20 December 1985
Supreme Court
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BANSAL & CO. & ANR. Vs UNION OF INDIA & ORS.

Bench: MUKHARJI,SABYASACHI (J)
Case number: Writ Petition (Civil) 43 of 1985


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PETITIONER: BANSAL & CO. & ANR.

       Vs.

RESPONDENT: UNION OF INDIA & ORS.

DATE OF JUDGMENT20/12/1985

BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) PATHAK, R.S.

CITATION:  1986 AIR  452            1985 SCR  Supl. (3) 880  1986 SCC  (1) 556        1985 SCALE  (2)1457

ACT:      Indian Railways  Act  1890  &  s.  27A  &  Preferential Traffic Schedule  - Movement  of Coal  -  Priorities  for  - Stations nominated  in Assam  and Meghalaya  Zones - Whether can be  treated as  stations at colliery sidings - Equitable distribution of  coal -  Necessity of  - Movement of traffic schedule -  Sanction -  Need for  coordination between  Coal Controller and General Managers.

HEADNOTE:      The  Ministry   of  Railways  exercising  powers  under section 27A  of  the  Railways  Act  issued  a  Preferential Traffic Schedule.  This Schedule  prescribed five priorities i.e. priorities  ’A’ to  ’E’ with  inter-se priority amongst ’A’ to  ’E’ to  be accorded by the railways for transport of certain  goods  or  class  of  goods  specified  under  each category. Different  kinds of  coal fell  under priority ’C’ (iii) which provides for movement of coal from collieries in accordance  with   programme  and   movements  sponsored  or recommended by  the Coal  Controller or the State Government Director, (Movement) Railways.      In Viklad  Coal Merchant,  Patiala v.  U.O.I. [1984]  1 S.C.R. 657,  the Supreme  Court held  that (i) section 27 of the  Indian  Railways  Act  casts  a  duty  on  the  Railway Administration  to  arrange  for  receiving  and  forwarding traffic without  unreasonable delay  and without partiality; (ii) Section  28 prohibited  the railway administration from giving undue  or unreasonable preference or advantage to any particular person  or railway  administration; (iii) Section 27A gave power to the Central Government to issue directions for giving  special facilities  or preferential treatment in transport of  goods or  class  of  goods  consigned  to  the Central Government  or the  Government of any State; (iv) in order to  be eligible for obtaining allotment of wagon under priority ’C’  it is  necessary for  the person indent in the wagon to  satisfy the  five  conditions  specified  therein, namely  (a)   that  the  coal  is  to  be  loaded  from  the collieries; (b)  that the coal to be loaded is in conformity with the  commodity quotas  laid down  from time to time for certain  types  of  coal  and  or  in  accordance  with  the programme and movements sponsored or recommended by the Coal Controller and/or  any Committee appointed by him; (c) or it

