Lowest Court affirmed Railway Claims Tribunal order directing railway to refund punitive charges collected after goods delivery, holding recovery must occur pre-delivery under Railways Act.
Railway to refund punitive charges collected post-delivery directed in lower court order; appeal to set aside that direction dismissed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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GAHC010025712016
THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : MFA/80/2016
UNION OF INDIA
REPRESENTED BY THE GENERAL MANAGER, N.F. RAILWAY, MALIGAON, GUWAHATI, DIST. KAMRUP M, ASSAM.
VERSUS
M/S KAMAKHYA TRANSPORT PVT LTD 239 , KAMLA MARKET, OPP. ASAF ALI ROAD, NEW DELHI-110002
Advocate for the Petitioner : MS.N R RABHA
Advocate for the Respondent :
Linked Case : MFA/57/2016
UNION OF INDIA REPRESENTED BY THE GENERAL MANAGER N.F. RAILWAY MALIGAON GUWAHATI DIST. KAMRUP M ASSAM.
VERSUS
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M/S KAMAKHYA TRANSPORT PVT LTD 239 KAMLA MARKET OPP. ASAF ALI ROAD NEW DELHI-110002
-----------Advocate for : MS.U CHAKRABORTY Advocate for : appearing for M/S KAMAKHYA TRANSPORT PVT LTD
Linked Case : MFA/29/2017
UNION OF INDIA REPRESENTED BY THE GENERAL MANAGER N.F. RAILWAY MALIGAON GUWAHATI DIST. KAMRUP M ASSAM.
VERSUS M/S C.M. TRADERS T.R.P. ROAD FANCY BAZAR GUWAHATI-781001 ASSAM.
-----------Advocate for : MS.N R RABHA Advocate for : MS.M SHARMA appearing for M/S C.M. TRADERS
Linked Case : MFA/28/2017
UNION OF INDIA REPRESENTED BY THE GENERAL MANAGER N.F. RAILWAY MALIGAON GUWAHATI DIST. KAMRUP M ASSAM.
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VERSUS
M/S VINAYAK LOGISTICS M.G. ROAD NEAR ICICI BANK GUWAHATI-781001 ASSAM.
-----------Advocate for : SC NF RLY Advocate for : MR.K P MAHESWARI appearing for M/S VINAYAK LOGISTICS
BEFORE
HON’BLE MRS. JUSTICE RUMI KUMARI PHUKAN
Date of hearing: 25.11.2021.
Date of judgment: 20.12.2021.
JUDGEMENT AND ORDER (CAV)
All the four petitions are taken up together as they have arisen out of the common judgment and order dated 19.01.2016, passed by the learned Railway Claims Tribunal, Guwahati Bench at Guwahati.
2. The MFA No.80/2016 is preferred against the impugned order passed in the Claim Application No.OA-III 229/2012, the MFA No.57/2016 is preferred against the impugned order passed in the Claim Application No.OA-III 228/2012, the MFA No.28/2016 is preferred against the impugned order passed in the Claim Application No.OA-III 185/2012 and the MFA No.29/2016 is preferred against the impugned order passed in the Claim Application No.OAIII 184/2012 .
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3. Heard Mrs. U. Chakraborty, learned standing counsel appearing for the appellant Railway as well as Ms. M. Sharma, learned counsel appearing for the private respondents.
4. In all the cases, the grievance of the applicants (respondents in present appeals) was that the freight has been overcharged by the respondent (appellants in present appeals) at destination station after the delivery of goods, which is not permissible and the respondent is stopped to claim any amount once the goods are delivered to the consignee.
5. The main grievance of the applicants in those four applications was that as per Section 74 of the Railways Act and Rule No.1820 of IRCM, Volume-II of 1991, the respondent railway can collect the dues and other charges only before delivery of the goods and not thereafter. But in the present cases, the respondent railway collected undercharges after delivery of the goods, which is illegal. Hence, the applicants are entitled to refund of freight charges paid by them after the delivery. In support of their claim, the applicants produced the details of invoice nos., railway receipt nos., dates of booking, etc. before the learned Railway Claims Tribunal.
