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Chargulla Sitarama Rao Vs. Patel Engineering Co. Ltd. - Court Judgment

LegalCrystal Citation
SubjectOther Taxes
CourtAndhra Pradesh High Court
Decided On
Case NumberLetter Patent Appeal No. 96 of 1971
Judge
Reported inAIR1973AP120
ActsAndhra Pradesh ( Andhra Area ) Canals and Public Ferries Act, 1890 -Sections 6, 8 and 9 to 18
AppellantChargulla Sitarama Rao
RespondentPatel Engineering Co. Ltd.
Appellant AdvocateN. Babiraju and ;A. Rangacharyulu, Advs.
Respondent AdvocateA. Seetharami Reddi, Adv.
Excerpt:
.....of the victim. the settled principles governing determination of compensation has been given a go-bye. compensation of rs.4,15,150/- awarded by the tribunal was enhanced to rs.8,20,000/-. - in spite of a notice of demand, the defendant failed to pay the said charges. there is a stipulation that the lessee cannot collect tolls from the certain specified persons like government servants, troops, mails etc. we, therefore, hold that the plaintiff has the exclusive right to collect tolls from anyone who crosses the river within the limits defined in the notification and every person, who fails to make such payment, is liable to the plaintiff to make good the loss. as he failed to pay the same, there was an infringement of the plaintiff's right to collect the tolls......was the highest bidder of an auction held on 4-3-1964 with respect to the bhadrachalam public ferry rights for a sum of rs. 29,200 /-. an agreement was entered into between the plaintiff and the panchayat samithi laying down the conditions under which the plaintiff has to run the ferry. under the said agreement the plaintiff claims an exclusive right to run a ferry and collect tolls within the limits prescribed in the notification. the defendant is an engineering contractor who undertook to lay a bridge across the river godavari at the place where the plaintiff's ferry is located. the defendant is bound to use the plaintiff's vessels and pay him the toll charges for conveying his men and materials across the river within the ferry limits. in spite of a notice of demand, the.....
Judgment:

M. Krishna Rao, J.

1. This appeal is filed by the plaintiff under Cl 15 of the Letters Patent.

2. The plaintiff filed the suit O. S. No. 2 of 1964 in the Court of the Agent to the Government, Government of Andhra Pradesh, Khammam for an account of the damages sustained by the plaintiff till the date of suit and also subsequent damages till the end of his lease period and for other ancillary reliefs. The plaint allegations are as follows : The plaintiff a resident of Bhadrachalam was the highest bidder of an auction held on 4-3-1964 with respect to the Bhadrachalam public ferry rights for a sum of Rs. 29,200 /-. An agreement was entered into between the plaintiff and the Panchayat Samithi laying down the conditions under which the plaintiff has to run the ferry. Under the said agreement the plaintiff claims an exclusive right to run a ferry and collect tolls within the limits prescribed in the notification. The defendant is an Engineering Contractor who undertook to lay a bridge across the river Godavari at the place where the plaintiff's ferry is located. The defendant is bound to use the plaintiff's vessels and pay him the toll charges for conveying his men and materials across the river within the ferry limits. In spite of a notice of demand, the defendant failed to pay the said charges. The action of the defendant in employing his own vessels for conveying the workers and material constitutes an infringement and disturbance of the plaintiff's exclusive right and hence the plaintiff is entitled to recover damages for the loss sustained by him.

3. The defendant contested the suit stating that he had already started his work even during the period of the previous ferry contractor, that there was no such objection or claim by the previous ferry contractor and that as he did not use the boats belonging to the plaintiff, he is not liable to pay the ferry or toll charges. He constructed a temporary bridge for the use of V. I. Ps. And the same was abolished. The plaintiff has no cause of action against the defendant under law and hence the suit is liable to be dismissed. The trial Court dismissed the suit holding that the plaintiff's exclusive right exists only at a single spot where his ferry starts, that he has no exclusive right within the limits prescribed in the notification and that the limits prescribed in the notification are not valid in law. Aggrieved by this judgment of the trial Court the plaintiff filed an appeal ( A. S. No. 484 of 1968 ) in this Court, Parthasarathi , J. who heard the appeal confirmed the judgment of the trial Court holding that the plaintiff does not possess any exclusive right for the entire area which was notified and that there was no infringement of plaintiff's rights, as the defendant did not carry or convey passengers for hire or remuneration and that as the defendant carried his own men in his boats there was no infringement of plaintiff's right. Against the said judgment, the plaintiff filed the present appeal under Clause 15 of the Letters Patent.

