Orissa High Court

M/S.National Aluminum Co. Ltd vs Union Of India on 18 January, 2023

       IN THE HIGH COURT OF ORISSA AT CUTTACK


                         FAO No.306 of 2022

(From the order dated 27th April, 2022 passed by the Technical Member,
Railway Claims Tribunal, Bhubaneswar Bench in M.A.No.27 of 2021)


M/s.National Aluminum Co. Ltd.               ......             Appellant


                                       Versus


Union of India                               .......            Respondent


Advocate(s) appeared in this case:-

 For Appellant            :        Mrs.Pami Rath, Advocate

 For Respondent           :        Ms.Babita Sahu, C.G.C.



             CORAM : JUSTICE B.P. ROUTRAY

                            JUDGMENT

th 18 January, 2023

B.P. Routray,J.

1. Present Appellant-NALCO (National Aluminum Company

Limited) is a Public Sector Undertaking Company. The Respondent-

Union is the Railways Administration i.e. East Coast Railway (ECoR).

2. Order dated 27th April, 2022 of the Railway Claims

Tribunal, Bhubaneswar Bench is impugned in the present appeal. In the

impugned order, learned Tribunal has refused to condone the delay in

presenting the application of the Appellant as not maintainable and

dismissed the claim.

3. NALCO booked consignments of private rail wagons

(rakes), Viz. BTAP, BTCS, BTPN for transportation by railways

between Visakhapatnam - Damanjodi and vice-versa. There are two

routes between the destination points, i.e. one route is KK Line and

another KR Line. KK Line is the shorter route and KR Line is the longer

route, and the difference is 100 Kms in distance between two.

According to NALCO, though the consignments were booked through

KR Line as per rationalization scheme, but in fact the railways hauled

the rakes through the shorter route and charged freight for longer route.

4. NALCO raised a claim for refund of surplus freight

charges, termed as overcharges, to the tune of Rs.63,55,93,751/-

received by Railways for the period from April, 2016 to March, 2021.

The claim application was filed under Section 16 read with Section 13

of the Railway Claims Tribunal Act, 1987 (hereinafter referred as 'RCT

Act') on 9th December, 2021, which was registered as O.A.Case No.27

of 2021 before the Railway Claims Tribunal, Bhubaneswar Bench.

Along with the claim application a petition for condonation of delay was

filed, since as per stipulation made under Section 17 of the RCT Act, it

is to be made within three years. For convenience, the relevant provision

under Section 17 is reproduced below:

"17.Limitation - (1) The Claims Tribunal shall not admit an application for any claim -

xxx xxx xxx

(c) under clause (b) of sub-section (1) of section 13 unless the application is made within three years from the date on which the fare or freight is paid to the railway administration:

xxx xxx xxx"

5. The objection was raised by Respondent-Railways before

the Tribunal to the effect that the mandatory notice required under

Section 106 of the Railways Act was not served by the Appellant before

filing of the claim application and in absence of such notice the claim

application is not maintainable, in addition to the prescription of

limitation of three years stated above. Section 106 of the Railways Act

is reproduced below:

"106. Notice of claim for compensation and refund of overcharge.-(1) A person shall not be entitled to claim compensation against a railway administration for the loss, destruction, damage, deterioration or non-delivery of goods carried by railway, unless a notice thereof is served by him or on his behalf,-

(a) to the railway administration to which the goods are entrusted for carriage; or

(b) to the railway administration on whose railway the destination station lies, or the loss, destruction, damage or deterioration occurs, within a period of six months from the date of entrustment of the goods.

(2) Any information demanded or enquiry made in writing from, or any complaint made in writing to, any of the railway administrations mentioned in sub-section (1) by or on behalf of the person within the said period of six months regarding the non-delivery or delayed delivery of the goods with particulars sufficient to identify the goods shall, for the purpose of this section, be deemed to be a notice of claim for compensation.

(3) A person shall not be entitled to a refund of an overcharge in respect of goods carried by railway unless a notice therefor has been served by him or on his behalf to the railway administration to which the overcharge has been paid within six months from the date of such payment or the date of delivery of such goods at the destination station, whichever is later."

6. The learned Tribunal while dealing with the prayer for

condonation of delay held that, since the basic norms stipulated in

Section 106(3) of the Railways Act has not been complied with by the

applicant the condonation application is not maintainable and

accordingly dismissed. Resultantly, the claim application was also

dismissed.

7. It is seen from the impugned order that the Tribunal while

dealing with the question of limitation has attracted the provisions of

requirement of sending mandatory notice prior to filing of the claim

application and mixed up both the issues to dismiss the limitation

petition as well as original application.

