M/S. S.K.L. CO.versusCHIEF COMMERCIAL OFFICER & ORS.

                       [2015] 15 S.C.R. 156


A                         MIS. S.K.L. CO.
                                 v.
             CHIEF COMMERCIAL OFFICER & ORS.
                  (Civil Appeal No. 6905 of 2005)
B
                      DECEMBER 29, 2015
       [VIKRAMAJIT SEN AND SHIVA KIRTI SINGH, JJ.]
        Railways Act, 1989- ss. 30, 31, 70 and 71- Contract
  of lease of Front Second Class Luggage Rake (FSLR) and
C Ventilated Parcel Van (VP) - By Railways - For a period of
  two years- The notification whereby the tenders were invited
  for grant of lease, challenged - On the ground that as a result
  of leasing out FSLR, the traders were denied the facility of
  transporting their goods at the rates specified in the Coaching
D Tariff No. 24 Part Ill (Rates for Parcels & Luggage Traffic) -
  Single Judge of High Court quashed the notification holding
  that award of contract of lease was bad in law- Division Bench
  of High Court held that action of inviting tenders could not be
  quashed as being opposed to ss. 30 and 31 - However, the
E Division Bench issued directions to the Railways to
  incorporate certain regulatory checks on the unbridled power
  of the lessee by fixing upper limit on the tariff that could be
  charged by the contractors - On appeal, held: Railways is
  empowered to auction the space for a particular period,
F provided the auction contractor adheres to prescribed tariff-
  The Railways is bound to follow and implement the ethos
  and parameters set by the Act - The intendment behind a
  statute can be metamorphosed or diluted by the Parliament
  and not by a sub-delegate - The Railways is directed to
G ensure that the successful tenderer, does not change carriage
  prices in excess of those prescribed by the Railways in
  Coaching Tariff No. 24 Part Ill - The appellants have failed
  to adduce any evidence to establish that the Railways had
  given undue preference in favour of any person, violating
H SS. 70 and 71.
                                 156
   M/S. S.K.L. CO. v. CHIEF COMMERCIAL OFFICER               157


     Disposing of the appeal, the Court                      A
      HELD: 1. In the instant case, the statute does not
prescribe any particular manner in which the wagons
are to be leased. Therefore, it cannot be said that if the
manner of taking a particular action is prescribed under
a statute, that action must be undertaken and performed B
in that manner or not at all. [Paras 9 and 12] [173-E; 166-
C]
     Babu Verghese v. Bar Council of Kera/a (1999)
     3 SCC 422 : [1999] 1 SCR 1121 ; Hussein                 C
     Ghadial/y v. State of Gujarat (2014) 8 SCC 425 -
     held inapplicable.
      2. The onus to prove that there has been a violation
of Sections 70 and 71 of the Railways Act, 1989 is on the
appellant, who failed to adduce any evidence to establish D
that the Respondent - Railways had given undue
preference in favour of any person. This is especially so
in light of the fact that the lease was given after an auction
process. [Para 12] [173-F]
      3.1 The direction by the Division Bench to the         E
Railway Administration that when calling for tenders, it
should fix the outer limit or the upper limit of rates
chargeable by the contractor for different trains, ensures
a regulatory check upon the unbridled power of the
contractor in fixing the tariff rates while accepting the    F
parcel service of the third parties. This direction has
attained finality so far as the Respondents are concerned
inasmuch as they have failed to challenge them by filing
an appeal. [Para 12] [173-G-H; 174-A]
                                                             G
    3.2 The Respondents have not earned an entirely
favourable Judgment. Even though several points
pressed by the victor of a litigation may have been
viewed with favour, and the Respondent may have
succeeded only one or some, if the matter is taken by        H
158        SUPREME COURT REPORTS               [2015] 15 S.C.R.


A the vanquished party to the portals of a superior forum,
  the victor may still press all the points argued by it earlier.
  A holistic reading of the impugned Judgment discloses
  that this direction was not given en passant or casually
  in that in the penultimate paragraph of the impugned
B Judgment the Division Bench emphasised that although
  they were allowing two writ appeals, the success of the
  Respondents was subject to compliance with the
  directions. [Para 12) [174-D-E, F-G]
          Nalakath Sainuddin v. Koorikadan Sulaiman
c         (2002) 6 sec 1 : [20021 1 Suppl. scR 1 -
          referred to.
        3.3 The Respondents are bound to follow and
  implement the ethos and parameters set by the Railways
0 Act. The intendment behind a statute can be
  metamorphosed or diluted by Parliament but not by a
  sub-delegate. If a shift from the Railways being a social
  vehicle to it being essentially a milch cow towards was
  intended, that mutation was only within the province of
E Parliament. The Court is, of course, not interfering with
  the right of the executive to formulate policy, but while
  doing so the Rubicon dividing the power of the principal
  and the delegate or sub-delegatee should not be ignored.
  [Para 14) [176-E, G; 177-C-D]
 F        Avinder Singh v. State of Punjab (1979) 1 SCC
          137: [1979] 1 SCR 845 ; Agricultural Market
          Committee v. Shalimar Chemical Works Ltd.
          (1997) 5 sec 516: [19971 1 Suppl. scR 164;
          P Na/la Thampy Thera v. Union of India (1983)
G         4 SCC 598 : [1984) 1 SCR 709 ; Vik/ad Coal
          Merchant v. Union of/ndia (1984) 1 SCC 619 :
          [1984) 1 SCR 657 - relied on.
          3.4 However, it cannot be accepted that the
      Respondents are not entitled or empowered to auction
 H
    M/S. S.K.L. CO. v. CHIEF COMMERCIAL OFFICER                159