4. The main point for consideration in this appeal is whether the plaintiff has not an exclusive right within the area notified and whether such a right is infringed by the action of the defendant.

5. In order to appreciate the point of controversy, it is necessary to refer to the relevant provisions of the Act and the terms of the agreement. The Madras ( Andhra Pradesh ) Canals and Public Ferries Act ( II of 1890 ) was enacted to make provision for the establishment of canals and public ferries in the State and for the management thereof. Under Section 3 the word ' Ferry ' is defined as a plea at which goods, animals or passengers are conveyed across a channel by means of vessels. ' Channel ' includes any waterway, whether natural or artificial. ' Public ferry ' is defined as a ferry declared to be subject to the provisions of Sections 9 to 18 of the Act. All vessels using a canal shall be either licensed or registered subject to certain exemptions made by the Government. Section 6 provides that Government may from time to time fix rates of fees payable for the licensing or registration of vessels and establish stations of which tolls shall be levied on vessels passing along a canal or on passengers, vehicles, animals or goods landed therefrom and fix the rates of such tolls and also fix fees for the use of public landing places whereas etc. Power is conferred under Section 7 on certain authorised officials to suspend or cancel licenses and to take steps to remove obstruction to navigation in contravention of the Act. Section 7-A confers power on the Government to apply certain rules even in the case of private ferries so as to secure the safety of passengers. Under Section 8 the Government is empowered to issue a notification constituting a public ferry, that is to say declaring that any ferry is subject to the provisions of Sections 9 to 18 of the Act from a date to be named in the notification and power is also given to the Government to define the limits of such ferry. The consequences of the promulgation of such a notification under Section 8 are laid down in Section 9, viz., on and from such date of notification all previous rights of ferry within the limits of the notification shall cease and determine and ' it shall be unlawful for any person not duly authorised to convey goods, animals or passengers by means of vessels across a channel within such limits while such notification is in force '. Whenever preexisting ferry rights are extinguished, compensation is payable to the owners in accordance with any law relating to acquisition of land for any public purposes. Under Section 10 the Government may ( a ) provide for the management of any Public Ferry, or ( b ) authorise any person to convey passengers, animals, vehicles or goods across a channel by means of vessels at any public ferry or ( c ) assign the management of any public ferry to a local board or municipal council. In cases falling under sub-cls. (a) and (b), the State Government may levy tolls at such rates as they may fix on passengers, animals, vehicles and goods conveyed across the ferry. Where under Clause (c) the management of a public ferry is assigned to a local board or municipal council, the local authority may levy tolls upon passengers, animals, vehicles and goods conveyed across the ferry at such rates as it may, subject to the control of the Government fix. All moneys received by the local authority from the tolls levied by it shall form part of its funds. A notice specifying the tolls leviable at any such ferry has to be published in the District Gazette and shall be exhibited for the public view at each side of the ferry. Under Section 11 the Government may by special order assign to a local authority the management any canal. Under Section 12 the State Government or the Managing authority shall appoint persons to collect tolls or fees payable under the Act. The collection of such tolls or fees be leased out under such conditions as the Government may prescribe. In such a case the lessee and his agents and servants shall be deemed to be persons appointed by the authority to collect the tolls. Section 13 lay down the procedure in case of non-payment of toll on demand. In case any tolls, fees other than licence-fees or penalties payable under this Act are not paid on demand by a person duly appointed or empowered to collect or impose he same such person may seize any vessel, goods vehicles or animals in respect of which such toll, fee or penalty is payable or anything in the possession of a passenger or person who is liable to such toll, fee or penalty and any person empowered by the Government or the Managing authority in this behalf may sell the same in public auction if the amount is unpaid. Section 16 confers power on the Government to make rules for the purpose of the Act.

