Bombay High Court
Union Of India vs M/S. Larsen & Tourbo Ltd on 28 September, 2012
Bench: M.N. Gilani
1 fa290.97
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
FIRST APPEAL No.290/1997
Union of India,
owing South Central Railway,
represented by General Manager,
South Central Railway, Rail Nilayam,
Secunderabad, Andhra Pradesh. ..... Appellant.
..Versus..
M/s. Ultratech Cemco Ltd.,
Awarpur Cement Works,
Awarpur, Distt. Chandrapur. .....Respondent.
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Mr. P.S. Lambat, Adv. for appellant.
None for the respondent.
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CORAM : M.N. GILANI, J.
DATED : 28/9/2012.
ORAL JUDGMENT.
1. This appeal is arising out of the order dated 19/12/1996
passed by Railway Tribunal, Nagpur Bench, Nagpur in Claim Application
No.3/OA-III/RCT/NGP/95 whereby the appellant was directed to refund
an amount of Rs.6,64,891/- received towards freight charges together with
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proportionate costs of the litigation.
2. The respondent operates cement manufacturing plant at
Awarpur, Distt. Chandrapur. It has a private siding to dispatch train loads
of cement to various destinations. It had booked three rakes of cement on
14/1/1994 for carrying to Shakurbasti a station of northern railway. Rakes
were booked via Ballarshah - Bhusawal - Itarasi and freight was paid
accordingly, although Ballarshah - Nagpur - Itarasi is the shortest route.
The total freight charges for carrying it via longer route was
Rs.50,02,897/- whereas the freight charges for shortest route was
Rs.43,38,006/-. It was then noticed that the rakes were carried via
shortest route although the freight charges were collected for the longer
route i.e. Ballarshah - Bhusawal - Itarasi route. For that reason the
respondent claimed refund of Rs.6,64,891/-.
3. The appellant filed written statement. It is admitted that the
rakes were booked and freight charges were collected which is payable for
the longer route i.e. Ballarshah - Bhusawal - Itarasi route. It is also
admitted that actually the goods were carried via the shortest route.
However, it is denied that the respondent is entitled to claim any refund of
the amount only for this reason. According to them, the central
Government has notified a Rationalized Scheme which directs the railway
administration to carry certain class of goods by such routes though such
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routes are not shortest routes. Thus, there was no irregularity in collecting
the freight charges which was consistent with the Rationalization Scheme
and practice followed by them.
4. The learned Tribunal observed that it is not fair and just to
charge freight on account of operational convenience via longer route and
then carrying the traffic via shortest route. After relying upon the
provisions of Rule 125(1)(h) of the Goods Tariff Part II, Volume 1, the
Tribunal held that recovering freight charges for carriage of goods via
longer route will be valid and legal only when goods are actually carried
by that route, however, when the goods are carried via shortest route,
freight charges should also be collected accordingly and excess amount, if
collected, be refunded.
5. Mr. Lambat, the learned counsel appearing for the appellant,
criticized the approach of the learned Tribunal. According to him, tariff is
made applicable as per the Rationalization Scheme. The freight charges
are collected as per the routes specified under the scheme, may be the
longer route. For operational convenience if goods are carried through a
shortest route, the consignor should have no concern with the same.
According to him, it is not the business of the consignor to check or verify
as to by what route goods were transported particularly, when the freight
charges have been calculated in terms of the route specified under
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Rationalization Scheme.
6. Mr. Pillai, the learned counsel appearing for the respondent,
supported the order impugned and relied upon the Single Judge decision
of this court in F.A. No.280/1997 decided on 16th of December 2009 and
also in F.A. No.271/1997 decided on 1st of July 2010.
7. Point which arises for my consideration is : whether the
learned Tribunal was justified in directing the refund of excess freight charges
amounting to Rs.6,64,891/- ?
8.
Facts which are relevant to decided the controversy involved
in this appeal are not disputed. It is logical to say that the freight charges
are recoverable upon the route specified under the Rationalization Scheme
irrespective of the fact that it is a longer route. Even the respondent did
not dispute the right of the appellant to recover freight charges depending
upon the route specified under Rationalization Scheme, may be it is a
longer route. The spine of controversy is after having recovered freight
charges based upon the fact that goods would be carried via longer route
specified under Rationalization Scheme, when may be for operational
convenience goods are carried through shortest route, could it be open for
the appellant to refuse to refund the excess of freight charges. This court
(Coram : Shri A.P. Bhangale, J.) dealing with this issue made reference to
section 72 of the Contract Act and observed thus :
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"Thus, bearing in mind the rule of equity underlying the above
statutory provision of Section 72 of the Contract Act, the contentions
raised on behalf of the appellant cannot be accepted as it would not
be just and proper to reverse the findings recorded by the Tribunal
which are based on proper appreciation of legal and equitable
principles. Railway Administration cannot be made an exception to
the principle of equity. It cannot charge more than what was just
and reasonable and unduly enrich itself."
9. I do not find any ground to deviate from the conclusion
arrived at in the case supra. Before the Tribunal circular dated 27/3/1987,
issued by the Railway Board, was relied upon. It provided that in the
event the goods are booked by the Rationalization Scheme to be carried by
shortest/cheapest route, freight charges may be retained by the carrier and
balance be remitted. On behalf of the appellant it was pointed out that
this circular has been withdrawn. In my view the effect of withdrawal of
the circular would not mean to say that the consignor has no right to claim
refund of the excess freight charges. What was sated in the circular dated
27/3/1987 was based upon the 'principle of equity' and 'unjust
enrichment'. The Rationalization Scheme and the routes specified therein
are binding upon the consignor in the sense that consignor cannot insist
upon the railway to carry the goods via shortest route. However, when the
freight charges are collected for longer route specified under
Rationalization Scheme, and goods are actually carried via shortest route,
retaining the excess fare would be wholly unfair and unjust. In that view
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of the matter, I do not find any merit in this appeal.
Appeal is dismissed with no order as to costs.
JUDGE
Tambaskar.