8. Mrs. Rath contends that the Tribunal has misconceived the

claim for refund of additional freight charges received by the railways

with the term 'overcharges' and in this regard she relies on a decision of

this Court reported in AIR 1997 Orissa 77 (Union of India and others

vrs. Steel Authority of India Limited).

9. The above referred case is involving similar issues where

SAIL filed a suit before the Sub-Judge, Rourkela praying for refund of

excessive charges received by the railways under the rationalization

scheme relating to the old Act, i.e. Indian Railways Act, 1890. Section

78-B of the old Act is same to the present Section 106 in the Railways

Act, 1989. This Court while deciding with the issue that, whether the

claim for refund of overcharge is maintainable for want of notice under

Section 78-B, have held that the claim is not one for 'overcharge' for the

simple reason that the goods were booked by a particular route and paid

the freight that was payable for that distance. The relevant observations

of this Court made in said decision are as follows:

"13. The respondent's claim for refund is based on the ground that though the goods were booked for being carried over the longer and dearer rationalized route, they were, in

fact, for a period of about nine months and a half carried over the shorter and cheaper route through it was charged and had paid the freight for the longer and dearer rationalized route. The claim in substance is for refund of the differential amount. The question, therefore, is whether or not this amount is "overcharge" as contended by the appellants.

13-A. the word "overcharge" has not been defined in the Act. Therefore, the common parlance meaning has to be taken to explain its meaning. In common parlance, the simple meaning of "overcharge" is anything charged in for a particular thing. Taking this to be the meaning of "overcharge", it has to be seen as to whether the claim of the respondent is or it not for refund of overcharge. Admittedly, the goods were booked for being carried over the rationalized route which covers a distance of 1082 kilometers. It is neither the respondent's case nor the appellants' case that what was charged towards freight was in excess of what was payable for the distance of 1082 kilometers. In other words, the respondent was not "overcharged" because no freight in excess of what was payable for 1082 kilometers was realized.

14. To appreciate the meaning of "overcharge", as illustration from the facts of the present case would, I feel, be appropriate Say. For example, 'A' had booked the coal for being carried by the shorter route covering a distance of 667 kilometers but freight was charged from him for the longer route covering a distance of 1082 kilometers. Here, since the coal was booked to be carried by the shorter route, freight ought to have been determined accordingly. So, any amount recovered from 'A' towards freight in excess of what was legally payable for the distance of 667 kilometers would be an 'overcharge' because what was recovered from him was over and above what was actually payable from the distance of 667 kilometers over which goods were booked. Alternatively, if 'a' had booked the goods over the longer route covering a distance of 1082 kilometers and freight was charged for such distance but carriage was over the shorter route covered distance of 667 kilometers, in such a situation, if 'a', on coming to know that though he had booked the goods to be carried over the longer route and had paid the freight accordingly yet as the goods were carried over the shorter route, claims for a refund, this claim would not be one for "overcharge" for the simple reason that he had booked the goods by a particular route and paid the freight that was payable for that distance. The claim of the respondent in the present case is of a like nature. Thus, under no stretch of

imagination can it be said that its claim is for refund of over- charge. The contention of the learned counsel for the appellants that the claim made by the respondent for refund of overcharge, therefore, must fail.

15. To put it differently, it is not the respondent's case that freight charged in excess of what was prescribed for a particular distance was recovered and that it wants refund of such excess charge. What in fact it claims is that the Railway Administration had collected such charges illegally and unreasonably because the goods booked over the longer route for which freight was paid were, in breach of the contract of carriage, carried over a shorter route and as such, it was entitled to a refund of the differential freight.

16. In view of the above finding that what was claimed by the respondent was not a refund of an overcharge, it follows that a notice under S.78-B(Sec.106 of the new Act) was not required to be served before filing the claim. The Tribunal was, therefore, right in entertaining the claim."

10. In view of the above, no second opinion can be there to

treat the claim of refund of additional freight charges beyond

'overcharges' and no prior notice under Section 106 of the Railways Act

is required to be sent. Undisputedly, no such notice has been sent by

NALCO as per the submissions made by Mrs.Rath in course of hearing

and the admitted fact remains that several intimations seeking refund of

such amount from the railways have been sent by NALCO in those

letters annexed to the claim application, as seen from the copy of the

claim application produced in course of hearing. So, no further

discussions on the facts of the present case is needed here on the

requirement of notice under Section 106.

