Holding

The Board’s resolution fixing Rs 30 per MT under the new handling system created a fresh scale of rates that required prior Central Government sanction under Section 52, and the question of its fairness is for the Central Government under Section 54.

Summary

The Visakhapatnam Port Trust levied handling charges of Rs 30 per metric ton for manganese ore after introducing a new handling system that eliminated its narrow‑gauge railway service. The private shippers, M/s Ram Bahadur Thakur Pvt. Ltd., challenged the rates, arguing that the new charges were a fresh scale of rates requiring prior Central Government sanction under Section 52 of the Major Port Trusts Act, 1963, and that the rates were unreasonable. The High Court quashed the Trust’s resolution and directed the Central Government to consider the shippers’ objections before fixing rates. The Supreme Court held that the new system created a new scale of rates, which indeed needed Section 52 sanction, and that the reasonableness of the rates is a matter for the Central Government under Section 54. Consequently, the Court affirmed the High Court’s direction to the Central Government and dismissed the appeals.

Issues considered

Whether the circulars and Board resolution fixing Rs 30 per MT constitute a remission under Section 53 or a new scale of rates requiring prior sanction under Section 52.
Whether the imposed handling charges are unreasonable, excessive, or lack a proper quid pro quo.
Whether any effective scale of rates existed for handling manganese ore between 20 May 1986 and 12 Feb 1992.
Whether the High Court’s direction to the Central Government to issue notices and hear objections under Section 54 is legally justified.

Legislation cited

Major Port Trusts Act, 1963s. 42, s. 48, s. 49, s. 50, s. 52, s. 53, s. 54

Subjects

major port trusthandling chargesscale of ratesSection 52Section 53Section 54natural justiceadministrative lawpublic interestwrit petitionArticle 226Article 136

Judgment

A THE VISAKHAPATNAM PORT TRUST
v.
M/S. RAM BAHADUR THAKUR PVT. LTD.

FEBRUARY 10, 1997
B
[DR. A.S. ANAND AND S.B. MAJMUDAR, JJ.]

Major Port Tmsts Ac4 1963 : Sections 52 to 54.

Scale of rates-For trans-shipment and shipping of goods-Fixing
C of--By Board of Tmstees-Handling charges for manganese ore at Rs. 35 per
MT approved by Central Government under S. 53--Rate included trampor-
tation of stocked ore from the plots within the Port to ships by narrow gauge
railway line at the cost of the Board-On representation by the shippers,
remission of Rs. 5 per MT granted by Board-Subsequently, Board by its
resolution introduced revised system under which stocked ore was to be
D transported to the wharf by employing shippers' own dumpers and loaders
and loadingwith their sling~sting na"ow gauge railway jystem dispensed
with-Rs 30 per MT was fixed as consolidated handling charges under the
new system-Held : Scale of rates depended upon conditions under which
services were rendered by the Board to shippers-New system replaced old
E system and, there/ore, for enforcement of the same prior sanction by Central
Government under S. 52 was sine qua non-It could not be treated as a
scheme of remission under S. 53.

Sections 53 and 54-Scale of rates-For services rendered by Board to
shippers-Fixed by Board and sanctioned by Central Government-Held : )
F Board empowered to grant exemption/remission under S. SJ-Central ,
Government empowered to modify or cancel the sanctioned rate--Board and
Central Government to exercise their respective powers independent of each
other. -

Sections 52 and 54-Scale of rates for trans-shipment of goods-Exist-
G ing rates approved by Central Government under S. 52 and remitted by
Board-Subsequently, revised by Board by introducing an entirely new sys-
tem-However, Central Government gave sanction to new system a few years
late,._-lfeld : during the intemgnum i.e., from the date of introduction of the
new system Jill the date of its sanction, the pre-existing rate would con-
tinu~Subject to resolving of objections raised-Although such rates were
H disputed, the High Court emd in holding that there was no effective scale of rates.
1080
VISAKHAPATANAMPORTlRUSfv.RAMBAHADURTIIAKURPVf.LTD. 1081
~ Sections 52 and 54-Scale of rates-For servi.ces rendered by Board for A
trans-shipment .of goods-Modification or cancellation of existing scale of
rates--Concemed parties raised objections that existing scale of rates were
unreasonable, excessive or lacking in quid pro quo-Held: Such parties could
file representations and Central Government could consider their repre-
sentations--ln appropriate cases, Central Government could give hearing to
affected parties before taking decision regarding modification or cancel/a- B
don-Objections and suggestions of the Board too had to be considered under
- -.,, S. 54 proviso-Hence, when aggrieved parties filed writ petition before High
Court raising such objections, the High Court was justified in directing Central
Government to give hearing to the parties' objections.

Administrative Law : c
Natural justice-Audi alteram partem-flearing-Held : Not required
to be given to affected parties by a legislative action or action of a delegated
legislative authority imposing any tax, fee or charges-However if statute
obliged the Government to consider modification or cancellation of existing
scale of rates iii public interest court could direct Government to their
D
representation-Once such representations were moved, Government must
consider them and in appropriate case give personal hearing to affected ..
parties.
·- Constitution of India 1950 : Article 226. E
Writ petition-Maintainability of-Alternative remedy-Held : Where
highly disputed question offact arose for decision, civil suit instead of writ
-lI petition would be the appropriate action :

" The respondents were dealers in manganese ore. They eiported F
manganese ore through the Minerals and Metals Trading Corporation of
India. For exporting the said ore they required the senices of the
appellant's Port through which their manganese ore was loaded in the ships
',., for export. The appellant- Port Trust for that purpose offered various
services and facilities to such shippers. The appellant-Port Trust main·
tained different yards in its premises. One such yard was divided into G
several plots, which were leased out by the Port Trust authorities to
'y different shippers. The respondent were the lessees of a few plots. Broad
'
gauge railway lines on one-side and narrow gauge railwaf lines on the other
side connected these plots. The manganese ore was being transported to the
plots situated within the limits of the Port by broad gauge railway line and H
1082 SUPREME COURT REPORTS [1997] 1 S.C.R.
~
A from those plots the stored manganese ore was being carried to the ships
for its outward journey in the course of the export by being transported in
skips drawn by a small engine of the narrow gauge railway line. Handling
of ore from the plots to the ships was done entirely by the Port authorities
at their own cost for which they used to charge handling charges at Rs. 35
per MT of manganese ore. This rate and the conditions under which
B handling services were then offered by the Board of Trustees were duly
sanctioned by the Central Government under Section 52 of the Major Port
I
Trusts Act, 1963. Despite the continuance of this system of handling
,-
service offered by the Board, a representation was made to the Board by
""
the shippers of the manganese ore to the effect that this consolidated rate
c of handling charges of Rs. 35 per MT of manganese ore was excessive. This
representation was partly accepted by the Board. It was resolved by the
Board to approve under Section 53 of the Act, a remission of Rs. 5 per MT
of manganese ore brought by dumpers to the appellant's Port and ex-
ported, on the basis of the Central issued by the Dock Labour Board. Thus,
the effective and operative rate of handling charges of manganese ore
D ~
became Rs. 30 per MT subject to the concerned shipper producing the
requisite certificate issued by the Dock Labour Board. This remission was
a conditional remission. The aforesaid remitted rate of handling charges
continued till the Traffic Manager of the appellant-Port Trust by a circular
informed all concerned that a new system of handling manganese ore ..
E would be introduced by the appellant•Port Trust. It recited that under the
revised system, the stocked ore will be transported to the wharf by employ-
ment by the shippers of dumpers and loaders and loading with net slings
dispensing with the existing narrow gauge system. This was followed by
another circular issued by the Traffic Manager of the appellant-Port Trust
notifying that a provisional consolidated handling charges of Rs. 30 per
t
F
MT for handling export of manganese ore etc. in the new system would be
levied. This provisional rate was placed before the Board, which by its
resolution approved the collection of consolidated handling charges of Rs.
30 per MT for handling manganese ore shipment in the new system. This ,,
Resolution clearly indicated that the Board resolved to levy fresh handling
G charges of Rs. 30 per MT in the light of the new system of offering such
services meaning thereby that the aforesaid rate of handling charges of
manganese ore would be levied by the Board despite withdrawal of the v'

facility of narrow gauge railway line for the shippers.

