Calcutta High Court
Bharat Food Products & Biscuit Co. P. Ltd vs The Union Of India & Anr on 1 April, 2014
Author: Tapabrata Chakraborty
Bench: Tapabrata Chakraborty
1
IN THE HIGH COURT AT CALCUTTA
Constitutional Writ Jurisdiction
ORIGINAL SIDE
Present:
The Hon'ble Justice Tapabrata Chakraborty
W.P. No. 2060 of 2006
Bharat Food Products & Biscuit Co. P. Ltd.
versus
The Union of India & Anr.
For Petitioner : Mr. Shyamal Sarkar,
Mr. Ram Anand Agarwal,
Ms. Nibedita Pal,
Mr. Rajesh Gupta,
Mr. A. G. Mukherjee.
For Respondents : Mr. Priyabrata Mukherjee,
Mr. Jyotiprokash Chatterjee.
Judgment On : 1st April, 2014.
Tapabrata Chakraborty, J.
2 The subject matter of challenge in the instant writ application is a notice dated 19th October, 2006 issued by the Assistant Commercial Manager, South-Eastern Railway for and on behalf of the respondent no.2 by which the said respondent had demanded a payment of outstanding amount of Rs.48,81,339/- from the petitioners.
The facts, in a nutshell, are that between May, 2005 and August, 2005 the petitioners had moved various railway rakes from mining areas to various ports, i.e., from various loading stations namely Barajamda, Noamundi, Barsuan etc. Several months after delivery of the goods, the railway authority intimated that they had weighed the rakes enroute and had found that in case of some of the wagons, there had been a overloading of iron ore fines. The punitive charges levelled against such overloading stands reflected in the chart annexed to the writ application at page 24. Upon receipt of the impugned notice dated 19th October, 2006 demanding an outstanding amount of Rs.48,81,339/-, the petitioners through their learned advocate issued a notice to the respondents 3 demanding withdrawal of the said impugned notice but the respondents maintained a deceptive silence.
Mr. Sarkar, learned advocate appearing for the petitioners submits that the impugned notice is without jurisdiction and that the punitive charges had been demanded after unloading of the goods and that such demand is violative of provisions of Section 73 of the Railways Act, 1999 (hereinafter referred to as the said Act of 1999) which permits recovery of punitive charges prior to delivery of the goods.
According to Mr. Sarkar the decision making process towards issuance of the memorandum demanding punitive charges suffers from unreasonableness and procedural impropriety inasmuch as the same was issued without affording any opportunity to the petitioners to exercise their right under Section 79 of the said Act of 1999.
Mr. Sarkar further submits that the goods were loaded upon acceptance of the weight as disclosed by the petitioners and that 4 prior to reweighment of the goods it was incumbent upon the respondents to issue appropriate notice to the petitioners.
In support of his contention, Mr. Sarkar had relied upon the following judgements :-
a) Unreported judgement dated July 30, 2009 delivered in the case of Ultra Tech Cement Limited & Another versus Union of India & Others.
b) Unreported judgement dated 27th January, 2010 delivered in the appeal against the judgement dated 30th July, 2009 passed in Union of India & Ors. Versus Ultra Tech Cement Ltd. & Anr.
c) The judgement dated 19th December, 2007 delivered in the case of Union of India & Ors. Versus Agarwala & Co. & Anr.
reported in (2008) 1 CHN 751.
The respondents had entered appearance and had filed an affidavit-in-opposition stating inter alia that the punitive charges being a part of freight can be collected even after delivery. The railway receipts were issued with remarks "SWA" (Senders Weight 5 Acceptance) and that the said receipt constituted a due notice towards weighment by the respondents. The petitioners had suppressed that one bill of punitive charge was demanded by the respondents after delivery of the consignment on 25th May, 2005 and that the petitioners had duly paid the said bill on 15th September, 2005. According to the respondents, after weighment, when the excess load was detected the matter was dealt with in terms of Section 73 of the said Act of 1989. The scope of Section 79 of the said Act of 1999 is limited to the exceptional case where the weighment was demanded by the parties. It had also been averred in the said opposition that as per Section 65 (2) of the said Act of 1989, the burden of prove lies upon the petitioners to establish that the load is within the permissible carrying capacity and that the punitive charge, as demanded, is the consequential effect of the offence committed by the petitioners in loading the goods beyond the carrying capacity.
Mr. Mukherjee, learned advocate appearing for the respondent submits that the railway receipt as issued constitutes sufficient notice towards reweighment and demand of punitive charges and 6 that the incorporation of the remark "SWA" does not constitute any bar towards reweighment of the goods.
According to Mr. Mukherjee that the word "May" as used in Section 73 of the said Act of 1989 suggests that the railway administration enjoys discretionary power to collect charges by way of penalty for overloading before or after the delivery of the goods.
According to Mr. Mukherjee the issuance of the demand notice towards payment of punitive charges after delivery of the goods cannot in any manner, frustrate the right of the railways to claim of the said punitive charges.
In support of his submissions, Mr. Mukherjee had relied upon a judgement delivered in the case of Jagjit Cotton Textile Mills etc. Versus Chief Commercial Superintendent N.R. & Ors. reported in AIR 1998 SC 1959.
