Rashmi Metaliks Limited vs Union Of India & Ors
2022 Latest Caselaw 6540 Cal

                      IN THE HIGH COURT AT CALCUTTA
                      CONSTITUTIONAL WRIT JURISDICTION
                               APPELLATE SIDE


                            W.P.A. 14067 of 2012



                           Rashmi Metaliks Limited

                                     Versus

                             Union of India & Ors.



For the Petitioners      : Mr. S.N. Mookherjee, learned Advocate General
                          Mr. Abhratosh Majumder, Ld. Sr. Adv.
                          Mr. Paritosh Sinha, Adv.
                          Mr. Amitava Mitra, Adv.
                          Ms. Sumita Shaw, Adv.
                          Mr. Ayan Banerjee, Adv.
                          Ms. Antara Choudhury, Adv.


For the UOI              : Mr. Ajay Krishna Chatterjee, Ld. Sr. Adv.
                          Mr. Subit Majumder, Adv.


Hearing concluded on     : 26.08.2022

Judgment On              : 14.09.2022


Saugata Bhattacharyya, J.:

1.    The writ petition has been preferred by Rashmi Metaliks Ltd. (hereinafter
referred to as the "petitioner company"), inter alia, questioning the system
introduced by the Senior Divisional Operations Manager, South Eastern
Railway, being the respondent no. 5 for loading the rakes at the private siding

of the petitioner company situates between Barajamda and Barbil stations for the period from 1st February, 2008 till 8th July, 2008 vide order of the said respondent no. 5 which was notified by the Station Manager, Barajamda. The petitioner company has also challenged letters dated 22 nd May, 2009; 8th July, 2009; 7th June, 2012; 19th November, 2009 and 9th February, 2010 whereby requests of the petitioner company for refund of demurrage charge was spurned.

2. Petitioner company provided infrastructure at its private siding situates on its land between the rail stations Barajamda and Barbil for rake loading and the weighbridge of the said siding is installed near to the take-off point wherefrom main line starts. According to the petitioner company full rake cannot be accommodated between the weighbridge and the take-off point. The said infrastructure for rake loading has been provided by the petitioner company for loading iron-ore. Before 1st February, 2008 the petitioner company was required to load the rakes under the system which was based on certification by the Guard of the rake who remained present at the siding of the petitioner company while loading. The free time for such rake loading has been three hours meaning thereby if for loading a particular rake more than three hours is consumed by the petitioner company as per norms the petitioner company is required to pay demurrage charges.

3. It has been submitted by the petitioner company that on introduction of new system effective from 1st February, 2008 the loading completion time was to be reckoned on weighment of the last wagon of the rake. Due to introduction of the procedure for determination of rake loading time effective from 1 st February, 2008 the certification made by the Guard of the rake was not to be considered for determining such loading time. Along with loading of rake the process of weighment of wagon was included being part of loading time till the weighment of the last wagon of a rake.

4. The specific case of the petitioner company is on most of the occasions during the period from 1st February 2008 till 8th July 2008 rake loading was completed within free time of three hours but it was due to delay in weighment of wagons the petitioner company was unnecessarily penalized on levy of demurrage charges. While formulating the case on behalf of the petitioner first by Mr. S.N. Mookherjee, learned Advocate General and subsequently by Mr. Abhratosh Majumder, learned senior advocate, have heavily relied upon a letter dated 9th February, 2010 issued by the Deputy Chief Operations Manager (I&S) of South Eastern Railway being the respondent no. 7 which is annexed to the writ petition at page 63. It has been submitted that in support of the case of the petitioner company it has been admitted that empty rake is attached with the engine and after completion of loading the engine draws the loaded rake towards weighbridge for weighment. Since the siding has got in-motion weighbridge located at the mouth of the siding very close to the take-off point and the segment of track between the weighbridge and take-off point is grossly inadequate for accommodating even one BOXN wagon, complete weighment of the rake is thus possible only when rake moves towards Barajamda station after getting the line clear. It has been indicated in the said letter dated 9 th February, 2010 by the respondent no. 7 since the weighment of rake is not possible without physical movement of the rake on the main line towards Barajamda station, the Chief Operations Manager directed that time certified by the concerned Guard would be accepted as loading completion time and division was advised accordingly.

