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PETITIONER: RAIGARH JUTE MILLS LTD.

       Vs.

RESPONDENT: EASTERN RAILWAY AND ANOTHER

DATE OF JUDGMENT: 24/03/1958

BENCH: GAJENDRAGADKAR, P.B. BENCH: GAJENDRAGADKAR, P.B. BOSE, VIVIAN DAS, SUDHI RANJAN (CJ) AIYYAR, T.L. VENKATARAMA DAS, S.K.

CITATION:  1958 AIR  525            1959 SCR  236

ACT:        Railway Rates Freight charges-Complaint of undue preference-        Unreasonable and excessive rates-Competitive traffic  Indian        Railways Act, 1890 (9 of 1890), ss. 28, 41

HEADNOTE: The  appellant company owned jute mills situated in  Raigarh in  the  State of Madhya Pradesh, and it had  to  bring  raw material  from  many railway booking  stations  outside  the State  as  there was no other means of  transport  both  for bringing  jute  to the mills and for carrying  the  finished products to ports for export to foreign countries; the  jute mills  in West Bengal and Madras had facilities  for  direct shipment  of  their goods without carriage by  rail  to  the ports,  and so the prices of the products of  the  appellant could  not be brought down to the competitive level for  the purposes of export out of, or sale in, India.  The appellant filed a complaint before the Railway Rates Tribunal under s. 41 of the Indian Railways Act, 1890, on the allegations that the Railway administration had contravened the provisions of s.  28 of the Act in that it had offered special  rates  for certain  stations in its zone to Kanpur which  were  cheaper than those that were charged between Raigarh and some  other railway  stations,  and  that the  charges  levied  for  the freight  of  the  appellant’s goods  were  unreasonable  and excessive.  The Tribunal found that competition between  the goods of the Kanpur mills and the appellant’s goods had  not been alleged or proved in the present case Held, that the mere fact that the goods of the Kanpur  mills are  transported at more favourable rates would not  attract the  provisions  of  s.  28 of  the  Act,  unless  there  is competition  between the goods of the Kanpur mills  and  the appellant’s  goods, and undue preference has been  shown  by the railway administration to the appellant’s competitor. Nitshill  and  Lesmahagow  Coal Company  v.  The  Caladonian Railway Company, (1874) 11 Railway and Canal Traffic  Cases, 39,  Denaby Main Colliery Company v.  Manchester,  Sheffield and  Lincolnshire Railway Company, [1886] 11 App.  Cas.  97, Lancashire Patent Fuel Company Limited v. London and  North-

