The loss-making Railways recently got a financial boost from the Supreme Court, which approved the Government’s decision to lease out spaces in its luggage compartments that ensured optimum revenue from the running of trains.
The Court’s verdict has come as a huge relief for the cash-starved railways that took a policy decision way back in the year 2000 to lease spaces in the Front Second Class luggage Rake (FSlR) and Ventilated Parcel (VP) Van. Interestingly, the Indian Railways Act 1989 has no provision for leasing out spaces in compartment to a third party. It was this reason that prompted a grape trader from Karnataka to challenge the Railways’ move. The HC dismissed the petition that prompted an appeal by him in apex court.
Dealing with the law, the bench of Justices Vikramajit Sen (now retired) and Shiva Kirti Singh said, “While it may be both pragmatic and sagacious to auction FSlR and VP, it can be done with an objective of gathering optimum revenue.” However, while permitting the Railways to delegate its functions to a third party, the Court put a rider. It directed the lessee not to charge carriage prices in excess of those prescribed in the coaching tariff. Perishable goods are charged Rs 2.38 per kg on the Delhi-Karnataka route. The rates differ for different trains.
Making an exception for the Railways, the bench was impressed by the submission by Rail authorities that though Railways is a social vehicle aimed at public interest, it also is a commercial undertaking that must take steps to make its operations financially viable. The decision to lease out space was taken to buck the trend of long distance trains running empty parcel vans and luggage compartments.
The bench observed, “Railway tariff no doubt has to be realistic and keep pace with time and if the State so perceives, need not be a losing financial proposition.” The Court did not wish to interfere with the policy making power of the executive but asked the Railways to bear in mind that while delegating power to a third party (delegate or sub-delegate) it must lay down principles for guidance of the third party. In no case, howsoever, the Court said that public interest must suffer.
The Railways had assured the Court that the FSlR is the first compartment after the engine and only half of the space in the wagon is used for carrying luggage or parcel.
The VP van is an additional compartment that gets added to the train in place of a passenger bogey only when the occupancy in the train is thin. However, the Railways will not hesitate to add another wagon to meet general needs of the public, an affidavit filed by Railways disclosed.