5. Taking cue from the content of the said letter dated 9 th February, 2010 it has been specifically submitted on behalf of the petitioner company that though rake loading on most of the occasions during the period from 1 st February, 2008 till 8th July, 2008 by the petitioner company was complete within the free time it was due to delay in weighing the rakes due to want of line clear signal from Barajamda station, the petitioner company could not complete the entire loading process within the free time of three hours

resulting in levy of demurrage charges to the tune of Rs.1,43,55,000/- for the said period from 1st February, 2008 to 8th July, 2008 as per the system introduced vide communication dated 31 st January, 2008.

6. On finding the fact that the petitioner company was being unnecessarily penalized on levy of demurrage charges in a routine manner due to introduction of the aforesaid system from 1 st February, 2008 the petitioner company first made applications for waiver of demurrage charges and one of such applications for waiver dated 9 th March, 2008 is at page 47 of the writ petition. In addition thereto on behalf of the South Eastern Railways applications for waiver made by the petitioner company are annexed to its affidavit-in-opposition, from page 71 to 77. On such applications for waiver total Rs.16,24,200/- was waived from the demurrage charge of Rs.1,43,55,000/- levied on the petitioner company for the said period from 1 st February, 2008 to 8th July, 2008.

7. Ultimately, as it has been submitted on behalf of the petitioner company that the respondent authorities rolled back from the system which was introduced from 1st February, 2008 for determination of rake loading time vide order dated 9th July, 2008 wherein it was notified that in respect of siding of the petitioner company and all sidings who opted for TILES, time certificate by the Guard of concerned rake would be accepted as loading completion time for the purpose of computing free time and calculation of demurrage. Such order dated 9th July, 2008 issued by the concerned authority of South Eastern Railway re-introduced the system for computation of rake loading time which was prevalent prior to 1st February, 2008. According to the petitioner company such rolling back vide order dated 9 th July, 2008 leads to admission on the part of the South Eastern Railway authorities that the system introduced for the period from 1st February, 2008 till 8th July, 2008 was faulty which resulted in levy of exorbitant amount as demurrage charges which the petitioner company had to pay during the said period. It has also been contended on

behalf of the petitioner company that such rolling back order dated 9 th July, 2008 coupled with the letter dated 9th February, 2010 issued by the respondent no. 7 established the fact that the concerned authority of the South Eastern Railway realized that system of computation of rake loading time which was introduced on and from 1 st February, 2008 compelled the petitioner company to pay demurrage charges in excess for the reasons beyond the control of the petitioner company. On issuance of rolling back order dated 9 th July, 2008 the petitioner company changed its perception and realised that it was not the case of waiver of demurrage charges in terms of the scheme of waiver issued vide order dated 11th October, 2004 rather the petitioner company thought it fit to make prayer for refund of entire demurrage amount which it had to pay during the period from 1 st February, 2008 to 8th July, 2008 when the system introduced by the concerned authority of South Eastern Railway for determination of rake loading time was in vogue. Accordingly, the petitioner company made representations dated 15 th June, 2009; 16th September, 2009; 23rd March, 2011; 25th April, 2012 and demand justice dated 2nd June, 2012. However, the prayer of the petitioner company for refund of demurrage charges as made in the aforesaid representations has been spurned by the concerned respondent authorities which triggered the present writ petition.

8. In support of the case made out by the petitioner company reliance has been placed on the following judgments: -

i) 1993 Supp (4) SCC page - 484, paragraph 11 (Union of India And Others. Vs. Alang Ship Breakers Pvt. Ltd., Bhavnagar And Others);

ii) (2020) 19 SCC page - 241 (Popatrao Vyankatrao Patil vs. State of Maharashtra And Others);

9. Mr. Ajay Krishna Chatterjee, learned senior advocate representing the South Eastern Railways has submitted that the contention of the petitioner

company on letter dated 9th February, 2010 of the respondent no. 7 should not be construed as admission of liability of the respondents to refund the demurrage charges paid by the petitioner company due to faulty system introduced by the respondents for the period from 1 st February, 2008 to 8th July, 2008 rather the said rollback order dated 9 th July, 2008 at best can be construed to the extent that the system of computation of rake loading time prevalent from 1st February 2008 to 8th July, 2008 could not yield expected result. According to the respondents, as the system of computation of rake loading time could not be made operational as it was expected by the authorities, rollback order was issued on 9 th July, 2008 reintroducing the system of computation of rake loading time as it existed prior to 1 st February, 2008. Furthermore, it has also been pointed out that since the method of computing rake loading time, as it was followed for the period from 1 st February, 2008 to 8th July, 2008, has been a policy decision the same cannot be questioned by the petitioner company by filing present writ petition. It has been contended that the petitioner company prayed for waiver of demurrage charges as per the Waiver Scheme and in consideration of such waiver applications the concerned respondent authority waived Rs.16,24,200/. Therefore, subsequently the petitioner company is estopped from making prayer for refund of entire amount of demurrage they paid during the period from 1st February, 2008 to 8th July, 2008.

