Karnataka High Court

South Central Railway vs The West Coast Paper Mills Ltd on 13 December, 2021

Bench: S.Sunil Dutt Yadav, S Rachaiah

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             IN THE HIGH COURT OF KARNATAKA
                       DHARWAD BENCH
        DATED THIS THE 13TH DAY OF DECEMBER, 2021
                           PRESENT
       THE HON'BLE MR.JUSTICE S. SUNIL DUTT YADAV
                             AND
            THE HON'BLE MR.JUSTICE S. RACHAIAH
        WRIT APPEAL No.100068/2015 [GM-RES]

BETWEEN:

1.   SOUTH CENTRAL RAILWAY
     REPRESENTED BY THE CHIEF,
     COMMERCIAL MANAGER (FM),
     GENERAL MANAGERS OFFICE,
     COMMERCIAL BRANCH, RAIL NILAYAM,
     SECUNDERABAD-500071

2.   UNION OF INDIA
     MINISTRY OF RAILWAYS,
     REPRESENTED BY THE SECRETARY,
     RAILWAY BOARD, RAIL BHAVAN,
     NEW DELHI-110001

3.   THE CHIEF COMMERCIAL MANAGER (FM)
     SOUTH WESTERN RAILWAYS,
     HEAD QUARTERS OFFICE,
     COMMERCIAL BRANCH,
     III FLOOR, LAKSHMI BALAKRISHNA,
     SQUATE, STATION ROAD, HUBLI,
     PRESENTLY AT HEAD QUARTERS
     OFFICE SOUTH WESTERN RAILWAYS,
     GADAG ROAD, HUBLI.                  ... APPELLANTS

(BY SRI: AJAY U PATIL, ADVOCATE)
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AND:

THE WEST COAST PAPER MILLS LTD
REP. BY ITS ASST. VICE PRESIDENT
(RAWMATERIAL), HAVING ITS REGISTERED OFFICE
AT P.B.NO.5, BANGUR NAGAR,
DANDELI-581 325
UTTAR KANNADA, KARNATAKA.                         ...RESPONDENT

(BY SRI. V.P.KULKARNI & SRI. GIRISH A. YADWAD, ADVOCATES)


     THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT ACT, 1961, PRAYING TO A) SET
ASIDE THE ORDER DATED 12/12/2014 ALLOWING THE
W.P.NO.16501/2006 (GM-RES) PASSED BY THE LEARNED
SINGLE JUDGE B) DISMISS THE W.P.NO.16501/2006 BY
ALLOWING THE APPEAL.

     THIS WRIT APPEAL COMING ON FOR FINAL HEARING THIS DAY,
S. SUNIL DUTT YADAV. J, DELIVERED THE FOLLOWING:

                          JUDGMENT

The petitioner who is the respondent in the present

proceedings had filed Writ Petition No.16501/2006 (GM-RES)

seeking to set aside the communication/order dated 15.06.2006

vide Annexure-V and the order dated 01.08.2006 vide

Annexure-Y and consequent demands on the basis of minimum

weight condition under the letter of respondent No.3 vide

Annexures-AC, AD, AE, AF, AG and AH respectively and had

called in question the resultant appropriation of the amounts due

to the petitioner from the respondents and for quashing of such

demand.

2. The parties are referred to by their rank before the

learned Single Judge in the Writ Petition, for the purpose of

convenience.

3. Writ Petition No.16501/2006 came to be allowed on

12.12.2014 and the demand at Annexures-AC, AD, AE, AF, AG

and AH were quashed and there was a direction that the amount

due to the petitioner was to be released within four weeks. As

against such order, the present writ appeal is filed by the

respondents - Union of India, South Central Railway and Chief

Commercial Manager, South Western Railway.

4. The facts that are made out are that the petitioner is

the manufacturer of paper and other paper products and its

factory is situated at Dandeli. It is stated that the petitioner

procured the raw materials from Markapur Road, Cumbum and

Ongole in the State of Andhra Pradesh, which raw materials are

transported through Railway Wagon, and the Railways collect the

freight charges.

5. It is made out from the facts that during the period

from January 1998 to June 1999, the petitioner had moved the

goods in 1068 Wagons consisting of timber waste from Cumbum

Station, 618 Wagons from Markapur Road to Dandeli, totaling to

1686 Wagons.

6. It is the assertion of the respondents that the freight

that was collected at the Railway Loading Station was without

noticing that in respect of eight-wheeled box open Wagons ought

to be calculated at two and half times of four wheeler wagons.