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is sponsored or recommended by the State 881 Government  and/or   other  recommending   authorities   and accepted by  the  Railway  Administrations;  (d)  or  it  is sponsored or  recommended by  Director, Movement  (Railways) Calcutta; and  (e) it  must be  in accordance with the Zonal Scheme applicable  to  each  field  and  the  principles  of transport rationalisation  in force  from time  to time, and that stoppage  at way-side  stations for the booking of coal in wagons  could not be described as violative of section 28 of the Act or indicated unreasonable restrictions.      The railways had been allotting wagons and rakes to its sponsored traders  even after  the judgment  of the  Supreme Court in  Viklad’s case  in priority  ’C’ when  loaded  from various  stations   nominated  for   coal  loading  on  N.F. Railways. For  movement of Khasi Coal there is no station at colliery siding.  As such  the coal loaded from the stations nominated for coal loading on N.F. Railway had been taken as coal  loaded   from  collieries.   One  party  M/s  Mangalam Enterprises - the respondent to the S.L.P. as well as to the writ petition filed a petition before the Gauhati High Court against the  registration of  indents on  the basis  of  the priorities granted  by Calcutta  High Court.  The High Court allowed they  Civil Rule  and directed the Railways to allot wagons in  priority ’C’  to the  sponsored traders only when they fulfil  the five  conditions set  out  in  Viklad  Coal Merchants, case and that otherwise the registration would be made under  ’E’ priority  and allotment of wagon rakes shall strictly be  according to  the seniority  of indents  at the booking station  as per  rule 201  of the  Goods Traffic. It further directed  that all existing indents registered under item ’C’  for  the  parties  not  fulfilling  all  the  five conditions were to be covered in ’E’.      Pursuant to  the aforesaid  order the Railways had been permitting loading  of  coal  by  those  having  sponsorship certificates under  item ’E’  even though  the indents might have been  registered under  item ’C’. Hence these petitions to the Supreme Court.      It was  contended before  the Supreme  Court  that  (1) those sponsorers  who had  to load  coal from stations which are  not  collieries  should  not  be  given  priorities  in priority ’C’  and, (2)  the  Preferential  Traffic  Schedule enjoins that  the movement  of Traffic  Schedule  should  be controlled by Controller of Movements and not by the general Managers  of   Regional  Railways  and  that  this  was  not canalised by the Controller of Movements.      Disposing of  the writ  petition and  the special leave petitions, 882 ^      HELD :  1. It  is true that the railways have permitted movement of  coal from  nominated railway stations which are not at  all collieries.  This had to be done in the interest of equitable  distribution of  coal in  the  whole  country. Otherwise, the  State of  Meghalaya  which  had  no  railway stations at  the  colliery  sidings  will  not  be  able  to transport any  coal for  the need of Punjab or the North. If there is  coal in  Meghalaya and there is need in Punjab and the North  then the  scheme should  be so read that even the nominated stations  in Assam,  nominated by high authorities of railways, should be treated for the purpose of the scheme as colliery sidings for Khasi coal in those areas. This, the Railways did  prior to the order of the High Court. This was proper interpretation  of the  judgment of the Supreme Court in Viklad’s  case, and  this should be adhered to. [890 G-H;

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891 A-B]      2. The area of Meghalaya falls within the Assam Fields. The list  of zonal  rationalisation of movement of coal from different   coal    fields   suggests    that   such   zonal rationalisation must  be controlled  by Central  Authorities and not  by General  Managers  of  different  Railways.  The movement of  such coal  must  be  such  that  it  should  be coordinated  by   the  Central  Authorities  like  the  Coal Controller and  cannot be  done haphazardly  by the  General Managers of  the different  regions. In  future, movement of coal should  be sanctioned by the Zonal Managers of Railways with the  prior consultation  and concurrence  of  the  Coal Controller. This  can be  achieved quickly  if intimation of the same  is sent  to the  Controller and  no  objection  is received  immediately,  it  will  be  deemed  to  have  been sanctioned.      In the  instant cases,  where requisitions have already been  issued  and  sanctioned  with  the  knowledge  of  the Controller  of   Coal  then   there  has   been   sufficient compliance. [892 A-F]      3(i) The stations nominated by the railway in Assam and Meghalaya Zones  should be  treated as  stations at colliery sidings in terms of the directions given in Viklad’s case.      3(ii)  the  allotment  of  wagons  made  by  the  Zonal Managers should  be adhered  to so far as these have already been made  and coal  should be  loaded but  in future  Zonal Manager should  follow the procedure in making allotments as indicated herein.      3(iii) in  cases where  the General  Managers  sanction movements of  coal, immediate  intimation should be given to the controller  of  Movements  and  vice  versa.  These  two authorities must  act in  harmony, and in consultation. [892 G-H; 893 A] 883