10. Mr. Chatterjee has also submitted that number of loaders deployed for loading rakes during the aforesaid period by the petitioner company cannot be ascertained from the writ petition and in absence of such particulars it would not be proper to proceed on the basis of delay made in weighing the rakes as there was no line clear signal from the nearby station as it has been indicated in the said letter dated 9th February, 2010 issued by respondent no. 7. It has been submitted by drawing attention of this Court to paragraph 7 of the affidavit-in-opposition wherein a table has been inserted indicating the detention time taken by the petitioner company in the year 2008. According to

the South Eastern Railway authorities it is not due to introduction of system with effect from 1st February, 2008 the petitioner company had to pay excess demurrage charges. The detention time taken by the petitioner company in the month of January 2008 was also quite high when such revised method of determining rake loading time was not introduced. Therefore, it has been submitted on behalf of the respondents that beyond the period from 1 st February, 2008 till 8th July, 2008, the petitioner company was levied demurrage charges for taking time to load rakes beyond the free time of three hours. It is submitted that no system is fully proof, therefore, for levy of demurrage charges during the aforesaid period only the method of computation of rake loading time should not be questioned. It is also urged on behalf of the respondent authorities basically the relief which has been sought for by the petitioner company is money claim. Therefore, in absence of specific admission of liability by the respondent authorities the relief as sought for by the petitioner company to the extent of refund of demurrage charges cannot be entertained and according to the South Eastern Railway authorities the letter dated 9th February, 2010 of the respondent no. 7 is not the admission of liability. Lastly, it has been submitted on behalf of the South Eastern Railway authorities that the present writ petition claiming refund of demurrage may not be entertained on availability of alternative remedy under the Railway Claims Tribunal Act, 1987. According to the respondent authorities if the petitioner company has any grievance relating to payment of demurrage charges the appropriate course left open is to approach the Railway Claims Tribunal. In support of aforesaid submissions made on behalf of the South Eastern Railway authorities reliance has been placed on the following judgments:-

i) AIR 1965 (SC) page - 1740; paragraphs - 5, 6 and 9 (Suganmal vs. State of Madhya Pradesh & Ors .);

ii) (1998) 4 SCC page - 539; paragraph 10 (Punjab Urban Planning & Development Authority vs. Shiv Saraswati Iron & Steel Re- Rolling Mills);

11. In consideration of the submissions made on behalf of the parties it appears that the petitioner company had to pay demurrage charges to the tune of Rs.1,43,55,000/- for the period from 1st February, 2008 till 8th July, 2008 when the system of computation of rake loading time consumed by the petitioner company in terms of order dated 31 st January, 2008 was in force. It further appears that prior to 31st January, 2008 the owners of private sidings who were engaged in loading of rakes like petitioner company had to load the rake within the free time of three hours to avoid payment of demurrage charges and for computing rake loading time certification by the Railway Guard attached to the rake was the basis. Computation of rake loading time based on certification of Railway Guard was re-introduced on and from 9 th July, 2008. However, during the period from 1st February, 2008 till 8th July, 2008 the concerned authority of South Eastern Railways introduced a system whereby rake loading time was required to be computed from the time of placement of rake till weighment of the last wagon of the rake. Due to such system being introduced for the aforesaid period vide order dated 31 st January, 2008 two components were included for determination of rake loading time. One is the time consumed by the owner of the siding (petitioner company) for loading the rake from the point of placement of rake till completion of loading and other is weighment of wagons of the rake with the help of in-motion weighbridge located at the mouth of the siding near to the take-off point. In consideration of the letter dated 9th February, 2010 of the respondent no. 7 it is felt that the track in between weighbridge and take-off point of the siding of the petitioner company is not adequate to accommodate one BOXN Wagon. Therefore, unless and until rake moves towards Barajamda station on getting the line clear the weighment of wagons cannot be made complete. A specific case has been made out by the petitioner company on the strength of the letter dated 9 th February, 2010 of the respondent no. 7 that due to want of line clear signal the weighment of rakes could not be made within free time of three hours and the petitioner company had to wait till line clear signal was provided which

ultimately facilitated rakes to move towards main line from the siding of the petitioner when the in-motion weighbridge located at the mouth of the siding could weigh the wagons of rakes. Unless and until, as per the system which was in force from 1st February, 2008 to 8th July, 2008, last wagon is weighed loading cannot be considered as complete.

