Allahabad High Court
M/S Indian Oil Corporation Ltd. vs Union Of India Thru. G.M. on 1 November, 2018
Bench: Saumitra Dayal Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD
A.F.R.
Court No. - 7
Case :- FIRST APPEAL FROM ORDER No. - 3076 of 2014
Appellant :- M/S Indian Oil Corporation Ltd.
Respondent :- Union Of India Thru. G.M.
Counsel for Appellant :- Prakash Padia
Counsel for Respondent :- Praveen Kumar Srivastava
With
Case :- FIRST APPEAL FROM ORDER No. - 3077 of 2014
Appellant :- M/S Indian Oil Corporation Ltd.
Respondent :- Union Of India Thru. G.M.
Counsel for Appellant :- Prakash Padia
Counsel for Respondent :- Praveen Kumar Srivastava
With
Case :- FIRST APPEAL FROM ORDER No. - 3078 of 2014
Appellant :- M/S Indian Oil Corporation Ltd.
Respondent :- Union Of India Thru. G.M.
Counsel for Appellant :- Prakash Padia
Counsel for Respondent :- Praveen Kumar Srivastava
With
Case :- FIRST APPEAL FROM ORDER No. - 3079 of 2014
Appellant :- M/S Indian Oil Corporation Ltd.
Respondent :- Union Of India Thru. G.M.
Counsel for Appellant :- Prakash Padia
Counsel for Respondent :- Praveen Kumar Srivastava
With
Case :- FIRST APPEAL FROM ORDER No. - 3080 of 2014
Appellant :- M/S Indian Oil Corporation Ltd.
Respondent :- Union Of India Thru. G.M.
Counsel for Appellant :- Prakash Padia
Counsel for Respondent :- Praveen Kumar Srivastava
With
Case :- FIRST APPEAL FROM ORDER No. - 3081 of 2014
Appellant :- M/S Indian Oil Corporation Ltd.
Respondent :- Union Of India Thru. G.M.
Counsel for Appellant :- Prakash Padia
Counsel for Respondent :- Praveen Kumar Srivastava
With
Case :- FIRST APPEAL FROM ORDER No. - 3082 of 2014
Appellant :- M/S Indian Oil Corporation Ltd.
Respondent :- Union Of India Thru. G.M.
Counsel for Appellant :- Prakash Padia
Counsel for Respondent :- Praveen Kumar Srivastava
With
Case :- FIRST APPEAL FROM ORDER No. - 3083 of 2014
Appellant :- M/S Indian Oil Corporation Ltd.
Respondent :- Union Of India Thru. G.M.
Counsel for Appellant :- Prakash Padia
Counsel for Respondent :- Praveen Kumar Srivastava
With
Case :- FIRST APPEAL FROM ORDER No. - 3084 of 2014
Appellant :- M/S Indian Oil Corporation Ltd.
Respondent :- Union Of India Thru. G.M.
Counsel for Appellant :- Prakash Padia
Counsel for Respondent :- Praveen Kumar Srivastava
With
Case :- FIRST APPEAL FROM ORDER No. - 3085 of 2014
Appellant :- M/S Indian Oil Corporation Ltd.
Respondent :- Union Of India Thru. G.M.
Counsel for Appellant :- Prakash Padia
Counsel for Respondent :- Praveen Kumar Srivastava
Hon'ble Saumitra Dayal Singh,J.
1. The present set of appeals arise from ten similar orders passed by the Railway Claims Tribunal, Ghaziabad, dated 6.8.2014. The Tribunal has rejected the ten separate claims made by the Indian Oil Corporation Ltd., as time barred. Since the facts of all cases are similar, the facts in FAFO No.3076 of 2014 pertaining to claim petition No. OA/III/564/07/Mathura alone are being noted in detail.
2. The appellant states it had entered into twelve contract/s with the Indian Railways (hereinafter referred to as the Railways), to transport bulk quantities of Bitumen to the New Guwahati railway station. The dispatches were made on different dates.
3. Admittedly, the freight rates as were agreed between the parties were paid by the appellant to the Railways, at the relevant time, without any let or objection, upon the goods being delivered at the New Guwahati Railway Station. Details of the twelve transactions are given below:
Sr. No.
FAFO No.
Railway Receipt No.
Date of the Railway Receipt
1.
3076/2014
304271
03/02/2002
2.
3077/2014
604942
31/08/2000
3.
3078/2014
304397
15/02/2002
4.
3079/2014
871158
21/05/2004
5.
3080/2014
604889
26/08/2000
6.
3081/2014
606220
20/09/2000
7.
3082/2014
606271
23/09/2000
8.
3083/2014
657846
21/03/2001
9.
3084/2014
606330
28/09/2000
10.
3085/2014
304366
12/02/2002
11.
(Not in issue)
304210
26/01/2002
12.