the space for a particular period. It may do so provided       A
the auction contractor adheres to the prescribed tariff.
The Respondents are directed to ensure that the
successful tenderer, does not charge carriage prices in
excess of those prescribed by the Respondents in
Coaching Tariff No. 24 Part Ill. [Paras 16 and 17] [177-G;     B
178-A-B]
     DCM v. Union of India (1988) 1 SCC 86 : [1988]
     1 SCR. 383 - referred to.
                    Case Law Reference                         c
[1999] 1 SCR 1121      held inapplicable         Para 9
[1984] 1 SCR 657       relied on                 Para 9
[1984] 1 SCR 709       relied on                 Para 9
(1988] 1 SCR 383       referred to               Para 10
                                                               D
(2014] 8 sec 425       held inapplicable         Para 12
(2002] 1 Suppl. SCR 1 referred to                Para 12
(1979] 1 SCR 845        relied on                Para 14
(1997] 1 Suppl. SCR 164 relied on                Para 14
     CIVIL APPELLATE JURISDICTION : Civil Appeal               E
No. 6905 of 2005.
     From the Judgment and Order dated 15.07.2004 of the
High Court of Karnataka at Bangalore in Writ Appeal No. 5722
of 2001.
                                                            F
      Mrs. Rani Chhabra, Yashraj Singh Deora,
Ms. Priyadarshinee Singh, Ms. ShreyaAgrawal, M/s. Mitter&
Mitter Co., Advs. for the Appellant.
      Ms. Kiran Suri, Sr. Adv., Ms. Vimla Sinha, Ms. Shweta
Garg, S. N. Terdal, B. Krishna Prasad, Advs. for the G
Respondents.
     The Judgment of the Court was delivered by
    VIKRAMAJIT SEN, J. 1. This Appeal assails the
Judgment dated 15.7.2004 of the High Court of Karnataka in     H
160       'SUPREME COURT REPORTS                [2015] 15S.C.R.


A Writ Appeal Nos. 5722-5723 of 2001 setting aside the
  judgment of the learned Single Judge dated 25. 7.2001 who
  had allowed both the Writ Petitions and quashed the impugned
  Notification, holding that the awarding of contract of lease of
  FSLR and VP is bad in law. The factual matrix of the present
B case is that in pursuance of the budget speech of the Hon'ble
  Minister for Railways in the year 1999-2000, the Respondents
  issued a tender notice no. 3/2000-2001 (hereinafter referred
  to as 'impugned notice') on 19.6.2000, inviting sealed tenders
  from traders and other interested parties for leasing of Front
c Second class Luggage Rake of 4 or 8 tons and Ventilated
   Parcel Van of 18 tons capacity on the Broad Gauge on payment
  of lump sum rate for loading of parcels by certain trains for a
   period of two years.
         2. The first compartment, immediately after the engine,
D  is known as Front Second Class Luggage Rake (FSLR) and
   each FSLR consist of four different sections. The first section
   is meant for carrying goods/parcels of 4 tons capacity, followed
   by the section known as the 'Brake Van' which is occupied
   only by the guard. The third section is for carrying unreserved
 E passengers, and the last section is again a luggage
   compartment with a capacity of 4 tons. Similarly, the last
   compartment in each train is known as Rear Second Class
   Luggage Rake (RSLR), which also consists of four sections
   similar to the FSLR. Further, if there is excess demand, a
 F Ventilated Parcel Van (VP) is added to the train after reducing,
   if necessary, a passenger compartment so as not to exceed
   the maximum hauling capacity of the engine. The VP is meant
   exclusively for the purpose of carrying parcels and its normal
   capacity is 18 tons. The Respondents had noticed that in some
 G trains, most of the time, the luggage capacity available in FSLR
   and RSLR was not being fully utilized resulting in loss of
   revenue. In view of this, as a matter of policy, it was decided
   by the Government of India to lease the luggage space in FSLR
   to traders and other interested persons after inviting tenders
 H fromthem.
    M/S. S.K.L. CO. v. CHIEF COMMERCIAL OFFICER                      161
                  [VIKRAMAJIT SEN, J.]