7. It is stated that the petitioner approached the

Railway Rates Tribunal at Chennai, (hereinafter 'R.R.T.' for

short) in Complaint No.3/2001 which came to be disposed off on

22.12.2005 calling in question the demand of Rs.52,44,859/-

raised on the movement of timber waste between January 1998

to June 1999 by calculating the freight charge on the basis of

minimum weight condition of 437.5 quintals. The said complaint

was disposed off by the following conclusion in the form of

declaration at para-29 of the order, which reads as follows:-

"29. We declare that:

            (i)      The     objection       taken     by     the   Respondent
                    Railways    that     the       challenge        as   to   the
                    unreasonableness          of     the    minimum       weight
                    condition   at     2½     times        applicable    to   four
                    wheeled wagon cannot be gone into by the
                    Tribunal is overruled.


            (ii)     So far as the issue No.1 is concerned, fixing

the minimum weight condition over and above 350 quintals would be unreasonable.

(iii) So far as the issue Nos.2 & 3 are concerned, the minimum weight condition fixed at 350 quintals is just and reasonable and does not suffer any infirmity. However, the evidence available does not support the contentions of the Complainant that the minimum weight condition should be fixed at 320 quintals per wagon.

(iv) So far as the issue No.4 is concerned, since the dispute of demand raised relates to a period anterior to the date of complaint, but it is left open to the complainant to approach the competent authorities for appropriate relief as they may desire."

8. It is submitted that after the order of R.R.T. , the

respondent Authority while taking note of the conclusion by

R.R.T., quantified its claims at Rs.52,44,859/- taking note of the

finding at para (iv) of the order, wherein the R.R.T observed that

the dispute of demand raised related to the period anterior to

the date of complaint and it was left open to the complainant to

approach the competent authority for appropriate relief

regarding the same. This calculation of Rs.52,44,859/- was

arrived at by fixing the minimum weight condition of 462.5

quintals as per Annexure-AC. The rate was calculated at two

and half times the minimum weight of four-wheeler Wagons in

terms of Rule 164 (2)(i) of Goods Tariff No.44 Part I, Vol.1 of

IRCA.

9. The petitioner filed the writ petition seeking for the

relief as observed above, primarily being aggrieved by the

demand by the respondent Authority recalculating the freight

stated to have been made pursuant to the audit objection being

raised. It is stated that the tariff was demanded by recalculating

the weight. The booking staff at the Railway Loading Station

had erroneously computed the minimum weight condition for

box wagons at two times instead of two and half times of four

wheeler wagons.

10. The learned Single Judge by a detailed order looked

into all the aspects and has set aside the demand at

Annexures-AC, AD, AE, AG and AH and further directed that the

amount due to the petitioner was to be released forthwith.

11. The said order has been called in question by the

respondents contending that the order of learned Single Judge

cannot be sustained, as the learned Single Judge has failed to

take note of Section 44 of the Railways Act, 1989 which provides

that the Tribunal may fix such rates or charges as it considers

reasonable from any date, not being a date earlier to the date of

filing of the complaint. It is contended that the order of R.R.T.

which has been relied upon by the learned Single Judge was

misconstrued and the learned Single Judge has relied on the

conclusions of R.R.T that the minimum weight condition over and

above 350 quintals would be unreasonable, while not noticing

the conclusion at para (iv) as regards the issue No.4, wherein

the R.R.T. has observed that the dispute of demand relates to

the period anterior to the date of complaint and hence, it was

left open to the complainant to approach the competent

Authorities for appropriate relief. Accordingly, it is submitted

that the order of learned Single Judge was erroneous.

12. It is further submitted that the contention of

respondents that the freight collected by the booking staff was

due to clerical error, i.e. instead of calculating the freight

payable in terms of Rule 164 (2)(i) of Goods Tariff No.41 Part I,

Vol.1.

13. Learned counsel for the respondents on the other

hand would contend that the order of learned Single Judge is in

accordance with law and no grounds are made out for

interference with the findings. It is further submitted that the

learned Single Judge has dealt with all aspects and no grounds

for interference is made out.