6. The respondent Railway filed their written statement resisting the claim of the applicants, that the applicant is a juristic person, which can only be represented by a natural person. Moreover, the applicant has not disclosed the name of any natural person, who would represent the applicant firm before the Tribunal. Hence the application is not maintainable. The respondent also averred that the Section 74 of the Railways Act does not bar the respondent railway from collecting due amount from a client even after the goods were delivered and there is no illegality. It was contended that applicant is not entitled to refund of amount already paid.
7. In Claim Application No.OA-III 184/2012, the consignor has declared the consignment as ‘grocery’, while preparing the forwarding note and accordingly the railway had collected the freight. But at the time of unloading/delivery, the consignment was found to be 1135 bags of
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‘mustard seed’ instead of ‘grocery’. Accordingly the consignee was informed by the letter dated 07.04.2012, issued by the CS (Goods)/NGC and one Subhash Mour had acknowledged the said letter for and on behalf of the applicant and paid the claimed amount on the same date, without any protest.
8. Similarly, in Claim Application No.OA-III 185/2012, instead of ‘papers’, at the time of unloading/delivery, the consignment was found to be ‘stancilled calcium carbonate’. Accordingly, the consignee was informed by the letter dated 07.04.2012, issued by the CS (Goods)/NGC and one G.L. Sharma had acknowledged the said letter for and on behalf of the applicant and paid the claimed amount on the same date, without any protest.
9. In Claim Application No.OA-III 228/2012, instead of ‘paper ware (other than stationary), at the time of unloading/delivery, the consignment was found to be ‘paper, cloth and plastic goods’. Accordingly the consignee was informed by the letter dated 29.10.2011, issued by the CS (Goods)/NGC and one R.R. Jaisawal had acknowledged the said letter for and paid the claimed amount on behalf of the applicant.
10. In Claim Application No.OA-III 229/2012, instead of ‘1066 pkts of machinery parts, 829 pkts spice and 921 pkts spices’, at the time of unloading/delivery, the consignment was found to be ‘nut bolt, plastic pipes, carpet sheet, wielding rod, calendar’, loaded in Wagon No.CRBCN 153572 and ‘Medicines, jeera, cloth, spices’ loaded in Wagon No.CRBCN 151434 and similarly in Wagon No.CRBCNAHS 023098, the consignment loaded was found to be ‘pan masala, jeera, groundnut, hawain chapple, pocket books’. Accordingly, the consignee was informed on the same day of delivery of the consignment and claimed amount was paid.
11. The respondent Railways is of views that they are authorized to raised, demand and collect any overdue amount due in respect of any consignment, either before or after the goods are delivered and prayed for dismissal of the claim applications.
12. Upon the pleadings of the parties, the following two issues were framed by the learned
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Tribunal:
13. Both the parties produced documents in support of their respective claim. After going through the documents and hearing arguments of learned counsel for both sides, the learned Railway Claims Tribunal, Guwahati decided all the issues in favour of the applicants.
14. The Tribunal take note of the fact neither Rule 1820 of the Indian Railway Commercial Manual –II, 1991 and/or Section 74 of the Railways Act provides that Railway can charge any punitive charge for overloading etc. after delivery of goods. Further, the decision of the Megha Technical & Engineers Pvt. Ltd. vs. Union of India, held in WP(C)/1262/2011 and the appeal arising out of said decisions in WA/71-74/2013 have been relied wherein it has been held that once delivery is made, power under Section 73, 78, 79 and 83 cannot be invoked and appreciating the facts in the above cases held that the punitive charges were realized by the Railway Department after delivery of charge, and hence the applicants (respondents herein) entitled for refund the punitive charges paid by them.