(No in issue)
870878
21/05/2004
While individual claims giving rise to the present set of appeals appear to have been lodged; rejected; claim petitions filed and rejected and; appeals (this set) filed in the first ten cases noted above, there is no dispute involved with respect to the last two transactions
4. Subsequently, in November 2005, upon internal audit objection dated 27.9.2005, the appellant claims to have first discovered, it had made payments to the Railways 6% in excess of the legally payable amount since according to that objection, under a circular issued by the Railway Board dated 14.3.1983, the Railways were obliged to grant 6% rebate on freight chargeable, to transport goods to the north-eastern parts of the country. New Guwahati railway station being located in the north-east of the country, the audit objection is claimed to have informed the appellant about the excess payment made by it. Though the exact text of that objection is not on record, however, since it is the appellant's own case that the audit objection was dated 27.9.2005 and it learnt of the same in November 2005, those facts are assumed to be true.
5. Thereafter, admittedly for the first time on 28.3.2006, the appellant-corporation wrote a letter to the Chief Commercial Manager (Refund) seeking refund @ 6% of the total freight paid by it, against twelve different Railway Receipts' (RRs' in short), during the period 26.8.2000 to 21.5.2004. The present set of appeals is with respect to ten of those twelve RRs' which details are noted in the chart above.
6. The Railways responded by letter dated 26.5.2006 calling for details of the claim made. The appellant was required to state whether it had filed any other/prior claim for refund with the Railways in respect of the disputed transactions.
7. The appellant claims to have replied on 21.6.2007 and submitted its reply containing evidence supported by an affidavit of its Manager (Railway Board). Copies of those documents are annexed to the affidavit in support of the stay application to the present appeal.
8. It is admitted the Railways did not correspond thereafter. Then, the appellant appears to have filed ten separate claim petitions in the month of November, 2007. These have been rejected by the Railway Claims Tribunal, as time barred. Hence the present appeals.
9. The period of limitation to file claim petitions is prescribed under Section 17(1)(a) of the Railway Claims Tribunal Act, 1987 (hereinafter referred to as the 'Act'), being three years. The aforesaid claim petitions were therefore clearly barred by limitation inasmuch as it is admitted to the appellant that the transaction giving rise to the claims were performed not later than 21.5.2004. These claims were thus filed with delay ranging between about seven months to four years.
10. Sri Prakash Padia, learned counsel for the appellant-corporation submits : (i) in the first place by virtue of Section 17 (2) of the Act, the Railway Claims Tribunal had ample jurisdiction and power to condone the delay in filing the claim petitions (filed beyond the period limitation/three years), (ii) the appellant had disclosed sufficient cause for condonation of the delay inasmuch as it could not make the claim of rebate earlier as it was not aware of the Railway Board's circular dated 14.3.1983 and that Circular letter first came to its knowledge in the month of November, 2005. The appellant-corporation immediately raised a claim for refund to the Railways that was also entertained but not discharged. Therefore, the claim petitions filed in the month of November, 2007 were not belated. Reliance has also been placed in the judgment of the Supreme Court in the case of Govind Pathak Vs. Union of India, 2001 AIR SC 44 5195. Learned counsel also submits, the Railways were obliged to grant rebate to the appellant-corporation under the circular letter of the Railway Board - the highest administrative authority of the Railways. It has thus been suggested that the Railway could not have charged anything more than that permitted by the Railway Board.
11. Sri Praveen Kumar Srivastava, learned counsel for the Railway on the other hand submits that the claim petitions filed by the appellant-corporation were hopelessly barred by time inasmuch as according to the appellant, it gained knowledge of the circular letter dated 14.3.1983 through an internal audit objection (dated 27.09.2005), in November, 2005 and the claim petitions were filed two years thereafter. Merely because the appellant may have corresponded with the Railways after lapse of limitation and the latter may have responded for some time may not either enlarge the limitation or be relevant for purpose of forming satisfaction to condone the delay. Also, it has been submitted, mere lack of knowledge of the Railway Board's circular cannot be cited as a reason to seek condonation of delay.
12. Perusal of the order passed by the Tribunal reveals, after taking note of the facts relied upon by the parties, the Tribunal had reached a conclusion that the satisfactory explanation had not been offered by the appellant to condone the delay.
13. Having considered the arguments advanced by learned counsel for the parties and having perused the record, in the first place, the Supreme Court in Sarpanch, Lonand Grampanchayat v. Ramgiri Gosavi, AIR 1968 SC 222 observed:
"3. The Authority has a discretion to condone the delay in presenting the application provided sufficient cause for the entire delay is shown to its satisfaction. This discretion like other judicial discretion must be exercised with vigilance and circumspection according to justice, common sense, and sound judgment. The discretion is to know through law what is just, see Keighley case.