H Respondent challenged the Resolution by filing a writ petition before
VISAKHAPATANAM PORT TRUST v. RAM BAHADUR THAKUR Pvr. LTD. 1083
the High Court. A Single Judge quashed the Resolution and circulars and A
allowed the writ petition. The Division Bench confirmed the decision of the
Single Judge. It was held by the High Court that the High Court that the
handling charges of Rs. 30. per MT with respect to manganese ore and
other ores in the light of the fresh system, could not be effectively pressed
into service by the Board as procedure under Section 52 of the Act had not
been followed. But the same was later on sanctioned by the Central
B
Government under Section 52 of the Act. Therefore, the controversy
survived regarding the appropriate handling charges for manganese or for
the relevant period i.e., from the date of introduction of the new system till
the date of its sanction by the Central Government and for that period the
Central Government, while exercising it powers under Section 52 of the c
Act, was required to consider the question regarding fixing of appropriate
handling charges after giving notice to the writ petitioners and hearing
their objections, if any. It was further directed that whatever payments
were made by the writ petitioners during the pendency of the writ appeals
and writ petition before the High Court at the rate of Rs. 20 per MT in D
respect of consignments of manganese ore would be subject to the final
adjustment to be made in the light of the decision of the Central Govern·
ment.

The following questions arose before this Court for determination.
E
1. Whether the impugned circulars and the impugned resolution of
the Board amount to remission of the then existing rates of handling
charges for manganese ore covered by Section 53 of the Act or whether
these rates require period sanction of the Central Government under
Section 52 of the Act before they could become effective.
F
2. Whether the impugned rates of handling charges were un-
reasonable, excessive and based on no proper quid pro quo between the
services rendered by the Board and the charges levied by the Board for
such services.

3. Whether there was any effective scale of rates for handling man·
G
J ganese ore at the premises of the appellant-Port during the relevant period
i.e., from the date of introduction of the new system till its sanction by the
Central Government. .

4. Whether the directions issued in the Impugned judgment to the H
:!.
"

1084 SUPREME COURT REPORTS [1997] 1 S.C.R.
A Central Government for issuing notices to the writ petit.ioners and for
hearing their objections before fixing handling charges for the relevant
period are justified in law.

·Dismissing the appeal, this Court

B HELD : 1.1. The relevant provisions of the Major Port Trusts Act,
1963 show that whenever any seal.es of rates for trans-shipment and
shipping of goods within the limits of the major port are to be fixed by the
-
concerned Board of Trustees such scales of rates can be fixed in the light
of the conditions under which such concerned services are offered by the
C Board to the shippers. Therefore, the given scheme of conditions in the
light of which scales of rates by way of handling charges are fixed by the
Board ·had a direct impact on the fixation of such scales of rates. Such
scales of rates are not fixed in vacuum but in connection with the nature
of the conditions, under which such services areoffered by the Board to the
D concerned consumers of such services, namely, the shippers. When such
scales of rates in the light of a given set of conditions for offering handling
services are fixed by the Board they cannot come into force unless such
scales of rates and the set of conditions for offering such services get prior
sanction of the Central Government as enjoined by Section 52 of the Act.
Once the approved conditions under which sanctioned scales of rates
E become effective under Section 52 for offering services_by the Board remain
the same and yet some remission or exemption needs to be granted by the
Board in special cases aller following the procedure of Section 53, it is not
required to apply to the Central Government for prior sanction of such
remission or exemption. [1098-G-H, 1099-A·D]
F
1.2. Section 54 of the Act shows that once scale of rates in the light
of the aJiproved and existing conditions under which the concerned ser·
vices are offered by the Board are sanctioned by the Central Government
and if it is brought to the notice of the Central Government that it is
necessary in the public interest to modify or cancel such sanctioned rates
G then the Central Government in exercise of its power under Section 54(1)
l
may pass appropriate orders modifying or cancelling the sanctioned '
operative rates in public interest. This is a power vested in the Central
Government, which is independent of the power of remission or exemption
of rates and charges available to the Board under Section 53. The Board
H under Section 53 and the Central Government under Section 54 can
VISAKHAPATANAMPORT TRUST v. RAM BAHADUR THAKUR PVT. Lill. 1085
...,._
independently of each other exercise these respective powers within the A
parameters of the provisions of Sections 53 and 54 of the Act. (1099-E-F]

1.3. The remission granted by the Board was in the light of the then
existing conditions of infrastructural facilities made available by the Board
to the concerned shippers who had to bear the burden of this rate. The
Board was perfectly justified in exercising its powers under Section 53 of B

-"'
the Act in granting the said remission for a class of goods, namely man-
ganese ore. But at the stage of latter Resolution there was no occasion for
the Board to reduce further the said rate of Rs. 30 per MT in the light of
the very same earlier existing system of handling of manganese ore. The
entire earlier existing system of handling manganese ore was given a go-by
and a new system was sought to be introduced as expressly mentioned in
c
the circulars. The moment the new system of handling of manganese ore
got introduced any fixation of handling charges of manganese ore in the
wake of introduction of such a new system of handling of manganese ore
exports would necessarily clothe the new rate with the characteristics of
being freshly settled handling charges. Therefore, the exercise of the Board D
undertaken as per Resolution required, for its efficacy, the prior sanction
of the Central Government as enjoined by Section 52. Admittedly, that was
not done by the Board The fixation of an appropriate scale of rates char-
geable from the concerned shippers who are now to be offered a different
_, and a truncated type of infrastructural facilities, would call fot an exercise
E
to be undertaken subject to the requirements of Section 52 and would go
out of the sweep of Section 53 as it would not amount to remission of
eiisting rates of handling charges having a nexus with the erstwhile and
unchanged system of infrastructural facilities which no longer remainl~d
"'> available to support such a remitted rate of handling charges. The very
foundation on which the earlier handling rates operated was knocked off F
and entirely a new foundation of infrastructural facilities of services came
into being. Any handling rates fixed in connection with such a new founda·
tion of handling-service-infrastructure necessarily would assume the fo1·m
of a new scale of rates. [1103-C-H, 1104-A]

-o!
1.4. The Division Bench of the High Court was justified in taking the G
view that the impugned Resolution seeking to bring into effect new rates

"" of handling charges in the ~ight of entirely new system of services then
offered by the Board required prior sanction of the Central Government
under Section 52 of the Act and could not be treated to be representing a
scheme of remission as envisaged by Section 53 of the Act. [1105-F -G] H
1086 SUPREME COURT REPORTS [1997] l S.C.R.
A 2.l. The question whether the scales of handling charges sought to
be levied from the respondents for handling their manganese ore during
the relevant period were just, fair and legal or not was justifiably left by
the High Court to be decided by the Central Government instead of
deciding it itself. Under the scheme of the Act itself the Central Govern-
B ment is the ultimate authority for deciding about the propriety and just-
ness of the' scales of rates of services to be rendered to the shippers by the
Board of the concerned Ports governed by the Act. In the light of this
statutory scheme, therefore, the reasonableness of the settled scales of
charges for hamlling goods as tried to be recovered by the Board under
the Act could be validly made the subject-matter of scrutiny of the Central
C Government by aggrieved parties by invoking the Central Government's
powers under Section 54 of the Act. When the writ petitioners raised the
contention about the excessiveness and unreasonableness of the scale of
rates of handling charges of manganese ore sought to be recovered from
them by the Board and when such contention required scrutiny of relevant
D evidence which may be led on the point, the High Court was perfectly
justified in leaving that question to be decided by the Central Government.
It will be for the Central Government to decide this question and to pass
appropriate directions in this connection which would be binding on the
appellant-Port Trust. [1106-E-H]

E 2.2. If it was felt by the High Court that highly disputed questions of
fact arose for its decision, the \\Tit petitioners could have been relegated to
·-
the remedy by way of civil suit where the matter could have been thrashed
out on proper evidence. However, that was not the only alternative remedy
)._
to which the Court could have releg;ited the writ petitioners. Under the
F · scheme of the Act Parliament in its wisdom has entrusted the task of •
monitoring and regulating the scales of rates and statements of conditions
under which .various services are offered by the Board under the Act to the
shippers, to the apex authority of the Central Government. [1106-B-C]