JUDGMENT:      CIVIL APPELLATE  JURISDICTION :  Special Leave Petition (Civil) Nos. 632 & 3386 of 1985.      From the  Judgment and  Order dated  11.12.1984 of  the Assam Nagaland, Meghalaya, Manipur and Tripura High Court in Civil Rule No. 619 of 1984.                             WITH      Writ Petition (Civil) No. 43 of 1985.      (Under Article 32 of the Constitution of India.)      S.C. Gupta, and K.K. Mohan for the Petitioners.      Govind Das,  N.R. Chowdhary,  O.P. Sharma, Anil Katyar, R.N. Poddar and C.V. Subba Rao for the Respondents.      Soumen Ghose  and N.R.  Choudhary for the Intervener in W.P. No. 43 of 1985.      The Judgment of the Court was delivered by      SABYASACHI MUKHARJI, J. Special Leave Petition Nos. 632 and 3386  of 1985  by  M/s  Bansal  &  Co.  and  M/s  Orient Distributors respectively  and the  Writ Petition  No. 43 of 1985  by   M/s  Bansal   &  Co.  under  article  32  of  the Constitution challenge  the validity  of the order issued by the North  East Frontier  Railway dated  21st December, 1984 whereby the  said railways  sought to implement the judgment and order of the High Court of Gauhati in Civil Rule No. 619 of 1984.      By the  said order,  it was  held that  M/s Vicky  Coal Concern, Calcutta  as well  as M/s Mangalam Enterprises were entitled to  priority ’E’  and not  to priority ’C’. None of the parties,  it was  declared by  the Gauhati High Court by

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its order  passed on  11th  December,  1984,  fulfilled  the requisite conditions  for  obtaining  priority  ’C’  of  the Preferential Traffic  Schedule of  the Railways  (for  short PTS). It  was declared  also that  there could  not  be  any discrimination whatsoever  between any  trader and  consumer whether privately  sponsored trader  or private  consumer in priority ’E’  and that  they should be allotted and supplied wagons strictly in terms of the provision of Rule 201 of the Goods Traffic  Rules (for short ’the rules’) for acceptance, carriage and  delivery of  general goods  issued  by  Indian Railways from  time to  time, and  in order  to get priority ’C’, they had to 884 fulfil the  five conditions  enjoined in the decision of the Court in  Viklad Coal  Merchant, Patiala,  Etc. v.  Union of India & Ors., [1984] 1 S.C.R. 657.      In order to appreciate the position, it is necessary to state that  there is  in existence  a rationalisation scheme for movement of coal, booking of coal is allowed from North- Eastern Railways  to difficult  States only  when the cam is sponsored by  the respective State Government. However, coal is allowed  to move  freely upto  the stations  on  east  of Siliguri as per said Rationalisation Scheme.      From 1980  onwards  certain  High  Courts  had  granted injunction orders  on railways  to allow booking of coals to various State  in priority  ’B’ and  ’C’ without  sponsoring certificates. The  Railways had  tried to  comply with those interim orders  although in certain cases, courts were moved by the Railways for vacation of the interim orders. Movement of coal  to various states took place under priority ’B’ and ’C’ during the pendency of such interim orders.      In Viklad  Coal Merchant, Patiala Etc. Etc. v. Union of India &  Ors. (supra),  the question  was considered by this Court. In  that case,  the petitions  in group  of petitions under article  32 of  the Constitution  were coal  merchants who, according  to them, had been denied the use of railways for transport  of coal from various coal fields and way-side station to  their  destination  by  certain  orders  of  the railways   which    were   described    as    illegal    and unconstitutional by  those  petitions.  The  court  examined these contentions and came to the conclusion that section 27 of the  Indian Railways  Act cast  a  duty  on  the  railway administration  to  arrange  for  receiving  and  forwarding traffic without  unreasonable delay  and without partiality. Section  28   of  the   said  Act   prohibited  the  railway administration from  giving undue or unreasonable preference or  advantage   to  any   particular   person   or   railway administration or  any particular  description  of  traffic. Section 27A  was inserted  in the  Act after  1950 to  given power to  the Central  Government to  issue  directions  for giving  special  facilities  or  preferential  treatment  in transport of  goods or  class  of  goods  consigned  to  the Central Government  or the  Government of any State or of in such other  goods or  class of  goods as may be specified in the order.      The Government of India, Ministry of Railways issued an order dated  1st April,  1972 containing its decision to add abbreviation ’GX’ below the abbreviation ’G’ in the list of 885 abbreviation at page 14, Chapter VI of the IRCA Alphabetical list of  Railway Stations  in India  and asking  the railway administration to decide and notify the names of stations to which this  new provision  would apply. Putting abbreviation ’GX’ against  a station  meant that the station was not open for outward booking of coal, coal shale etc. in wagon loads.