4.The wording of the second proviso is similar to the provisions of Section 5 of the Indian Limitation Act. In Krishna v. Chathappan, the Madras High Court indicated in the following passage how the discretion under Section 5 should be exercised:
"We think that Section 5 gives the Courts a discretion which in respect of jurisdiction is to be exercised in the way in which judicial power and discretion ought to be exercised upon principles which are well understood; the words 'sufficient cause' receiving a liberal construction so as to advance substantial justice when no negligence nor inaction nor want of bona fides is imputable to the appellant.
This decision received the approval, of this Court in Dinabandhu Sahu v. Jadumoni Mangaraj3 and Ramlal, Motilal and Chhotetal v. Rewa Coalfields Ltd.4 The words "sufficient cause" in the second proviso to Section 20(2) should receive a similar liberal construction".
(emphasis supplied)
14. Then, as to what constitutes "sufficient cause" in GMG Engg. Industries v. Issa Green Power Solution, (2015) 15 SCC 659 the Supreme Court observed :
"It is well settled that the expression "sufficient cause" is to receive liberal construction so as to advance substantial justice. When there is no negligence, inaction or want of bona fide is imputable to the appellants, the delay has to be condoned. The discretion is to be exercised like any other judicial discretion with vigilance and circumspection. The discretion is not to be exercised in any arbitrary, vague or fanciful manner. The true test is to see whether the applicant has acted with due diligence".
(emphasis supplied)
15. Though indirectly, learned counsel for the appellant has invoked the "discovery rule" to explain the long delay on part of the appellant to institute the claim. The claim petitions arose out of a purely contractual dispute from a commercial transaction and the present is not a case where it may be said, despite acting with due diligence the appellant could not have known or could not have been aware of the alleged excess payment made by it to the Railways, till before submission of the internal audit objection. In any case, the appellant having first lodged the claim petitions almost two years thereafter, principally, the "discovery rule" had no applicability to the facts of the case. The belated claims having arisen with respect to commercial dispute and not in respect of any tortuous liability of the Railways, no benefit can be drawn by the appellant on account of its presumed ignorance, if any, of the Circular of the Railway Board dated 14.03.1983. Any dispute as to rates should have been raised promptly either when the contract was being executed or when it had been performed, and in any case within limitation.
16. That apart, the communications entered into between the parties do not constitute "sufficient cause" as to the delay. Even according to the petitioner's own case, in November 2005 the appellant became aware, both as to the Railway Board's circular as also the limitation to file the claim petitions having expired or about to expire. Still, no claim petition was instituted at that time. It may have been different if the appellant had promptly filed the claim petitions in the year 2005 itself. However, it filed the claim petitions two years thereafter. That diluted the explanation furnished, beyond the level of acceptance by the Tribunal.
17. Also, the communications that may have been made by the Railways may only be relevant as to the rights of the parties. However, the remedy to claim those rights came to an end upon expiry of period of limitation statutorily prescribed. The mere filing of non-statutory representations that too with respect to a money claim, cannot constitute "sufficient cause" to explain the delay.
18. On merits, the explanation offered is of ignorance of a circular issued by the Railway Board dated 14.03.1983. That itself puts the case of the appellant on a very weak footing inasmuch as once the existence of such an old circular is not denied, it was for the appellant-corporation to have been diligent and to have claimed its rights under that circular, at the relevant time i.e. while entering into the contract for transportation of goods. The contract having been fully performed and payments having been made at the rates agreed between the parties, the mere existence of a rate Circular, does not render any ex-facie illegality as may give rise to a claim by the appellant.
19. In any case, once it had entered into a commercial contract with the Railways for transportation of certain goods wherein the rate for payment was admittedly agreed upon, then, even assuming that the appellant gained knowledge of the aforesaid circular in the month of Nov, 2005, it is doubtful if it could claim any new or other rights there under contrary to the specific freight contract entered into by it. A duly executed contract, fully performed may not be altered or repudiated, even in part, after its due performance.
20. Also, the appellant-corporation having paid the price upon successful transportation of the goods, the contract stood fully performed, to the full satisfaction of the contracting parties. Merely because the appellant-corporation may have subsequently gained knowledge of a pre-existing circular with respect to freight tariff charges, the same could not be relied to repudiate or alter the terms of a duly performed commercial contract. Audit objections sometimes have an unintended deleterious side-effect on the otherwise normal functioning of corporations and government departments and agencies, leading to avoidable litigation that get instituted, perhaps with the only object to give a decent burial to the audit report that may otherwise have been inconvenient to deal with, administratively, keeping in mind the presumption of unrealized monetary gain or avoidable loss to the organization (subject of audit), they seek to invariably raise.
21. Consequently, for that reason also, the Railway Claims Tribunal has not made any mistake in rejecting all the claim petitions as time barred. The present appeals lack merit and are accordingly dismissed.
22. No order as to costs.
Order Date :- 1.11.2018
Gaurav Pal