6. We will now refer to the notification and the terms of the agreement in favour of the plaintiff. The notification was issued under Section 8 of the Act in the Fort St. George Gazette dated 25-9-1923 when the Andhra area was part of the erstwhile composite State of Madras. It declares that five ferries mentioned therein shall be subject to the provisions of the Act. We are concerned with item 3 noted as - ' Bhadrachalam Bhadrachalam Eastern Bank - Along side Godavary Ferry :

'the Godavari bank commencing from Maddula Vagu to Pokalavari Vagu upto a distance of 25,000 links or 5,506 yards ( 3 miles 1 furlong ). Western Bank - H. E. H. Nizam's Dominions. '

The conditions of the agreement ( Ex. A-3 ) under which the ferry rights were auctioned in favour of the plaintiff are as follows : Condition 9 states that ' no fees shall be collected from the trial villagers at the ferries Nos. 3 to 6 of the notification. ' Rule 5 says that .

'no toll shall be demanded in the following cases:-

(A) Government mails, stores and remittances and all animals and vehicles employed in the same.

(B) All Government Officials (including troops and their families) travelling on duty and bearing passes signed by the head of the office and also in case of police officers, prisoners and property in their custody.

(C) All parties employed by Government servants to carry official reports and records when so carrying such reports and records.

(D) All servants of local boards and Panchayat Samithi, Zilla Parishad travelling on duty within their jurisdiction and bearing passes signed by the concerned officers.

(E) Stores, etc., belonging to Panchayat Samithi, Children under 6 years old.

(F) Such other persons as may from time to time be exempted by the Chief Executive Officer.. Panchayat Samithi, Bhadrachalam'.

The various other conditions provide for the manner in which the plaintiff has to maintain the ferry and the duties to be performed by him. At the end of the contract there is a schedule of ferry rates with respect to various categories i.e., men, animals, goods, etc., and the said rates have to be exhibited in vernacular by the side of the ferry.

7. The relevant provisions of the Act and the agreement quoted supra may be summed up as follows : A 'ferry' is a place where goods, animals or passengers are conveyed across a channel by means of vessels, and a 'public ferry' is that which is declared to be subject the provisions Sections 9 to 18 of the Act. The provisions of Sections 9 to 18 of the Act are made applicable by virtue of a notification under the Act defining the limits of the ferry. In respect of such a public ferry the State Government may make arrangements or running the same for fixing the rates and collection of the fees and tolls. The State Government may assign the management of the public ferry to any local authority in the present case the Panchayat authority may levy tolls upon passengers across the ferry at such rates at it may fix subject the control of the Government and all moneys received by the local authority by way of tolls shall form part of its funds. This power of management of the toll which is assigned to the local authority may again be assigned by way of lease in public auction in favour of any person bidding at the auction. Such lessee shall be a person appointed and authorised to collect the tolls. He is invested with powers of seizure etc., of vessel belonging to unauthorised persons who convey passengers across the ferry. The Act confers rights penalties for breach of violation of the conditions of management.

8. The agreement lays down various conditions as to the maintenances of the vessels and the precautions to be taken by the lessee in the management of the ferry. There is a stipulation that the lessee cannot collect tolls from the certain specified persons like Government servants, troops, mails etc. It was further provided that no tolls shall be collected from hill-tribes. There is a further provision that tolls cannot be collected by the lessee from the persons who obtained exemption from the Chief Executive Officer of the Panchayat Samithi. It is, therefore, clear from the provisions of the Act that the lessee of the public ferry is empowered to collect the tolls which are payable to the Government. A tolls is in the nature of a local tax. The service run by the plaintiff is not in the nature of public messenger service. The lessee merely acts as the agent of the local authority for collecting the tolls which are a source of revenue for the local authority. In view of the fact that the legal incidence resulting from the lease of the public ferry are laid down in a self-contained Act and the terms of the agreement, it is not necessary for us to go into the various English and Indian cases defining the nature of the ferry. It is now sufficiently established by authority that the person can sue for damages if there is an infringement of the ferry right. The said right is in the nature of a monopoly and its infringement is actionable.