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Pursuant to  this order,  the abbreviation ’GX’ was appended to  all  way-side  stations  in  the  coal-belt.  Thereafter Government of India, Ministry of Railways by its order dated 27th April,  1972 revised  Rules 1  and  2  of  the  Eastern Railway Coal  Traffic Part  I. The  revised rules  provided, inter alia,  that all  traffic in  coal etc.  in wagon loads will be  loaded only from colliery sidings, coke oven plants and washeries  on the  Eastern Railway,  but coal  in  wagon would  not  be  permitted  at  the  stations  serving  these colliery washeries.      In exercise  of the  powers conferred under section 27A of the  Railways  Act,  the  Union  of  India,  Ministry  of Railways  issued   a  Preferential  Traffic  Schedule.  This schedule prescribed  five priorities  i.e. priorities ’A’ to ’E’ with  inter se  priorities amongst  ’A’  to  ’E’  to  be accorded by  the railways  for transport of certain goods or class of  goods specified  under  each  category.  Different kinds of  coal falls under priority ’C’ (iii) which provides for movement  of coal  from collieries  in  accordance  with programmes and  movements sponsored  or recommended  by  the Coal Controller and/or any Committee appointed by him and/or the State  Government and/or  other recommending authorities and  accepted   by  the   Railways  Administrations   and/or Director, Movement  (Railways), Calcutta,  and in accordance with the  Zonal Scheme  applicable to  each  field  and  the principles of  transport rationalisation  in force from time to time.  Priority  ’E’  is  a  residuary  clause  and  also involves movement of coal from collieries.      As contended  by M/s  Bansal &  Co., certain conditions had to  be fulfilled  for  getting  priority  ’C’  (iii)  in accordance with  the interpretation put by this Court in the aforesaid decision  in Viklad  Coal Merchant’s  case, it  is necessary to  set out  priority ’C’  (iii) as appears in the Preferential Traffic Schedule which is as follows:           "(iii) Coal  from collieries  in  accordance  with           commodity quotas  laid down  from time to time for           certain types  of coal  and/or in  accordance with           programmes and  movements sponsored or recommended           by  the   Coal  Controller  and/or  any  Committee           appointed by 886           him and/or  the  State  Governments  and/or  other           recommending  authorities   and  accepted  by  the           Railways Administrations and/or Director, Movement           (Railways), Calcutta,  and in  accordance with the           Zonal Scheme  applicable to  each  field  and  the           principles of  transport rationalisation  in force           from  time   to  time.   A  list   of   sponsoring           authorities authorised  to sponsor  coal movements           in this item is given in Annexure ’B’.           (b) Besides  the sponsoring  authorities mentioned           in Annexure  ’B’ movement of Coal may be sponsored           by "any  other authority  who may  be appointed by           the Government from time to time".           (c) Recommendation  for allotment  of wagons  by a           sponsoring    authority     or    acceptance    of           recommendations  or   issue  of  sanction  by  the           Railway      Administration/Director      Movement           (Railways) does  not guarantee allotment/supply of           wagons.  Allotment/supply   of  wagons   would  be           regulated according to operational exigencies from           time to  time. Allotment/supplies of wagons may be           cancelled  or   reduced  by   Director,   Movement           (Railways).           (d) The period of validity of programmes/sanctions