The learned Tribunal framed details charts regarding date of booking, delivery as well
as punitive charges paid by the applicants in the following manner:
| OA No. | Date of booking |
Date of delivery of goods |
Amount Punitive Undercharge by the applican |
of paid t |
Money no. & date by N.F. Ra |
Receipt issued ilway |
|---|---|---|---|---|---|---|
| III-184/12 | 2.04.2012 | 7.04.2012 | Rs.4,47,965/- 9.04.2012 |
on | 367505 9.04.2012 |
dated |
| III-185/12 | 2.04.2012 | 7.04.2012 | Rs.4,97,342/- 9.04.2012 |
on | 367503 9.04.2012 |
dated |
| III-228/12 | 25.10.2011 | 29.10.2011 | Rs.3,07,902/- 2.11.2011 |
on | 876913 2.11.2011 |
dated |
| III-229/12 | 9.10.2011 | 13.10.2011 | Rs.15,12,959/- 17.10.2011 |
on | 886869 17.10.201 |
dated 1 |
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Thus, on the basis of the documents produced by both the parties and the relevant law as well as the decisions on the subject, have allowed the prayer of the applicants with a direction to refund the charges as follows:
“(i) In Claim Application No.OA-III 184/2012, the respondent Railway was directed to pay the applicant, a sum of Rs.4,47,965/- along with simple interest @6% per annum, from the date of filing of the original application i.e. from 01.08.2012, till the date of this order, through ECS on supplying details of bank account particulars. In addition to the above, the respondent was also directed to pay the proportionate application fee amounting to Rs.4,706/- and the Legal Practitioner’s fee of Rs.3,000/-.
(ii) In Claim Application No.OA-III 185/2012, the respondent Railway was directed to pay the applicant, a sum of Rs.4,97,342/- along with simple interest @6% per annum, from the date of filing of the original application i.e. from 01.08.2012, till the date of this order, through ECS on supplying details of bank account particulars. In addition to the above, the respondent was also directed to pay the proportionate application fee amounting to Rs.4,953/- and the Legal Practitioner’s fee of Rs.3,000/-.
(iii) In Claim Application No.OA-III 228/2012, the respondent Railway was directed to pay the applicant, a sum of Rs.3,07,902/- along with simple interest @6% per annum, from the date of filing of the original application i.e. from 07.12.2012, till the date of this order, through ECS on supplying details of bank account particulars. In addition to the above, the respondent was also directed to pay the proportionate application fee amounting to Rs.4,006/- and the Legal Practitioner’s fee of Rs.2,790/-.
(iv) In Claim Application No.OA-III 229/2012, the respondent Railway was directed to pay the applicant, a sum of Rs.15,12,959/- along with simple interest @6% per annum, from the date of filing of the original application i.e. from 07.12.2012, till the date of this order, through ECS on supplying details of bank account particulars. In addition to the above, the respondent was also directed to pay the proportionate application fee amounting to Rs.10,031/- and the Legal Practitioner’s fee of Rs.3,000/-.
The respondent was granted 90 days’ time to comply with the terms of the award, failing which they shall be liable to pay simple interest @9% per annum, from the date of filing of the original petition till the payment is made.”
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15. Being aggrieved by the impugned judgment and order, the present appeals are preferred by the appellant/respondent Railway, on the ground that the impugned judgment and order was not passed in accordance with the law and facts, the same is not based on proper appreciation of the provisions of the Railways Act, 1989, that the learned Tribunal failed to take into consideration the correct factual and legal aspect of the matter in arriving at the conclusion, that the learned Tribunal failed to take into consideration that the consignors had booked their consignments by declaring the same to be separate item but in realty the loaded different items than what they had stated at the time of booking the consignment, that the appellant is authorized to demand and collect the under charge from the respondent/applicant, for false declaration made in the forwarding note at booking Station, as the right and liability passed to the respondent/consignee from the consignor, as per provision of Section 74 of the Act. The further case of the appellant is that the learned Tribunal failed to take into consideration that the demand for making payment of under charge was made at the time of delivery and in doing so, there is no illegality and in case of non-payment of the same, the appellant is authorized to detain the consignment, as per Section 83 of the Act.
16. Accordingly, the appellants Railway sought for setting aside the judgment and order dated 19.01.2016, passed by the learned Railway Claims Tribunal, Guwahati, after hearing the parties.