14. It is also contended that there is an alternative

remedy available for the petitioner. By virtue of remedy

available under Section 13 of the Railways Claims Tribunal Act,

1987, the petitioner ought not to have approached the Writ

Court while seeking the remedy insofar as the demand raised by

the respondents.

CONSIDERATION:-

I. Alternative remedy under Section 13 of the Railways Claims Tribunal Act, 1987:-

15. Having heard both sides, at the outset, it needs to

be noticed that as regards the contention of alternative remedy

under Section 13 of the Railway Claims Tribunal Act 1987, it

ought to be noticed that Railway Claims Tribunal has power to

entertain the claims as envisaged under Section 13(1)(a)(i)(ii)

and (b) and under Section 13(1A), the Railway Claims Tribunal

exercises jurisdiction and powers in respect of claims, the

compensation payable under Section 124A of the Railways Act,

1989.

16. It must be noticed that in the present case, the

grievance of the petitioner is that the respondents had raised the

demands on the basis of audit report, which had pointed out

errors in demand of freight by the respondents. As regards such

grievance, on previous occasion, the R.R.T. has already passed

an order in Complaint No.3/2001. As against such finding of the

R.R.T, the petitioner has sought to assail the demand contending

that the demand raised by the respondents was in excess of

minimum weight condition of 350 quintals for timber waste

which was held to be unreasonable by the R.R.T. As regards

such legal grievance of the respondents, it cannot be held that

there was a remedy provided under Section 13 of the Railways

Claims Tribunal Act, 1987 which is apparent on a plain reading of

Section 13. The remedy under Sections 13 is limited to:

(a) claims for compensation 13(1)(a)(i) & (ii)

(b) claims for refund of fares under Section 13(i)(b)

(c) claims arising from untoward incidents as contemplated under Section 13(1A) of the Railway Claims Tribunal Act, 1987.

(d) Claims under Section 13(1B) as contemplated under Chapter-VII of the Railways Act 1989. Chapter-VII includes the claims under Section 36(c) which includes the complaints regarding levy charges, which are unreasonable.

However, the exercise of this power is limited to fixing the rate

or charge for a period 'not being a date earlier to the date of

filing of the complaint'. In the present case, the exercise is

undertaken in Complaint No.3/2001 of approaching the Railway

Rates Tribunal under Section 36(c) as regards the claims of

Railways of freight on the basis of two and half times of the

minimum weight for loading of open four wheeler Wagons.

17. The petitioner has obtained the partial relief in the

form of declaration that fixing the minimum weight condition

over and above 350 quintals as being unreasonable.

Subsequently, despite the order in Complaint No.3/2001, the

respondent Authorities have raised the claim of freight of

Rs.52,44,859/-. This claim is raised by calculation on minimum

weight of 437.5 quintals, which has been challenged by filing

Writ Petition No.16501/2006, contending amongst other grounds

that calculation on the basis of minimum weight condition over

and above 350 quintals is impermissible as already declared in

Complaint No.3/2001. Accordingly, the question of driving the

petitioner once again to approach the R.R.T. does not arise.

18. The scope of power of R.R.T cannot be said to cover

the redressal of grievance of the petitioner as made out in the

present case and accordingly, it cannot be said that Section 13

of the Railway Claims Tribunal Act, 1987 provides for a remedy.

Accordingly, in light of the above discussion, the contention of

respondents that the petitioner is required to approach R.R.T. is

devoid of merit and is rejected.

II. Finding of Railway Rates Tribunal regarding reasonableness of minimum weight condition in complaint No.3/2001.

19. Insofar as the other contentions of respondents are

concerned, it is to be noticed that R.R.T by its order in Complaint

No.3/2001 has recorded a finding that fixing of minimum weight

condition over and above 350 quintals would be unreasonable.

Though learned counsel for the respondents would contend that

by relying upon the conclusion at para (iv) that in light of

Section 44 of the Railways Act, 1989, the R.R.T. does not have

the power to fix the rate or charge for the period earlier to the

date of filing of the complaint, it ought to be noticed that the

power of R.R.T. to declare that certain rate to be unreasonable is

not taken away. The Apex Court in the case of Upper Doab

Sugar Mills Ltd. Shamli (U.P.) v. Shahdara (Delhi),

Saharanpur Light Railway Co.Ltd. Calcutta reported in AIR

1963, SC 217 while considering Section 41(1) of the earlier Act,

which corresponds to Section 36 of the Railways Act, 1989 has

concluded at para-18 as follows:-

"18. What the Tribunal has to do after a complaint is made is mentioned in Section 41(1) itself. It is said there that the Tribunal shall hear and decide the complaint. The complaint being that something is unreasonable all that the Tribunal has to decide is whether that thing is unreasonable or not. A finding that it is unreasonable does not involve any consideration or decision of what would flow from the finding. In other words, in making the complaint the complainant can ask only for a declaration that the rate or charge is unreasonable and it is only this declaratory relief which the Tribunal has been authorised to give. There is no provision that the Tribunal can also give a consequential relief."