      3. FSLR of Train rio. 2627 Bangalore- New Delhi- A
Karnataka Express (Daily) [hereinafter 'Karnataka Express']
was leased for a period of two years at Rs. 19,800/- per 4
metric ton space per day. The lease was given on 24. 7 .2000
in favour of a company known as BIC Logistic Limited, in
pursuance to a tender issued by the Respondents. The lessees B
agreed to pay for the two spaces each of 4 tons at that rate
aggregating to Rs. 39,600/- per 8 tons per day. The Appellant
filed Writ Petition No. 27568 of 2000 before the High Court of
Karnataka, challenging the impugned notice. The Appellant is
engaged in trading of grapes who contended that as a result C
of the Respondents leasing out the FSLR in the Kamataka
Express, the Appellant was denied the facility of transporting
grapes from Bangalore to New Delhi at the rates specified in
the Coaching Tariff no. 24 Part Ill (Rates for Parcels & Luggage
Traffic), which came into effect on 1.4.2000. Another trader of D
grapes filed Writ Petition No. 37150 of 2000 before the High
Court of Karnataka on 27 .11.2000 seeking to restrain the
Respondent- Railways from charging any tariff other than that
specified in Coaching Tariff No.24 Part Ill. The learned Single
Judge by common Judgment dated 25.7.2001 allowed both E
the Writ Petitions and quashed the impugned notification,
holding that the awarding of contract of lease of FSLR and VP
is bad in law. Aggrieved by the decision of the learned Single
Judge, the Respondents preferred two appeals.
      4. Before the Division Bench, the Respondents                  F
contended that the learned Single Judge erred in holding that
the authority of the Respondents to lease the carrying capacity
in the trains is only in accordance with Section 30 and 32 of
the Indian Railways Act, 1989 (for brevity the 'Act') which, for
convenience, are reproduced below:                                   G
     30. (1) The Central Government may, from time to time,
     by general or special order fix, for the carriage of
     passengers and goods, rates for the whole or any part
     of the railway and different rates may be fixed for different   H
162         SUPREME COURT REPORTS                  [2015] 15S.C.R.



A          classes of goods and specify in such order the conditions .
           subject to which such rates shall apply.
           (2) The Central Government may, by a like order, fix the
           rates of any other charges incidental to or connected with
           such carriage including demurrage and wharfage for the
B          whole or any part of the railway and specify in the order
           the conditions subject to which such rates shall apply.
           31. The Central Government shall have power to-
           (a) classify or reclassify any commodity for the purpose
c              of determining the. rates to be charged for the
               carriage of such commodities; and
           (b) increase or reduce the class rates and other charges.
           32. Notwithstanding anything contained in this Chapter,
D          a railway administration may, in respect of the carriage
           of any commodity and subject to such conditions as may
           be specified,-
           (a) quote a station to station rate;
           (b) increase or reduce or cancel, after due notice in the
E
               manner determined by the Central Government, a
               station to station rate, not being a station to station
               rate introduced in compliance with an order made
               by the Tribunal;

 F         (c) withdraw, alter or amend the conditions attached to
               a station to station rate, other than conditions
               introduced in compliance with an order made by the
               Tri.bunal; and
           (d) charge any lump sum rate.
G
           5. The Respondents contended that the learned Single
      Judge failed to understand the objective and purpose with
      which the available parcel space in FSLR and VP was being
      sought to be exploited. The Respondents stated that it aimed
 H    to benefit by getting maximum rate without affecting the
    M/S. S.K.L. CO. v. CHIEF COMMERCIAL OFFICER                     163
                  [VIKRAMAJIT SEN, J.]

 interests of the general public, for whom there was still          A
 adequate provision of space available in every train. The
 Respondents further stated that in pursuance of an order of
the High Court dated 28.1.2002, an affidavit had been filed by
the Respondents which would allay any apprehension of the
Appellant, with respect to it being inconvenienced in               B
transporting its commodities. The Respondents will not hesitate
 to consider adding another wagon to meet the needs of the
 general public. Finally, the Respondents contended that there
 was no express provision permitting them to give the wagon
 on lease, however, au contraire, neither was there any provision   c
·under the Act which prohibited tbe Respondents from doing
 so. The Appellant while supporting the order of the learned
 Single Judge, placed reliance on Section 70 and 71 of the
Act, which is being provided for the facility of reference.
      70. A railway administration shall not make or give any       D
      undue or unreasonable preference or advantage to, or
      in favour of, any particular person or any particular
      description of traffic in the carriage of goods.
      71. (1) The Central Government may, if it is of the opinion   E
      that it is necessary in the public interest so to do, by
      general or special order, direct any railway
      administration-
      (a) to give special facilities for, or preference to, the
      carriage of such, goods or class of goods consigned by        F
      or to the Central Government or the Government of any
      State or of such other goods or class of goods;
      (b) to carry any goods or class of goods by such route or
      routes and at such rates;
                                                                    G
      (c) to restrict or refuse acceptance of such goods or class
      of goods at or to such station for carriage, as may be
      specified in the order.
      (2)Any order made under sub-section (1) shall cease to
      have effect after the expiration of a period of one year      H
164       SUPREME COURT REPORTS                   [2015] 15 S.C.R.


