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PETITIONER: INDER MAL JAIN & ANR. ETC.

       Vs.

RESPONDENT: UNION OF INDIA & ORS. ETC.

DATE OF JUDGMENT08/12/1983

BENCH: DESAI, D.A. BENCH: DESAI, D.A. MISRA, R.B. (J) MISRA RANGNATH

CITATION:  1984 AIR  415            1984 SCR  (1)1016  1984 SCC  (1) 361        1983 SCALE  (2)923

ACT:      The Indian  Railways Act,  1890-Sec. 114A-Validity  of- Whether ultra-vires Art. 19(1) (g) of Constitution of India.      The Railway  Tourist  Agent  Rules,  1980-Validity  of- Conditions prescribed  for becoming authorised agent-Whether arbitrary, unreasonable  and  irrelevant-Whether  the  Rules ultra vires the Act and Art. 19(1) (g) of the Constitution.

HEADNOTE:      The petitioners  who claimed  to  be  carrying  on  the business as  railway travel  agents and rendering service to the travelling  public in  booking II class seats and berths in various passenger trains, challenged the validity of sec. 114A of  the Indian  Railways Act, 1890 as being ultra-vires Art. 19(1)  (g) of the Constitution and also the validity of the Railway  Tourist Agent  Rules, 1980  as ultra-vires  the Act, and  Art. 19(1)  (g) of  the Constitution on the ground that the  Rules and the Act placed unreasonable restrictions on the  petitioners’ right to carry on their lawful business guaranteed by  Art.  19(1)  (g)  of  the  Constitution.  The petitioners  argued   that  the  conditions  of  eligibility prescribed in  the Rules  for obtaining status of authorised agents  in   their  cumulative  effect  were  impossible  of compliance and  were so deliberately drawn up as to help and encourage  wealthy   commercial  heavy-weights   to   obtain recognition simultaneously  denying the  same opportunity to persons like  the petitioners  who cater to the needs of the common man. The petitioners urged that railways earn bulk of their revenue  from second  class travelling  passengers and they were  the most  neglected and  to such  needy  persons, petitioners were  affording some  respite from  standing  in queues for  hours, to  be jostled out by shutting the ticket window in  their face.  It was  also stated  that the  court should  be  realistic  in  taking  note  of  the  prevailing corruption in booking railway tickets which would be further accentuated if every intending passenger had to stand in the queue for hours and return empty-handed.      Dismissing the  petitions, but  directing  the  Railway Board to prepare an appropriate scheme, ^      HELD: If  a privilege is granted to do a certain thing,

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it would  be open  to prescribe  conditions for enjoying the privilege.   The   railway   administration   alone   should ordinarily sell  its tickets. Sec. 66 of the Act enables the administration to  appoint authorised  agents  for  sale  of tickets. These  authorised agents  must of  necessity fulfil certain criteria. The criteria appear to 1017 have been  devised with  an eye  on  extending  facility  to foreign travellers  as well  as the  financial viability  to secure against failure to pay for tickets sold by recognised agents. With  this end  in view,  the conditions for minimum financial guarantee and having a Money Changer’s licence and other  allied   conditions   were   prescribed.   Intendment underlying the scheme of setting up authorised agents is not only to  check sharp  practices, curb  fleecing of  gullible passengers, but  render efficient  service. The Rules ensure fulfillment  of   the  intendment  underlying  the  impugned provisions. Viewed  from  this  angle,  the  conditions  are neither irrelevant  nor  arbitrary.  It  is  stated  by  the respondents that  as many  as 17  agents have been given the status of authorised railways tourist agents in Delhi alone. This is  not controverted.  Therefore,  the  conditions  are capable of being complied with. Failure or inability of some of  the  petitioners  to  comply  with  them  would  not  be sufficient to  reject them  as  unreasonable,  arbitrary  or irrelevant. The  conditions are reasonable and are conducive to the objects sought to be achieved. [1022 A-E]      Ramana Dayaram  Shetty  v.  The  International  Airport Authority of  India and  Ors. [1979]  3 S.C.R.  1014 and M/s Kasturilal Lakshmi  Reddy and  Ors. v.  State of  Jammu  and Kashmir and Anr., [1980] 4 S.C.C. 1 referred to.      Sec. 114A  of the  Act merely prescribes punishment for unauthorisedly carrying  on of  business  of  procuring  and supplying railway  tickets. If sec. 66 envisages appointment of authorised  agents obviously  anything  to  the  contrary would be  contravention  of  sec.  66  and  if  it  is  made punishable under sec. 114A of the Act, the section would not be ultra vires the Constitution. [1023F]      An agency  has to  be devised  to cater to the needs of class II  passengers,  which  can  render  service  in  this behalf. The agency has to be subjected to strict control and regulatory measures.  May  be,  that  the  petitioners  were abusing their  activities and  were  guilty  of  some  sharp practices. It  cannot be  said that  all of them were of the same class,  and it  also should not be forgotten that their activities were  facilitated by  their counter  parts in the booking-office. It  can be  safely said that to some extent, it was  a joint  venture. Therefore. merely dismissing these petitions would  be further  adding to  the miseries  of the travelling public.  The Railway  Board is therefore directed to prepare  a scheme  for recognising travel agents catering to the  needs of  the class  II passengers  with  sufficient control over  their activities  and put the same before this Court within three months from today. [1024F-H]

