Supreme Court clarifies the scope of Section 143 of the Railways Act in cases of unauthorised e-ticket sales: Inspector, Railway Protection Force vs. Mathew K Cherian (2025) INSC 51 (09 January 2025)

Date of the Judgment: 09 January 2025
Citation: 2025 INSC 51
Judges: Justice Dipankar Datta and Justice Prashant Kumar Mishra
Can authorized railway agents be prosecuted under Section 143 of the Railways Act, 1989 for unauthorized actions like creating multiple user IDs to sell e-tickets? The Supreme Court of India recently addressed this question in a set of appeals concerning the interpretation of Section 143 of the Railways Act, 1989. The court clarified the scope of this provision, distinguishing between unauthorized individuals and authorized agents in the context of e-ticket sales. The judgment was delivered by a bench comprising Justice Dipankar Datta and Justice Prashant Kumar Mishra.

Case Background

The case involves two sets of appeals with different factual scenarios but a common legal question. The first set of appeals arises from a case against Mathew K. Cherian, the managing director of a finance company, who was accused of creating fraudulent user IDs on the Indian Railway Catering and Tourism Corporation (IRCTC) portal to procure and sell railway tickets for profit. The Railway Protection Force (RPF) conducted a search at his office on 11.03.2016, leading to the registration of Crime Case No. 524/2016 under Section 143 of the Railways Act, 1989. Mathew was accused of running an unauthorized business of procuring and supplying railway tickets.

The second set of appeals involves J. Ramesh, the owner of “Big Top Travels,” an authorized agent for railway e-tickets. On 05.12.2019, Case Crime No. 3116/2019 was registered against Ramesh under Section 143 of the Railways Act, 1989, following a search and seizure operation at his shop. He was accused of supplying e-tickets booked through multiple user IDs. Additionally, Case Crime No. 600/2020 was registered against him for allegedly supplying Tatkal e-tickets by creating multiple personal user IDs, contrary to IRCTC rules.

Timeline:

Course of Proceedings

Mathew K. Cherian approached the High Court of Kerala seeking to quash the criminal proceedings against him. The Kerala High Court quashed the proceedings, stating that Section 143 of the Railways Act, 1989, was enacted before the advent of e-tickets and does not apply to online ticket sales. On the other hand, J. Ramesh sought to quash the criminal proceedings against him in the High Court of Judicature at Madras. The Madras High Court refused to quash the proceedings, holding that creating multiple user IDs for procuring tickets for illegal gain is a violation of the law, even for authorized agents.

Legal Framework

The core legal provision under consideration is Section 143 of the Railways Act, 1989. This section outlines penalties for unauthorized individuals engaged in the business of procuring and supplying railway tickets. The section reads:

“143. Penalty for unauthorised carrying on of business of procuring and supplying of railway ticket –
(1) if any person, not being a railway servant or an agent authorised in this behalf,-
(a) carries on the business of procuring and supplying tickets for travel on a railway or from reserved accommodation for journey in a train; or
(b) purchases or sells or attempts to purchase or sell tickets with a view to carrying on any such business either by himself or by any other person,
he shall be punishable with imprisonment for a term which may extend to three years or with fine which may extend to ten thousand rupees, or with both, and shall also forfeit the tickets which he do so procures, supplies, purchases, sells or attempts to purchase or sell:
Provided that in the absence of special and adequate reasons to the contrary to be mentioned in judgment of the court, such punishment shall not be less than imprisonment for a term of one month or a fine of five thousand rupees.
(2) Whoever abets any offence punishable under this section shall, whether or not such offence is committed, be punishable with the same punishment as is provided for the offence.”

The Supreme Court noted that the objective of Section 143 of the Railways Act, 1989, is to restrict entities not under the disciplinary control of the railways from conducting the business of procuring and supplying railway tickets. Railway servants and authorized agents are exempt from this provision.

