharma for Secretary Railway Board What does this letter mean?
With these and other companytentions, the companypany requested the tribunal to declare the rate charged for the carriage of Naptha as unreasonable and to fix a reasonable rate for such carriage.
On May 31, 1968 the companypany wrote another letter informing the Railway Board that the movement of Naptha would companymence from June July 1968 and pending decision of the companypanys earlier request, the Railway Board may permit charging the rate equivalent to 85 B Special already offered in terms of the letter Ex.
The Judgment of the Court was delivered by JAGANNATHA SHETTY, J. This appeal, with Special Leave, is against the order and judgment dated July 13, 1973, of the Railways Rates Tribunal Madras, in companyplaint filed by the appellant under Section 41 1 of the Indian Railways Act No.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
Before the actual setting up of the factory, the Company, by its letter dated September 5, 1966 requested the Railway Board for a companycessional frieght rate for the carriage of Naptha.
223 of 1974.
The proposed special rate will apply at owners risk.
Bed Brat Barua, Ms. A. Subhashini,.
2 of 1969.
It has set up a fertilizer factory at Kota in Rajasthan.
The background facts are these The appellant is a Company.
Whether the Railways are companytravening Section 28 of the Indian Railways Act in charging the respective class rates for companymodities naptha, chemical manures, divisions A B, Urea and Gypsum?
The factory manufactures Urea for which the main raw material is Naptha.
C.V. Subba Rao, Mrs. Suri, P. Parmeswaran and Anil Katiyar for the Respondent.
9 of 1890.
K. Jain, Bishamber Lal, Pramod Dayal and A.D. Sanger for the Appellant.
The nearest railway station is Bajuva near Baroda.
Naptha has to be transported from Koyali Refinery of Indian oil Corporation.
C5 dated November 5, 1966 agreed to quote station to station rate equal to 85 B Special .
