In this writ petition, the petitioner, who is an exporter of barytes, has prayed for the issue of a writ of certiorari to quash the orders of the third respondent in C2/23003/82/T, dt. 17-8-1982 and C2/33287/83/T, dt.10-12-1983. On 10-5-1982, the petitioner applied for space for storage of barytes in the transit area of the Madras Port. By proceedings of the third respondent, dt. 31-5-1982, the petitioner was allotted 2000 sq. metres of transit space at Jawahar Dock-IV with effect from 1-6-1982, for a period of one month under the monthly licence system for storage of barytes. The petitioner was required to remit a sum of Rs.30,000 towards security deposit and one month's licence fee in advance. The terms and conditions of allotment of storage space in transit area are governed by the scale of rates framed under the provisions of the Major Port Trusts Act 1963 (hereinafter referred to as the 'Act'). At the time of allotment of space to the petitioner the prevailing rate was Rs.375 per 100 sq. metres as prescribed in the scale of rates then in force. Though the petitioner was initially permitted to occupy the space so allotted for only one month, subsequently, the petitioner was allowed to occupy the allotted space for a period of three months. Meanwhile, the scale of rates was amended by the Board and sanctioned by the Central Government and published in Part VI - S.3(a) of the Tamil Nadu Government Gazette Extraordinary, dt.31-7-1982. In terms of the revision, the monthly licence fee payable for use of the space in transit area was increased to Rs.1500 a month per 100 sq. metres with effect from 1-8-1982. By proceedings of the third respondent dt. 17-8-1982, the petitioner was given notice of the revision in the rates, apart from the publication in the Gazette. The rates were further amended and the amendments were published in the Tamil Nadu Government Gazette Extraordinary Part VI - S.3(a) dt. 30-11-1983. Thereunder, the monthly rent payable was fixed at Rs.1950 per 100 sq. metres for the open space in the transit area with effect from 1-12-1983, which was also communicated to the petitioner by proceedings of the third respondent dated 10-12-1983. The petitioner seeks to quash the communications referred to earlier on the main ground that the increase in the rates is arbitrary and unreasonable.


2. In the counter-affidavit filed by the respondents 2 and 3, they have stated that very limited space is available in the transit area and in public interest it is necessary to make that space available for others who use the port premises and avail the services and the revision of rates was done in accordance with the provisions of Ss.48, 49 and 52 of the Act, after a comparative study of the rates charged by the other major ports in this country, the Central Warehousing Corporation, etc. by similar services and taking into account the facts relating to the expenditure incurred. It was also stated that a revision in the rates in the manner done became necessary keeping in view the duty of the Board to discharge its statutory obligations and services and taking into account the previous revisions, the rates charged in other ports, the extra burden imposed on the port administration owing to expansion schemes, increase of salaries and allowances and amenities, provided to the officials, staff and workers of the Port, etc. The increase in the rate was thus said to be reasonable and not arbitrary.


3. Though in the affidavit filed in support of this writ petition it was stated that the procedure for revising the rates had not been followed, at the time of the hearing of the writ petition, the learned counsel for the petitioner accepted that the Board had the power to revise the rates and that the procedure for effecting a revision of rates as per the Act had also been followed. The only contention urged by the learned counsel for the petitioner is that there has been an arbitrary increase in the rates and such increase was wholly unreasonable and unnecessary and opposed to the principles of natural justice and not having any correlation to the cost of services. Reliance in this connection was placed by the learned counsel for the petitioner upon the decisions in Coimbatore Municipality v. Subbiah (1980) 1 Mad LJ 51 : 1980 AIR(Mad) 130) (FB), Delhi Municipality v. Birla Cotton Spinning and Weaving Mills, , Kasturilal v. State of Jammu and Kashmir, and Devidas v. State of Punjab, On the other hand, the learned counsel for the respondents 2 and 3 submitted that the Board is under a statutory obligation to perform certain duties and equally they have statutory powers to fix scales of fees and rates and the relevant criteria had been taken into account before revising the rates and, therefore, no exception can be taken to revision as effected. The learned counsel referred in this connection to the decisions of the Supreme Court in Trustees, Port of Madras v. Aminchand Pyarelal, Port of Bombay v. Indian Goods Supplying Co., and Corporation of Calcutta v. Liberty Cinema.