JUDGMENT:      ORIGINAL JURISDICTION  : Writ Petitions No. 8200-01/83, 4386-90/82, 4298-4308/82 and 3762/82.           (Under Article 32 of the Constitution.)      Anis Shayarwardy  and C.  P. Pandey for the Petitioners in WPs. 8200-01/83.      S. S.  Khanduja and  Yaspal Dhingra for the Petitioners in WPs. 4386-90/82.

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1018      P. Govindan Nair and Altaf Ahmed for the Petitioners in WPs. 4298-4308/82.      Shankar Ghosh, B. P. Maheshwari and B. P. Singh for the Petitioners in WP. 3762/82.      V. C.  Mahajan, R. N. Poddar, Ms. Halida Khatun and Ms. A. Shubhashini for the Respondents.      The Judgment of the Court was delivered by      DESAI, J.  Petitioners in this group of petitions under Art. 32  of the  Constitution claimed  to be carrying on the business as  railway travel  agents. One of the petitions in this group  is filed  by an association styled as Travellers Service  Agents  Association  (Regd.).  The  member  of  the Association also  claimed to  carry on  business as  railway travel  agents.   Petitioners  and   the  members   of   the Association claim  to be  engaged in  the business of travel agents over  a decade  and a half and according to them they are rendering  useful service  to the  travelling public  in booking  seats  and  berths  in  various  passenger  trains. According to  them they  ordinarily cater  to the  needs  of middle-class and  lower-middle  class  passenger-the  common man-travelling by  second class  in the  railways who cannot afford to  wait for long hours standing in queues at railway stations and  yet cannot  afford to avail of the services of the railway  tourist agents who generally cater to the needs of the  wealthy elite  of the  society. Petitioners complain that  the   railway  administration  encourage  wealthy  and influential  railway   tourist  agents  by  sacrificing  the interest of  the railway  travel agents like the petitioners and that thereby the railway administration is depriving the large lower  middle class  travellers from  availing of  the services of  the petitioners  which is  available at a cheap price  of  roughly  Rs.  8  per  ticket.  According  to  the petitioners, the business carried on by them is a lawful one but since  the introduction  of  Sec.  114A  in  the  Indian Railways  Act,   1890  (‘Act’  for  short)  they  are  being harassed,   tortured    and   mulcted    by   the    railway administration. They  aver that unreasonable restriction are placed on  their right  to carry  on their  lawful  business guaranteed by  Art. 19(1)  (g) of  the Constitution  by  the rules framed  by the Central Government under Sec. 47 of the Act styled  as Railways  Tourist Agent  Rules, 1980 (‘Rules’ for short) which are ultra-vires the Act as also ultra-vires Art. 19(1)  (g) and  they are  hounded out  of their  lawful business. Petitioners  accordingly contend that not only the Rules but also Sec. 114A which came into 1019 force  on   May  11,   1982  by  which  in  the  absence  of recognition, if the petitioners carry on their business they are  liable   to  be  prosecuted  and  sentenced  to  suffer imprisonment  are   ultra-vires  Art.   19(1)  (g)   of  the Constitution.      A comprehensive  counter-affidavit was  filed  both  in Writ Petition  No. 3762/82  and  Writ  Petition  Nos.  8200- 8201/83  by   one  Vijay   Kumar,  Joint  Director,  Traffic Commercial (G)  I  in  the  Ministry  of  Railways.  Broadly stated,  the   respondents  contend  that  even  before  the insertion of  Sec. 114A  by the  Indian Railways  (Amendment Act, 1982,  Secs. 70  and 114 of the Act prohibited transfer of a  ticket or  travel on a transferred ticket as also sale of a  ticket or  purchase thereof  from anyone  other than a railway  servant   or  agent   authorised  by   the  railway administration in  this behalf. Referring to the clandestine business carried  on by the petitioners, it is stated in the counter-affidavit as under :