9. The short question for consideration in this appeal is whether there was any infringement of the plaintiff's right by the defendant-contractor.

10. The learned counsel for the appellant contended that the entire approach of the Courts below is erroneous in law. The learned counsel for the respondent raised four points for our consideration. In the first place it is urged that the defendant was carrying his men and material at a place outside the limits defined in the notification. This point was not at all pleaded in the trial Court. The only point that was argued was that the plaintiff's right to run the ferry was confined only to a spot at Bhadrachalam and though certain limits are prescribed in the notification the plaintiff has no right in the whole area other than the ferry place at Bhadrachalam. Our attention was invited to a plan of the locality. The ferry is known as ' the Bhadrachalam Godavari Ferry. ' At the relevant spot the river takes a curved course. In defining the limits in the notification it is stated that the eastern limit is Pokalavari Vagu and 5,500 yards along side the eastern bank upto Maddula Revu. While Pokalavari Vagu is on the eastern bank, Maddula Revu is on the Western bank towards the South of Pokalavari Vagu. It is, therefore, submitted that the limit is to be defined by a diagonal line from Pokalavari Vagu to Gummur on the western bank which is exactly opposite to Bhadrachalam and that if the limit is so drawn the defendant's bridgeway is covered only in part and not in its entirety. Apart from the fact that this question was never raised in the Courts below, we are not convinced about the same. In fixing the limit the notification speaks of the limit of 5,500 yards along side the river on the eastern side from Pokalavari Vagu. While mentioning the southern limits, as there was no landmark on the eastern bank, reference was made only to Maddula Revu which is on the western bank. The reasonable construction to be put up on the description is that limit on the eastern bank is from Pokalavari Vagu on the northen side to a point opposite to Maddula Revu on the eastern side of the bank at a distance of 5,500 yards. Similarly on the western bank the limit is 5,500 yards starting from Maddula Revu on the south along side the western bank to a point opposite to Pokalavari Vagu. It follows, therefore, that the limits of the ferry lie between these two limits enclosing a length of 3 miles 1 furlong. In this view of the matter, it is clear that the entire bridge work across the river undertaken by the defendant lies in the limit of 5,500 yards.

11. The second aspect raised on behalf of the respondent is that the defendant was exempted from paying the ferry charges. This point also has not been raised in the Courts below. It is provided in the notification that such an exemption should be obtained from the Panchayat Samithi's Chief Executive Officer for the simple reason that the revenue goes to the Panchayat Samithi. There is admittedly no such order of exemption obtained from the Executive Officer. But the respondent's learned counsel relies upon Ex. B-2 a certificate issued by the Divisional Engineer, High ways, Bridge Division, Bhadrachalam, certifying that the site for the construction of the bridge at Bhadrachalam was handed over to the contractor. It is argued that when the site was handed over to the defendant, there is an implied exemption that no tolls need be paid. We are unable to read any such thing into the certificate. It merely authorises the defendant to enter upon the site and do certain work and nothing more. The Divisional Engineer is not a person who is authorised to grant any exemption of payment of tolls either under the Act or under the agreement. There is equally nothing in the contract executed by the defendant with the Government for the construction of the bridge exempting the contractor from payment of local taxes. Reliance is next placed by the respondent on the provisions of Section 5 of the Act. But a perusal of this section shows that government has the power to exempt any vessel from getting registered or taking a licence. Section 5 refers only to registration of a vessel for using the canal, evidently for navigation purposes. It does say anything about the levy of the tolls or exemption from payment of such levy. We do not, therefore, accept this contention that the defendant is exempted from payment of tolls.