4. In so far as the power to revise and the procedure to be adopted for revision is concerned, there is no dispute. The only question is, whether the revision of rates can be characterised to be arbitrary or unreasonable and not bearing any correlation to the scope of the cost of services rendered under the statute by the Board. The transit area for storage of barytes allotted to the petitioner is very near to the quay side and that is one reason why such space is allotted for the storage of barytes on monthly licence basis, which is ordinarily not considered for other types of cargo. Further, facilities for the completion of documentation procedure under one roof are available there. Even so, thirty days free period for clearance/shipment is made available. Therefore, in order to avoid congestion and also allow other port users to use the port premises, it would be necessary to see to it that the allottee vacates the premises by the expiry of the period of licence. Apart from this, the Board is obliged to perform certain services and levy and recover charges for the services for import or export in connection with which the Board is maintaining a huge establishment comprising of buildings, transit and storage sheds, covered and open space, quays, berths, jetties, wharfs, docks, machinery, equipments, security arrangements, etc.. Considerable expenditure has to be incurred by the Board in the maintenance of these facilities in the course of the discharge of its obligations under the Act. In addition, the scale of rates fixed by the Port Trust, Madras, was found to be the lowest on a comparative study of the prevailing rates charged at the other major ports for similar services. Only with a view to remove the disparity in the scale of rates between the Madras Port and the other major ports with reference to open spaces allotted, the Board had undertaken the revision of the rates and while doing so, it had also taken into account the increase in the services owing to the expansion of the port and the need to mobilise more resources to satisfactorily continue to perform its obligations and rendering the services under the Act. The increase in salaries and allowances as well as the amenities provided to the staff, workers and other officials and the maintenance of the establishment comprising of buildings, transit and storage sheds, covered and open space, quays, berths, jetties, wharfs, machinery, equipments, security arrangements, etc., have all been taken into account in the process of the revision of the rates as could be gleaned from the files made available by the Port Trust. Only after a consideration of all the aforesaid aspects, the recommendation for the revision as done has been made and that has also been sanctioned by the Central Government under S. 52 of the Act. Thus, a consideration of the circumstances leading to the revision clearly points out that all round increase in the cost of performing its statutory duties and rendering the services enjoined on it by the Act has compelled the Board to increase the rates. Under S.48 of the Act, the Board shall from time to time frame a scale of rates and the Board in this case has proceeded to discharge the duty laid on it under S. 48 of the Act. The several factors which had thrown an additional burden on the Board in the matter of the performance of its statutory duties and rendering services has been taken into account to justify the revision in the rates and this cannot be stated to be either arbitrary or unreasonable or even unrelated to the cost of services. There is also nothing opposed to the principles of natural justice in the revision of the scale of rates, for, under the provisions of the Act, it is not obligatory on the part of the Board to inform all the port users prior to the revision of the scale of rates. To avoid any arbitrariness and unreasonableness in the matter of the revision of the scale of rates, there is a check provided under S.52 of the Act in that the Central Government will have to consider the scale of rates framed by the Board and sanction it and the scales will become effective only when so sanctioned and published by the Board in the official Gazette. Thus, on a careful consideration of all the facts and circumstances relating to the revision of the scales of rates, such revision cannot be characterised to be either arbitrary or unreasonable or in any manner opposed to the principles of natural justice.


5. It only remains to refer to the decisions relied on by counsel on both sides. In Coimbatore Municipality v. Subbiah, (1980) 1 Mad LJ 51 : 1980 AIR(Mad) 130) (FB) it was laid down that the extent of the trade or the location of the stalls would be irrelevant consideration in the matter of fixing the rates and, therefore, the fee levied by the Municipality based on those considerations would be arbitrary. Such is not the case here. The decision in Delhi Municipality v. Birla Cotton, Spinning and Weaving Mills, does not in any manner assist the petitioner to support its contention that the revision of the scale of rates is either arbitrary or unreasonable. In Kasturilal v. State of Jammu and Kashmir, it was pointed out that every activity of the Government has a public element and, therefore, it must be informed with reason and guided by public interest and if the activity is not reasonable and is also not in public interest then it would be invalid. Earlier it has been pointed out how the revision of the scale of rates is justified not only in public interest but also with a view to enable the Board to continue to discharge its responsibilities and obligations and perform services according to the provisions of the Act under circumstances of increased cost of services. How the revision had also been done in a manner to bring about uniformity in the rates charged by all the major ports in the country has also been earlier referred to. Under those circumstances, the decision in Kasturi Lal v. State of Jammu and Kashmir, cannot apply to this case. Similarly Devidas v. State of Punjab also would be inapplicable, for, there the question was whether the Legislature had effaced itself in the matter of fixation of rates as it did not give any guidance under the provisions of the statute, while here the attack on the revision of scale of rates is that it is only unreasonable and arbitrary and not without power. Thus, none of the cases relied on by the learned counsel for the petitioner support his contention.