3. Although the new scale of rates for handling charges of manganese
G ore pursuant to the Board's Resolution was without prior sanction of the
Central Government under Section 52 of the Act yet as a consequence of ·-
the said finding it would not necessarily follow that no other effective scale
of r;ites for handling manganese ore would be left in the field. The earlier
scale of rates as sanctioned by the Central Government was already
H. remitted tl;ough conditionally by the appellant-Port Trust itself Resolu-
VlSAKHAPATANAMPORTTRUSTv.RAMBAHADURTHAKURPVT.Lm. 1087
tion. Thus from the date of Resolution the effective scale of rates for A
".;l,. handling charges of manganese ore remained Rs. 30 per MT. It is this rate
,, which must be treated to have continued during the interregnum period.
.Of course even this remitted rate of Rs. 30 per MT in the light of the
\\ithdrawn infrastructural facility of narrow gauge railway line, which in
its turn had shifted the burden of transport charges of manganese ore
B
from plots to the wharf on the shoulders of the shippers, resulted in
lopsided rate and whether it, therefore, became unreasonable or not and
by then whether it was backed up by proper quid pro quo or not would
..., remain a burning and moot question which bas to be resolved by the
"' appropriate authority under the Act. All the same it could not have
assumed by High Court in the impugned judgment that during the,relevant c
period there was no effective scale of rates for handling manganese ore at
all. To that extent it must be held that the Division Bench was in error
when it persuaded itself to hold that view. The said finding of the High
Court is, therefore, set aside. [1107-E-H, 1108-A-C]
D
4. There is no question of invocation of principles of natural justice
~:
or hearing the affected parties when legislative action is brought on the
anvil of scrutiny or for that matter even an action of a delegated legislative
authority is brought in challenge. A legislative exercise or exercise by a
subor'dinate legislative agency imposing any tax or fee or charges would
not require the effected parties to be beard before such charges of impost E
are levied. But this may be relevant at the stage of Section 52 of the Act
wherein the scales of rates and statements of conditions framed by the
Board are put up for prior sanction of the Central Government. However,
the said situation would. not prevail when a grievance is made by the
_. concerned aggrieved parties who submit that the sanctioned scales of rates F
-· which are prevalent and operative required modification or cancellation
in public interest as they are unreasonable, excessive or, wholly or partly,
lack the back up of quid pro quo. The Central Government being an
impe(sonal body function far away from the places where the major ports
and other ports are situated it would be obvious that relevant facts for
invoking exercise if its powers under Section 54 of the Act will have to be G
brought to the notice of the Central Government and that can be d'one only
by aggrieved interested parties by way of re11resentations. Filing of such
'-.,.. representations before the Central Government by the concerned ag-
grieved parties, therefore, cannot be said to be contra-indicated by Section
54(1). Once such representations are moved it will be the statutory obliga- H
1088 SUPREME COURT REPORTS [1997) 1 S.C.R.
A tion of the Central Government to consider the said representations and
for effective discharge of its power-cum-duty entrusted to it under Section
54(1) it may be opeu to the Central Government in appropriate cases to
even permit the aggrieved parties representationists to be heard in person,
if so thought fit, and thereafter if the Central Government thinks it fit to
B make appropriate modification or cancellation of the settled and sanc-
tioned scale of rates of handling charges as leviable by the concerned
Boards it can proceed under Sections 52 and 54 of the Act calling upon
the Board to effect such modifications or cancellations and in the process
it has to consider the objections or suggestions of the concerned Boards
as laid down by the proviso to Section 54(1). If .before effecting such
C cancellations or modifications in the scale of rates the concerned Boards
have to be heard, if found necessary, or their objections are to be con-•
sidered there is no reason why the aggrieved parties who move the Central
Government invoking its powers under Section 54(1) should not be con-
sidered by the Central Government. Of course it has to be left to the
D Central Government as to how to consider such objections. But it cannot
be said that if a competent court gives a direction in an appropriate case
to the Central Government to give notice to the objectors, call for their
objections and to consider the same such a direction would be dehors the
scope and ambit of Section 54 of the Act. It must, therefore, be held that
the directions issued by the Division Bench of the High Court in the
E impugned judgment can be effectively sustained under Section 54 of the
Act, if not under Section 52 thereof. (1108-E-G, 1109-D-H, 1110-A-B]

5. The appropriate authority in the Central Government is directed
to decide the question regarding scale of rates for the relevant period after
F issuing notice to the writ petitioners and considering their objections, if >·..
any, and also after considering the objections, if any, raised by the Board
in this connection. The said exercise should be completed by the ap-
propriate authority in the Central Government within a period of four
months. If it is found that the appellant-port Trust is liable to refund any
excess amount of handling charges to the respondents as collected by it
G from the respondents during the relevant period, it will be bound to refund
the same within a period of eight weeks from the date of decision of the
Central Government with interest at the rate of 12% per annum from the
date of payment of the excess amount of handling charges by the respon-
dents to the Board till the actual refund thereof by the Board to be
H respondent-writ petitioners. (1110-F, 1111-B-C]

t
i\
V!SAKHAPATANAM PORT1RUST '· RAM BAHADUR THAKUR PVT. LTD. [S.B. MAJMUDAR. J.J 1089

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 3972-74 A
of 1993.

From the Judgment and Order dated 1.10.92 of the Andhra Pradesh
High Court in W.A. Nos. 1379, 1380 an 17407 of 1987.

Vinod Bobde, C.K. Sasi and Kailash Vasudev for the Appellants. B

M.N. Krishnamani, Jitender Mahapatra, Praveen Kumar Singh and
T.V. Ratnam for the Respondent No. 1.
....
R.F. Nariman, P.H. Parekh and Ms. Bina Madhavan for the Respon-
dents. C
The Judgment of the Court was delivered by

S.B. MAJMUDAR, J, : These three civil appeals on grant of special
leave to appeal under Article 136 of the Constitution of India bring in
chall~nge a common judgment and order rendered by a Division Bench of D
the High Court of Andhra Pradesh dismissing two writ appeals moved by
the appellant. The Vishakhapatnam Port Trust and its Traffic Manager,
and a~lowing one writ petition moved by the respondent-writ petitioner
against the present appellants. The said common judgment and order
dated 1st October 1992 are assailed by the appellants on diverse grounds E
which will be highlighted in latter part of this judgment.The main grievance
of the appellants centers round the question of levying of appropriate
handling charges from various shippers who seek to export manganese ore
from the wharves of the appellant's Port. In order to appreciate this
grievance it is necessary to note a few relevant introductory facts.
F
The respondents in these appeals were the original writ petitioners
before the High Court. They are dealers in manganese ore. They export
manganese ore through the Minerals and Metals Trading Corporation of
India. For exporting the said ore they naturally require the services of
appellant No. l's Port through which their manganese ore is loaded in the
ships for export. The appellant-Port for that purpose offers various services G
and facilities to such shippers. The appellant-Port maintains different yards
in its premises. One such yard is known as 'Eastern Yard' which is divided
into several plots of varying e:xient between 100 square meters and 600
square meters. These plots are leased out by the Port Trust authorities to
different shippers. The writ petitioners are the lessees of a few plots. They H
1090 SUPREME COURT REPORTS [1997] 1 S.C.R.

A are at a distance of about 200 meters to 1500 meters from the wharf. These
plots are connected by broad gauge railway lines on one side and narrow

B
gauge railway lines on the other side. The ore is transported to the plots
on the broad gauge railway line and is transported to ships by narrow gauge
railway line. The shippers can also transport the ore to their respective
plots by road using dumpers or lorries. The handling of ore from the plots
1
to the ships was previously undertaken by the Port authorities. The entire
operation consisted of :

(a) Loading of ore into the skips by the port labour; ....

c (b) Transport of ore from the plots to the vessels utilising the internal
narrow gauge railway system belonging to the port.

(c) Transferring the ore from the skips to the ships hold, utilising
the port labour.

D Under Sections 48, 49 and 50 of the Major Port Trusts Act, 1963 (for short
. 'the Act'), the Board of Trustees is enabled to charge for the services '-
rendered by the Board. In exercise of the powers conferred under Sections
48 and 49 of the Act, the Board periodically notifies the scales of rates and
conditions and the handling charges for the manganese ore for the said
E operation were fixed at the rate of Rs. 35 per thousand kilograms for-one
metric. ton. These handling charges were inclusive of equipment hire
charges. In May 1986 the writ petitioners received a circular from the
Traffic Manager of the Port stating that the then existing N.G. system
would not be available and that the revised system would come into force
F on or around 20th May 1986. The consequences of the· abolition was that _.•
the shippers were required to employ their own dumpers and loaders to ~
transport the ore from the dump area to the wharf and load the ore on to
the ships utilising their slings. No port labour or other personnel and
equipment of the port might be required or utilised as the entire operation
would be carried out by the shipper. On 10th June 1986 the Traffic .
G Manager of the .Port issued a circular notifying that a provisional con-
solidated handling charge of Rs. 30 per Metric Ton for handling export of
manganese ore in the new system, would be levied. Consequently the
previous handling charges of Rs 35 were substituted by Rs. 30 per M.T.
According to the writ petitioners this levy of charges of Rs. 30 per M.T.
H under the new system of handling of manganese ore at the appellant-Port
~
V!SAKHAPATANAM PORTTRUSTv. RAM BA HAD UR 11-IAKURPVJ'. LTD. (S.B. M.AJMUDAR, J.J 1091

was unreasonable and excessive. They made several representations in this A
~- connection. According to the Writ Petitioners for transporting manganese
(
~
ore form the plots and putting it on board the ship the shippers will have
to incur approximately Rs. 37 per M.T. and the Port authorities collect
Rs. 30 per M.T. after withdrawal of the services by them. Under these
circumstances two writ petitions were filed by respondents in Civil Ap- B
peals Nos. 3972 and 3973 of 1993 before the High Court. They were writ
petition Nos. 8891 and 14503 of 1986. These writ petitions were heard by