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         for rakes/piecemeal movement may be laid down from           time to  time by  Railway Administration/Director,           Movement    (Railways).     The    validity     of           programme/sanction     does      not     guarantee           allotment/supply of wagons.           (e) Inter  se seniority  of the class of consumers           would be  laid down  from time  to time by Railway           Administration Director,  Movement (Railways)  and           may be  altered/modified from time to time. Within           the same  class or category of consumers seniority           may be  fixed from time to time depending upon the           operational  and   other  considerations.  Railway           Administration/Director  Movement  (Railways)  may           permit distress  allotments/supply of  wagons when           considered necessary.  Nothing  laid  down  herein           shall be  considered as  contrary to  notes (a) to           (b) appearing under Priority ’E’." Annexure B  mentions the  State Collieries  -  about  27  in number  who  are  sponsoring  authorities  to  sponsor  coal movements.      In Viklad Coal Merchant’s case, the petitioners therein who were coal merchants alleged that sum total of various 887 restrictions including one dated 1st April, 1972 introducing abbreviation ’GX’  and  the  Preferential  Traffic  Schedule specifying priorities  under section  27A(1) of  the Act  in their cumulative  effect imposed a total ban on transport of coal by  the railways  at the  instance and their action was violative of  articles 14  and 19(1)(g) of the Constitution. Other contentions  were also raised. Discussing the need for the  controlling   movement  of  coal  and  desirability  of channalising coal  for public  sector by sponsoring agencies and accepting  that railways  was subject  to constitutional check on the monopoly, the court came to the conclusion that instructions issued under section 27A were neither violative of the  Act nor  the provisions  of the Act. i.e. section 28 and 27A  violative of articles 14 or 19 of the Constitution. It was  emphasised that  a  developing  country  with  mixed economy  and   economic  planning  had  certain  targets  to achieve. These  targets were  planned  in  advance  and  the economic activity  was geared  to the  achievement of  these targets. If  the required  resources necessary for achieving the targets  were readily  available,  no  difficulty  would arise. But  a developing  country had  to so  distribute its scarce resources  to achieve and accomplish desired targets. This situation  is bound to lead to a gap between demand and supply or  various facilities.  Transport was  one of  such. Once there  was a  gap  between  the  demand  for  transport service offered  by  the  railway  and  the  supply  of  the service, the resources being not sufficient to meet with all existing demands,  the scarce  resources would  have  to  be equitably distributed  keeping in  view the  planned target. The equitable  distribution  would  necessarily  necessitate imposing  of   reasonable  restrictions   and  according  of priorities.  Then   this  Court  analysed  the  Preferential Traffic Schedule  of the  list of sponsoring authorities and came to  the conclusion  that the  list indicated  that  the Central and  State Governments  as  well  as  highly  placed Central and  State Government officers had been appointed as sponsoring  authorities  in  respect  of  coal  required  by different area and industries. This Court therefore rejected the  contention   that  the   setting  up   of  recommending authorities in  priority ’C’  ultra vires section 27A of the Act. This Court observed that transport of coal is according to a  plan drawn up a year in advance. Further this plan was