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Western  Railway  Company,  (1904)  XII  Railway  and  Canal Traffic  Cases,  77 and Lever Brothers, Limited  v.  Midland Railway  Company,  (1909)  XIII Railway  and  Canal  Traffic Cases, 301, relied on. Held,  further, that in considering the question as  to  the reasonableness  of the railway freight the relevant  factors would   mainly   be  the  working  costs  of   the   railway administration and 237 other  material circumstances, and neither the  geographical location  of  the appellant on account of which  it  has  to incur  additional  expenses  of  transport,  nor  the   cost incurred  in  producing  the jute goods  nor  the  commodity prices prevailing in the market,- have any relevance.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 231 of 1954. Appeal  by special leave from the judgment and  order  dated August 17, 1953, of the Railway Rates Tribunal at Madras  in Complaint Case No. 5 of 1952. S.   C. Isaacs and R. C. Prasad, for the appellant. H. N. Sanyal, Additional Solicitor--General of India, H. J. Umrigar and R. H. Dhebar, for the respondents.  1958.   March 24.  The Judgment of the Court was  delivered by GAJENDRAGADKAR  J.-This  is  an  appeal  by  special(  leave against  the  order passed by the  Railway  Rates  Tribunal, hereinafter  called the tribunal, at Madras  dismissing  the appellant’s complaint under s. 41 of the Indian Railways Act (9  of 1890), to be described hereinafter as the  Act.   The appellant,  Raigarh  Jute Mills Ltd., is a  limited  company owning  jute mills which are ,situated in Raigarh in  Madhya Pradesh.   For the production of jute goods,  the  appellant has  to  bring raw material, viz., jute  from  many  railway booking  stations  outside the State of Madhya  Pradesh  and there is no other means of transport except by rail both for bringing  jute  to the mills and for carrying  the  finished products  to ports for export to foreign countries.  In  its complaint,  the  appellant  has  alleged  that  the  railway administration  had contravened the provisions of s.  28  of the  Act  and also that the charges levied  by  the  railway administration for the freight of the appellant’s goods were unreasonable and excessive.  According to the appellant, the Assam  Railway (now North-Eastern Railway)  offered  special rates  for jute from certain stations in its zone to  Kanpur and  the basis of these rates was cheaper than that  of  the rates charged between Raigarh and some other stations on the East  Indian Railway and the Bengal-Nagpur Railway (now  the Eastern Railway).  Both the Eastern Railway and the 238 North-Eastern Railway are State Railways and as such it  was not  open  to  either  of  them  to  mete  out  differential treatment.   The appellant further contended that the  other jute’  mills  in West Bengal and Madras had  facilities  for direct  shipment of their goods without carriage by rail  to the  ports,  whereas,  in the case  of  the  appellant,  the railways  charged  freight  up and down in  respect  of  the entire  traffic of the appellant ; inevitably the prices  of the products of the. appellant could not be brought down  to the competitive level for the purposes of export out of,  or sale  in,  India.  The appellant annexed  to  its  complaint table,,  of goods rates of the two railways and  urged  that the  unusual increase in the rates charged to the  appellant

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was  telling  very heavily on the appellant as  compared  to other mills.  According to the appellant,’ the freight rates should  be on the basis prevailing in the year 1949  as  the market  had  gone down to the level existing in  that  year. The  appellant’s complaint therefore prayed that, since  the prevailing  rates  were  unreasonable  and  excessive,   the tribunal  should  issue directions for the  introduction  of fair and reasonable rates. When  the  complaint was first filed, both the  East  Indian Railway  with its headquarters at Calcutta and  the  Bengal- Nagpur  Railway  with its headquarters  at  Kidderpore  were impleaded  as respondents.  Subsequently, the railways  were reorganized and the complaint was then suitably amended with the result that the Eastern Railway with its headquarters at Calcutta was substituted for both the original  respondents. Later  on, the Union of India was impleaded as respondent  2 to the complaint. Both  the  respondents denied. the allegations made  in  the complaint.  It was alleged on their behalf that the existing tariff  rates for the movement of jute were  reasonable  and not excessive.  It was also alleged by the respondents that, beyond  drawing attention to special rates which applied  to traffic from certain stations on the Assam -Railway  section of the NorthEastern Railway to Kanpur, the appellant had not submitted  concrete evidence, facts or figures to  make  out even a prima facie case that the prevailing tariff 239 rates for jute were unreasonable.  The respondents’ case was that  the  fact that the appellant’s mill was  situated  far away from the port and as such had to incur additional  cost had,  no  relevance or bearing on the case made out  in  the complaint  and  the same cannot be treated as a  ground  for consideration of any special rates.  The Union of India  has specifically’  raised  the additional plea that  even  after reorganization  the two railways in question  were  separate entities  and were working in the different  regions  having more or less divergent local conditions, and so they did not constitute one railway administration within the meaning  of the Act and s. 28 was therefore inapplicable. On  these contentions four principal issues were  framed  by the  tribunal.  All the three members of the tribunal  found that  the freight rates for the transport of jute to  Kanpur from  certain stations in the Katihar section of the  North- Eastern  Railway were lower than those for its transport  to Raigarh.   In  fact this position was  conceded  before  the tribunal.   On the question as to whether the  disparity  in the said rates amounted to " undue " preference under s.  28 of  the  Act,  the members of the  tribunal  took  different views.  The President Mr. Lokur and Mr. Roy, member, were of the  opinion that the two railways constituted  one  railway administration.  They thought that it was just and equitable to  hold that, although a railway administration may mean  a manager,  yet  in this case it also  meant  the  Government. They were, however, not satisfied that the disparity in  the rates  justified the appellant’s complaint about "  undue  " preference.   That  is  why they  rejected  the  appellant’s grievance  that the railway administration  had  contravened the provisions of s. 28 of the Act.  Mr. Subbarao, the third member of the tribunal, was inclined to take the view  that, though  the final control of both the railways may  be  with the  Government  or its representative,  viz.,  the  Railway Board, the actual management of the different zones was with the respective managers, and so the two railways in question cannot  be  said to constitute one  railway  administration. Proceeding to deal