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         "It is  submitted that  unauthorised persons  like      the petitioners  were, however, taking advantage of (i)      the absence  of  any  specific  provision  in  the  law      prohibiting the carrying on of business in purchase and      supply of  rail tickets  and (ii)  of the fact that law      does not  require the intending passenger to personally      or physically  present himself  as the  booking counter      for purchase  of ticket  for his  journey, were and are      purchasing tickets  generally in  fictitious names  and      thereby cornering reserved accommodation and compelling      genuine passengers  to turn  to them  for  purchase  of      reserved tickets  (booked in fictitious names) at heavy      premia.  These  unauthorised  persons  thus  make  huge      profits but the passengers who were found travelling on      transferred tickets  had to  pay  heavy  penalties  and      undergo prosecutions. The unauthorised agents from whom      these  tickets   were  purchased  invariably  remainded      untraced. It  is to  deal with  this situation that the      impuged law (S. 114A) was considered necessary." A further contention was raised that if the petitioners want to carry on their business as travel agents they must comply with the  Rules framed  by the Central Government under Sec. 47 of  the Act  and on being recognised under the Rules they would be  entitled to  carry on their business and therefore it is idle to contend that an embargo has been placed on the business carried on by the petitioners. It was 1020 contended  that   it  had   become  necessary  to  save  the travelling public  from the  unlawful activities  of persons carrying on  business as  railway  travel  agents  and  that regulatory rules  have to  be framed  and it  cannot be said that these  rules impose any unreasonable restriction on the petitioners’ right  to carry  on their  business.  Qua  Sec. 114A, it was stated that on receipt of persistent complaints from the public regarding black marketing in reservations by unauthorised travel agents and other persons. it was decided to provide  a suitable  check on  their activities.  A penal provision  was   enacted  providing  that  the  carrying  on business of  procuring and  supplying  tickets  or  reserved accommodation for  journey by  train unless so authorised by railway administration  would constitute  an offence and the same would  be  punishable.  That  is  the  genesis  of  the introduction of Sec. 114A in the Act.      Mr. Shanker Ghosh, who led on behalf of the petitioners followed by  Mr. Govindan  Nayar could not seriously contend that either  the Rules or Sec. 114A were ultra vires the Act or the  Constitution. The  Rules were  framed in exercise of the power  conferred on  the Central  Government by  Sec. 47 which  provides  that  the  Central  Government  shall  make general rules  consistent with  the Act for the purposes set out in  various clauses,  the last  clause being ‘generally’ for regulating the travelling upon, and the use, working and management of  the railway.’   Sec.  66 of  the Act provides that every  person desirous  of  travelling  on  a  railway, shall, upon  payment of  his fare, be supplied with a ticket by a  railway servant  or an agent authorised by the railway administration in  this  behalf,  specifying  the  class  of carriage for  which, and  the place  from and  the place  to which, the  fare’ has been paid, and the amount of the fare. Travelling without  a proper ticket is an offence punishable under Sec.  113 of  the Act.  The railway  administration is therefore under  an obligation  to make arrangement for sale of tickets and Sec. 66 enables it either to make arrangement to sell  tickets on  its own  or  through  or  by  an  agent authorised by  the railway administration in this behalf. If