12. In view of the procedure of computation of rake loading time as introduced vide order dated 31st January, 2008 this Court is tasked to ascertain the loading time of rakes consumed under the system by the petitioner company. Since as per old system prior to 31 st January, 2008 as well as the system which was reintroduced on and from 9 th July, 2008 for computation of demurrage charges for taking time beyond the free time of three hours rake loading time as certified by the Guards was needed to be reckoned whereas under the system as per the said order dated 31 st January, 2008 along with rake loading time weighment time of wagons being another component which was added to the system. Taking note of this feature of the system as per order dated 31st January, 2008 this Court directed the concerned authorities of South Eastern Railways to produce the records from where it can be ascertained the time taken for loading the rakes by the petitioner during the aforesaid period and the time consumed for weighing the wagons.

13. The learned advocate representing respondent authorities requested this Court that since the issue pertains to the year 2008 by way of illustration permit the respondent authorities to produce the records relating to the month of April 2008. Acceding to such request made on behalf of the respondent authorities this Court permitted the respondent authorities to produce the documents for the month of April 2008 which would show separately the time consumed for loading the rakes and for weighing the rakes. Subsequently on 26th August, 2022 a chart has been produced before this Court from where it can be deciphered the time consumed by the petitioner for loading the rakes and the time required for weighing the rakes for the month of April 2008. Such

chart produced before this Court on 26th August, 2022 is taken on record. On placing such chart it has been submitted on behalf of the respondent authorities that in the month of April 2008 total 37 rakes were loaded at the siding of the petitioner company though paragraph 5 of the affidavit-in- opposition indicates 36 rakes were loaded and out of total number of 37/36 rakes loaded at the siding of the petitioner according to the respondents while loading 23 rakes petitioner company consumed more than free time of three hours. But on perusal of such chart it appears that while loading those 23 rakes the time consumed as considered by the Railway Authority was inclusive of time taken for loading of rakes and time taken for weighment of rakes whereas the loading of rakes on most of the occasions was within the free time of three hours.

14. This Court was inclined to consider similar chart which was produced before this Court in respect of April 2008 for other months during the period from 1st February, 2008 to 8th July, 2008 but it was submitted on behalf of the South Eastern Railway authorities that since the issue pertains to the year 2008 the respondents were finding it difficult to produce such chart in respect of rest of the months. In view of such submissions being made on behalf of the South Eastern Railway authorities this Court has to proceed on the basis of the chart produced for the month of April, 2008 by taking the same as an illustration while deciding the claim of the petitioner company for refund of demurrage charges which they deposited in terms of the computation made by the South Eastern Railway authorities on introduction of the system in terms of the order dated 31st January, 2008 which remained in force till 8 th July, 2008.

15. From the case made out by the parties it appears that before 31 st January 2008 and after 8th July 2008 petitioner company had to pay charge / demurrage charge based on time certified by the Guard accompanying the rakes meaning thereby as per rake loading time consumed by the petitioner

company demurrage charge was assessed without taking into consideration weighment time. Such weighment time was brought into the purview in assessing demurrage charge as per order dated 31 st January 2008. Weighment time can only be counted when the rake moves towards mainline through the in-motion weighbridge fitted at the mouth of the siding and such fact is corroborated from the letter of the respondent no. 7 dated 9 th February 2010. It also transpires from the said letter dated 9 th February 2010 that detention on account of weighment was started counting on petitioner company's account; therefore detention of rakes on account of weighment which could not be made complete since the rake was not permitted to move till line clear signal was provided depicts a situation which is beyond the control of the petitioner company and which was the reason for imposition of demurrage charge penalising the petitioner by the rigor of the said system which was prevalent from 1st February 2008 till 8th July 2008.

16. This Court on production of relevant records tried to enquire into the fact whether the petitioner company during the period from 1 st February 2008 till 8th July 2008 took more than free time of three hours in loading the rakes. Since the railway authority could only produce chart for the month of April 2008 Court on taking the same as an illustration finds that on most of the occasions though loading of rakes was complete within the free time of three hours but it was for the wighment of rakes petitioner company was considered to have taken more than the said free time resulting in imposition of demurrage charge. As it has been discussed above weighment of rakes depends upon the movement of rakes towards mainline through in-motion weighbridge on getting line clear signal, the delay caused due to weighment of rakes ought not to be attributable to the petitioner company.