Arguments

Arguments of the Prosecution:

• ✓ Section 143 of the Railways Act, 1989, does not permit authorized agents to carry out unauthorized actions under the guise of authorization.
• ✓ The provision must be interpreted in line with the overall scheme to promote the efficacy of the railway system.
• ✓ Mathew created hundreds of user IDs to sell railway tickets at a premium, which constitutes an offense under Section 143 of the Railways Act, 1989.
• ✓ Section 143 of the Railways Act, 1989, makes no distinction between physical tickets and e-tickets.
• ✓ The offense under Section 143 of the Railways Act, 1989, is a social crime aimed at preventing the touting of railway tickets.
• ✓ The Kerala High Court erred in quashing the criminal proceedings against Mathew, as the complaint reveals a prima facie case under Section 143 of the Railways Act, 1989.
• ✓ The Madras High Court correctly refrained from following the Kerala High Court’s decision.

Arguments of the Accused (Mathew and Ramesh):

• ✓ The plain words of Section 143 of the Railways Act, 1989, do not make the creation of multiple user IDs an offense.
• ✓ Section 143 of the Railways Act, 1989, must be construed strictly as it is a penal provision.
• ✓ The e-ticketing scheme could not have been conceptualized by the legislature when the Act was passed.
• ✓ Section 143(1)(a) of the Railways Act, 1989, was intended to penalize the sale of tickets by unauthorized persons.
• ✓ Ramesh, being an authorized agent, could not be proceeded against under Section 143(1) of the Railways Act, 1989.
• ✓ Any breach by Ramesh should be addressed in a civil court, not a criminal court.
• ✓ The decision of the Madras High Court should be reversed, and the decision of the Kerala High Court should be upheld.

Issues Framed by the Supreme Court

The Supreme Court framed the following key issues:

1. Whether the act of creating fake/multiple user IDs by an individual, who may or may not be an authorized railway agent, with the intention to procure and supply online tickets through IRCTC portal, would constitute an offense under Section 143 of the Railways Act, 1989?
2. Whether the criminal proceedings against Mathew and Ramesh merited quashing by the respective High Courts?

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered the following authorities:

Cases:

• ✓ Senior Electric Inspector v. Laxminarayan Chopra [AIR 1962 SC 159]: This case established the principle that statutory provisions can apply to new facts and situations if the words are broad enough to encompass them, even if the legislature did not envision those developments. The Court held that a modern legislature is presumed to be aware of the enlarged meaning a concept might attract with the march of time.
• ✓ Dharani Sugars and Chemicals Ltd. v. Union of India [(2019) 5 SCC 480]: This case followed the principle laid down in Senior Electric Inspector v. Laxminarayan Chopra, reiterating that a statute can apply to new circumstances if its language is wide enough.
• ✓ Comdel Commodities Ltd. v. Siporex Trade S.A. (No. 2) [(1990) 2 All ER 552 (HL)]: This English decision was cited to support the view that a statute can apply to novel situations not contemplated at the time of its enactment if the language of the enactment is wide enough.
• ✓ Jugalkishore Saraf v. Raw Cotton Co. Ltd. [AIR 1955 SC 376]: This case emphasized the cardinal rule of literal interpretation of statutes, stating that statutes should be read by giving words their ordinary, natural, and grammatical meaning.
• ✓ Ansal Properties & Industries Ltd. V. State of Haryana [2009 (3) SCC 553]: This case reiterated the rule of literal construction, stating that courts cannot read anything into a statutory provision that is plain and unambiguous.
• ✓ R.P. Kapur v. State of Punjab [1960 SCC OnLine SC 21]: This case discusses the principles for quashing a criminal proceeding.
• ✓ State of W.B. v. Swapan Kumar Guha [(1982) 1 SCC 561]: This case also discusses the principles for quashing a criminal proceeding.
• ✓ State of Haryana v. Bhajan Lal [1992 Supp (1) SCC 335]: This case provides guidelines on when a criminal proceeding can be quashed.
• ✓ Pepsi Foods Ltd. v. Special Judicial Magistrate [(1998) 5 SCC 749]: This case discusses the principles for quashing a criminal proceeding.
• ✓ Amit Kapoor v. Ramesh Chander [(2012) 9 SCC 460]: This case also discusses the principles for quashing a criminal proceeding.