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240 with  the appellant’s complaint on this basis, Mr.  Subbarao rejected its argument of " undue " preference on the  ground that  s.  28 was inapplicable in the present case.   In  the result,  the  issue  about " undue  "  preference  was  held against  the appellant by all the. members of the  tribunal. In  regard to the appellant’s case that the increase in  the freight   for   the  transport  of  jute  to   Raigarh   was unreasonable and excessive, the President Mr. Lokur and  Mr. Sabbarao  found  that the plea had not been  proved  by  any evidence.   On  the other hand, Mr. Roy made  a  finding  in favour of the appellant and held that the rates in  question were  shown  to be unreasonable and  excessive.   Since  the majority  decision,  however, was against the  appellant  on this point, the appellant’s complaint was dismissed.  It  is against this order of the tribunal dismissing its  complaint that  the  appellant  has come to this Court  in  appeal  by special leave. Before dealing with the merits of the contentions raised  by the  appellant, it would be convenient to refer  briefly  to the  provisions of the Act in regard to the constitution  of the tribunal as they were in operation at the material time. Section 26 bars jurisdiction of ordinary courts in regard to acts or omissions of the railway administration specified in the section.  Section 34 deals with the constitution of  the Railway  Rates  Tribunal.  According to  this  section,  the tribunial  consists  of a President and  two  other  members appointed  by the Central Government.  The tribunal  had  to decide the complaint filed before it with the aid of a panel of assessors as prescribed under s. 35 of the Act.   Section 46  lays down that the decision of the tribunal shall be  by the majority of the members sitting and shall be final.   It is  obvious  that  this  provision  about  the  finality  of the  tribunal’s  decision cannot affect this Court’s jurisd- iction under Art. 136 of the Constitution. Let  us now set  out the  material  provisions of the Act on which the appellant’s complaint is founded. Section 28 provides:  " A railway administration shall not make or give any undue or unreasonable preference or advantage to,                     241 or   in  favour  of,  any  particular  person   or   railway administration, or any particular description of traffic, in any respect whatsoever, or subject any particular person  or railway  administration  or any  particular  description  of traffic   to   any  undue  or  unreasonable   prejudice   or disadvantage in any respect whatsoever." A  breach  of  the  provisions of  s.  28  by  the  railway’ administration may give rise to a complaint under s. 41  (1) (a).  This section provides for complaints against a railway administration on five different grounds enumerated in  cls. (a)  to (e) and it requires that the tribunal to which  such complaints  may  be  made  shall hear  and  decide  them  in accordance  with  the provisions of ch.  V. In  the  present case, we are concerned with cls. (a), (b) and (c) of s.  41, sub-s.   (1).    Clause   (a)  covers   cases   of   alleged contravention of the provisions of s. 28; el. (b) deals with cases  where  it  is  alleged  that  the  administration  is charging station to station rates or wagon-load rates  which are  unreasonable; -and cl. (c) deals with cases  where  the railway   administration  is  levying  charges   which   are unreasonable.  Then s. 41, sub-s. (2) (i) lays down that, as soon as it is shown that the railway administration  charges one  trader or class of traders or the traders of any  local area  lower  rates  for the same or similar  goods  than  it