17. Heard the arguments advanced by learned counsel for both sides and perused the record.
18. Mrs. U. Chakraborty, learned counsel for the appellants in her argument has assailed the judgment on the same grounds that has been taken while preferring the appeals that such a punitive charge has been made on the same day by the Railway Department and such a payment has also been made without any protest by the applicants. She has accordingly
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contended that there is no illegality in collecting under charge on the day of delivery of the notice which again paid without protest and nothing is refundable to the respondents. Further, it has been contended that as per Section 83 of the Railway Act, Railway authority is authorities/entitled to detain the consignment for non-payment of demanded amount as said section provides that the Railway authority can raise demand and collect any amount due in respect of any consignment either before or after delivery of consignment. Thus, the affairs conducted by the Railway authorities is stated to be within the framework of law to raise the punitive charges from the applicants, as they carried the consignment deceitfully, defrauding the Railway authorities.
19. Per contra, Ms. M. Sarma, learned counsel for the respondents/applicants has submitted that the Railway authority had collected penal freight from the respondents after the delivery of consignment, which is wholly illegal as beyond purview of law. The said punitive charge were obtained without providing any scope for hearing on the matter in a compelling manner and the same now cannot be agitated that the same was made without protest. Rather, record reveals that the applicants sought for clarification as to the calculation so made by the appellants/Railway authority. Consignor cannot be blamed for such undue payment, which was illegally raised and procured by the Railway authority without giving any scope for reply/hearing. Principles of natural justice as well as the provision of law itself has been violated by the Railway authority while realizing such punitive charges and the learned Tribunal has clearly appreciated both factual and legal aspect in proper perspective of law which called for no interference.
20. Due consideration has been made to the submission of both the parties and also gone through the record along with documents.
21. It is to be noted that the learned Tribunal had precisely prepared the chart as regard the booking, delivery and the notice as well as the date of realization of punitive charges. The same is not disputed by both the parties. Going by the chart, it would reveal that date of delivery of goods is prior to making of punitive charges. Record reveals that in all the cases,
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notice was served on the very day of delivery of goods and charge was also realized on same dues. It is discernible that no prior notice was served upon the applicants before realizing the punitive charges.
22. The learned counsel for the appellants has stated about the Rule 1820 of Indian Railway Commercial Manual and the Section 74 of the Railway Act in support of the contention that there is no illegality in realizing the punitive charge. It would apposite to reproduce the provision referred above.
Rule 1820 of the Railway Commercial Manual II, 1991 read as follows:
“ 1820. Recovery of railway dues before delivery of goods . – Before delivery of goods, it should be seen that all railway dues and other charges have been paid. Wharfage and demurrage charges should be levied under tariff rules and recovered, from the consignees endorsee before the removal of goods from railway premises. Similarly, all undercharges noticed as a result of check of invoices, weighment of goods, etc, should be recovered from consignees/endorsee before delivery of goods. As regards overcharges claimed at the time of delivery, the procedure indicated in Chapter XXI should be followed.”
10. Section 74 of the Railways Act, 1989 states as under:
“ 74. Punitive charge for overloading a wagon – Where a person loads goods in a wagon beyond its permissible carrying capacity as exhibited under Sub-section (2) or sub-section (3) or notified under sub-section (4), of Section 72, a railway administration may, in addition to the freight and other charges, recover from the consignor, the consignee or the endorsee, as the case may be, charges by way of penalty at such rates, as may be prescribed, before the delivery of the goods :
Provided that shall be lawful for the railway administration to unload the goods loaded beyond the capacity of the wagon, if detected at the forwarding station or at any place before the destination station and to recover the cost of such unloading and any charge for the detention of any wagon on this account.”
Both the provisions clearly read recovery of dues can be made before delivery of consignment/goods.
23. So far as regard the contention of the appellants that the Railway authority has a right
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to raise the charges even after delivery of goods under Section 83 of the Acts, it would be relevant to reproduce the provision, which is as below:
“ 83. Lien for freight or any other sum due. – If the consignor, the consignee or the endorsee fails to pay on demand any freight or other charges due from him in respect of any consignment, the railway administration may detain such consignment or part thereof or, if such consignment is delivered, it may detain any other consignment of such person which is in, or thereafter comes into its possession.”
24. The scope and ambit of Section 73, 74 and 83 of the Railways Act has been clearly dealt with by the Hon’ble Apex Court in Jagjit Cotton Textile Mills vs. Chief Commercial Superintendent N.R. and Others, (1998) 5 SCC 126 , the ratio of which is also the followed by this Court WA/71/2013 (as relied by the respondents’ side).