Legal Provisions:

• ✓ Section 143 of the Railways Act, 1989: This provision specifies the penalties for unauthorized carrying on of business of procuring and supplying railway tickets.

Judgment

The Supreme Court held that Section 143 of the Railways Act, 1989, prohibits any person, other than a railway servant or an authorized agent, from conducting the business of procuring and supplying railway tickets. The provision does not specify the modalities of procurement and supply and applies to both physical and online sales. The court clarified that the mere fact that e-tickets were introduced after the enactment of the Act does not render the provision toothless.

The Court distinguished between “procure” and “purchase,” stating that travel agents procure tickets in the name of passengers in lieu of a commission. Taking active steps to acquire and provide tickets to third parties without being a railway servant or an authorized agent would attract the expression ‘procure and supply’ as in Section 143 of the Railways Act, 1989.

The court also held that while Section 143 of the Railways Act, 1989, does not criminalize the creation of multiple user IDs, it does penalize the actions of unauthorized agents. The court emphasized that penal provisions have to be read strictly and narrowly, and Section 143 of the Railways Act, 1989, penalizes only the actions of unauthorized agents and not unauthorized actions of authorized agents.

How each authority was viewed by the Court?

• ✓ Senior Electric Inspector v. Laxminarayan Chopra [AIR 1962 SC 159]*: The Court followed this authority to interpret Section 143 of the Railways Act, 1989, in light of technological advancements, holding that a statutory provision can apply to new facts and situations if the words are broad enough to encompass them.
• ✓ Dharani Sugars and Chemicals Ltd. v. Union of India [(2019) 5 SCC 480]*: The Court followed this authority, which reiterated the principle laid down in Senior Electric Inspector v. Laxminarayan Chopra.
• ✓ Comdel Commodities Ltd. v. Siporex Trade S.A. (No. 2) [(1990) 2 All ER 552 (HL)]*: The Court cited this authority to support the view that a statute can apply to novel situations not contemplated at the time of its enactment if the language of the enactment is wide enough.
• ✓ Jugalkishore Saraf v. Raw Cotton Co. Ltd. [AIR 1955 SC 376]*: The Court referred to this authority to emphasize the rule of literal interpretation of statutes, stating that statutes should be read by giving words their ordinary, natural, and grammatical meaning.
• ✓ Ansal Properties & Industries Ltd. V. State of Haryana [2009 (3) SCC 553]*: The Court cited this authority to reiterate the rule of literal construction, stating that courts cannot read anything into a statutory provision that is plain and unambiguous.
• ✓ R.P. Kapur v. State of Punjab [1960 SCC OnLine SC 21]*: The Court referred to this authority as one of the precedents to discuss the principles for quashing a criminal proceeding.
• ✓ State of W.B. v. Swapan Kumar Guha [(1982) 1 SCC 561]*: The Court referred to this authority as one of the precedents to discuss the principles for quashing a criminal proceeding.
• ✓ State of Haryana v. Bhajan Lal [1992 Supp (1) SCC 335]*: The Court referred to this authority as one of the precedents to provide guidelines on when a criminal proceeding can be quashed.
• ✓ Pepsi Foods Ltd. v. Special Judicial Magistrate [(1998) 5 SCC 749]*: The Court referred to this authority as one of the precedents to discuss the principles for quashing a criminal proceeding.
• ✓ Amit Kapoor v. Ramesh Chander [(2012) 9 SCC 460]*: The Court referred to this authority as one of the precedents to discuss the principles for quashing a criminal proceeding.

What weighed in the mind of the Court?