12. The third point which is raised before us by the respondent's learned counsel is that except at the Bhadrachalam Revu the plaintiff had no exclusive right at any other point within the limit specified in the notification, and the last point raised is that the defendant did not convey members of the public for remuneration, but he carried his own men in his own boats across the river and that there was no infringement of the plaintiff's ferry rights. The last two points may be considered together and they relate to the main question to be decided. As we have already pointed out, the provisions of Section 8 empower the Government to define the territorial limits of the ferry. When once such limits are prescribed, the ferry becomes a public ferry and all the provisions of Sections 9 to 18 are attracted. The plaintiff as lessee became entitled to collect the tolls from all persons crossing the river. The learned counsel for the respondent made a further submission that the limit of 3 miles 1 furlong is unreasonable and that the limit should be confined only to the place where the plaintiff's boat starts. The question of reasonableness has not been raised in the trial Court and we are not inclined to permit this point at this stage. When the statute authorities the Government to prescribe the limits of a ferry, it cannot be argued that the notification defining the limits is ultra vires. By prescribing the limits the plaintiff is authorised to ply his boats at as many places as he chooses between the limits. He has, therefore, exclusive monopoly to run his boats to convey passengers and goods across the river. It follows, therefore, that no other person has a right to convey passengers across the river within these limits. The Act requires that when a ferry is constituted as a public ferry, no person, other than the authorised person, shall be entitled to convey passengers. The contention of the learned counsel for the respondent is that the respondent did not convey passengers, i. e., members of the public on hire and that he was conveying his workmen in his own boats. We are not inclined to take the narrow view that the word ' passenger ' refers only to a passenger for hire. The word ' passenger ' includes any person who is conveyed in the vessel. We have already pointed out that the nature of the levy is not skin to a passenger fare but a tax which is payable to the Government by every one who crosses the river. Under law the defendant is liable to pay the tolls for the Government when he crosses the river even in his own boats unless he gets an exemption from the local authority. The defendant admittedly does not come within the categories of persons who are exempted from the payment of tolls., So long as the liability to pay the tolls exists on the part of the defendant-contractor, he cannot avoid payment of such tolls to the plaintiff who is a contractor or a farmer of such due to the local authority.

13. Another point raised on behalf of the respondent is that the plaintiff did not possess sufficient number of boats to convey the defendant's workmen and his material. The question does not arise for consideration at this stage. The plaintiff no doubt stated that he was always ready and willing to offer his services and that he was also bound to offer his services as per the terms of the agreement. It is suggested on behalf of the plaintiff that he would have established another ferry at the workspot for the convenience of the defendant if only he was willing to pay the charges. We, therefore, hold that the plaintiff has the exclusive right to collect tolls from anyone who crosses the river within the limits defined in the notification and every person, who fails to make such payment, is liable to the plaintiff to make good the loss.

14. It was lastly urged by the respondent's learned counsel that the work was already begun prior to the commencement of the plaintiff's lease, that the previous lessee never demanded the toll charges from the defendant and that the plaintiff is therefore, estopped from collecting the same. This contention was also not raised in the Courts below. If the previous lessee did not levy the tolls, the plaintiff is certainly not bound by any omission on the part of the previous lessee. When the plaintiff took possession of his ferry, he immediately demanded the tolls from the defendant contractor. At that stage the defendant should have obtained exemption from the Chief Executive Officer of the Samithi but no such exemption was obtained.

15. The true legal position may be summed up as follows. For using the canal any person has to take licence for his boats. For crossing the ferry there is a liability to pay the toll tax unless the persons come within the exempted list. It is no answer to say that a person is crossing in his own boat. The Government's right to levy the toll is assigned to the local authority viz, the Panchayat Samithi which in its turn assigned the said right to the plaintiff for consideration. Hence the plaintiff is only collecting the tax due to the Government. If the plaintiff is running a passenger service then those who donot make use of the said service may not be liable to pay anything to the plaintiff. But in the present case the levy is a compulsory one and the defendant cannot escape payment by stating that he was carrying his own men. As the defendant had no exemption he is bound to pay the toll. As he failed to pay the same, there was an infringement of the plaintiff's right to collect the tolls.

16. For all the above reasons, we disagree with the conclusions of the learned Judge. We accordingly allow this appeal. There will be a preliminary decree in favour of the plaintiff for rendition of accounts for the determination of the loss sustained by the plaintiff on account of the defendant during the entire period of the lease. The parties are directed to bear their respective costs in this appeal.

17. Appeal allowed.


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