A        from the date of such order, but may, by a like order, be
         renewed from time to time for such period not exceeding
         one year at a time as may be specified in the order.
         (3) Notwithstanding anything contained in this Act, every
         railway administration shall be bound to comply with any
B        order given under sub-section (1) and any action taken
         by a railway administration in pursuance of any such
         order shall not be deemed to be a contravention of section
         70.
c       6. The Appellant contended that Section 70 was an
  implied restriction on the Respondents capacity to call for such
  tenders. The only exception to Section 70 is Section 71, which
  can be exercised only on the discretion of the Central
  Government, for the purpose of public interest. The Appellant
0 contended that by inviting such tenders, no public interest was
  being served and instead has led to the creation of a monopoly
  in favour of one person with respect to the mode of
  transportation, which in turn was detrimental to public interest.
  Extending the line of argument on Section 71, the Appellant
E contended that the Central Government had not issued any
  special or general order, enabling the Respondents to give
  special or preferential facility in the carriage of goods to anyone
  who offers the highest lump sum rate. The Appellant submitted
  that the content of the affidavit filed by the Respondent ran
F counter to the impugned Notification. As a result, the assurance
  sought to be given by means of an affidavit appeared to be an
  imaginary one. Finally, the Appellant submitted that the
  contractors are charging an exorbitant rate of Rs.8 per kg for
  transporting the consignment, whereas the Railways were
G charging only Rs.2.38 per kg for the transport of perishables
  from Bangalore to Delhi. This power to revise the tariff rates
  was bestowed exclusively on the Central Government under
  Section 32, and thus its delegation to a third party by entering
  into a lease agreement is in contravention of the statutory
  provisions.
H
    M/S. S.K.L. CO. v. CHIEF COMMERCIAL OFFICER                   165
                  [VIKRAMAJIT SEN, J.]

      7. In its reply, the Respondents contended that Section     A
70 of the Act stated that the Railway Administration shall not
give any undue or unreasonable preference. It was submitted
that the Respondent-Railways, by inviting tenders pursuant to
a policy decision will not amount to giving any undue or
unreasonable preference to one competitor over another.           B
Further, it was submitted that even in the absence of Section
70, the Railway Administration being an Authority postulated
by Article 12 of the Constitution, could not have discriminated
between similarly placed parties, as that would tantamount to
a violation of Article 14 of the Constitution.                    c
       8. The Division Bench of the High Court opined that the
impugned Notification was not issued under Section 30 and
31 of the Act, but instead was a product of a policy decision of
the Government of India which aimed to augment the earnings
of the Respondent-Railways by leasing the FSLR and VP in D
different trains. The Respondent-Railways are run as a
commercial undertaking, and its administration cannot be
prevented from taking steps to increase its revenue, as long
as they are not detrimental to the interest of the general public.
It was held that the action of inviting tenders could not be E
quashed as being opposed to Section 30 and 31. The High
Court observed that to prove that Section 70 had been violat€d,
the Appellant had to establish that undue preference had been
given to one over another, and as the Appellant failed to provide
any cogent evidence to that effect, this contention was F
dismissed. The apprehension of the Appellant was that due to
the leasing out of space to a third party, there was less than
adequate space for the general public, and that, as a result
they would have no choice but to approach the third party and
pay any rate that he may quote. The High Court observed that G
this apprehension of the Appellant had been allayed by the
affidavit filed by the Respondents wherein they had stated that
if the need arises they would ordain more space for the parcel
service. Thus, the High Court allowed the appeals. However,
with the intention of safeguarding the interest of the general H
166         SUPREME COURT REPORTS                    [2015] 15 S.C.R.


A     public, it also issued directions to the Respondent to
      incorporate certain Regulatory checks on the unbridled power
      of the lessee. The checks were meant to be in the form of an
      upper limit on the tariff that could be charged by the contractors
      for different trains. Aggrieved by the decision of the High Court,
B     the Appellant has filed the present appeal.
            9. The arguments of the learned Counsel for the Appellant
      are fourfold. Firstly, Babu Verghese v. Bar Council of Kerala,
      (1999) 3 SCC 422 reiterates that if the manner of taking a
      particular action is prescribed under a statute, that action must
C     be undertaken and performed in that manner or not at all; as
      there is no provision under the statute to lease out space to a
      third party, the Respondents are hit by the said principle.
      Secondly, the decision of the Respondent-Railways to lease
      the parcel space in favour of a particular individual amounted
D     to an unreasonable preference being given to that individual
      and therefore violated Section 70 (supra). Thirdly, the learned
      counsel relied on the maxim delegatus non potest delegare
      and submitted that under Sections 30 to 32, the power to fix
      the tariff rate is conferred only on the Central Government and
E     the Respondent-Railways. Thus, by further delegating their
      authority, they violate the established legal principle that a
      delegatee cannot sub-delegate. Finally, the learned Counsel
      for the Appellant elaborated on the role of the Railways as a
      social vehicle, by citing the case of Viki ad Coal Merchant v.
 F    Union of India, (1984) 1 SCC 619, the relevant paragraph reads
      thus:
             13. Re Ground 1: Railway is a common carrier and
             being State owned it is subject not only to the provisions
             of the Act but also the fundamental rights guaranteed
G
             by Part Ill of the Constitution. However much before the
             advent of the Constitution when different railways were
             owned by incorporated companies, Section 28 of the
             Act precluded the different railway administrations from
             granting undue preference to any particular person or
 H
M/S. S.K.L. CO. v. CHIEF COMMERCIAL OFFICER               167
              [VIKRAMAJIT SEN, J.]