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subject to  the decision  of the Standing Linkage Committee. Every meticulous  detail was  worked out in advance. A daily loading of maximum number of wagons was pre-planned. All the steps  indicated   therein  were   arranged  including   the abbreviation  ’GX’   in  effective  implementation  of  plan movement of  coal. Therefore stoppage at way-side station of the booking  of coal  in wagons  could not  be described  as violative of section 28 of the Act or indicated unreasonable restrictions  violative   of   article   19(1)(g)   of   the Constitution. 888      Dealing with  the Preferential  Traffic Schedule,  this Court dealt with different priorities and analysing priority ’C’ which  gave the  movement of  coal to  sponsored dealers priority, this Court observed at pages 677-678 of the report as follows:           "Priority ’C’ (iii) which deals with coal provides           for transport  of coal  from collieries to various           parts  in  India.  It  was  subjected  to  varying           constructions. It  has been  extracted earlier. In           order to  be eligible  for obtaining  allotment of           wagon under  Priority ’C’, it is necessary for the           person indenting  the wagon to satisfy the various           conditions specified  therein. They  are: (i) that           the coal is to be loaded from the collieries; (ii)           that the  coal to  be loaded is in conformity with           the commodity  quotas laid  down from time to time           for certain  types of  coal and/or  in  accordance           with the  programmes and  movements  sponsored  or           recommended by  the  Coal  Controller  and/or  any           Committee  appointed   by  him;  (iii)  or  it  is           sponsored or  recommended by  the State Government           and/or other recommending authorities and accepted           by the  Railways Administrations;  (iv) or  it  is           sponsored or  recommended  by  Director,  Movement           (Railways),  Calcutta;  (v)  and  it  must  be  in           accordance with  the Zonal  Scheme  applicable  to           each  field   and  the   principles  of  transport           rationalisation in  force from  time to  time.  In           order  to   comply  with  the  pre-conditions  for           eligibility  under   Priority  ’C’,   a  list   of           sponsoring authority  authorised to  sponsor  coal           movements is  drawn up  and is set out in Annexure           ’B’ to  the Preferential  Traffic Schedule.  These           general conditions  are further subject to Notes A           to  E.   Why  such   an  exhaustive  and  detailed           provision is made is not difficult to answer? Coal           forms 32%  of the total transport of goods handled           by the  Railways. On  an average, more than 10,000           wagons  will   have  to   be  allotted  daily  for           transport of  coal. Coal being a primary source of           energy  used   by  heavy  industries,  electricity           generating plants,  steel plants  as also  cooking           fuel used in the remotest parts of the country, it           is  necessary   to  handle   its  transport   with           scientific precision.  Therefore, there is a prior           planning about  a year  in advance drawn up by the           Director, Movement  (Railways) setting  out  Zonal           Scheme of  distribution applicable  to each  coal-           field  force   from  time  to  time.  The  purpose           underlying 889           setting  up   of   sponsoring   and   recommending           authorities is  to ascertain  the needs of various           regions of  the country  who is  their  respective

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         regions would  be in  close and  intimate  contact           with the  consumers of  coal both  industrial  and           individual. Even  though power  has been conferred           on them  to  sponsor  or  recommend  indenting  of           wagons of  coal from  collieries this  network  of           sponsoring  and   recommending   authorities   are           subject to  the Zonal  Scheme applicable  to  each           coal  field   and  the   principles  of  transport           rationalisation in  force from  time to  time. The           nerve centre  is the Director, Movement (Railways)           of all  the activities connected with transport of           coal. In  addition to  this the Government has set           up a  Standing Linkage Committee in the Department           of coal  in the Ministry of Energy. This Committee           assesses the  link and  requirement of  particular           source of  coal. The  Committee keeps  in view the           requirements  of   such   major   industries   and           establishments  using   coal  like  the  Railways,           thermal power  stations, fertiliser plants, cement           plants, steel  plants, textile factories, chemical           industries and the like. This very narration would           show that  if  there  is  disturbance  in  regular           supply of  coal to  this priority sector resulting           in  their   closure,  there   would  be  a  ripple           effecting various  ancillary industries creating a           major dislocation  in  the  national  economy  and           escalating  haunted   spectre  of   lay  off   and           unemployment. That  is why  planning is undertaken           every year in advance and but for any emergency it           is considered  inadvisable to  disturb the advance           Planning because  any such  disturbance results in           serious dislocation  of  this  primary  source  of           energy being  distributed  all  over  the  country           keeping in view national priorities."      The first  condition indicated in priority ’C’ (iii) is the coal  to be  loaded from  collieries. This is one of the conditions. It  has however  been found  and it  is  further stated and  admitted by  the railways  that the railways had been allotting  wagons and  rakes to  its sponsored  traders even after  the judgment  of this  Court in Viklad’s case in priority ’C’ when loaded from various stations nominated for coal loading  on N.F.  Railways. For  movement of Khasi coal there is  no station  at colliery  siding. As  such the coal loaded from  the stations nominated for coal loading on N.F. Railway had  been taken as coal loaded from collieries. This was not pointed out to the court in Viklad’s 890 case. One  party M/s Manglam Enterprises - the respondent to SLP as  well as to the Writ Petition filed a petition before the Gauhati  High Court  against the registration of indents on the  basis of the priorities granted by other High Court, namely the  Calcutta High  Court.  The  Gauhati  High  Court passed its  order  in  the  aforesaid  Civil  Rule  set  out hereinbefore asking the Railways to allot wagons in priority ’C’ to  the sponsored  traders only  when they fulfilled the five conditions set out in the judgment of this Court as set out hereinbefore,  otherwise the  registration would be made under ’E’  priority and  allotment  of  wagons  rakes  shall strictly be  according to  the seniority  of indents  at the booking stations as per rule 201 of the Goods Tariff. It was further directed  that all existing indents registered under item ’C’  for  the  parties  not  fulfilling  all  the  five conditions were to be covered in ’E’.      In pursuance  of this  order, the  Railways  have  been permitting loading  of  coal  by  those  having  sponsorship