I have heard the submissions made by the learned advocates appearing for the respective parties and I have considered the materials on record.
7
The unreported judgement dated 30th July, 2009 delivered in the case of Ultra Tech Cement Limited & Another Versus Union of India & Others, the Hon'ble Court had inter alia observed as follows :-
"Since it is the admitted position that the claim on account of penalty in respect of every consignment covered in either petition was raised (and the petitioners were informed of the charge of overloading) more than several weeks subsequent to the delivery of the respective consignments, the claims are bound to fail on the ground that the petitioners were not afforded a chance to exercise the right conferred on a consignee or an endorsee under Section 79 of the Act."
The said judgement dated 30th July, 2009 had been affirmed by the Hon'ble Appeal Court through a judgement dated 27th January, 2010 wherein the Hon'ble Court had inter alia observed as follows :-
"We are in full agreement with His Lordship and we do not find any scope of interference. Section 73 did empower the Railways to 8 charge penalty on overloading. The Railways would have to do it before the delivery so that the consignor and/or the consignee, as the case may be, could demand re-weighment in terms of Section 79 to refute such charge. Such opportunity was not given to Ultra Tech Cement Ltd. in the instant case."
The judgement delivered in the case of Union of India & Ors. Versus Agarwala & Co. & Anr. reported in (2008) 1 CHN 751 was delivered in the backdrop of facts almost similar to the facts of the instant case.
In the said matter the facts were as follows :-
"The goods were loaded at Chirai, Gujrat and the Railway declared weight was accepted with the instruction to the SM enroute to weigh jointly at the destination before delivery. However, at the destination, initially no intimation was given to the writ petitioner complaining that the wagons were overloaded, and that as a result, a total number of 683 bags was unloaded. All that was informed was that there was short-delivery by specifying the number of short-delivered bags but reason for short-delivery was 9 not disclosed and consequently, the writ petitioners removed the specified short-delivered goods on October 22, 1991 expecting further delivery in future. At any rate, he was bound to remove the goods otherwise he would be subjected to demurrage. Subsequently, on October 29, 1991, demand for penal charge for overloading was made for the first time alleging excess loading and immediately thereafter, on October 30, 2007, the writ petitioners raised dispute against the allegation of overloading and demanded reweighment of the off-loaded goods."
Attention of this Court was also drawn to paragraph 12 of the said judgement reported in (2008) 1 CHN 751 which runs as follows :-
"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 reweighed in the presence of the representatives of the parties concerned. As provided in para 1451 of IRCM, the Railway receipts should not be granted till the goods are correctly examined and weighed and when 10 the senders are required to load their consignments, the Railway receipts should not be given until loading has been completed to the satisfaction of the Railway."
The allegation of suppression as levelled against the petitioners for non-discloser of payment of a punitive charge demanded subsequent to the delivery of the goods, does not tantamount to relinquishment of the right of the petitioners to challenge the impugned memorandum dated 19th October, 2006.
It is an admitted fact that, the punitive charges were demanded by the respondents through issuance of notice subsequent to unloading of the goods.
It also stands admitted that the railway receipts were issued containing an endorsement to the effect that "SWA" (Sender Weight Acceptance) and that as such the burden was upon the respondents to show that the declaration of weight mentioned in the receipt was not correct.
The respondents argue that since the petitioners chose not to be represented when the weighment was undertaken by the 11 respondents at an intermediate station, they cannot be permitted to question the authenticity thereof. Such argument is unsustainable inasmuch as when the statute had given the consignee or the endorsee a qualified right to seek weighment, the railways cannot altogether scuttle such right by making a claim on account of penalty for overloading at a time when no meaningful request for weighment can be made by the consignee or the endorsee.
The judgement in the case of Jagjit Cotton Textile Mills etc. (Supra) as relied upon by the respondents was considered in all the judgements upon which reliance had been placed by the petitioners and the said judgement was found to be distinguishable inasmuch as in the same the question was whether railway authority can release the penal charge of overloading of wagon from the consignee instead of the delinquent consignor. In the instant case, the authority of the railways to realize the penalty is not disputed by the petitioners but the grievance is that such demand could not have been made by the railways subsequent to unloading of goods and that too upon reweighment in absence of the petitioners. 12
In my opinion, the respondents were bound to show, before it imposed the punitive charges on the petitioners, that there had been a proper adjudication of the alleged liability of the petitioners for which punitive charges were imposed. The respondents had failed to make the petitioners' aware of the Railways claim on account of penalty for overloading prior to delivery of the goods. The very word "Punitive" as had been used by the Rule makers shows that the petitioners are to suffer for the fault on their part and on that basis an adjudication as to the petitioners' liability has to be made a condition precedent before imposition of penalty/punishment by way of punitive charges.
In the instant case, admittedly no such adjudication had been made and the punitive charges had been demanded after unloading and without reweighment of the consignment in presence of the petitioners.
For the foregoing reasons, the writ application is allowed and the impugned notice dated 19th October, 2006 issued for and on behalf of the respondent no.2 is set aside and quashed. 13
Urgent Photostat certified copy of this judgment, if applied for, be given to the parties, as expeditiously as possible, upon compliance with the necessary formalities in this regard.
(Tapabrata Chakraborty, J.)