 any particular traffic or to any particular railway A
 administration, or subject anyone to any undue or
 unreasonable prejudice or disadvantage in the matter
 of transport of goods or passengers. Railway being a
 State monopoly, to checkmate its monopolistic power
 in the larger public interest it has to be subjected to B
 regulatory measures. Simultaneously it became
 necessary to arm Central Government with power to
 direct railway administration to give preference in the
 matter of transport of the goods of the Government,
 Central or State or specified goods to meet the C
 demands of various regions as well as needs of
 Government. Intention was to classify Government in a
 class by itself for the purpose of Article.
  14. To meet the challenge of Article 19(1 )(g) the Central
  Government was armed with power to accord priority D
  in transport of goods in larger public interest. Soon after
 ·the advent of the Constitution, to arm the Central
  Government with requisite power to direct the railway
  administration to give special facilities for or preference
  to the transport of any such goods or class of goods E
  consigned to the Central Government or to the
  Government of any State or such other goods or class
  of goods as may be specified in the order, Section 27-
  A was introduced in the Act which enabled it by a general
  or special order to direct the railway administration to F
  grant special facilities for or preference to the transport
  of goods. Such a general or special order can be issued
  by the Central Government if in its opinion it is necessary
  in the public interest to do so. Now indisputably the
  goods consigned to the Central Government or to G
  Government of any State must obviously have a priority
  over what we may loosely describe as private
  transporters, because it is well-settled that the Central
  or the State Government is in a class by itself. This view
  is founded on the assumption that all activities of the H
168   SUPREME COURT REPORTS                    [2015] 15S.C.R.


A      State are in public interest in the sense that they are
       either undertaken on behalf of the public or that the loss
       or gain arising from them falls upon the public. The
       goods consigned to the Central or the State Government
       are, unless shown to the contrary necessarily to be used
B      to. carry on governmental activity undertaken for the
       benefit of public or to subserve some public interest and
       which may as well include the efficient administration of
       the governmental agencies. Section 27-A also confers
        power to direct any railway administration to give special
c      facilities for or preference to the transport of goods or a
       class of goods as may be specified in a general or
        special order that may be issued in this behalf. The
       Central Government is better equipped to know what
       class of goods are required to be sent to any particular
D      area expeditiously to meet some shortage, or for
        national security or to meet an emergency or any natural
        or man-made catastrophe so as to accord special
       treatment in the matter of transport. Section 28 can be
        said to some extent to be a corollary to Section 27-A
 E      inasmuch as the railway administration on its own is
        prohibited from giving undue or unreasonable
        preference or advantage to, or in favour of, any particular
        person or railway administration, or any particular
        description of traffic, in any respect whatsoever, or
 F      subject any particular person or railway administration
        or any particular description of traffic to any undue or
        unreasonable prejudice or disadvantage in any respect
        whatsoever. To repeat railway being a State monopoly
        undertaking, it had to be statutorily controlled from
 G      abusing its monopolistic character by prohibiting it from
        giving any undue or unreasonable preference or
        advantage or acting in any manner which would
        evidence undue or unreasonable prejudice or
        disadvantage in any respect whatsoever. Equality
      . guaranteed by Article 14 is translated into statutory
 H
    M/S. S.K.L. CO. v. CHIEF COMMERCIAL OFFICER                   169
                  [VIKRAMAJIT SEN, J.]

      provision in Section 28. A State monopoly like the A
      railway administration cannot be trusted to act fairly and
      that is the object underlying Section 28. If everyone was
      to get equal facility for transport of his goods by railway
      without anyone claiming priority or anyone having power
      to grant preference or special facility, in an emergency B
      this equal opportunity would create a havoc. Therefore
      on the other hand, the Central Government to meet the
      needs of the country arising in any eventuality can give
      directions for giving special facilities for or preference
      to the transport of goods or any class of goods. In the     c
      absence of power such as conferred by Section 27 -A,
      floods, droughts, national security requirements,
      unscrupulous hoarders, artificial shortages, materials
      for national projects in a country of the dimensions of
      India cannot be effectively and adequately tackled. This o
      is the genesis of the power conferred by Section 27 -A.
The judgment discusses the Indian Railways Act, 1890 in
which, Sections 27 and 28 correspond to Section 70 and 71
of the present Act. To further buttress his final submission on
the role of the Railways, the learned Counsel for the Appellant   E
also cited P. Na Ila Thampy Thera v. Union of India, (1983) 4
sec 598, the relevant paragraph has been provided below:
      25. We have said earlier that the Railways are a public
      utility service run on monopoly basis. Since it is a public F
      utility, there is no justification to run it merely as a
      commercial venture with a view to making profits. We
      do not know - at any. rate it does not fall for
      consideration here - if a monopoly based public utility
      should ever be a commercial venture geared to support
      the general revenue of the State but there is not an iota G
      of hesitation in us to say that the common man's mode
      of transport closely connected with the free play of his
      fundamental right should not be. We agree that the Union
      Government should be free to collect the entire
                                                                  H
170       SUPREME COURT REPORTS                  [2015] 15 S.C.R.