- ""
a learned Single Judge of the High Court who after hearing the parties
came to the conclusion that for substituting the new scale of handling
charges for manganese ore for the earlier existing scale of Rs. 35 per M.T. c
when the Port was providing its own labour and narrow gauge railway line
siding for transporting the ore from dumping yard to the wharf, the
procedure required by Section 52 ·of the Act was not followed by the
appellant-Port and hence the new scale of rates could not effectively be
pressed in service by the Board against the writ petitioners. So far as the
D
contention of the writ petitioners that t1'e levy of Rs. 30 per M.T. under
-.....{ the new system of handling of manganese ore pursuant to the impugned
circulars dated _19th May 1986, 10th June 1986, and 18th July 1986 and
resolution dated 26th June 1986 was excessive and unreasonable was
concerned, the learned Single Judge observed that it was not for the Court
to work out the details minutely to find out the actual cost incurred for E
the service and then decide at what rate the handling charges should be
collected by the Port and that the Central Government will have to
consider all these aspects while granting sanction to the new scale of
handling charges under Section 52 of the Act. Accordingly the impugned
circulars and resolution of 1986 were quashed and writ ::Petitions were F
..' allowed. The appellants herein filed writ appeals against the aforesaid
order of the learned Single Judge being Writ Appeal Nos. 1379 and 1380
of 1987 before the High Court. Said two writ appeals along with the
companion Writ Petition No. 17407 of 1987 were heard by a Division
Bench of the High Court which by the impugned common judgment and G
order confirmed the decision of the learned Single Judge and dismissed
the writ appeals ..Companion writ petition was also allowed. The Division
Bench noted that the handling charges of Rs. 30 per M.T. with respect to
"-,-·- manganese ore and other ores in the light of the fresh system came to
be later on sanctioned by the Central Government under Section 52 of H
1092 SUPREME COURT REPORTS [1997] 1 S.C.R.

A the Act and they came in force with effect from 12th February 1992.
Therefore, the controversy survived regarding the appropriate handling
charges for manganese ores for the period from 20th May 1986 to 12th
February 1992 and for that period the Central Government, while exercis-
ing its power under Section 52 of the Act, was required to consider the
B question regarding fixing of appropriate handling charges after giving
notice to the writ petitioners and hearing their objections, if any. It was
further directed that whatever payments were made by the writ petitioners
during the pendency of the writ appeals and writ petition before the High
Court at the rate of Rs. 20 per M.T. in respect of consignments of
C manganese ore would be subject to the final adjustment to be made in the
light of the decision of the Central Government.

Rival contentions

At the time of final hearing of these appeals Shri Vinod Bobde,
D learned senior counsel appearing for the appellants vehemently submitted
that the Division Bench of the High Court had ex f acie erred in law in
taking the view that the rates of handling charges for manganese ore as
fixed by the Board's impugned resolution dated 26th June 1986 were
required to be sanctioned by the Central Government under Section 52 of
the Act and without such prior sanction they could not operate. It was
E submitted that the earlier sanctioned rate under Section 52 was Rs. 35 per
M.T. which held the field from 1st January 1984 and this scale of rates was
duly published by the appellant-Port. That thereafter on two occasions the
appellant- Port gave remission to alleviate the hardship of the shippers
exporting manganese ore by utilising the services offered by the appellant-
F Port. That one such remission was given by the Board in its meeting No. 7
of 1984-85 held on 30th October 1984. That was the remission of Rs. 5 per
M.T. of manganese ore brought by dumpers to Visakhapatnam Port and
exported therefrom. This remission was to be given on the basis of the
certificate issued by the Dock Labour Board. Thus this remission was a
conditional remission. It was admittedly under Section 53 of the Act. That
G subsequently when the facility of utilisation of narrow gauge railway line
on the premises of the Board was withdrawn the Board by the impugned
resolution dated 26th June 1986 gave a fresh remission of Rs. 5 per M.T.
from the sanctioned rate of Rs. 35 per M.T. by making it unconditional.
Consequently even the impugned resolution dated 26th June 1986 also
H remained within the four corners of Section 53 of the Act and that the High
-~
\

VISAKHAPATANAM PORTTRUSTv. RAM BAHADUR THAKUR PVT. LTD. (S.B. MAJMUDAR, l.] 1093

Court was in error in taking the view that these impugned circulars sought A
to introduce a new scale of rates which required prior sanction of the
Central Government under Section 52 of the Act.

It was next contended by Shri Bobde that even assuming that the
impugned resolution sought to bring into force new scale of rates in. the
B
light of the changed system of services made available by the Board for
shipment of the manganese ore, and that such new scale of rates without

- prior sanction of the Central Government was ineffective during the
relevant period from 20th May 1986to12th February.1992, then as a logical
corollary it should have been held ·by the High Court that the earlier
existing handling rate of Rs. 35 per M.T. remained operative as it would
not get substituted by any effective new rate of handling charges of man-
c
ganese ore and the writ petitioners would be liable to pay the handling
charges for the aforesaid relevant period at the rate of Rs. 35 per M.T.

It was p.ext contended by Shri Bobde that if the writ petitioners had D
any grievance about the alleged excessive handling charges or that there
_,1
was no quid pro quo between these rates on the one hand and the services
rendered by the Board oa the other and if the High Court found that highly
disputed questions of fact arose, for resolution of this dispute, the writ
petitioners should have bee{l relegated to the remedy of civil suit. In any
case, according to Shri Bobde, Section 54 of the Act could have been E
pressed in service in such an eventuality and the writ petitioners could have
been relegated to the remedy of representation before the Central Govern-
ment in this connection. Shri Bobde also submitted that even if Section 54
was to be invoked fJXation of appropriate rates which is a delegated
legislative function, there was no question of giving any hearing to the p
... objectors-writ petitioners and consequently the direction of the Division
Bench about the issuing of notices to the writ petitioners and hearing their
objections was clearly misconceived.

On the other hand Shri R.F. Nariman, learned senior counsel for the
respondent, submitted that the old scale of rates for handling of manganese G
ore levied by the appellant-Board from 1st January 1984 was fJXed in the
light of the type of services then rendered by the Board and the infrastruc-
tural facilities made available by the Board to the shippers in those days.
That under the previous system the Port authorities handled the ore from·
the plots to the ships by utilising the port labour and the internal railway H
1094 SUPREME COURT REPORTS [1997] 1 S.C.R.
A system belonging to the Port and for the entire operation handling charges
were levied at the rate of Rs. 35 per M.T. That under the new system
sought to be introduced from June 1986 onwards transportation of ore was
to be the responsibility of the shippers who had to employ their own labour.
0

Under these circumstances when the Board fixed scale of rates at Rs. 30
B per M.T. and when the earlier infrastructural facilities and the benefit of
utilisation of internal railway system earlier available to the shippers were
withdrawn, the said rate of Rs. 30 Per M.T. would obviously become a new
scale of rates interlinked with the changed system of conditions for han-
dling manganese ore from June 1986 onwards and consequently prior
sanction of such new rates in the light of the new system was a condition ·~
C precedent under Section 52 of the Act for making this new scale of rates
effective. However Shri Nariman, learned senior counsel fairly stated that \
the Board no doubt has powers under Section 53 of the Act to grant ·-
exemption or remission of existing rates of charges in special cases as
contemplated by Section 53 and in such an eventuality previous sanction
D of the Central Government may not be necessary. But on the peculiar facts
and circumstances of the case the High Court rightiy held that the im-
pugned rates of handling charges sought to be introduced by the resolu-
tion of 26th June 1986 did require previous sanction of the Central
Government under Section 52 of the Act.

E It was next contended by Shri Nariman that no fault could be found
with the direction of the High Court in requiring the Central Government
to consider the objections of the writ petitioners against the proposed
fixation of rates by the Board under the new system on the ground that
they w.ere excessive and unreasonable and it was for the Central Govern-
F ment to take an informed decision in the matter and that obviously cannot
prejudice the appellant-Board. In this connection it was submitted by the '
learned senior counsel for the respondents that by an order dated 10th
August 1993 this Court while granting special leave to appeal against the
impugned judgment and order of the High Court had directed the respon-
dents to pay the charges at the rate of Rs. 30 per M.T. from June 1986
G onwards and accordingly the respondents have paid the balance amounts
of disputed handling charges all throughout from June 1986 onwards till
11th February 1992. That in the same order this Court had directed that if
ultimately the appellants fail in appeal the amount that is recovered by
them from the respondents will be paid by them with interest as may be
H fixed by this Court. However learned senior counsel Shri Nariman fairly
~ I

VISAKHAPATANAM PORTlRUST ... RAM BAHADUR THAKUR PVT. LTD. [S.B. MAJMUDAR,J.) 1095

stated that in case this Court is inclined to uphold the order of the High A
Court, if the Central Government is directed to resolve this controversy
between the parties within a fixed period then the payments made by the
respondents pursuant to the interim order of this Court dated 10th August
1993 may be made subject to the decision of the Central Government and
the rights and obligations of respective parties to this litigation may be
B

-
directed to be worked out in the light of the said decision of the Central
Government. He however added a rider to hls submission that in case
-< according to the decision of the Central Government the respondent
become entitled to refund of any amount this Court may fix appropriate
rate of interest to be paid by the appellant-Board to the respondents on
such amounts. c
Points for determination

In the light of the aforesaid rival contentions the following points
arise for our determination :
D
1. Whether the impugned circulars dated 19th May 1986, 10th June
1986 and 18th July 1986 and the impugned resolution of the
Board dated 26th June 1986 amount to remission of the then
existing rates of handling charges for manganese ore covered by
Section 53 of the Act or whether these rates require prior E
sanction of the Central Government under Section 52 of the Act
before they could become effective.