11. The next question comes, whether the delay beyond three

years, as prayed in the limitation petition by NALCO before the

Tribunal, is liable to be condoned ? As stated earlier, the application

was for condonation of delay and the consideration before the Tribunal

in the impugned order was on the same question. The claim period is

extended from April, 2016 till March, 2031 and the claim application

was filed in December, 2021. Here, it needs to be mentioned that,

according to the Appellant Company, it had booked the consignment of

rakes from Visakhapatnam to Damanjodi and vice-verse and paid the

freight charges in the longer route according to the rationalization

scheme published in terms of Section 27-A of the Railways Act. It is

averred in the claim application at paragraph 7.6 and 7.10 that, the cause

of action though arose in the year 2016, but it was not within their

knowledge about such wrongful enrichment of the Railways by

collection of higher freight charges than payable, and they were

constantly pursuing the Respondent-Railways for disclosure of such

particulars again and again and ultimately the information could be

obtained at the later period of the year 2021. As a matter of condonation

of limitation under Section 5 of the Limitation Act, it is to be generally

considered in a liberal way depending on the facts of each case, as

propounded in several decisions of the Supreme Court. The Supreme

Court in the case of Esha Bhattacharjee v. Managing Committee of

Raghunathpur Nafar Academy and Others, (2013) AIR SCW 6158,

after referring to number of decisions, have culled out the principles as

follows:-

"15. From the aforesaid authorities the principles that can be broadly be culled out are:

(i) There should be a liberal, pragmatic, justice-oriented, non-pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice.

(ii) The terms "sufficient cause" should be understood in their proper spirit, philosophy and purpose regard being had to the fact that these terms are basically elastic and are to be applied in proper perspective to the obtaining fact-situation.

(iii) Substantial justice being paramount and pivotal the technical considerations should not be given undue and uncalled for emphasis.

(iv) No presumption can be attached to deliberate causation of delay but, gross negligence on the part of the counsel or litigant is to be taken note of.

(v) Lack of bona fides imputable to a party seeking condonation of delay is a significant and relevant fact.

(vi) It is to be kept in mind that adherence to strict proof should not affect public justice and cause public mischief because the courts are required to be vigilant so that in the ultimate eventuate there is no real failure of justice.

(vii) The concept of liberal approach has to encapsulate the conception of reasonableness and it cannot be allowed a totally unfettered free play.

(viii) There is a distinction between inordinate delay and a delay of short duration or few days, for to the former doctrine of prejudice is attracted whereas to the latter it may not be

attracted. That apart, the first one warrants strict approach whereas the second calls for a liberal delineation.

(ix) The conduct, behaviour and attitude of a party relating to its inaction or negligence are relevant factors to be taken into consideration. It is so as the fundamental principle is that the courts are required to weigh the scale of balance of justice in respect of both parties and the said principle cannot be given a total go by in the name of liberal approach.

(x) If the explanation offered is concocted or the grounds urged in the application are fanciful, the courts should be vigilant not to expose the other side unnecessarily to face such a litigation.

(xi) It is to be borne in mind that no one gets away with fraud, misrepresentation or interpolation by taking recourse to the technicalities of law of limitation.

(xii) The entire gamut of facts are to be carefully scrutinized and the approach should be based on the paradigm of judicial discretion which is founded on objective reasoning and not on individual perception.

(xiii) The State or a public body or an entity representing a collective cause should be given some acceptable latitude.

(xiv) An application for condonation of delay should be drafted with careful concern and not in a half hazard manner harbouring the notion that the courts are required to condone delay on the bedrock of the principle that adjudication of a lis on merits is seminal to justice dispensation system.

(xv) An application for condonation of delay should not be dealt with in a routine manner on the base of individual philosophy which is basically subjective.

(xvi) Though no precise formula can be laid down regard being had to the concept of judicial discretion, yet a conscious effort for achieving consistency and collegiality of the adjudicatory system should be made as that is the ultimate institutional motto.

(xvii) The increasing tendency to perceive delay as a non- serious matter and, hence, lackadaisically propensity can be exhibited in a non-challant manner requires to be curbed, of course, within legal parameters."

12. Moreover, in the case at hand it is seen that the cause of

action regarding payment of excessive freight charges for the longer

route were paid and continued to be paid till March, 2021. According to

the statements appended to the claim application for the aforesaid

period, prima facie, the same is quite candid. In such case, where the

cause of action continues on repetition, in the opinion of this Court, the

period, if any, beyond three years from the date of filing of the claim

application is to be condoned and the matter should be dealt with on

merit. Accordingly, this Court is in favour of condoning the delay, if any

is there, in filing the claim application and the same is condoned.

13. In the result, this Court restores the claim application and

directs the learned Railway Claims Tribunal to consider the claim