6. On the other hand, the decision in Trustees, Port of Madras v. Aminchand Pyarelal, referred to by the learned counsel for the respondents 2 and 3 is in point. Therein, the statutory obligation of the Port Trust to perform certain duties as well as its statutory power to fix scales of fees and rates has been recognised. It is also significant that the nature of the statutory functions discharged by the Port Trust and the services rendered by it have been adverted to. According to that, the Port Trust is a body of a public representative character entrusted by the Legislature with authority to frame a scale of rates and statement of conditions, subject to which it shall or may perform certain services. The following observations in that connection occurring at page 1942 are relevant-


".....S.39(1) and (2) of the Act (Madras Port Trust Act 2 of 1905), casts on the Board an obligation, according to its powers, to provide all reasonable facilities, if so required by any owner, for various kinds of services mentioned in Cls. (a), (b) and (d) of S.39(1), which include services in regard to landing of goods between vessels and docks in possession of the Board and receiving, storing or delivering goods brought within the Board's premises. The Board under S.39(3) shall, if required, take charge of the goods for the purpose of performing the services. After the goods are thus taken charge of and a receipt given for them, no liability for any loss or damage which may occur to the goods attaches to any person to whom the receipt has been given or to the master or owner of the ship from which the goods have been landed. The responsibility of the Board, for the loss, destruction or deterioration of goods of which it has taken charge is, under S. 40 of the Act, that of a bailee under Ss.151, 152 and 161 of Contract Act, subject to some modifications. Thus the rates which the Board levies are a consolidated charge for the various services it renders and the liability which it is compelled by statute to undertake."


Again, at page 1943. The Supreme Court has observed as under :-


".......Every scale and every statement of conditions framed by the Board has to be submitted to the Central Government for sanction under S.44 and it is only when it is so sanctioned that it has the force of law. The requirement of sanction by the Central Government is a restraint on unwise, excessive or arbitrary fixation of rates.....Thus, the statute provides for the necessary safeguards, checks and counter checks as an insurance against fixation and levy of harsh or unjust rates." *


The purpose of fixation of rates is also clearly set out at page 1943 in para 28 in the following words :-



"There is a fundamental aspect of the fixation of rates which the High Court has overlooked. What is the object and purpose of the rates which the Board charges to the importer? Port Trusts do not do the business of warehousing goods and the rates which the Board charges for storage of goods are not levied as a means of collecting revenue. The Board is under a statutory obligation to render services of various kinds and those services have to be rendered not for the personal benefit of this or that importer but in the larger national interests. Congestion in the ports affects the free movement of ships and of essential goods. The scale of rates has therefore to be framed in a manner which will act both as an incentive and as a compulsion for the expeditious removal of the goods from the transit area. Ships, like wagons, have to be kept moving and that can happen only if there is pressure on the importer to remove the goods from the Board's premises with the utmost expedition. The appellants in their reply statement filed in the High Court have referred to the Report of the Committee set up in 1967 by the Ministry of Transport and Shipping, Government of India. The Committee consisted of top-level experts, one each from the ports of New York, London and Notterdam who made a general survey of the Ports and Harbours in India. The Committee observed in its report, 'to effect quick clearance of the cargo from the Harbour, the demurrage rates may be so fixed as to make it unprofitable f

or importers to use the Port premises as a warehouse'. Viewed from this angle, the scales of rates cannot be characterised as unreasonable." * The Supreme Court has also upheld the power under S.42 of the Madras Port Trust Act 2 of 1905, to fix the scale of rates. In view of the aforesaid decision of the Supreme Court and the considerations taken into account for the revision of the scale of rates, there is nothing unreasonable or arbitrary in the revision of scale of rates as done. It will be also useful in this connection to refer to the decision in Port of Bombay v. Indian Goods Supplying Co., where the Supreme Court, after referring to its earlier decision in Trustees, Port of Madras v. Aminchand Pyarelal, laid down that the importer cannot deny his liability for payment of demurrage, though the delay in clearing was not due to his negligence as the rates imposed are under the authority of law, the validity of which cannot be questioned. In Corporation of Calcutta v. Liberty Cinema, the Supreme Court pointed out that where a body is required to perform statutory functions, it is given power to decide when and in what manner the functions are to be performed and if for this it needs money which will vary from time to time, with the prevailing exigencies, it has the power to fix such rates as may be necessary to meet its needs and bear the expenses required to discharge its functions. This decision would also undoubtedly support the stand of the, respondents 2 and 3 that under the circumstances referred to earlier, the revision of the scale of rates is justified. No other point was argued. Consequently, the rule nisi is discharged and the writ petition is dismissed with costs of respondents 2 and 3. Counsel's fee Rs.500/-.