Calcutta High Court (Appellete Side)
Private Limited & Anr vs Eastern Railway & Ors on 8 March, 2017
Author: Arindam Sinha
Bench: Arindam Sinha
Judgment IN THE HIGH COURT AT CALCUTTA
CONSTITUTIONAL WRIT JURISDICTION
(APPELLATE SIDE)
WP 12628 (W) of 2016
Shree Enterprises Coal Sales
Private Limited & Anr.
Vs.
Eastern Railway & Ors.
Mr. R. A. Agarwala, Adv.
Mr. Kumar Gupta, Adv.
Ms. Nibedita Pal, Adv.
Mr. Ramesh Dhar, Adv.
Mr. A. G. Mukherjee,Adv.
... For the Petitioners
Mr. Krishna Das Poddar, Adv.
... For the Railways
Heard on : 16.01.2017, 24.01.2017 & 08.03.2017.
Judgment on : 08.03.2017.
Arindam Sinha, J. : The challenge in this writ petition is directed against
demand dated 26th April, 2016 and purported exercise of lien by letter dated 10th
May, 2016 of the Railways. The petitioners had consigned coal from Kottaddi
Colliery, Pandaveswar in Burdwan to Kushmi, in Uttar Pradesh. The
consignment was unloaded and delivered to the petitioners at Kushmi without
any demand raised.
It appears from the impugned demand that one rake of the coal consigned
was re-weighed at Mughalsarai and upon finding there was overloading, penalty
of Rs. 18,94,498/- became due as was demanded from the petitioners. The
Railways sought to exercise lien over a subsequent consignment as per the
impugned letter dated 10th May, 2016.
Mr. Agarwal, learned advocate for the petitioners referred to section 73 of
the Railways Act, 1989. He submitted, since there was no demand made prior to
delivery, it was impossible for his clients to challenge the demand based upon
purported re-weighment at Mughalsarai. Admittedly, the re-weighment was done
en route and without notice to the petitioners. He submitted the re-weighment
could not be done in relying 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 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 relied 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 to submit that
his clients were entitled to reliefs prayed for. The said paragraphs 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 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."
Mr. Poddar, learned advocate appeared on behalf of Railways and referred to
section 83 of the said Act to submit, the exercise of lien was proper. He relied 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."
Mr. Poddar submitted further, the petitioners had accepted the re-
weighment as was intimated to them at the time of delivery. In spite thereof the
petitioners did not challenge the manner of assessment of weight on re-
weighment. They cannot now challenge the demand of penalty on the basis of
such re-weighment. He handed up copy of letter dated 27th January, 2017 from
the Deputy Chief Vigilance Officer (T) writing for the General Manager (Vigilance)
to the Deputy Chief Commercial Manager (CL & FM). The relevant portion relied
upon by Mr. Poddar in that internal communication of the Railways is
reproduced below:-
"3. The said rake was reweighed at MGS/ WB at 16.18 hrs dated 20.01.2016
and the particulars of weighment sent to CGS/ KHM through FOIS at 18.27 hrs
dated 20.01.2016. Again on 21.01.2016 at 18.56 hrs CGS/KHM was
intimated through FOIS to realize the under charge (Annexure-5). The said rake
was placed at KHM/NER for un loading at 14.55 hrs at 21.01.2016 & became
released at 11.50 hrs on 22.01.2016 hence the message was given in time
when the said rake was placed for unloading."
He then relied on a judgment of this Court in the case of Union of India
vs. Biswanath Agarwal reported in 2015(2) CLJ (Cal) 257 to submit that the
Railways can reject a request of the owner of consignment for further weighment.
Not only was the re-weighment informed to the petitioners, no request for further
weighment was made by them. Mr. Poddar added that Biswanath Agarwal
(supra) was followed by a learned single Judge of this Court in an unreported
judgment dated 23rd February, 2017 in W.P. 2917 (W) of 2017 [Nirma Limited
& Anr. vs. The Union of India & Ors.]. According to him, in that case the goods
were loaded on to the rake without verification by Railway officials. The re-
weighment was duly made and thereafter even if the petitioners had asked for
further weighment, the same could have been lawfully declined as held in
Biswanath Agarwal (supra). The petitioners are in a position which is worse
since having had intimation of re-weighment they did not ask for further
weighment. Lastly, he relied on another judgment of a learned single Judge of
this Court in the case of Friend's (H.P.) Station vs. Senior Regional Manager
reported in (2009) 3 WBLR (Cal) 981 for the submission that the writ petition
was not maintainable.
On the question of whether or not the petitioners were informed of the re-
weighment, Mr. Agarwal had drawn attention to paragraph 9 of the writ petition
and paragraph 3 of the affidavit-in-opposition dealing with the same. The said
paragraphs are reproduced below:-
writ petition:-
"9. The rake reached at Kusumi on 21st January 2016 and the railway
delivered the goods to the petitioner no. 1 without any demur on 22nd January
2016."
affidavit-in-opposition:-
"3. That with reference to the averments as made in paragraph 1 to 9 of the
writ petition the respondents have nothing to say as the same are matters of
record."
It is clear from above that there can be no dispute on facts regarding the petitioners not being informed about the demand for penalty when the goods were delivered to them. The said internal communication of the Railways also supports such inference.
Section 73 gives power to the Railway administration to recover from the consignor, the consignee or the endorsee, as the case may be, in addition to the freight and other charges, charges by way of penalty at prescribed rate before the delivery of the goods. 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. However it is not necessary for this Court to express a view on whether section 83 empowers the Railway administration to exercise lien thereunder for recovery of charges by way of penalty, since Bhagaban Dey (supra) is not applicable to the present case as distinguishable on facts. In that case the re-weighment 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 in that judgment liberty was given to the petitioner to lodge complaint with the Tribunal questioning the reasonableness of the impugned demands.
Reshmi Metaliks Ltd. (supra) does not have any application to the facts of this case since the judgment was relied upon for the proposition 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 there was exercise of power under section 78 prior to delivery.
So also Biswanath Agarwal (supra) is not applicable to the facts of the case, but in paragraph 44 of that judgment, inter alia, the following was said :-
"44. ... .... ....When a demand for additional freight consequent upon reweighment under Section 78 of the Act is made after discharging the consignment, the consignee or the endorsee is robbed of the opportunity to dispute such demand and as such the demand may, in appropriate cases, be set aside. ... ..."
This Court notices that even Nirma Limited (supra) is distinguishable on facts since in that case the consignment was never taken delivery of. In the case of Friend's (H.P.) Station (supra) this Court had found there was a disputed question of fact which could not be decided by the writ Court. No disputed question of fact arises in this case as borne out from the pleadings reproduced above as well as the said internal communication relied upon by Mr. Poddar.
The question arising out of the challenge in the writ petition appears to have been answered in Ultra Tech Cement (supra). That view found support in the observations made in Biswanath Agarwal (supra) reproduced above. The writ petition therefore succeeds. The impugned demand vide letter dated 26th April, 2016 and consequent order dated 10th May, 2016 are set aside and quashed. The Railways will forthwith release the consignment over which they purported to exercise lien.
The writ petition is disposed of.
Urgent photostat certified copy of this judgment, if applied for, be given to the learned advocates for the parties on usual undertakings.
(Arindam Sinha, J.)