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charges  to  other  traders or class of traders  or  to  the traders  in another local area, the burden of  proving  that such  lower  charge does not amount to "  undue"  preference shall lie on the railway administration; and s. 41 (2)  (ii) lays  down  that,  in deciding the question  of  "  undue  " preference,  the  tribunal  may, in addition  to  any  other considerations  affecting the case, take into  consideration whether  such lower charge is necessary in the  interest  of the  public.   The decision of the questions raised  by  the appellant  before  us  will depend upon the  scope  and  the effect  of the provisions contained in ss. 28 and 41 of  the Act. Section  28  is obviously based on the  principle  that  the power derived from the monopoly of railway carriage must  be used in a fair and just manner in respect of all persons and all descriptions of traffic 31 242 passing  over  the  railway area.   In  other  words,  equal charges  should normally be levied against persons or  goods of  the  same  or similar kinds passing  over  the  same  or similar  area  of the railway lines and under  the  same  or similar circumstances; but this rule does not mean that,  if the railway administration charges unequal rates in  respect of  the  same or similar class of goods traveling  over  the same  or similar areas, the inequality of rates  necessarily attracts  the  provisions of s. 28.  All  cases  of  unequal rates  cannot necessarily be treated as cases of  preference because   the   very  concept   of   preference   postulates competition   between  the  person  or   traffic   receiving preference and the person or traffic suffering prejudice  in consequence.  It is only as between competitors in the  same trade  that a complaint of preference can be made by one  in reference  to  the other.  If there is no  such  competition then no complaint of preference can be made even though  the charges  levied against similar goods may not be equal.   It may be possible to assume that there is competition  between similar  commodities put on the market in the same area  for domestic consumption; but no such competition can be assumed between  traffic of goods for export and traffic of  similar goods  for  home  consumption.  It is  only  when  goods  or persons  can  be said to be _pari passu that a  question  of preference arises and so it is where the competition between two persons or classes of goods is either admitted or proved that  the  question of the application of s. 28  would  ever arise.   Then  again,  even as between  competing  goods  or persons, it would not be enough to prove mere preference  to attract  the  provisions of s. 28, for  theoretically  every case of preference may not necessarily be a case of "  undue "  preference.   It is only when the tribunal  is  satisfied that  the  railway  administration  has  shown  "  undue   " preference  in favour of a particular class of goods that  a complaint  can be successfully entertained under s.  41  (1) (a).   The  position under s. 28 thus appears to  be  clear. Whoever  complains against the railway  administration  that the provisions of s. 28 have been contravened must establish that 243 there  has been preference between himself and his goods  on the one hand and his competitor and his goods on the  other; and where it appears to the tribunal that such preference is "  undue " preference, the complainant would be entitled  to adequate relief under s. 41 (1) (a) of the Act. It  is true that, while enquiring into the  complaint’  made under s. 41, as soon as the complainant shows inequality  of