>
2. Whether the. impugned rates of handling charges were un-
reasonable, excessive and based on no pcoper quid pro quo
between the services rendered by the Board and the charges F
levied by the Board for such services.

3. Whether there was any effective scale of rates for handling
manganese ore at the premises of the appellant-Port during the
~ relevant period from 20th May 1986 to 12th February 1992.
G
4. Whether the directions issued in the impugned judgment, to the
Central Government for issuing notices to the writ petitioners
and for bearing their objections before fixing handling charges
for the period from 20th May 1986 to 12th February 1992 are
justified in law. H
1096 SUPREME COURT REPORTS [1997] 1 S.C.R.

A We will deal with these points seriatim.
Point No. 1

In order to appreciate the controversy concerning this point it is
necessary to have a look at the relevant provisions of the Act. As per
B Section 1 sub-section (3), the Act in the first instance was to apply to major
ports of Cochin, Kandla and Vishakhapatnam, Appellant No. 1 is one such
Port. This port which is a major port has to have a Board of Trustees duly
constituted as per Section 3 of the Act. Vaiious statutory duties are
enjoined on the Board by the Act. Section 42 of the Act deals with
C 'preformance of services by Board or other person'. Sub- section (1)
thereof lays down that a Board shall have power to undertake certain
services. The relevant services which are required to be undertaken by the
Board are indicated in clauses (a), (b) and (d) of Section 42(1) which read
as under:

D "(a) landing, shipping or transhipping passengers and goods be-
tween vessels in the port and the wharves, piers, quays or docks
belonging to or in the possession of the Board;

(b) recel.ving, removing, shifting, transporting, storing or delivering
goods brought within the Board's premises;
E
(c) .......................................................................... .

( d) receiving and delivering, transporting and booking and
despatching goods originating in the ves;els in the port and in- l.
tended for carriage by the neighbouring railways, or vice versa, as
F a railway administration under the Indian Railways Act, 1890 (9
of 1890); and

(e) .......................................................................... .

Chapter VI of the Act deals with 'Imposition and recovery of rates at
G ports'. We may refer to the relevant provisions of the said Chapter
which have a direct bearing on the controversy posed for our considera-
tion. As per Section 48 sub-section (1) every Board shall from time to
time frame a scale of rates at which, and a statement of the conditions
under which, any of the services specified in the clauses to this sub-sec-
H tion shall be performed by itself or any person authorised under section
·~
I

VJSAKHAPATANAM PORTTRUSfv. RAM BAHADUR THAKURPVf. LTD. [S.B. MAJMUDAR, J.] 1097

42 at or in relation to the port or port approaches. Sub-sections (l)(b) and A
(l)(e) of Section 48 of the Act are relevant in this connection. They read
as under:

"48. (l)(b). landing and shipping of passengers or goods from or
to such vessels to or from any wharf, quay, jetty, pier, dock, berth,
mooring, stage or erection, land or building in the possession or B
occupation of the Board or at any place within the limits of the
port or port approaches;

(c) ···········································································

(d) ···········································································
c
(e) any other service in respect of vessels, passengers or goods,
excepting the services in respect of vessels for which fees are
chargeable under the Indian Ports Act."

A conjoint reading of Section 42(1) and 48(1) shows that the Board has to D
frame a scale of rates at which and a statement of conditions under which
the concerned services are made available at the major port by the Board
concerned. It, therefore , becomes clear that the scale of rates for trans-
shipment of goods to and from vessels in the port or port approaches and ·
for landing and shipping of goods from or to such vessels from any wharf, E
quay, jetty, pier, dock etc. within the premises of the port, has a direct
linkage with the conditions under which such services are rendered. Con-
sequently, the scale of rates for such services which are to be offered by
the Board of a major port to the concerned shippers has to be ascertained
or fixed in the light of the type of conditions subject to which such services
are offered.
F

We may now turn to the other relevant provisions of this Chapter.
They consist of Sections 52, 53 and 54 which deserve to be extracted in
extenso as under :

52. Prior sanction of Central Government to rates and conditions. - G
Every scale of rates and every statement of conditions framed by
a Board under the foregoing provisions of this Chapter shall be
submitted to the Central Government for sanction and shall have
effect when so sanctioned and published· by the Board in the
Official Gazette. H
1098 SUPREME COURT REPORTS [1997) 1 S.C.R.
A 53. Exemption from, and remission of, rates or charges. - A Board
may in special cases and for reasons to be recorded in writing,
exempt either wholly or partially any goods or vessels or class of
goods or vessels from the payment of any rate or of any charge
leviable in respect thereof according to any scale in force under
this Act or remit the whole or any portion of such rate or charge
-
B so levied.

54. Power of Central Govemment to require modification or cancel-
lation of rates. - (1) whenever the Central Government considers
it necessary in the public interest so to do, it may, by order in
c writing together with a statement of reasons therefore, direct any
Board to cancel any of the scales in force or modify the same,
within such period as that Government may specify in the order. 1

(2) If any Board against whom a direction is made under sub-sec-
tion (1) fails or neglects to comply with such direction within the
D specified period, the Central Government may cancel any of such
.,..._
scales or make such modifications therein as it may think fit;

Provided that before so cancelling or modifying any scale the
Central Government shall consider any objection or suggestion
E which may be made by the Board during the specified period.

(3) When in pursuance of this section any of the scales has been
cancelled or modified, such cancellation or modification shall be
published by the Central Government in the Official Gazette and
shall thereupon have effect accordingly."
F
A mere look at the aforesaid provisions shows that whenever any scales of
rates for trans-shipment and shipping of goods within the limits of the

-
major port are to be fixed by the concerned Board, such scales of rates
can be fixed in the light of the conditions under which such concerned
services· are offered by the Board to the shippers. Therefore, the given
G scheme of condition in the light of which scales of rates by way of handling
charges are fixed by the Board has a direct impact on the fixation of such
scales of rates. In other words such scales of rates are not. fixed in vacuum
but in connection with the nature of the conditions under which such
services are offered by the Board to the concerned consumers of such
H services, namely, the shippers. When such scales of rates in the light of a
VISAKHAPATANAM PORT TRUST,. RAM BAHADUR THAKUR PVT. LTD. [S.B. MAJMUDAR.J.) 1099

~- given set of conditions for offering handling ~ervices are fixed by the Board A
they cannot come into force unless such scales of rates and the set of
conditions for offering such services get prior sanction of the Central
Government as enjoined by Section 52 of the Act. So far as Section 53 is
concerned, it confers power on the Board in special cases to give exemp-
tion or remission from such fixed and current rates as may have received
B
prior sanction of the Central Government under Section 52 meaning
thereby that once the Central Government has sanctioned rates and con-
_,..,..
l- ...... ditions under which such rates are to be imposed by the Board as laid down
by Section 52, if the concerned Board in special cases wants to give any
exemption or remission for handling any goods or vessels or class of goods
or class of vessels from payment of such fixed rates or charges it can do c
so under Section 53 of the Act. .This postulates that once the approved
conditions under which sanctioned scales of rates become effective under
Section 52 for offering services by the Board remain the same and yet some
remission or exemption needs to be granted by the Board in special cases
after following the procedure of Section 53, it is not required to apply to
D
the Central Govermilent for prior sanction of such remission or exemption.
So far as Section 54 is concerned, it shows that once scales of rates in the
light of the approved any existing conditions under which the concerned
services are offered by the Board are sanctioned by the Central Govern-
ment and if it is brought to the notice of the Central Government that it is
necessary in the public interest to modify or cancel such sanctioned rates E
then the Central Government in exercise of its power under Section 54(1)
may pass appropriate orders modifying or cancelling the sanctioned opera-
tive rates in public interest. This is a power vested in the Central Govern-
4 ment which is independent of the power of remission or exemption of rates
~
and charges available to the Board under Section 53. The Board under F
Section 53 and the Central Government under Section 54 can inde-
pendently of each other exercise these respective powers within the
parameters of the provisions of Sections 53 and 54 of the Act.