The Supreme Court’s decision was influenced by several factors, primarily the need to maintain the integrity of the railway ticketing system and to interpret the law in a manner that addresses current realities while adhering to established principles of statutory interpretation. The Court emphasized that Section 143 of the Railways Act, 1989, is a penal provision enacted to tackle a social crime and that the Indian Railways is a keystone of the country’s infrastructure. The Court was cognizant of the fact that the railway system carries a huge number of passengers annually and any effort to disrupt the integrity and stability of the ticketing system has to be stopped. The Court also noted that the e-ticketing system was introduced for the convenience and betterment of the passenger’s experience of travelling on a train.

Logical Reasoning:

The Court rejected the Kerala High Court’s view that Section 143 of the Railways Act, 1989, was outdated and did not apply to online businesses. The Court emphasized that statutory interpretation must consider advancements in technology and that a provision can be applied to new situations if its language is broad enough. The Court also rejected the argument that the tickets were purchased by genuine passengers, stating that travel agents procure tickets in the name of passengers for a commission.

The Court stated that “Section 143, on its plain language, prohibits any person, other than a railway servant or an authorised agent, to conduct the business of procurement and supply of railway tickets.” The Court further stated that “The provision does not specify the modalities of the procurement and supply. Hence, if we read the section and give its contents the natural and ordinary meaning, keeping in mind the objective and purpose of the legislation, as discussed above, it admits of no doubt that this provision criminalises unauthorised procurement and supply, irrespective of the mode of procurement and supply.” The Court also stated that “Section 143, by being completely silent on creation of multiple user IDs, penalises the actions of only the unauthorised agents and not unauthorised actions of the authorised agents.”

The Supreme Court allowed the appeal against the Kerala High Court’s decision and restored the criminal proceedings against Mathew. The Court also allowed the appeal against the Madras High Court’s decision and quashed the criminal proceedings against Ramesh. The Court clarified that the observations made in the judgment were for the purpose of deciding the appeals and should not be construed as an expression of opinion on the merits of the prosecution’s case.

Key Takeaways

• ✓ Section 143 of the Railways Act, 1989, applies to both physical and online sales of railway tickets.
• ✓ Unauthorized individuals engaged in the business of procuring and supplying railway tickets, irrespective of the mode of procurement, can be prosecuted under Section 143 of the Railways Act, 1989.
• ✓ Authorized agents cannot be prosecuted under Section 143 of the Railways Act, 1989, for unauthorized actions such as creating multiple user IDs.
• ✓ Breaches of contract by authorized agents should be addressed through civil action, not criminal proceedings.
• ✓ Statutory provisions can be applied to new situations and technological advancements if the language of the provision is broad enough to encompass them.

Directions

The Supreme Court directed that the criminal proceedings against Mathew be restored and taken to its logical conclusion in accordance with the law. The Court also directed that the criminal proceedings against Ramesh be quashed.

Development of Law

The ratio decidendi of the case is that Section 143 of the Railways Act, 1989, prohibits unauthorized individuals from conducting the business of procuring and supplying railway tickets, irrespective of the mode of procurement. The judgment clarifies that while the provision applies to both physical and online sales, it does not penalize authorized agents for unauthorized actions. This decision clarifies the scope of Section 143 of the Railways Act, 1989, and provides guidance on its application in the context of e-ticket sales and the actions of authorized agents.

Conclusion

The Supreme Court’s judgment in this case clarifies the scope of Section 143 of the Railways Act, 1989, in the context of e-ticket sales. The Court held that while unauthorized individuals can be prosecuted for unauthorized procurement and supply of railway tickets, authorized agents cannot be prosecuted under this provision for unauthorized actions. The decision emphasizes the need to interpret penal provisions strictly and narrowly, while also acknowledging the relevance of technological advancements in the application of the law. This judgment is significant for railway authorities, travel agents, and individuals involved in the sale of railway tickets, as it provides clarity on the legal implications of unauthorized ticket sales in the digital age.