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rates  and proves that the competing goods are charged  less than   his   own,  the  onus  shifts  on  to   the   railway administration  to  prove that such lower  charge  does  not amount to " undue " preference.  The initial burden to prove preference  is on the complainant; but when the said  burden is  discharged by the proof of unequal rates as between  the complainant  and  his  competitor, it  is  for  the  railway administration  to prove that the preference is not "  undue ".  In the absence of satisfactory evidence adduced  by  the railway  administration in justification of  unequal  rates, the  tribunal  may hold that the  unequal  rates  complained against by the complainant amounts to " undue "  preference. If,  on  the other hand, the  railway  administration  leads evidence  to  show justification for the inequality  of  the rates, then notwithstanding the existence of unequal  rates, the   tribunal   need   not  necessarily   find   that   the administration  has  contravened the provisions  of  s.  28, because  it  is  only  where " undue  "  preference  by  the administration  is  shown  that  it  can  be  said  to  have contravened  the said section.  In considering the  question as  to whether the alleged preference amounts to "  undue  " preference  or  not, the tribunal may also -be  entitled  to consider   whether   the   lower  charge   levied   by   the administration  in respect of the competing class  of  goods was  necessary in the interest of the public.  That  is  the result of the provisions of s. 41, sub-s. (2)(i) and (ii). In  this  connection  we may refer to some  of  the  English decisions  to  which  our attention was  invited.  In  Lever Brothers,  Limited  v. Midland Railway Company (1),  it  was held  that  the railway was not called upon to  justify  the disparity of rates on which the (1)  (1909) XIII Railway and Canal Traffic Cases, 301. 244 complaint by Lever Brothers, Limited, was based because  the applicants  had  failed to establish that Messrs.  J.  W.  & Sons,  Limited,  in  respect  of whom  the  lower  rate  was charged, were the competitors of the applicants.   Referring to  the  fact that the rates charged to the  two  respective companies  were different, Vaughan Williams L.  J.  observed that  he did not think that the difference in  rates  itself constituted  any  undue preference by  the  Midland  Railway Company  of  Watsons as competitors of Levers.  One  of  the reasons  why the complaint made by Lever Brothers,  Limited, failed was that it was not shown that Messrs.  J. W. & Sons, Limited,  were competitors of Lever Brothers’  Limited,  and that eliminated the application of s. 27 (1) of the  Railway and  Canal  Traffic Act of 1888.   Similarly  in  Lancashire Patent  Fuel  Company Limited v. London and  North-  Western Railway Company (1), it was held that no competition existed between coal carried for shipment, and that carried for  the trader  and so the application made on the ground  of  undue preference was incompetent.  It was proved in this case that the  applicant’s slack was carried by the railway  companies at  a higher rate than that for slack carried for  shipment; but the complaint based on this unequal charges was rejected on  the  ground  that " it cannot be  said  that  the  slack carried  by  the railway companies for the  applicants  ever comes  into competition with the slack which is  carried  by the railway companies for ordinary shipment ". On the  other hand,  in  The Nitshill and Lesmahagow Coal Company  v.  The Caledonian Railway Company (2), it was held that the railway administration  had  shown undue preference because  it  was proved  that the goods unequally charged  were  commercially and  substantially  of the same description  and  there  was competition  between  them.  Whether or not the  goods  were