It is in the light of the aforesaid statutory scheme that the moot question
posed for our consideration on this first point for determination has to be
G
answered keeping in view the background facts governing this controversy.
'r It is not in dispute between the parties that from 1st January 1984 the
handling charges for manganese ore levied by the appellant Board were
fixed at Rs. 35 per M.T. This rate was duly sanctioned by the Central
Government under Section 52 of the Act. At the time when the aforesaid H
1
A 1100 SUPREME COURT REPORTS [1997] 1 S.C.R.

rate was fixed the manganese ore was being transported to the plots
situated within the limits of the Port by broad gauge railway line and from
those .plots the stored manganese ore was being carried to the ships for its
outward journey in the course of the export by being transported in skips
B drawn by small engine on the narrow gauge railway line. Handling of ore
from the plots to the ships was done entirely by the Port authorities at their
own cost for which they used to charge handling charges at Rs. 35 per M.T.
The operation consisted principally of three activities noted earlier. It was
this system of transporting of manganese ore within the precincts of the
Port that formed the basis for fixation of the rate of handling charges at
C Rs. 35 per M.T. of manganese ore. This rate and the conditions imder
which handling services were then offered by the Board as already noticed
were duly sanctioned by the Central Government under Section 52 of the
Act. Despite the continuance of this system of handling services offered by
the Board from 1st January 1984, a representation was made to the Board
D in the closing months of 1984 by the shippers of the manganese ore to the
effect that this consolidated rate of handling charges of Rs. 35 per M.T. of .,...
manganese ore was excessive as for unloading operation from the wagons,
Dock Labour was being engaged and that in the process of exporting
manganese ore at the lowest economic cost some of the exporters started
bringing manganese ore to Visakhapatnam Port by dumpers. The Dock
E Labour Board during 1984 resolved to levy Rs. 12.50 per M.T. towards
Dock labour Board Charges for manganese ore brought by dumpers to
Visakhapatnam Port by the concerned shippers. Therefore, it was repre-
sented by the shippers to the Board that in addition to Rs. 35 per M.T.
which they had to pay by way of handling charges to the Board they were
p -also required to pay Rs. 12.50 per M.T. by way of handling charges to the
Dock Labour, thus making them out of pocket to the tune of Rs. 47.50 per
M.T. Consequently, from the sanctioned and operative handling charges of
Rs. 35 per M.T. as levied by the Board from the shippers of manganese
ore a remission of Rs. 12.50 per M.T. was sought. It is this representation
· which was partly accepted by the Board by its resolution dated 30th
G October 1984 on Agenda Item No. 16. It was resolved by the Board to
approve under Section 53 of the Act, a remission of Rs. 5 per M.T. of
manganese ore brought by dumpers to Visakhapatnam Port and exported,
on the basis of the Certificate issued by the Dock Labour Board. In the
·· light of the aforesaid resolution of the Board it becomes clear that though
H the sanctioned rates or charges for handling of manganese ore were Rs. 35
.,
VISAKHAPATANAMPORTTRUSfv. RAMBAHADUR THAKUR PVT. LTD. (S.B.MAIMUDAP,J.] 1101

per M.T., by remission of Rs. 5 per M.T. given by the Board in exercise of A
its statutory powers under Section 53, the effective and operative rate of
handling charges of manganese ore became Rs. 30 per M.T. subject to the
concerned shipper producing the requisite certificate issued by the Dock
Labour Board. Shri Bobde, learned senior counsel for the appellants was,
therefore, right when he submitted that this remission was a conditional
B
remission. Nonetheless it cannot be doubted that it was a remission given
by the Board from the existing and operative sanctioned handling charges
,....., for manganese ore. Thus from 30th October 1984 onwards the effective
-<
handling rates for manganese ore, so far as the appellant-Board is con-
cerned, became Rs. 30 per M.T. in the light of the then existing conditions
of services offered by the Board, namely, making available to the shippers c
who wanted to utilise handling services of the Board the use of the skips
drawn by small engine on the narrow gauge railway line from the siding of
the plots upto the wharf and transferring tlie ore from the skips to the
ship's holding utilising the Port Labour.
·D
The aforesaid remitted rate of handling charges continued upto
middle of 1986 when the impugned circulars and the Resolution saw the
light of the day. It is necessary to have a look at these circulars for
appreciating their correct scope and ambit. The Traffic Manager of the
appellant-Port by circular dated 19th May 1986 informed all concerned
that a new system of handling manganese ore will be introduced by the E
appellant-Trust. It recited that under revised system, the stocked ore will
be transported to the wharf by employment by the shippers of dumpers
and loaders and loading with net slings dispensing with the existing narrow
.... gauge system. This new system was to come into force after completion of
~
loading of manganese ore on the expected vessel on or around 20th May F
1986 and the manganese ore shippers were requested to note that narrow
gauge system would not be available thereafter. This was followed by
another circular dated 10th June 1986 issued by the Traffic Manager of the
appellant-Trust notifying that a provisional consolidated handling charges
,. of Rs. 30 per M.T. for handling export of manganese ore etc. in the new
~ system would be levied. It is obvious that this circular referred to the rate G
of notified consolidated handling charges as provisional because· it had to
be approved by the Board. It is this provisional rate which was placed , for
consideration of the Board of Trustees in its meeting dated 26th June 1986.
Agenda Item No. 19 which was placed for consideration of the Board
recited as follows : H
1102 SUPREME COURT REPORTS [1997] 1 S.C.R.

A "AGENDA ITEM NO. 19 : Manganese Ore Shipment - Col-
lection of handling charges in
respect of OHL Workers in new
system .of handling Manganese
Ore Exports."

B The Resolution of the Board stated that it approved the collection of
consolidated handling charges of the 30 per M.T. only for handling Man-
ganese Ore Shipment in the new system. This Resolution clearly indicates
that the Board resolved to levy fresh handling charges of Rs. 30 per M.T.
in the light of the new system of offering such services meaning thereby
C that the aforesaid rate of handling charges of manganese ore would be
levied by the Board despite withdrawal of the facility of narrow gauge
railway line for the shippers. In other words thenceforward the shippers
had to carry at their own cost the dumped manganese ore from the plots
to the wharf by employing their own dumpers and modes of transport. Thus
D the very system of offering of handling services by the Board underwent a ')-·
sea-change as per the Resoll)tion of 26th June 1986 .. Of course the rate
remained Rs. 30 per M.T. which was already holding the field prior to the ·
said Resolution on account of the remission of 30th October 1984 as noted
earlier. But though the rate of handling services apparently remained the
E same, when viewed in the light of the then existing infrastructural facilities
of narrow gauge railway line being available to the shippers it now became
operative as a new rate in the light of entirely a new system of shipment
services offered by the Board fnr handling of manganese ore at its port.
Thus in substance the rate fixed by the Board as per its Resolution dated
26th June 1986 by way of handling charges of manganese ore became a
F new scale of rates in the light of new set of infrastructural services offered
by the Board. It the light of this Resolution the Traffic Manager issued
the impugned consequential circular dated 18th July 1986 by which it was
notified that the provisional consolidated handling charges of Rs. 30 per
M.T. only for handling export of Manganese Ore etc. in the new system
G communicated vide its office circular cited, was the final rate. A conjoint
reading of the circulars dated 19th May 1986, 10th June 1986 and 18th July
-
1986 and the Resolution dated 26th June 1986 leaves no room for doubt
that from 21st of May 1986 entirely a new system for handling the man-
ganese ore at the Port came into existence and in that light a new handling
H rate for manganese ore was being fixed by the Board. Once that happened
~'
VISAKHAPATANAM PORT1RUSTv. RAMBAHADUR TIIAKURPVT. LTD. [S.B. MAJMUDAR,J.) 1103