A        ·operational cost which would include the interest on the
          capital outlay out of the national exchequer. Small
          marginal profits cannot be ruled out. The massive
          operation will require a margin of adjustment and,
          therefore, marginal profits should be admissible.
B       10. Per contra, learned Senior Counsel for the
  Respondents contended that the Appellant has only challenged
  the impugned Notification. However, the impugned notification
  was only an extension of what was envisaged in the policy of
  the Government, and that the Appellant erred by not challenging
C the said policy decision of the Government. The learned
  Counsel relied on Article 73 of the Constitution and submitted
  that the Central Government had full power to deal with the
  property of the Respondent-Railways in any manner it found
  appropriate or beneficial. Further, it was contended that the
D onus to prove unreasonableness was on the Appellant. This
  contention was supplemented with the case of DCM v. Union
  of India (1988) 1 SCC 86, the .relevant portion has been
  reproduced below:
         12. The relevant provisions of the Railways Act, 1890,
 E
         which have a material bearing on the question are these:
         Section 41 provides for filing complaints against Railway
         Administration. The section provides as follows, so far
         as it is material:
 F       "41. (1 )Any con:iplaint that a railway administration
         (a) is contravening the provisions of Section 28 or
         (b) is charging for the carriage of any commodity between
         two stations a rate which is unreasonable, or
 G       (c) *    *      *
         may be made to the Tribunal and the Tribunal shall hear
         and decide any such complaint in accordance with the
         provisions of this chapter."
 H
M/S. S.K.L. CO. v. CHIEF COMMERCIAL OFFICER                     171
              [VIKRAMAJIT SEN, J.]

 Section 28 provides:                                           A
 28. A Railway administration shall not make or give any
 undue or unreasonable preference or advantage to, or
 in favour of, any particular person or railway
 administration, or any particular description of traffic, in
 any respect whatsoever, or subject any particular person       B
 or railway administration or any particular description of
 traffic to any undue or unreasonable prejudice or
 disadvantage in any respect whatsoever.
 13. The third question formulated by us relates to the         c
 contravention of Section 28 of the Railways Act. The
 scope of this section has been considered by this.Court
 in Rajgarh Jute Mills Ltd. v. Eastern Railway. There it was
 observed that a party who complains against the railway
 administration that the provisions of Section 28 have been     0
 contravened must establish that there has been
 preference between himself and his goods on the one
 hand and his competitor and his goods on the other.
 Gajendragadkar, J. (as he then was) observed:
 "Section 28 is obviously based on the principle that the E
 power derived from the monopoly of railway carriage
 must be used in a fair and just manner in respect of all
 persons and all descriptions of traffic passing over the
 railway area. In other words, equal charges should
 normally be levied against persons or goods of the same F
 or similar kinds passing over the same or similar area of
 the railway lines and under the same or similar
 circumstances; but this rule does not mean that, if the
 railway administration charges unequal rates in respect
 of the same or similar class of goods travelling over the G
 same or similar areas, the inequality of rates necessarily
 attracts the provisions of Section 28. All cases of unequal
 rates cannot necessarily be treated as cases of
 preference because the very concept of preference
                                                                H
172   SUPREME COURT REPORTS                     [2015] 15 S.C.R.


A     postulates competition between the person or traffic
      receiving preference and the person or traffic suffering
      prejudice in consequence. It is only as between
      competitors in the same trade that a complaint of
      preference can be made by one in reference to the
B     other."
       14. In the light of these principles, the Tribunal considering
      the material on record held that there is no evidence
       produced by the company to justify any grievance under
      Section 28. We see no reason to disagree with this
c     conclusion. It is, in our opinion, perfectly justified. In fact
       Mr K.K. Jain learned Counsel for the appellant also did
      ·not seriously dispute the correctness of that finding
       recorded by the Tribunal.
      15. We may now turn to the second question. Mr K.K.
D
      Jain urged that the rate charged by the Railway
      Administration is per se unreasonable. Here again the
      onus to prove the alleged unreasonableness of the freight
      rests on the company. It is for the company to establish
      that the rate charged by the Railway Administration for
 E
      the carriage of Naptha is unreasonable. Of course, this
      onus could be discharged by relying upon the material
      produced by the Railways. Mr Jain, therefore, relied upon
      a statement Exhibit C-46 in support of his case. Exhibit
 F
               a
      C-46 is statement of surplus "working cost" in respect
      of carriage of Naptha from Bajuva to Dadhevi. It is, in our
      opinion, not necessary to analyse the statement. Even
      assuming that the Railways are earning some surplus
      income after deducting the operation cost that by itself
      is no ground to hold that the freight charged is per se
G
      unreasonable. It must be borne in mind that the Railways
      are run as a commercial undertaking and at the same
      time it being an instrumentality of the State, should serve
      the national interest as well. There is however, no
      obligation on the Railways to pass on the extra amount
H
    MIS. S.K.L. CO. v. CHIEF COMMERCIAL OFFICER                  173
                   [VIKRAMAJIT SEN, J.]

