Calcutta High Court (Appellete Side)
Shree Enterprises Coal Sales Private ... vs Eastern Railway & Ors on 16 January, 2017
Author: Arindam Sinha
Bench: Arindam Sinha
1 WP 12628 (W) of 2016 13 16.01.2017 ddas Shree Enterprises Coal Sales Private Limited & Anr.
Vs. Eastern Railway & Ors.
Mr. R. A. Agarwala Mr. Kumar Gupta Ms. Nibedita Pal Mr. Ramesh Dhar Mr. A. G. Mukherjee ... ... For the petitioners Mr. Krishna Das Poddar ... ...For the Railways Mr. Agarwala, learned advocate appears on behalf of the petitioners and submits, the challenge of his client is directed against demand dated 26th April, 2016 and purported exercise of lien by letter dated 10th May, 2016. The petitioners consigned coal from Kottaddi Colliery, Pandaveswar in Burdwan to Kusmhi in, it is submitted, Uttar Pradesh. It appears from the impugned demand that one rake of the coal consigned was reweighed at Mughalsarai and upon finding there was overloading, penalty of Rs. 18,94,498/- became due as was demanded from the petitioners. The consignment was unloaded and delivered to the petitioners at Kusmhi without such demand raised. The Railways sought to exercise lien over a subsequent consignment as per the impugned letter dated 10th May, 2016.
Mr. Agarwala refers to Section 73 of the Railways Act, 1989. He submits, since there was no demand made prior to delivery, it was impossible for his clients to challenge the demand based upon purported reweighment at 2 Mughalsarai. Admittedly, the reweighment was done en route and without notice to the petitioners.
Mr. Poddar, learned advocate appears on behalf of the Railways and refers to Section 83 of the said Act. He relies on a judgment of a learned Single Judge of this Court in the case of Bhagaban Dey vs. Union of India & Ors. reported in AIR 2010 Calcutta 13 in particular to paragraphs 21 and 22 therein as are reproduced below :-
"21. According to the provisions of S. 83 any freight or other charges due from a person for any consignment can be recovered by a railway administration by exercising lien over any consignment of such person that comes into the railway administration's possession subsequently. If the provisions of S. 73 provided that punitive charges according to them cannot be demanded and recovered by a railway administration after the delivery of the goods, then there would have been no need for making the provisions of S. 83.
22. Once the provisions of S. 83 are considered, it becomes clear that punitive charges under S. 73 can be demanded and recovered by a railway administration even after the delivery of the goods in question. In view of the provisions of S. 73, the railway administration is, however, not under any obligation to deliver the goods unless the punitive charges demanded by it are paid by the person concerned. Hence there is no reason to say that in view of the provisions of S. 73 and the fact that a substantial part of the goods in question was transported by the petitioner from the place where they were unloaded from the wagons, the railway administration was not entitled to demand the punitive charges."
In reply, Mr. Agarwala relies on an unreported judgment dated 24th December, 2014 of a Division Bench of this Court in MAT 1970 of 2014 [Reshmi Metaliks Limited & Anr. vs. Union of India & Ors.] in particular to the 3 paragraph as is reproduced below :-
"Similarly, Section 78 of the said Act does not authorize the railway administration to blacklist any consignor and/or consignee on any of the grounds as mentioned in para 6 of the said Rates Circular. Section 78 of the said Act simply authorizes the railway administration to re-measure, re-weigh or reclassify any consignment and/or calculate the freight and other charges and correct any other error or collect any amount that may have been omitted to be charged and such exercise can only be done by the railway authorities before delivery of consignment. Thus, once the consignment is delivered, the railway administration loses its jurisdiction to exercise any of its powers as enumerated under Section 78 of the said Act."
He also relies on another Division Bench judgment of this Court in the case of Union of India & Anr. (E. Rly.) vs. Ultra Tech Cement Ltd. & Anr. reported in AIR 2011 Calcutta 216 in particular to paragraphs 20 and 21 which are reproduced below :-
"20. After considering Section 73 and 83 it appears to us that the said two Sections govern the realization of the charges and from the said sections it appears to us that as has been held by the Hon'ble single Judge in order to take punitive charge for overloading a wagon, the concerned parties must be given intimation of the overloading and once the goods have been booked after due weighment, such punitive charge cannot be levied unless the goods are re-weighed in the presence of the representatives of the parties concerned. The said principle has been laid down in the case of Union of India v. Agarwala (supra) and further we have noticed that the conduct of the railways would show that the belated demand has been made subsequent to the delivery being effected and thereby it violates the instruction given in the 4 Railways Manual to its officials to obtain payment prior to the release of the goods prescribed.
21. We noticed the paragraphs of the manual and in the light of the sections of the Railways Act, we find that the writ petitioners were not afforded a chance to exercise the right conferred on a consignee or a consignor under Section 79 of the Act. Therefore, we have no hesitation to hold that the steps taken by the railways are in violation of the said provisions of law, thereby is not sustainable in the eye of law."
Section 73 gives power to the Railway administration, inter alia, to recover from the consignor, the consignee or the endorsee, as the case may be, charges by way of penalty at prescribed rate before the delivery of the goods in addition to the freight and other charges. By the impugned demand penalty was sought to be recovered after delivery. Section 83 empowers the Railway administration to detain consignments, present or future, on the failure of the consignor, consignee or the endorsee, as the case may be, to pay on demand any freight or other charges. There is no mention of recovery of penalty in Section 83. Reshmi Metaliks Ltd. (supra) does not have any application to the facts of this case since the ratio of that judgment is that once the consignment is delivered, the Railway administration loses its jurisdiction to exercise any of its powers as enumerated under Section 78 of the said Act. In this case the undisputed position is that there was no exercise of power under Section 78 either for remeasurement, 5 reweighing or reclassification of any consignment, recalculation of freight and other charges or to correct any other error or calculate any amount that may have been omitted to have been charged after the delivery of the goods. Bhagaban Dey (supra) is not applicable to the present case as distinguishable on facts. In that case the reweighment was made at the destination station but behind the back of the petitioner. Demand for penalty was made before entire delivery had been effected. Serious disputed questions of facts had arisen which is why that judgment gave liberty to the petitioners to lodge complaint with the Tribunal questioning the reasonableness of the impugned demands.
This Court notices that in Ultra Tech Cement Ltd. (supra) Railways manual had been referred to which Mr. Poddar is unable to produce. He submits, he will produce it on the next date.
List this writ petition next Tuesday, i.e. on 24th January, 2017.
(Arindam Sinha, J.) 6 7