20. Section 41(1) of the Railways Act 1890 has been

amended by Act 56 of 1949. There was an amendment again in

December 1957 by Act 53 of 1957, which reads as follows:-

"41(1) Any complaint that a railway administration

(a) is contravening the provisions of section 28, or

(b) it charging for the carriage of any commodity between two stations a rate which is unreasonable, or

(c) is levying and other charge which is unreasonable shall hear and decide any such complaint in accordance with the provisions of this Chapter."

21. Section 36 of Railway Act 1989 reads as follows:-

"36. Complaints against a railway administration.--Any complaint that a railway administration--

(a) is contravening the provisions of section 70; or

(b) is charging for the carriage of any commodity between two stations at a rate which is unreasonable; or

(c) is levying any other charge which is unreasonable, may be made to the Tribunal, and the Tribunal shall hear and decide any such complaint in accordance with the provisions of this Chapter."

22. On a comparison of Section 41 of the earlier Act and

Section 36 of the Railways Act 1989, the provisions being more

or less identical insofar as Section 41(1)(c) and 36(c), the

finding of Apex Court in para-18 would operate as regards the

finding to be made under Section 36(c). By virtue of the

observation of Apex Court, it cannot be said that R.R.T. has no

power to decide whether the fixation was unreasonable or not,

which could be made by way of declaratory relief, though no

consequential relief could be made. If that were to be so, the

finding of R.R.T. that fixing the minimum weight condition over

and above 350 quintals would be unreasonable was something

within the power of R.R.T.

23. It must also be noted that the order of R.R.T. has

not been called into question by the respondent Authority. In

fact, the respondent Authority has relied on the observation at

para (iv) of the order of R.R.T. and would also be bound by the

other observations of the same order which declares that fixing

of minimum weight condition above 350 quintals was

unreasonable. Such conclusion of R.R.T. has attained finality

between the petitioner and the respondents, as the respondents

have not challenged such conclusion. Upon such declaration by

R.R.T., further fixation to be made by the respondent Authority

ought to be in terms of such finding. The R.R.T. while raising

the demand has relied on minimum weight condition in excess of

350 quintals while calculating the dues at Rs.52,44,859/-, which

is impermissible.

III. Other findings

24. The learned Single Judge has adverted to the order

of R.R.T. while also noticing that R.R.T. had in its earlier

judgment in the case of The Orient Paper and Industries

Ltd., Brajrajnajar, Orissa v. The Union of India reported in

1982 RRT 283 has opined as follows:

"that the weight for charge should be either the actual weight of the estimated weight closely related to the actual weight that can be loaded in a wagon is a well settled and generally accepted rating principle. Taking into account the materials gathered from the various test weighments conducted by the Railways as also the one conducted under the directions of the Tribunal, as also the variety of the wood normally procured for the transportation by the complainant and the possibility of

achieving easily the minimum weight of 350 quintals when the other variety of wood of greater weight than the "Subabul' variety of softwood is transported, 350 quintals could reasonably and legitimately be considered and viewed as closely related to 324 quintals, which is the maximum that was considered to be loaded in the BCX/Box wagons and consequently charging on the basis of any weight beyond 350 quintals alone in our view would be unreasonable and unjustified."

25. If the judgment of R.R.T. in the case of Orient

Paper and Industries (supra) relates to a period prior point of

time, it could be stated that the same also ought to be taken

note of, which has again been reiterated by R.R.T. in Complaint

No.3/2001.

26. The learned Single Judge has also opined that R.R.T.

has taken a pragmatic view and arrived at the conclusion that

350 quintals fixed as minimum weight condition was reasonable.

27. The learned Single Judge has also opined that

though the demand was raised by respondent Authority as per

Rules, it was without consideration of the loading ability of the

Wagons, the goods transported and other relevant practical