17. After rolling back on issuance of the order dated 9 th July 2008 to the previous system which was in force prior to 31 st January, 2008 it was felt by the petitioner company that waiver of demurrage charge under the waiver

scheme was not the appropriate remedy and accordingly representations were made on 15th June, 2009 and 16th September, 2009 demanding refund of wrongly levied demurrage charges which the petitioner company had to pay during the period when the order dated 31st January, 2008 remained in force. In addition thereto petitioner company also preferred a representation dated 20th May, 2008 pointing out flaw in the system of determining demurrage charge as per said order dated 31st January, 2008 specifically objecting the method applied by the railway authority which rested on line clear signal and the same is beyond control of the petitioner company. Petitioner had made specific case before the railway authority that it was due to delayed line clear signal entire process of rake loading could not be made compete within the free time of three hours but the petitioner company had to pay demurrage charge in spite of loading the rake within such free time.

18. This Court has been persuaded by the learned counsel representing the petitioner company to proceed on admission of liability on the basis of contents of the letter dated 9th February, 2010 of the respondent no. 7 and ratio of the judgment of Popatrao (supra) gets attracted as it has been submitted. On the other hand sum and substance of the argument advanced on behalf of the railway authority is that the said letter dated 9 th February, 2010 at best can be construed as admission of system introduced vide order dated 31 st January, 2008 which could not yield expected result resulting in rolling back order dated 9th July, 2008. It is contended that such rolling back order read with letter dated 9th February 2010 of the respondent no. 7 if construed as weakness in the system introduced by the respondent authority same ought not fortify the case of the petitioner company as decided in Punjab Urban Planning (supra).

19. However this Court is not required to decide the issue simply on the parameter whether the said letter dated 9th February, 2010 is to be construed as admission of liability by the railway authority or not after production of records before this Court in the form of chart which reveals that on most of the

occasions petitioner company completed rake loading within free time of three hours but weighment of rakes could not be made for the reasons beyond the control of the petitioner company as discussed above. This Court even after granting opportunity to the railway authority to produce similar charts for other months during the period from 1st February, 2008 till 8th July, 2008 as it has been produced for the month of April 2008 but the respondents have expressed inability as a result whereof the said chart of April 2008 is taken as an illustration while deciding claim of the petitioner company for refund of demurrage charge which it had paid during the period from 1 st February, 2008 till 8th July, 2008.

20. It further appears that point of maintainability of this writ petition on the ground of availability of alternative remedy in consideration of section 13 of the Railway Claims Tribunal Act, 1987 before the Claims Tribunal as urged on behalf of the railway authority, is misplaced argument. Section 13(1)(b) confers jurisdiction on Claims Tribunal in the event of claims for refund of freight. 'Freight' is defined under section 2(17) of the Railways Act, 1989 whereas 'demurrage' is defined under section 2(11). Therefore the term 'demurrage' cannot be equated with the term 'freight'.

21. Accordingly concerned respondent authorities are directed to identify during the period from 1st February, 2008 till 8th July 2008 on which dates and occasions petitioner company consumed more than free time of three hours to complete loading of rakes (excluding the time consumed for weighment of rakes) on consideration of records and charts, one of which for the month of April 2008 has been produced before this court. Upon identifying those dates and occasions when petitioner company took in excess of free time in loading rakes only the respondent authorities are directed to recalculate demurrage charge for the aforesaid period. It is made clear that demurrage charge cannot be counted on account of petitioner company on those occasions when petitioner company completed rake loading within free time of three hours but

it was due to weighment of rake free time was exceeded. Such recalculation shall be completed by the concerned respondent authority within a reasonable time but not later than twelve weeks from the date of communication of this order and determine the amount accordingly which was paid in excess by the petitioner company towards demurrage charge during the period from 1 st February, 2008 till 8th July, 2008 and release the same in favour of the petitioner company on adjusting Rs. 16,24,200/- which has been waived, within a period of four weeks thereafter. On recalculation of demurrage charge as per above direction a formal order shall be passed by the concerned railway authority containing the basis of such recalculation and same shall be communicated to the petitioner company within one week from the date of recalculation.

22. However interest as claimed by the petitioner company is not allowed since at the first instance petitioner company prayed for waiver of demurrage under the waiver scheme against payment of Rs. 5700000/- (rupees fifty seven lacs) approximately towards demurrage charge and the railway authority waived Rs. 16,24,200/-.

23. With the above observations and directions writ petition stands disposed of. However, there shall be no order as to costs.

24. Urgent photostat certified copy of the order, if applied for, be given to the parties, upon usual undertakings.

(Saugata Bhattacharyya, J.)