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certificate and  others as  per various  High Courts  orders under item  ’E’ including  M/s Bansal  & Co  even though the indents might  have been registered under item ’C’. This has resulted in  the present  special leave  petition as well as the Writ Petitions.      As mentioned hereinbefore one of the conditions is that coal should  be loaded from collieries and this condition is not fulfilled  in the  case of  Khasi coal  as there  is  no colliery in Meghalaya State unless the nominated stations in Assam are  treated  as  colliery  sidings  for  Khasi  coal. Railways have issued a notification to that effect.      Two  contentions   were  urged  before  us  that  those sponsorers who  had to load coal from stations which are not collieries should  not be  given priorities in priority ’C’. Secondly, the Preferential Traffic Schedule enjoins that the movement  of   Traffic  Schedule  should  be  controlled  by Controller of  Movements and  not by the General Managers of the regional Railways.      So far as the first contention is concerned, it is true that railways  had permitted movement of coal from nominated railway stations which are not at collieries. This had to be done in  the interest  of equitable  distribution of coal to the whole  country. Otherwise  State of Meghalayas which had no railway stations at the colliery sidings will not be able to transport  any coal for the need of Punjab or North. This would be improper if there is coal in Meghalaya and there is need in Punjab and North then the 891 scheme should be so read that even the nominated stations in Assam, nominated  by high authorities of railways, should be treated for  the purpose  of the  scheme as colliery sidings for Khasi  coal in  those areas.  This Railways did prior to the order  of  the  Gauhati  High  Court.  This  was  proper interpretation of the judgment of this Court keeping in view the rationale  of the  said  decision  and  this  should  be adhered to.      The second  contention was  that this was not canalised by  the  Controller  of  Movements.  It  is  true  that  the Controller of  Movements who  had been  general idea  of the scheme would  know all  of the  movements.  But  this  is  a sponsored coal  and General  Managers of  the Railways would also know about the movements of coal.      Mr.  Ghosh   appearing  for  some  of  the  respondents submitted that the Preferential Traffic System was supported and reservation in priority ’C’ was sustained subject to the conditions that  the coal must be booked from the collieries and further  urged that  where in situations such coal could not be  booked from  the collieries, there was no warrant in the decision of this Court in Viklad’s case to permit as has been done  in this  case  loading  of  coal  from  nominated stations  by   railways.  We   are  unable  to  sustain  the submission made on behalf of the respondents on this ground. It is  true  that  this  Court  in  the  aforesaid  decision permitted the  preferential traffic  system on  the basis of priority ’C’  and one of the main conditions of priority ’C’ was that  booking of  coal must  be from the collieries. But the situation  like the  one we  have before  us is  that in areas having  coal fields  or having excess quantity of coal available for  use in  other parts of the country, having no railway stations  in the  collieries cannot  supply coal  to those places  in Punjab  and North  where coal  is required. This would  be contrary  to  the  system  of  equitable  and reasonable readjustment  of  rights  between  the  different sectors, upon  the whole basis of which the decision of this Court  rested   in  Viklad’s   case,  unless  the  nominated

