Do “rule of attribution” which is relevant to the functioning of a limited company be applied in the case of organizational structure like Railways? Orissa HC answers

Orissa High Court: A Division Bench of S. Muralidhar, CJ and B.P. Routray, J. dismissed the petition being devoid of merits.

Aggrieved by the refusal of the General Manager, South Eastern Railways, Kolkata (OP 2) to accord him a right of passage over railway land in order to gain access to a public road on the eastern side of the plot purchased by him, the Petitioner approached this Court with the present writ petition in 2003.

Gautam Mukherji, Senior Advocate submitted that the Petitioner could invoke the “rule of attribution” as the Railways should be held vicariously liable to honour the promises made by its officers. Railways cannot be permitted to resile from the assurance held out in both the letters dated 31st July, 1990 and subsequent communication dated 21st November, 1995 respectively addressed to M/s. RDB that they had no objection to giving the Petitioner a right of passage over the railway land. It was further submitted that the Petitioner could also assert an easementary right over Railway land as that was the only shortest approach to his land from the public road.

Counsel for the Railways Mr S.R. Pattnaik that the construction of a multi-storied apartment on Petitioner’s plot with its entrance facing the railway land would cause a security hazard and block the main VIP entrance to Bhubaneswar Platform No.1. Further, it was pointed out that the permission granted by the BDA to the Petitioner was subject to Section 16(3) of the Orissa Development Authority Act, in the absence of such access, BDA could not have granted permission for raising a six storied structure.

The Court relied on judgment Meridian Global Funds Limited Management Asia Ltd. v. Securities Commission (1995) 2 AC 500 and observed that to invoke the, “rule of attribution” it has to be shown that the organizational structure of the Railways permitted officers at the level of DRM to take decisions that could be considered final and binding on the Railways. However, given the functioning of a State body like the Railways in India, which is governed by complex decision-making structures, it appears that the, rule of attribution‟ which might be relevant to the functioning of a limited company, where the doctrine of vicarious liability ties down the company to the decisions of its servants and agents, would be inapposite. Factually, in the present case, it is apparent that the decision taken at the level of the DRM of the Railways, favorable to the Petitioner, was not concurred with at the higher level of the General Manager. Consequently, the Petitioner cannot possibly rely on the „rule of attribution‟ to bind the Railways down to the decision of the DRM.

The Court relied on judgment Motilal Padampat Sugar Mill Company Ltd. v. State of Uttar Pradesh (1979) 2 SCC 409 and observed that in the present case, at no time prior to the Petitioner purchasing the plot in question in 1977 was he given an assurance by the Railways about granting him a right of passage to the public road on the eastern side of the plot through their land. In fact at no time prior to his commencing construction on the plot, more than twelve years later in 1990, was there such an assurance. Therefore, an important ingredient for invoking the doctrine of promissory estoppels, viz., that the Petitioner as a promisee should have altered his position relying on such assurance is missing in this case. Here, the Petitioner “altered” his position by commencing construction even before he sought permission from the Railways. It was not the other way around viz., it was not that the Railways held out an assurance to the Petitioner that they would provide him a passage through their land, and then acting on such assurance the Petitioner altered his position. The Court is therefore not persuaded that the Petitioner can invoke the doctrine of promissory estoppel to seek a mandamus to the Railways to provide him with a right of passage to the public road through their land.

The Court held “As far as the present case is concerned, the fact remains there is now an approach road to the Petitioner’s plot even if it may not be through the Railway land that is adjacent to the public road. For the reasons already spelt out in detail, this Court is not inclined to grant the reliefs prayed for.”[Hrudananda Biswal v. Union of India, 2021 SCC OnLine Ori 81, decided on 31-05-2021]

Arunima Bose, Editorial Assistant has reported this brief.

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