     realised by the carriage of goods to customers. Nor it is   A
     necessary to share the profit with the commuters. As Mr
     Barua learned Counsel for the Railways said that in the
     case of commodities of national needs such as
     foodgrains, crude oil etc., it may be necessary for the
     Railways to charge below the operation cost. To offset      B
     such a loss the Railways may charge higher freight for
     certain other classified commodities. Therefore, it seems
     to us, that the cost of operation cannot by itself be the
     basis for judging the reasonableness of the rate charged.
       11. The Learned Senior Counsel submitted that the C
Appellant had failed to furnish any evidence to justify his claim
that the Respondents had acted in an unreasonable manner
by favouring one person over another.
       12. We have carefully considered all the arguments 0
addressed before us. We do not find any.force in the contention
of the Appellant on the applicability of the Taylor vs. Taylor
principle applied by this Court in most recently in Hussein
Ghadially vs. State of Gujarat (2014) 8 SCC 425. In the instant
case the statute does not prescribe any particular manner in E
which the wagons are to be leased. On the issue of Section
70 and 71, we are in agreement with the contention of the
Respondent, that the onus to prove that there has been a
violation of the said section is on the Appellant, who failed to
adduce any evidence to establish that the Respondent - F
Railways had given undue preference in favour of any person.
This is especially so in light of the fact that the lease was given
after an auction process. The Division Bench directed the
Railway Administration that when calling for tenders, it should
fix the outer limit or the upper limit of rates chargeable by the G
contractor for different trains. This ensures a regulatory check
upon the unbridled power of the contractor in fixing the tariff
rates while accepting the parcel service of the third parties.
This direction has attained finality so far as the Respondents
are concerned inasmuch as they have failed to challenge them H
174         SUPREME COURT REPORTS                   [2015] 15S.C.R.


A     by filing an appeal. As far back as on 5.8.2015 we had brought
      this state of affairs to the notice of the learned Senior Counsel
      for the Respondents. A challenge to this direction could have
      been made in any legally known manner to rectify the position.
      This is sought to be salvaged by learned Senior Counsel by
B     relying on certain observations of a coordinate Benc,h in
      Nalakath Sainuddin v. Koorikadan Sulaiman 2002 (6) SCC
      1. However, the question which has to be addressed by us is
      whether or not the Respondent is "a person aggrieved" by the
      impugned Judgment. In our opinion, we are not confronted by
c     multiple possibilities on this aspect other than that the
      Respondents are persons aggrieved in view of the explicit
      direction of the Division Bench in the impugned Judgment
      extracted above. What we have before us is not an instance
      of the Respondents earning an entirely favourable Judgment,
D     even though some of the arguments proffered by them may
      not have found favour with the Court. The settled position in
      law as is evident from a proper perusal of Nalakath is that
      even though several points pressed by the victor of a litigation
      may have been viewed with favour, and the Respondent may
 E    have succeeded only one or some, if the matter is taken by
      the vanquished party to the portals of a superior forum, the
      victor may still press all the points argued by it earlier. The
      Judgments of the High Courts which have been analysed by
      this Court in Nalakath do not go to the extent, as they clearly
.F    cannot, that a critical" direction which is unfavourable to the
      Respondent can be assailed even in the absence of filing a
      cross or a separate appeal. A holistic reading of the impugned
      Judgment discloses that this direction was not given en passant
      or casually in that in the penultimate paragraph of the impugned
 G    Judgment the Division Bench emphasised that although they
      were allowing two writ appeals, they were at pains to reiterate
      that the success of the Respondents was subject to compliance
      with the aforementioned directions which we entirely affirm.
           13. Instead of complying with the directions a futile effort
 H    has been made by the Respondents to dilute them, nay render
    M/S. S.K.L. CO. v. CHIEF COMMERCIAL OFFICER                       175
                  [VIKRAMAJIT SEN, J.]