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Sec.  66  enables  the  railway  administration  to  appoint authorised agent  for  sale  of  tickets  obviously  it  was necessary for  the Central Government to prescribe by rules, the  conditions   of  eligibility,  lay  down  criteria  and guidelines for  appointment of  authorised  railway  agents, enjoying  power   to  sell   tickets   which   the   railway administration would  be bound  to honour.  With this end in view, the Central Government framed the Rules. 1021      The  Rules   prescrible  conditions  and  criteria  for appointment as a railway tourist agent. Briefly stated, they are: 1) that the intending agent must posses a trade licence from the  competent authority  to carry on the business of a tourist agent  in India;  2) must  be financially  sound and should possess  the latest  Income-tax Clearance Certificate (I.T.C.C.) from  the Income-tax  Authority of India; 3) such an intending  agent should  have minimum  paid-up capital of not less  than rupees  one Lakh  to treat him as financially sound; 4)  he should  have obtained  recognition to act as a travel agent  from the  Government; 5)  he should  have been carrying on  the business  of a  travel agent  for a minimum period of  one year;  6) he should possess a Money Changer’s licence from  a competent  authority to deal with and handle the foreign exchange in India; 7) he must have an office and the premises  properly maintained with adequate conveniences at a  central place  in the  city so  as to  accommodate the visit of  sufficient number of customers and to provide them with the  reasonable conveniences.  The question  is whether the criteria  or conditions  for eligibility for recognition as authorised  railway tourist agent prescribed in the Rules are irrelevant  or arbitrary.  It  was  contended  that  the requirements amongst  others that  such a person must have a minimum paid-up  capital of  not less  than rupees one Lakh, and that  he must  be carrying  on the  business as a travel Agent for  a minimum  period of  one year and that he should possess  a   Money  Changer’s  licence  were  considered  so irrelevant by  this Court that while granting interim relief of Oct.  8, 1982, interim injunction was granted restraining the railway  administration from enforcing these conditions. The question  is whether  any or  all  of  these  conditions individually or collectively are so irrelevant to the object sought to  be achieved  by the  Rules or  are such  as would smack  or  arbitrariness  ?  The  argument  was  that  these conditions were  so deliberately  drawn up  as to  help  and encourage  wealthy   commercial  heavy-weights   to   obtain recognition simultaneously  denying the  same opportunity to persons like  the petitioners  who cater to the needs of the common man.      If what  has been stated in the counter-affidavit filed on behalf of the railway administration that the petitioners or atleast  some of  them were  guilty of cornering reserved accommodation and  thereby compelling  genuine passengers to turn to  them for  purchase of  reserved tickets  booked  in fictitious names at high premia, it was absolutely necessary to cheque  these illegal  activities permitting exploitation of the harassed travelling public. If a privilege is 1022 granted to do a certain thing, it would be open to prescribe conditions  for   enjoying  the   privilege.   The   railway administration alone  should ordinarily  sell  its  tickets. Sec. 66  enables the  administration to  appoint  authorised agents for  sale of tickets. These authorised agents must of necessity fulfil  certain criteria.  The criteria  appear to have been  devised with  an eye  on  extending  facility  to foreign travellers  as well  as the  financial viability  to

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secure against failure to pay for tickets sold by recognised agents. With  this end  in view,  the conditions for minimum financial guarantee and having a Money Changer’s licence and other allied  conditions were prescribed. The long-term view appears to  be that those seeking service of tourist agents, must get  a comprehensive  service at  one  place,  such  as railway tickets, foreign exchange conversion, exertise about the business,  easy access  and legitimacy  in business  and indisputably the conditions extracted above assure the same. Intendment underlying  the scheme  of setting  up authorised agents is  not only  to check sharp practices, curb fleecing of gullible  passengers, but  render efficient  service. The Rules ensure  fulfillment of  the intendment  underlying the impugned provisions.  Viewed from this angle, the conditions are neither  irrelevant nor  arbitrary. It  may be  that the petitioners may  not be able to fulfil the same, but that by itself cannot  render them  unreasonable. The conditions are reasonable and  are conducive  to the  objects sought  to be achieved. Failure or inability of some of the petitioners to comply with  them would  not be sufficient to reject them as unreasonable, arbitrary or irrelevant.      In this  connection, however, Mr. Govindan Nayar relied upon Ramana  Dayaram Shetty  v.  The  International  Airport Authority of  India and Ors.(1) wherein it is observed that’ in a  welfare state, the government activities have expanded so wide  that licences are required before one can engage in many kinds of business or work and the power to give licence means power  to withhold  them and this gives control to the Government or to the agents of the Government or many people It was  further observed that many individuals and many more businesses enjoy largest in the form of Government contracts and that  the Government  cannot give  or  withhold  largess arbitrary discretion  or at  its sweet  will. Even,  in  the matter of  Governmental largess,  it  was  stated  that  the Government cannot  act arbitrarily.’ We fail to see how this observation  would  be  of  any  assistance  in  this  case. Similarly, the decision in M/s Kasturilal 1023 Lakshmi Reddy  and Others  v. State  of Jammu and Kasmir and Another(1) would  hardly  be  of  any  assistance.  Sec.  66 enabled the  railways to  sell  tickets  through  authorised agents. The  Central Government  framed rules  for obtaining recognition as  authorised agents  and the  Rules prescribed relevant conditions  for efficient  working of  a recognised agent. There  is  no  question  of  distributing  Government largess in  this case  nor any arbitrariness in Governmental action.  The  challenge  to  the  Rules  on  the  ground  of arbitrariness must fail.      One more  contention may  be noticed. It was urged that the  conditions  of  eligibility  for  obtaining  status  of authorised agents in their cumulative effect were impossible of compliance  with the  result that  under the  pretext  of regulatory  measures  a  total  embargo  is  placed  on  the business  of   the  petitioners   and  therefore   also  the restrictions are  unreasonable. In  the counter-affidavit it is stated  that as  many as seventeen agents have been given the status  of authorised  railway tourist  agents in  Delhi alone. This  in not  controverted. Therefore  the conditions are capable  of being  complied  with.  If  the  petitioners cannot  afford  to  do  the  same,  that  would  not  render conditions unreasonable.  Apart from  this, we  are  of  the opinion that conditions can be complied with.      The next attack was on the validity of Sec. 114A of the Act.   Sec.    114A   merely   prescribes   punishment   for unauthorisedly carrying  on of  business  of  procuring  and