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stations, stations  nominated by the Railways are treated as ’railway stations’  in collieries  in the spirit of Viklad’s case. We read it accordingly. We may further note that there was no allegation that the power of nomination so far has in any way been misused.      The second objection was and there is some substance in that, that  there is  a  zonal  schedule  and  principle  of controlled transportation  should be  borne in mind. In this connection our 892 attention was  drawn to  page 177  of Special Leave Petition No. 632  of 1985 indicating the zonal rationalisation scheme for movement  originating from  different coal fields, where item (I)  mentions Assam Fields. The area of Meghalaya falls within the  Assam Fields.  The list of zonal rationalisation of movement of coal from different coal fields suggests that such zonal  rationalisation must  be controlled  by  Central authorities  and   not  by  General  Managers  of  different Railways. This was vital for free and equitable distribution and was  necessary for  the ceilings for the year 1985 to be observed by  sponsoring authorities  for the core sectors by the Central  and State  sponsoring authorities  for non-core sectors and  these were indicated in Annexures 1A, 1B and 1C of the  said  scheme.  It  was  further  submitted  that  in Viklad’s  case  at  page  668  of  the  report,  this  Court emphasised that  coal loading is a matter of huge dimensions and the  Department of Coal, Ministry of Energy had set up a standing linkage  committee. The  movement of such coal must be such  that  it  should  be  coordinated  by  the  Central authorities like  the Coal  Controller and  cannot  be  done haphazardly  by   the  General  Managers  of  the  different regions. As  indicated before,  there is  some substance  in this. But  if the movements are coordinated and for this the Controller of  Coal as well as General Managers, in case one authority requisitions wagons and intimates the other, there should  be   sufficient  compliance.   In  this  case  where requisitions have  already been  issued and  sanctioned with the  knowledge  of  the  Controller  of  Coal  (because  the procedure followed  postulated that every item was intimated to him and was not objected), then there has been sufficient compliance. In future movements of coal should be sanctioned by  the   Zonal  Managers   of  Railways   with  the   prior consultation and  concurrence of  the Coal  Controller. This can be achieved quickly if intimation of the same is sent to the Controller  and no objection is received immediately, it will be  deemed to  have been  sanctioned. So  far as  these cases are  concerned, the indents for which wagons have been issued and  which were  cancelled due to the judgment of the Gauhati High  Court should  forthwith be  rescinded and  M/s Bansal &  Co. and  other similarly situated like them should be permitted  to load the coal in wagons in pursuance of the wagons issued in their favour. We order as follows:-      1. that the stations nominated by the railways in Assam and  Meghalaya  Zones  should  be  treated  as  stations  at colliery  sidings  in  terms  of  the  directions  given  in Viklad’s case      2. that  the allotment  of wagons  made  by  the  Zonal Managers 893 should be  adhered to so far as these have already been made and coal  should be  loaded but  in  future  Zonal  Managers should follow  the procedure  in making allotments indicated in this judgment.      3. that  in cases  where the  General Managers sanction movements of  coal, immediate  intimation should be given to

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the controller  of  Movements  and  vice  versa.  These  two authorities must act in harmony, and in consultation.      4. that  except these directions there will be no order on the  Special Leave  Petitions as  well as no order on the Writ Petition and these are disposed of accordingly.      Parties will pay and bear their own costs. M.L.A.                                Petitions disposed of. 894