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commercially  and substantially of the same description  was the   point   in  issue  between  the   parties;   but   the complainant’s  case was accepted and it was found  that,  on the whole, the two articles (1)  (1904) XII Railway and Canal Traffic Cases, 77, 79. (2)  (1874) 11 Railway and Canal Traffic Cases, 39, 45. 245 were substantially of the same description " and cannot  but be  regarded as competitive and that there ought not  to  be any  difference  in the rates at which they are  carried  ". This  decision shows that if unequal rates are  charged  for the  carriage  of  similar or  same  goods  travelling  over similar  or same areas, then the, inference as to " undue  " preference  can  be drawn unless the preference  alleged  is otherwise shown to be justified by valid reasons.  In Denaby Main   Colliery  Company  v.  Manchester,   Sheffield,   and Lincolnshire  Railway Company (1), the Earl of Selborne,  in his  speech, observed that he did not think it  possible  to hold  (looking  at the context in which the  material  words stand)  that  " the mere fact of inequality in the  rate  of charge when unequal distances are traversed can constitute a preference  inconsistent with them ". It may be pointed  out incidentally that the provisions of s. 2 of the Railway  and Canal  Traffic  Act,  1854  (17  &  18  Vict.  c.  31)   are substantially similar to the provisions of s. 28 in our Act. Thus it is clear on these authorities that a complaint  made under  s.  41(1)(a)  can succeed only if it  is  shown  that preference  has been shown by the railway administration  to the  complainant’s  competitor and  the  administration  has failed  to  adduce  evidence in justification  of  the  said preference.  It will now be necessary to consider the merits of the appellant’s case in the light of this legal position. The  application  made by the appellant does  not  in  terms allege  any "undue" preference at all.  Mr. Isaacs, for  the appellant,  conceded  that  the  application  had  not  been happily  worded; but his comment was that the  pleadings  of both  the parties are far from satisfactory.  That no  doubt is  true;  but if the appellant wanted to make  out  a  case against the railway administration under s. 41(1)(a), it was necessary  that  he should have set up a  specific  case  of "undue"  preference.  The application does allege  that  the mills  at Kanpur are able to carry raw jute at a lower  rate but  there  is no allegation that between the goods  of  the Kanpur mills and the goods (1)  (1886) 11 App.  Cas. 97,114. 246 of the appellant there is any competition in the market.  On the  other  hand, the application refers  to  the  advantage enjoyed  by the jute mills in West Bengal and’  Madras  over the appellant.  Reading the complaint filed by the appellant as a whole, it would .appear that the complaint by necessary implication  refers to the competition between the goods  of West  Bengal  and Madras mills on the one hand and  the  ap- pellant’s  goods on the other.  The appellant no doubt  also avers  that the rate charged for the transport of the  goods are  unreasonable and excessive but that is another part  of the complaint which we will consider separately.  It  would, therefore,  be difficult to accept Mr. Isaaes argument  that the  appellant’s  complaint should be read as  including  an allegation  about competition between the appellant and  the Kanpur  mills.  If no such allegation has been made  by  the appellant  in  his  complaint,  it  would  not  be  fair  to criticise the respondents for not denying the existence,  of any such competition. But  apart  from this technical  difficulty,  the  appellant

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cannot  even  refer  to any evidence on which  it  would  be possible to base a conclusion as to the competition  between the  goods produced by the Kanpur mills and the  appellant’s goods.   Mr.  Isaacs has taken us through  the  evidence  of Amritlal  Bannerjee, Mustafi and Paul; but we have not  been able  to  see any statement made by any of  these  witnesses which  would show that there was a competition  between  the two sets of goods.  On the other hand, such meagre  evidence as is available on the record would seem to suggest that the goods produced by the Kanpur mills are sent to local markets for  domestic  consumption  and do not enter  the  field  of competition  with  the  appellant’s  goods  at  all.    That presumably is the reason why the appellant could not  allege any  competition  between  its goods and the  goods  of  the Kanpur  mills and none of the witnesses could speak  to  it. Mr.  Isaacs was thus constrained to refer to  the  statement (R-18) filed by the respondents for the purposes of  showing that  the  appellant’s goods travelled to  some  centres  in India which may be covered by the goods of the Kanpur 247 mills.   In our opinion, this is an argument of  desperation and  it  cannot help the appellant.  One  of  the  questions which  was  apparently  raised before the  tribunal  was  in respect  of  the volume of traffic and it is  in  connection with  this  particular  part of the  dispute  that  relevant statements were prepared by the respondents and filed before the  tribunal.  It would, we think, be unreasonable to  make use  of some of the statements contained in these  documents for  the purpose of deciding whether the  appellant’s  goods and  the  goods  produced by the  Kanpur  mills  enter  into competition  in the markets in India.  If the appellant  had attempted  to  lead evidence on this point  the  respondents would  naturally  have  had an  opportunity  to  rebut  that evidence.   It  is too late now to make out a case  of  this alleged competition and seek to prove it by stray statements contained  in the document filed by the  respondents  before the tribunal for a wholly different purpose.  That being the position of the evidence on the record we have no difficulty in  accepting  the  view of the  tribunal  that  competition between  the goods of the Kanpur mills and  the  appellant’s goods  has  not  been  alleged  or  proved  in  the  present proceedings.   If that be the true position, then  the  mere fact  that the goods of the Kanpur mills are transported  at more favourable rates would not attract the provisions of s. 28 of the Act. The next question which remains to be considered is  whether the  appellant  has  proved that the rates  charged  by  the administration  in respect of the goods transported  by  the appellant  are  per  se unreasonable.   On  this  point  the appellant  has led no evidence at all.  In its complaint  it has  no doubt averred that there has been an undue  increase in  the freight charges but no allegation is made as to  why and  how the, actual charges are unreasonable.   It  appears that the appellant is under a disadvantage because its mills are situated at Raigarh in Madhya Pradesh far away from  the shipping  centres  of transport and the competing  mills  in West Bengal and Madras are very near the export centres: but the fact that by its geographical location the appellant has to incur, additional 248 expenses  of transport would not be relevant in  considering the  reasonableness  of the freight charges.  It  is  common ground that the freight charges are levied at the same  rate by the railway administration in respect of either raw  jute or  jute  products  against  all the  mills.   There  is  no