25. In Jagjit Cotton Textile Mills (supra), the Hon’ble Supreme Court held that although the Railway authorities are seized of the powers raising the punitive charges, for overloading the wagon but that punitive charges are required to be raised before delivery is caused. Following the decision of Jagjit Cotton Textile Mills (supra), this Court in WA/71/2013, it has been held that when the delivery is made to the consignee at the point of destination and no penalty is raised before such delivery, it will not be open to the Railway thereafter demand penalty and to seek any lien over future consignment and on harmonious reading of Section 73, 74 and 83, the position that emerges that Railway cannot seek the demand of penalty after delivery of consignment.
26. Section 83 of the Railway Act has been interpreted by the Hon’ble Supreme Court in Jagjit Cotton Textile Mills (supra) that said section permits enforcement of the lien in case of failure on the part of consignor, consignee or endorsee to pay the freight and other charges due on him, which includes the consignee as condition precedent for delivery of goods and no lien can be raised by the Railway after delivery is caused, and no lien can be presumed after delivery.
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27. For proper appreciation of the matter, Section 73 and 78 is reproduced below:
“ Section 73 punitive charge for overloading a wagon – Where a person loads goods in a wagon beyond its permissible carrying capacity as exhibited under sub-section (2) or sub-section (3) or notified under sub-section (4) of Section 2, a Railway administration, may, in addition to the freight and the other charges, recover from the consignor, consignee and endorsee as the case may be, charges by way of penalty at such rate as may be prescribed, before delivery of the goods .
Section 78. Power to measure and weigh etc. – Notwithstanding in the Railway receipt, Railway administration, may before delivery of the consignment at the right to –
28. From perusal of the aforesaid provisions itself reveals that penal charges for overloading can be claimed prior to delivery of goods and not thereafter. Once delivery is made, the power under Section 73, 78 and 83 cannot be invoked.
29. It reveals that the learned Tribunal has rightly relied upon the decision of Meghna Technical & Engineers Pvt. Ltd. endorsing the legal aspect that the provision under Section 83 of the Act cannot be exercised after delivery of the goods. Admittedly, in the present case, no prior notice was issued upon the respondents about the illegalities or irregularities committed by them and on the very day of delivery of goods, the penalty was charged and realized, whereas it is the mandatory requirement that a notice is to be served upon the consignor, consignee etc. indicating about the amount claimed, so that such person can submit their reply/objection etc. It is violative of provision of the law and against the principal of natural justice as the other party was not given an opportunity of being heard.
30. In view of the foregoing discussions and decision referred above, it can be held that the
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condition precedent for raising a demand for excess load has not been fulfilled in any of the cases, to collect excess punitive charges. The Railway authority cannot raise and collect the punitive charges after delivery, by violating the act and the rules. The learned Tribunal has properly appreciated the relevant provisions of the act and rules while arriving at the findings, directing the appellants to refund the charges to the respondents/applicants. The impugned order is accordingly upheld.
The appeal stands dismissed for the reasons stated above.
Return the LCR.
JUDGE
Comparing Assistant
3 issues framed by the court
Whether railway administration is authorized to collect punitive charges for overloading after delivery of goods under Section 74?
Whether Section 83 permits realization of dues post-delivery when no prior notice was issued violating natural justice.
Whether the lower Tribunal correctly upheld the refund of punitive charges collected after delivery.
Colour shows how this judgement treated each authority
Megha Technical & Engineers Pvt. Ltd. vs. Union of IndiaRelied on¶52
Megha Technical & Engineers Pvt. Ltd. vs. Union of India
Jagjit Cotton Textile Mills vs. Chief Commercial Superintendent N.R. and OthersFollowed¶86
Jagjit Cotton Textile Mills vs. Chief Commercial Superintendent N.R. and Others
WA/71-74/2013Relied on¶52
3 provisions across 2 enactments
UNION OF INDIA REPRESENTED BY THE GENERAL MANAGER, N.F. RAILWAY
M/S KAMAKHYA TRANSPORT PVT LTD
M/S C.M. TRADERS
M/S VINAYAK LOGISTICS
RUMI KUMARI PHUKAN
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