Section 52 of the Act directly got attracted because the scale of rates at A
~'i- Rs 30 per M.T. having a direct nexus with the statement of new conditions
for offering handling services by the Board was sought to be got imple-
mented by the Board. Hence prior sanction of the Central Government
became a must for such new impost. The submission of Shri Bobde, learned
senior counsel for the appellants that even at this stage the Board sought B
to give a remission from the existing sanctioned scale of rates, that is, Rs.
35 per M.T. as was current from 1st January 1984, cannot be accepted for
the simple reason that the Board had already given remission of Rs. 5 per
""' .... M.T. to the shippers of manganese ore subject to the condition laid down
by the Resolution of the Board dated 30th October 1984 with effect from c
that day. That remission was in the light of the then existing conditions of
infrastructural facilities made available by the Board to the concerned
shippers who had to bear the burden of this rate. The Board was perfectly
justified in exercising its powers under Section .53 of the Act in granting
the said remission for a class of goods, namely, manganese ore. But at the
D
stage of latter Resolution dated 26th June 1986 there was no occasion for
-: the Board to reduce further the said rate of Rs. 30 per M.T. in the light
of the very same earlier existing system of handling of manganese ore. The
entire earlier existing system of handling manganese ore was given a go-
by and a new system was sought to be introduced as expressly mentioned
in the circulars of 19th May 1986 and 10th .Tune 1986 in the light of which E
the Board Resolution dated 26th June 1986 saw the light of the day. The
moment new system of handling of manganese ore got introduced any
fixation of handling charge of manganese ore in the wake of introduction
of such a new system of handling of manganese ore exports would neces-
... sarily clothe the new rate with the characteristics of being freshly settled p,
..,.
handling charges. Once this conclusion is reached the exercise of the Board
undertaken as per Resolution dated 26th June 1986 required, for its
efficacy, the prior sanction of the Central Government as enjoined by
Section 52. Admittedly, that was not done by the Board. The fixation of an

- appropriate scale of rates chargeable from the concerned shippers who are G
new to be offered a different and a truncated type of infrastructural
facilities, would call for an exercise to be undertaken subject to the require~
ments of Section-52 and would go out of the sweep of Section 53 as it would
r not amount to remission of existing rates of handling charges having a
nexus with the erst\vhile and unchanged system of infrastructural facilities H
1104 SUPREME COURT REPORTS [1997] 1 S.C.R.
A which no longer remained available to support such a remitted rate of
handling charges. In other words the very foundation on which the earlier
handling rates operated was knocked off and entirely a new foundation of
infrastructural facilities of services came into being. Any handling rates
fixed in connection with such a new foundation of handling-services-in-
B frastructure necessarily would assume the form of a new scale of rates. Shri
Bobde's submission flies in the face of the express recitals found in the
impugned circulars of 1986 in the light of which the impugned Resolution
of the Board dated 26th June 1986 was passed. The scope and the ambit
of the Resolution of 26th June 1986 can be better highlighted as under : ·

c When the effective rate of handling charges was Rs. 30 per M.T.
prior to May 1986, the shippers were given facility to carry their
load of dumped manganese ore from plots to wharf by utilising
narrow gauge railway line belonging to the Port authorities. This
facility was made available by the Board at its own cost. If value
D of this infrastructural facility for carrying dumped ore from plots
to wharf which was at a distances of 200 meters to 1500 meters
from the concerned plots, is approximately taken at Rs. 6 per M.T.
the burden of handling charges at the aforesaid rate would work
out as under :

E Total burden of handling charges to be borne by the shippers
would then be Rs. 30 per M.T. Out of this amount Rs. 6 per M.T.
would be sperit by the Board for providing the facility of narrow
gauge railway line. Only balance of Rs. 24 per M.T. would be
available for being credited to the coffers of the Board as real
F handling charges recovered from the concerned shippers. Thus in
substance Rs. 24 per M.T. would be the real handling charges
benefit of which would be available to the Board.

G
However, after May 1986 when the narrow gauge railway line
facility was withdrawn and the shippers had to spend for carrying
dumped ore from plots to wharf and once Rs. 30 per M.T. was
still being charged by the Board as handling charges, the shippers
in fact would be out of pocket to the tune of Rs. 36 per M.T. by
-
way of handling charges as Rs. 30 per M.T. net would be collected
from them by the Board and in addition thereto the shippers would
H be spending an amount at the rate of Rs. 6 per M.T. by way of
'
VJSAKHAPATANAMPORTTRIJSh RAMBAHADUR THAKUR PVT. LTD. (S.B. MAJMUDAR,J.] 1105

transport charges for carrying the dumped ore from the plots to A
the wharf as that much earlier benefit would now be lost to the
shippers. Consequently, the Board would now collect by way of
real handling charges a net amount of Rs. 30 per M.T. instead of
the earlier real scale of rates of Rs 24 per M.T. Thus in essence
an substance the scale of rates of handling charges would go up
B
from Rs. 24 per M.T. to Rs. 30 per M.T. for being made available
to the Board and that would get credited to the coffers of the
Board. This effect of the new scheme of handling charges intro-
duced by the Board by the impugned Resolution, therefore, cannot
be said to be amounting to a mere remission from the erstwhile
earlier existing scales of handling charges. It is a misnomer to c
suggest that still the Board can be said to have given a remission
and not a hike in the scale of handling charges by introducing new
system of transporting of ore within il-; premises. Nor can it be
.said with any justification that the Board was not required to get
this new scale of hw.dling charges which included a real hike in D
the charges, sanctioned by the Central Government under Section
52 of the Act. In fact from 1992 the Board itself had got the new
system of handling charges and the scales of charges, in absence
of narrow gauge railway line facility which had stood withdrawn
from the suppliers, sanctioned by the Central Government under
Section 52 of the Act. If that is so, it is axiomatic that it should E
have got the changed scales of rates of handling charges in the
light of the new system of handling services introduced from May
1986 also sanctioned by the Central Government.

We, therefore, find that the Division Bench of the High Court was justified F
in taking the view that the impugned Resolution dated 26th June 1986
seeking to bring into effect new rates of handling charges in the light of
entirely new system of services then offered by the Board required prior
sanction of the Central Government under Section 52 of the Act and could
not be treated to be representing a scheme of remission as envisaged by
Section 53 of the Act. Point No. 1 is answered accordingly. G

Point No. 2

So far as this grievance of the writ petitioners is concerned, the
learned Single Judge tobk the view that it was not for the court to go into H
1106 SUPREME COURT REPORTS [1997) 1 S.C.R.

A the minutest details about the value of the services rendered by the Board
and its exact co-relation with the rate of the handling charges sought to be ~·.
recovered by the Board for offering these services. Shri Bobde, learned
senior counsel for the appellants, was right when he contended that if it
was felt by the Court that highly disputed question of fact arose for its
decision the writ petitioners could have been relegated to the remedy by
B way of a civil suit where matter could have been thrashed out on proper
evidence. However that was not the only alternative remedy to which writ
petitioners could have been relegated by the Court. Under the scheme of
the Act it appears clear that the Parliament in its wisdom has entrusted
the task of monitoring ano regulating the scales of rates and statements of
c conditions under which various services are offered by the Board under
the Act to the shippers, to the apex authority of the Central Government.
The scales of rates and statements of conditions framed by the Board in
rendering these services have to get prior sanction of the Central Govern-
ment before they become effective. Even that apart the Central Govern-
ment in public interest may direct the Board to suitably modify or cancel
D such rates in exercise of its powers under Section 54 and if the directions ,
of the Central Government are not followed by the Board the Central
Government itself can cancel such rates or may make such modifications
therein as it may think fit after considering the objections of the Board
concerned. The statutory powers entrusted by the Parliament to the
E Central Government both under Sections 52 and 54 of the Act leaves no
room for doubt that under the scheme of the Act itself the Central
Government is the ultimate authority for deciding about the propriety and
justness of the scales of rates of services to be rendered to the shippers by
the Board of the concerned Ports governed by the Act. In the light of this
statutory scheme, therefore, the reasonableness of the settled scales of
F charges for handling goods as tried to be recovered by the Board under
the Act could be validly made the subject-matter of scrutiny of the Central
Government by aggrieved parties by invoking the Central Government's
powers under Section 54 of the Act. When the writ petitioners raised the
contention about the excessiveness and unreasonableness of the scale of
rates of handling charges of manganese ore sought to be recovered from
G them by the Board and when such contention required scrutiny of relevant
evidence which may be led on the point the High Court was perfectly
...
justified in leaving that question to be decided by the Central Government.
It is obvious that it will be for the Central Government to decide this
question and to pass appropriate directions in this connection which would
H be binding on the appellant-Board. In short the question whether the scales
VISAKHAPATANAM PORTTRUST>. RAMBAHADUR TilAKURPVf. LTD. [S.B. MAJMUDAR.J.] 1107

of handling charges sought to be levied from the respondents for handling A
their manganese ore during the relevant period between 20th May 1986
and 12th February 1992 were just, fair and legal or not was justifiable left
by the High Court to be decide by the Central Government instead of
deciding it itself. Point No. 2 is answered accordingly.

