Intec India Limited vs Union Of India & Ors

S. Ravindra Bhat, J

Complaining of arbitrariness, the appellant had sought the remedy under Article 226 of the Constitution in respect of the detention/demurrage

charges for two months (from 14.08.2016 to 15.10.2016) claimed by the respondent (hereafter “CONCORâ€) to the extent of Rs. 6,04,686/-. The

appellantâ€s contention was that the materials on the record produced before the Single Judge revealed that CONCOR was beneficiary as lessee of

public lands for which it paid an extremely subsidised fee. The learned Single Judge rejected the plea of arbitrariness and held that the detention

charges claimed by CONCOR and the private agency i.e. COSCO were justified. It was held also that COSCO was neither a State nor were its

activities covered under Article 226 of the Constitution.

Dr. Amit George, learned counsel relies upon the decision in The Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha

Swamiar of Sri Shirur Mutt AIR 1954 SC 282 to highlight especially the distinction made in the judgment between a licence and other charges to say

that a licence charged by a Government agency has a bare nexus with the fee. It is thus contended that having regard to the extremely subsidised

nature of lease charges that CONCOR bears for access to the public lands â€" to the tune of Rs. 44 crores on which its depot is located, the detention

charges based upon tariffs fixed by it are arbitrary and unreasonable. Learned counsel also relied upon the judgment reported as Ramana Dayaram

Shetty v. The International Airport Authority of India and others AIR 1979 SC 1628 to contend that when the State chooses to engage itself in a

commercial activity, it has to act reasonably, having regard to the compulsions of its duty to offer welfare benefits and ensure widest reach to those

entitled to the service.

The respondents, especially CONCOR, resist the appeal and contend that judicial review cannot be resorted to for examination of the charges fixed

for the services rendered as is sought to be done. In the counter affidavit filed in answer to writ proceedings, it was clearly demonstrated that the

tariff is not based on the alleged subsidised rates at which the lease was obtained but rather it is the culmination of an elaborate process whereby

proposed charges are paid at the rates fixed, and where no rates are so fixed, charges are paid at such rates as may be fixed by the authorities. It is

submitted that for fixing the tariff at the relevant rates, a report consultation mechanism is resorted to whereby stakeholders such as shipping lines and

other service providers†views are also taken into account. Learned counsel relied upon the counter affidavit to indicate some of the considerations

that weighed with CONCOR and the authorities at the time of fixation.

The Court is of the opinion that there is no infirmity in the impugned judgment. Whilst fixation of licence fee for an activity which is akin to a

sovereign function such as calculation of fee for providing licenses or registration to aircraft vessels and motor vehicles or even services which the

State offers in its capacity as a sovereign entity, undoubtedly, have to bear a direct and perhaps an approximate nexus with the activity itself and

therefore ought to be reasonable, even minimal, that restriction, however, in the opinion of the Court, does not imply that the State chooses to engage

in what are purely “commercial activities†that can be carried out by other entities. In such situation, the State exercises either by itself or through

its agencies the powers that are fettered and also vested with all the rights as well as the obligations imposed on like entities who operate in the

commercial field having regard to its choice under Article 298 of the Constitution. Life Insurance Corporation of India v. Escorts Limited 1986 (1)

SCC 264 is an authority for proposition that when the State chooses to operate commercially, it cannot be undoubtedly fettered and operates in the

same level playing field as provided and authorized, with the added responsibility of broadly conforming to non-arbitrariness and discrimination. The

record reveals that CONCOR routinely undertakes and reports exercise of tariff fixation on periodical basis which entails consultation with all

stakeholders. Doubtlessly, importers and exporters are also part of such exercise. In the present case, the petitioner/appellant could not clear the

goods for two months and was imposed deduction charges which it knew when it entered into the arrangement with CONCOR. Having regard to

these factors, this Court is of the opinion that there is no infirmity in the impugned judgment.

The appeal is accordingly dismissed.