nugatory by a side wind in terms of the additional affidavit dated    A
3.9.2015 a perusal of which makes it abundantly clear that it
should have assailed the directions in the impugned Judgment.
These asseverations, inter alia, are as follows:           ·
      "That it is respectfully submitted that fixing of outer/upper
      limit cannot be done by Railways for the reasons listed         B
      as follows:
     (i) The contracts for leasing parcel space of the
           Brakevans is an activity which comes under earn-
           ings contract in which price is not regulated by Rail- C
           ways.
     (ii) The parcel leasing policy is introduced to maximize
           revenue through parcel traffic and to avoid
           underutilization of Parcel space available in each
           train.
                                                                   D
     (iii) The. leaseholder takes the parcel space of the
            Brakevans after going through the competitive bids
            and he also incurs expenses towards ancillary
            services provided to his customers.
     (iv) The leaseholder cannot charge exorbitant rates be- E
            cause there are alternative trains for the public in
            which in which parcel space is held by other lease
            holders as well as Railway. The customers can move
            their cargo either by road or by air. Thus in effect,
            these rates are actually market determined rates and F
            no leaseholder can increase it beyond a point that
            traffic can bear in view of presence of other compet-
            ing modes i.e. trucks flights and other trains wherein
            both leased and departmental parcel portions are
            available.                                             G
     (v) The leaseholder takes the responsibility for safe
           ·custody of goods entrusted to him and compensates
            for any loss or damages on his own during transit.
     (vi) If the charges levied by the leaseholder are high then
            there is every chance for the customers to move the H
176       SUPREME COURT REPORTS                   [2015] 15S.C.R.


A            traffic by road or air. Hence, the leaseholder is
             constrained to keep the rates low after ensuring his
             marginal profit.
         (vii) Since introduction of Parcel Leasing Policy in the
               year 1991 and till date, exceptfor this petition there
B              is no other case pending before any of the Hon'ble
               Court with regard to fixation of outer/upper limit.
         (viii) Parcel Leasing Policy is well patronized among the
                merchant community and running successfully for the
                last 25 years all over India and all the parties viz.,
c               the merchant community, leaseholder and Railways
                are benefited by this scheme."
         14. The Appeal before us can be disposed of by us·
  without any further complaint or grievance by the Appellant, by
D directing the Respondents to fix the outer or upper limit of rates
  chargeable by contractors for different trains. We say this for
  the simple reason that the Respondents are bound to follow
  and implement the ethos and parameters set by the Railways
  Act: The learned Single Judge had followed and applied
E decisions of this Court when called upon to interpret different
  sections of the Act. Over a quarter of a century ago it has
  been emphasised that the Railways enjoy a monopolistic
  character, the justification of corollary of which would be the
  fulfilment and attainment of public interest. The Railway Budget,
F presented each year, is studied threadbare with special
  interest and emphasis on what the Central Government hopes
  to achieve in the coming year, and the most prominent and
  predominant feature whereof is the advancement of social
  interests. That the intendment behind a statue can be
  metamorphosed or diluted by Parliament but not by a sub-
G delegate has been unequivocally reiterated by this Court.
  Avinder Singh v. State of Punjab 1979 (1) SCC 137 enunciates
  that the Legislature cannot efface itself; it cannot delegate the
  plenary or essential legislative function; and even if there is
  delegation, the delegate must function under its supervision
 H
    M/S. S.K.L. CO. v. CHIEF COMMERCIAL OFFICER                   177
                  [VIKRAMAJIT SEN, J.]

otherwise "if the delegate is free to switch policy it may be A
usurpation of legislative power itself'. In Agricultural Market
Committee v. Shalimar Chemical Works Ltd. (1997) 5 SCC
516 we have restated that "the legislature cannot abdicate
essential legislative function in favour of another. Power to
make subsidiary legislation may be entrusted by the legislature B
to another body of its choice but the legislature should, before
delegating, enunciate either expressly or by implication, the
policy and the principles for the guidance of the delegates". In
applying this dicta, it seems to us that if a shift from the Railways
being a social vehicle to it being essentially a milch cow         c
towards was intended, that mutation was only within the
province of Parliament. This is especially so keeping in
perspective the observations made by this Court in P. Nalla
Thampy Thera and Viklad Coal Merchant. In saying so,
we do not intend, even a whit, to interfere with the right of the D
executive to formulate policy, but while doing so the Rubicon
dividing the power of the principal and the delegate or sub-
delegatee should not be ignored.
      15. Railway tariffno doubt has to be realistic and keep
pace with time and if the State so perceives, need not be a        E
losing financial proposition. While it may be both pragmatic
and sagacious to auction FSLR & VP it can be done with an
objective of gathering the optimum revenue. It has not been
contended before us nor is any material available disclosing
that the tariff itself has been increased by adherence to the      F
statutory procedure.
       16. We are, however, unable to accept the argument
articulated on behalf of the Appellant that the Respondents are
not entitled or empowered to auction the space for a particular G
period. It may do so provided the auction contractor adheres
to the prescribed tariff. We permit a period of three months to
the Respondents to comply with the impugned Judgment of
the Division Bench.

                                                                   H
178          SUPREME COURT REPORTS                 [2015] 15 S.C.R. .


A        17. The Appeal is accordingly disposed of in these terms.
  The Respondents are directed to ensure that the successful
  tenderer, in our case, Respondent No.4, does not charge
  carriage prices in excess of those prescribed by the
  Respondents in Coaching Tariff No. 24 Part Ill. It will be seen
B that this direction is not drastically different to that contained in
  the impugned Judgment since the fixation of "the outer limit or
  the upper limit of rates chargeable by the contractor" would
  have been carried out by complying with a procedure
  envisaged by law. The Judgment of the Division Bench is
c upheld, but to this extent only.

      Kalpana K. Tripathy                            Appeal disposed of.