Point No. 3
B
)
J In this connection, it was vehemently urged by learned senior counsel
Shri Bobde for the appellants that the Division Bench in the impugned
judgment had wrongly assumed that once it was held that the impugned
scale of rates sought to be introduced by the Board as per its Resolution c
dated 26th June 1986 was ineffective in the absence of prior sanction from
the Central Government under Section 52 of the Act, there was a hiatus
or a vacuum during the period between 20th May 1986 and 12th February
1992 and during that time there was no effective scale of handling charges
at all which could have been charged by the Board from the concerned D
shippers of manganese ore. To that extent Shri Bobde's contention is well
sustai:tied. While answering Point No. 1 we have already held agreeing with
the High Court that the new scale of rates for handling charges of man-
ganese ore pursuant to the Board's Resolution dated 26th June 1986 was
ineffective without prior sanction of the Central Government under Section
52 of the Act. But as a consequence of the said finding it would not E
necessarily follow that no other effective scale of rates for handling man-
ganese ore would be left in the field- Of course the extreme contention of
Shri Bobde that the earlier scale of rates which was in force from 1st
January 1984, namely, Rs. 35 per M.T. of manganese ore would remain
operative during this period cannot be accepted. The reason is obvious. As F
already noticed, the earlier effective scale of rates as sanctioned by the
Central Government which was operative from 1st January 1984 being Rs.
35 per M.T. was already remitted though conditionally by the appellant-
Board itself by its Resolution dated 30th October 1984. Thus from 30th
October 1984 the effective scale of rates for handling charges of manganese G
ore remained Rs. 30 per M.T. It is this rate which must be treated to have
continued during the interregnum period from 20th May 1986 till 12th
February 1992. Of course even this remitted rate of Rs. 30 per M.T., from
20th May 1986 onwards had operated in absence of the availability of
infrastructural facility of narrow gauge railway line which had stood
withdrawn by the Board from the shippers. Consequently, whether the .said H
1108 SUPREME COURT REPORTS [1997] 1 S.C.R.
A existing remitted rate of Rs. 30 per M.T. from 20th May 1986 in the light
of the withdrawn infrastructural facility of narrow gauge railway line, which
in its turn had shifted the burden of transport charges of manganese ore .
from plots to the wharf on the shoulders of the shippers, resulted in a
lopsided rate and whether it, therefore, became unreasonable or not and
B by then whether it was backed up by proper quid pro quo or not would
remain a burning and moot question which had to be resolved by the
appropriate authority under the Act. All the same it could not have been
assumed by the High Court in the impugned judgment that during the
relevant period from 20th May 1986 to 12th February 1992 there was no
effective scale of rates for handling manganese ore at all. To that extent it
C must be held that the Division Bench was in error wheri it persuaded itself
to hold that view. The said finding of the High Court is, therefore set aside.
Point No. 3 is answered accordingly. This takes us to consideration of the
last point for determination.

Point No. 4
D

Shri Bobde, learned senior counsel for the appellants was right when
he contended that there is no question of invocation of principles of natural
justice or hearing the effected parties when legislative action is brought on
E the anvil of scrutiny or for that matter even an action of a delegated
legislative auth~rity is brought in challenge. It is axiomatic that a legislative
exercise or exercise by a subordinate legislative agency imposing any tax or
fee or charges would not require the affected parties to be heard before
such charges or impost are levied. But this argument of Shri Bobde may
be relevant at the stage of Section 52 of the Act wherein the scales of rates
F and statements of conditions framed by the Board are put up for prior
sanction of the Central Government. However the said situation would not
prevail when a grievance is made by the concerned aggrieved parties who
submit that the sanctioned scales of rates which arc prevalent and operative
require modification or cancellation in public interest as they are un-
G reasonable, excessive or, wholly or partly, lack the back up of quid pro quo.
As and when such grievances are made and are required to be exammed
by the Central Government in exercise of its statutory powers and functions ..
under Section 54 of the Act, if the Central Government gets convinced.that
in public interest appropriate modifications or cancellation of rates are
H required to be made, then it would be the statutory obligation of the
VISAKHAPATANAM PORTTRUST,. RAMBAHADUR THAKUR PVT. LTD. [S.B. MAJMUDAR,J.) 1109
A
Central. Government to direct the concerned Board accordingly and it will
'Y;-
be equally the duty of the Board to carry out such suggested modifications
or cancellations as directed by the Central Government. At that stage if
the objections of aggrieved parties are directed to be considered by the
Central Government in public interest no fault can be found with such a
direction. Therefore, we find that the directions issued by the Division
B
Bench in the impugned judgment can be well sustained under Section 54
of the Act by treating the objections raised by the writ petitioners before
~-
.,( the High Court as amounting to a request to get appropriate modifications
or cancellations of the scales of rates for handling manganese ore at the
appellant's Port in public interest. It is obvious that the Central Govern- c
ment in exercise of its powers under Section 54 of the Act can undertake
the· exercise enjoined by the said Section if it considers it necessary in
public interest so to do. Central Government being an impersonal body
functioning far away from the places where the major ports and other ports
are situated it would be obvious that relevant facts for invoking exercise of D
. .,.., its powers under Section 54 of the Act will have to be brought tc the notice
of the Central Government and that can be done only by aggrieved inter-
ested parties by way of representations. Filing of such representations
before the Central Government by the concerned aggrieved parties, there-
fore, cannot be said to be contra- indicated by Section 54 sub-section (1). E
Once such representations are moved it will be the statutory obligation of
the Central Government to consider the said representations and for
effective discharge of its power-cum-duty entrusted to it under Section
54(1) it may be open to the Central Government in appropriate cases to
even permit the aggrieved parties representationists to be heard in person,
~
• if so thought fit, and thereafter if the· Central Government thinks it fit to F
make appropriate modification or cancellation of the settled and sane-
tioned scale of rates of handling charges as leviable by the concerned
Board it can proceed under Sections 52 and 54 of the Act calling upon the
Board to effect such modifications or cancellations and in the process it
has to consider the objections or suggestions of the concerned Boards as G
laid down by the proviso to sub-section (2) of Section 54. If before effecting
such cancellations or modifications in the scale of rates the concerned
'y Boards have to be heard, if found necessary, or their objections are to be
considered there is no reason why the aggrieved parties who move the
Central Government invoking its powers under Section 54(1) should be H
1110 SUPREME COURT REPORTS [1997] 1 S.C.R.

A treated as total strangers whose objections should not be considered by the
Central Government. Of course it has to be left to the Central Government
as to how to consider such objections. But it cannot be said that if a
competent court gives a direction in an appropriate case to the Central
Government to give notice to the objectors, call for their objections and to
B consider the same such a direction would be dehors the scope and ambit
of Section 54 of the Act. It must, therefore, be held that the directions
issued by the Division Bench of the High Court in the impugned judgment
can be effectively sustained under Section 54 of the Act, if not under
Section 52 thereof. Point No. 4 is, therefore, answered in the affirmative.

c In the light of our conclusions and findings on lhe aforesaid points
for de-termination we may take stock of the situation. The impugned
decision rendered by the Division Bench of the High Court and the
ultimate directions issued therein will have to be sustained subject to the
rider that the High Court was not justified in taking the view. that during
D the period from 20th May 1986 to 12th February 1992 there was no
effective scale of rates for handling manganese· ore. The appeals, therefore,
are liable to fail.
"".
Now remains the question as to what final directions should be issued
in the light of the interim order passed by this Court on 10th August 1993.
E As we are confirming the order of the High Court directing the Central
Government to decide the question about the appropriate scale of rates of
handling charges of manganese ore at the Visakhapatnam Port during the
period from 20th May 1986 to 12th February 1992 and as that direction has
remained stayed for all these years, we direct the appropriate authority in
F the Central GovernmeI!t to decide the said question after issuing notice to
the writ petitioners and considering their objections, if any, and also after
considering the objections, if any, raised by the Board in this connection.
Said exercise should be completed by the appropriate authority in the
Central Government within a period of four months from the date of
receipt of copy of this order at its end. Respondent-writ petitioners were
G directed by an interim order of this Court dated 10th August 1993 to pay
the handling charges at the rate of Rs. 30 per M.T. from June 1986
onwards. We are told that for the entire period till 12th February 1992 the
respondents have paid up the balance of the amounts and the balance of
the handling charges accordingly. As the question about lhe charging of
H appropriate scale of rates of handling charges is being left to be decided
VISAKHAPATANAMPORTTRUSf.. RAMBAHADUR IBAKURPVT. LID. [S.B. MAJMUDAR,J.J 1111

by the Central Government by our present order, it would be in the interest A
of justice to direct· that though these appeals are being disposed of, the
question of refunding any amounts of excess handling charges paid by the
respondent during the aforesaid period is left to be decided in the light of
the ultimate decision of the Central Government on this question. It is B
obvious that in the light of the decision of the Central Government if it is
found that the appellant-Board is liable to refund any excess amount of
handling charges to the respondents as collected by it from the respondents
during the relevant period, it will be bound to refund the same within a C
period of eight weeks from the date of decision of the Central Government
with interest at the rate of 12% per annum from the date of payment of ·
the excess amount of handling charges by the respondents to the Board till
the actual refund thereof by the Board to the respondent-writ petition,ers.
The appeals are dismissed accordingly with no order as to costs in the facts
and circumstances of the case.

v.s.s. Appeals dismissed.