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supplying railway  tickets. If Sec. 66 envisages appointment of authorised  agents obviously  anything  to  the  contrary would be  contravention  of  Sec.  66  and  if  it  is  made punishable under  Sec. 114A  of the  Act, we fail to see how the section would be ultra vires the Constitution. Therefore the contention must be negativated.      Both  Mr.   Shanker  Ghosh   and  Mr.   Govindan  Nayar strenuously contended  that even  if the Rules and Sec. 114A are not ultra vires the 1024 Constitution, the provisions of the Rules are so designed as to help  big houses  to  carry  on  business  as  authorised tourist  agent  and  they  would  hardly  be  interested  in catering to  the needs  of common  man  belonging  to  lower middle-class  passengers  forming  bulk  of  the  travelling public,  travelling   by  second   class  and  paradoxically contributing major  share in  railway  revenues.  They  also pointed out  that going  to the  station half an hour before the departure  of the  train, buy  the ticket  and enter the train, find a seat or standing accommodation and perform the journey is  a chapter in remote past. It was urged with some vehemence and  acerbity but  with  full  justification  that railways  earn  bulk  of  their  revenue  from  second-class travelling passengers and they are the most neglected and to such needy  persons, petitioners were affording some respite from standing  in queues for hours, to be jostled out by the shutting the ticket window in their face. It was also stated that the  Court should  be realistic  in taking  note of the prevailing corruption in booking railway-tickets which would be further  accentuated if  every intending passenger has to stand in the queue for hours and return empty-handed. By way of an  additional limb  to this submission, it was submitted that if  someone from a long distance wants to come to Delhi and return  the next day, how is he going to arrange for his ticket. Could  he ever  think of  going to  Thomas Cook  and agents of  their ilk  and would  he do his work for which he has come to Delhi or stand in a queue to purchase the return ticket ? We see considerable force in this submission. It is a very realistic appraisal of the situation and we would not permit railway administration, a monopoly, turning blind eye to this  desperate situation.  It is said that comparatively it is easy to enter heaven than obtain a railway ticket. Add to this malaise the misery of the people coming from outside having no  relations who  can afford  to waste their time to get the  ticket. Therefore  an agency  has to  be devised to cater to  the needs of class II passengers, which can render service in  this behalf.  The agency  has to be subjected to strict control  and regulatory  measures. May  be, that  the petitioners were abusing their activities and were guilty of some sharp  practices. It  cannot be  said that  all of them were of  the same class, and it also should not be forgotten that their  activities were  facilitated by  their  counter- parts in the booking-office. We can safely say that, to some extent, it  was a joint venture. Therefore merely dismissing these petitions  would be  further adding to the miseries of the travelling public. We therefore direct the Railway Board to prepare  a scheme  for recognising travel agents catering to the needs of class II passen- 1025 gers with  sufficient control  over their activities and put the same before this Court within three months from today.      With these  observations, all  the writ  petitions  are dismissed with no order as to costs. H.S.K.                                  Petition dismissed. 1

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