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inequality  of rates so far as the -mills in this  zone  are concerned.  The appellant appears, to have argued before the tribunal  that the rates of freight leviable by the  railway administration  should  have  some  relation  to  the  costs incurred  by  the appellant in producing the jute  goods  as well as the commodity prices prevailing in the market.  This argument  has  been rejected by the tribunal  and  we  think rightly.   It seems to us clear that the costs  incurred  by the  appellant  which  are partly  due  to  the  appellant’s geographical  position  can have no  relevance  whatever  in determining  the reasonableness or otherwise of the  railway freight charged by the railway administration.  Nor can  the railway  freight move up and down with the rise and fall  of the  commodity prices.  In dealing with the  question  about the   reasonableness  of  the  railway  freight,  it   would naturally  be relevant to consider mainly the working  costs of   the   railway   administration   and   other   material circumstances.  When a complaint is made against the railway administration  under s. 41(1)(b) or (c), the onus to  prove the  alleged  unreasonableness of the freight rests  on  the complainant  and  if  the complainant  makes  no  effort  to discharge this onus his plea that the rates are unreasonable must inevitably fail. It appears that Mr. Roy, one of the members of the tribunal, was  inclined to take the view that the special rates  given to  the Kanpur mills in Katihar area should be  regarded  as normal and reasonable rates; and since the rates charged  to the appellant were higher than the said rates, he held  that the rates charged against the appellant are unreasonable per se.   In our opinion, this view is entirely erroneous.   The rates  charged  to the Kanpur mills are  admittedly  special rates.   Whether or not these concessional or special  rates should  have  been granted to the Kanpur mills is  a  matter with which the present enquiry is 249 not  concerned.   There may be reasons to justify  the  said concessional  rates;  but it is plain that  the  special  or concessional rates charged by the railway administration  in another  zone  cannot  be  treated as  the  sole  basis  for determining  what  rates should be charged by  the  railway. administration in other zones, and so we do not see how  the appellant can successfully challenge the majority finding of the tribunal that the rates charged against the  appellant’s goods  are  not  shown to be unreasonable per  se.   In  the result  we  must  hold that the tribunal  was  justified  in rejecting  the complaint made by the appellant.  The  appeal therefore fails and must be dismissed with costs. Before we part with this case, we would like to mention  two points  which  were  sought to be argued before  us  by  the learned  Additional  Solicitor-General  on  behalf  of   the respondents.  He challenged the correctness of the  majority view of the tribunal that the two railways operating in  two different   zones  in  question  constituted   one   railway administration  within  the  meaning of s.  3,  sub-s.  (6). Alternatively, he argued that, even if the two railways were held  to constitute one railway administration and that  the disparity  in charges amounted to the granting of " undue  " preference  to  the  Kanpur mills, s. 46 of the  Act  was  a complete  answer to the complaint under s. 41(1)(a).   Since we  have  held in favour of the respondents  on  the  points urged before us by Mr. Isaacs on behalf of the appellant, we do not propose to deal with the merits of these contentions.                                  Appeal dismissed. 32 250

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