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M/s. S.K.L. Co. v. Chief Commercial Officer & Ors.

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 6905 of 2005)Decided 29 Dec 2015
Civil Appeal No. 6905 of 2005
Justice Vikramajit Sen · Justice Shiva Kirti Singh

Background

The Indian Railways leased luggage space in certain passenger trains to traders by tender. A grape trader challenged the lease, arguing that the lessee could charge more than the Railways' official Coaching Tariff for carrying parcels, which left traders without the benefit of the official rate. The learned Single Judge of the Karnataka High Court quashed the leasing notification, but a Division Bench reversed that decision while directing that lessees must not exceed the prescribed tariff.

Decision Breakdown

The Supreme Court upheld the Division Bench's judgment only to the extent of its direction. It held that the Railways may auction parcel space, but the successful contractor must charge no more than the rates set in Coaching Tariff No. 24 Part III. The Court noted that the Railways are bound by the statutory framework of the Railways Act, 1989, and that any shift in Railway policy towards revenue maximisation at the public's expense was for Parliament to make, not for a sub-delegate. It also rejected the Railways' attempt to dilute the Division Bench's direction through a later affidavit. The Railways were given three months to comply.

Lesson Learnt

Even when a public body hands a service to a private contractor, the contractor must still follow the officially approved tariff that the public pays. If a private operator is charging more than the notified rate for a public service, the law requires the authority to enforce the rate.

Official source (sci.gov.in)View Judgment (PDF)

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