Tyrist Enterprises & Anr. v. Chairman Railways Board & Ors.

1. A Division Bench of this Court vide order of 3rd November, 2015 in LPA 685/2015, titled Union of India & Ors. Vs. Jai Balaji Industries Limited & Anr., had directed as under:- “As per the impugned order the appellants were to return the wagons to the respondents within a period of one month from today or alternatively purchase the wagons at an agreed price. We extend the period of one month as stated in the impugned order, i.e. one month from today. If the appellant does not wish to purchase the wagons, it shall return the same within one month from today to the respondent. In case the appellant intends to purchase the wagons or fails to make any response within one month from today, the appellant would calculate the price of the wagons as per its norms under the scheme and tender the payment to the respondents within three months from today. When making payment, the respondent shall be informed about the basis of the calculation of price made by the appellant. The respondent may accept the price being paid by the appellant without prejudice to its rights and contentions. If the respondent is not satisfied with the price or payment of other dues it may initiate appropriate steps for arbitration for adjudication of the price at which the appellant would be entitled to by the wagons.”

2. Since the afore-noted directions are common in all the above captioned four petitions, therefore, with the consent of learned counsel for the parties, while treating CONT.CAS(C) 398/2018 as the lead case, these petitions have been heard together and are being disposed of by this common order.

3. It is a matter of record that afore-referred directions issued by Division Bench of this Court in these petitions have attained finality. Prior to filing of these petitions, a Notice was sent by petitioners to respondent, which was duly responded to, on the basis of Executive Director Committee’s Report of 13th December, 2016. The stand taken by respondents in their reply to the above said notice is as under:- “On the basis of ED Committee’s report, the following calculations have been done to determine the RESIDUAL VALUE OF THE RAKES”- No of Rake Total Time period till 03.11.2015 (order passed by Hon’ble Double Bench of Delhi High Court) since induction of rakes No. of Rakes eligible for freight for freight rebate as per the policy (72 rakes as per/rake) Capital cost per rake (Rs. in Cr.) Annual depreciation per rake (Rs. In Crore) Valuation of the rake for the period i.e. from 03.11.2015 till expiry of the contract Rake one 9 years 5 months 2 days 678 13,00,00,000 1,30,00,00/- 7512100.46 Rake Two 9 years 2 months 2 days 660 13,00,00,000 1,30,00,00/- 10762100.46 Rake Three 7 years 9 months 12 days 560 13,00,00,000 1,30,00,00/- 28822602.74 Rake Four 7 years 1 month 1 days 510 13,00,00,000 1,30,00,00/- 37881050.23 Total 4 Rakes 2,408 8,49,77,853.89 It is observed that you have placed indents and consequently loaded only 798 rakes against 2736 rakes for which you were eligible for freight rebate. Also the actual average lead of the traffic for all the rakes together was only 305 km compared to 700 km as was admissible as per the policy for freight rebate. This under utilization of the rake by the investor reflects lack of marketing and initiative and demand from their side. It is worth mentioning that railways revenue has also been adversely affected due to this lack of marketing initiative and less demand from the investor. Due to less utilization by 1938 rakes by the party as compared to anticipated as per the policy guidelines Indian Railways suffered revenue loss of about Rs.404.57 crore. It is very evident from the above that by adjusting the Railways’ aforesaid loss with the valuation of the WIS rake as per aforesaid calculation, no amount is found to be payable by you. As the residual value of the WIS rake i.e. Rs.8,49,77,853.89 (as per calculation table at Page 2) has been surpassed by the loss of revenue caused to the Railways by you, the Railways will be constrained to file claim for the said loss after adjustment of Rs.8,49,77,853.89.”

4. On behalf of petitioners, it is submitted that respondents are in defiance of afore-referred Division Bench’s order, which required respondents to return the wagons/rakes to petitioner within a period of one month or in the alternative purchase the wagons/rakes at an agreed price. It is submitted that the counter claim set up by the respondents in their reply is without any basis and in any case, without initiating any proceedings, respondents cannot set off the alleged counter claim and have to abide by the directions issued by the Division Bench of this Court. It is submitted by counsel for petitioners that respondents have gone beyond the directions issued by the Division bench, as the counter claim of respondents is for anticipated damages, which have not been determined in any form. So, it is submitted that respondents be directed to purchase the wagons/rakes obtained by them from petitioners.

5. On the contrary, learned counsel for respondents submits that their reply to the notice served upon petitioners, is in compliance with the above-noted directions issued by the Division Bench of this Court and if petitioners are not satisfied with the reply so given, then they are at liberty to invoke the arbitration clause or to avail of the remedies, as available in law. Thus, it is submitted that the above-said directions issued have been already complied with and so, these petitions deserve dismissal.

6. Upon hearing and on careful perusal of the directions issued by a Division Bench of this Court, as referred to above, and the material on record, I find that respondent-Railways was directed to calculate the price of wagons/rakes as per its norms under the Scheme and tender it to petitioners herein, which according to petitioners, has not been done by respondent-Railways. The stand of respondent-Railways is evident from Reply of 23rd February, 2018 given by them to petitioners’ Notice seeking compliance of the aforesaid directions issued by a Division Bench of this Court. While relying upon E.D. Committee’s Report of 13th December, 2016, residual value of the wagons/rakes in question has been assessed, but due to under utilization of the wagons/rakes by petitioners, respondent-Railways claims to have suffered revenue loss of `404.57 crores and so, according to respondent-Railways, no amount is payable to petitioners in lieu of wagons/rakes in question. It is evident from respondents’ Reply of 23rd February, 2018 that respondent-Railways intends to file a claim for the revenue loss suffered by them due to under utilization of wagons/rakes in question and according to respondent- Railways, it would be done after adjusting the price of wagons/rakes. E.D. Committee’s Report on valuation of wagons/rakes procured under Wagon Investment Scheme is the basis on which the reply of 23rd February, 2018 has been sent by respondent-Railways to petitioners.

7. In the considered opinion of this Court, respondent-Railways has substantially complied with the afore-referred directions issued by a Division Bench of this Court as the valuation of wagons/rakes in question has been done and if petitioners are not satisfied with respondents’ Reply of 23rd February, 2018, then they are at liberty to seek arbitration or avail of the remedies as available in law. Since the loss of revenue suffered by respondent-Railways due to under utilization of wagons/rakes in question has surpassed the value of wagons/rakes in question, therefore, according to respondent-Railways, nothing is payable to petitioners.

8. This Court finds that there is no willful disobedience of the abovereferred directions issued by a Division Bench of this Court. No case for initiating proceedings under The Contempt of Courts Act, 1971 against respondents is made out. Accordingly, these contempt petitions are dismissed with liberty as aforesaid, while making it clear that legality of respondent’s Reply of 23rd February, 2018 has not been gone into. It is left open to be considered in appropriate proceedings, if so invoked.

JUDGE NOVEMBER 14, 2018 r/s