Punjab-Haryana High Court

Eastern Coal Mills vs Union Of India on 10 April, 2024

Author: Anil Kshetarpal

Bench: Anil Kshetarpal

                                Neutral Citation No:=2024:PHHC:049816




RSA-1615-1991 (O&M)                     1     2024:PHHC:049816

141 IN THE HIGH COURT OF PUNJAB AND HARYANA
                  AT CHANDIGARH

                                        RSA-1615-1991 (O&M) and
                                        XOBJC-3-C-1992
                                        Date of decision: 10.04.2024
Eastern Coal Mills
                                               ....Appellant

            Versus

Union of India
                                              ..Respondent

CORAM: HON'BLE MR. JUSTICE ANIL KSHETARPAL

Present:-   Mr. M.L.Sarin, Sr. Advocate with
            Ms. Hemani Sarin, Advocate for the appellant

            Mr. Ramesh Sharma, Advocate for respondent no.1 & 2

            Mr. Vinay Kumar Pandey, Advocate for respondent no.3

ANIL KSHETARPAL, J (Oral)

1. With the consent of the learned counsel representing the

parties, the Regular Second Appeal filed by the consignee (defendant

no.3) and cross objections filed by the plaintiff shall stand disposed of

by a common order.

2. The plaintiff M/s Jagatjit Cotton Textile Mills Limited filed

a suit for recovery of Rs.97,089/- inclusive of interest at the rate of 15%

per annum till 27.07.1986, primarily against the Indian Railways. In

substance, the plaintiff claims that penal rate of Rs.78,002/-- recovered

by the Railways towards over loading of the coals in the wagon is

illegal. In substance, it is the case of the plaintiff that the aforesaid

consignment has been loaded by the consignor and it was the

responsibility of the Indian Railways to check and remove the excess

coal if there was overloading of the wagons. It has been submitted that

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once the consignment has been delivered without any objections, M/s

Jagatjit Cotton Textile Mills Limited (consignee) is not liable to pay the

penal charges. The Indian Railways defended the suit on the ground that

as per the Indian Railways Act, 1890 and the Indian Railways

Commercial Manual, for disposal of excess load, the penal charges can

be recovered from the consignee. Defendant no.3 contested the suit on

the ground that they do not have any responsibility and it is the

responsibility of the Railway Authority to see that the wagons are loaded

as per the instructions.

3. Upon analysis of the pleadings, the trial court settled the

following issues:-

"1. Whether plaintiff is a public limited company duly registered incorporated and Sh.S.G.Vyas Chief Accountant-cum-Commercial Manager of the Company is competent to file the suit? OPP.

2. Whether the plaintiff is entitled to recover Rs.97,089/- inclusive of interest at the rate of 18% per annum uptodate? OPP.

3. Whether the plaintiff has no locus standi to file the present suit? OPD.

4. Whether there is no cause of action against defendant No.3?OPD.

5. Whether the name of defendant no.3 is liable to be struck off under order 1 rule 10(2) read with Section 151 CPC? OPD.

6. Whether the suit is bad for mis-joinder of parties? OPD.

7. Relief."

4. The trial court decreed the suit against the Railways

whereas the suit was dismissed against defendant no.3. The First

Appellate Court has absolved the Indian Railways, however, the liability

was fastened upon defendant no.3 (consignor).

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5. Heard the learned counsel representing the parties at length

and with their able assistance perused the paperbook. alongwith the

requisitioned record.

6. Learned counsel representing the appellant submits that in

view of the judgment passed in 'Jagjit Cotton Textile Mills vs.Chief

Commercial Superintendent NR and others' (1998)5 SCC 126, it is

the consignee, which is liable to pay the amount. He submits that the

respondent - Company was party before the Supreme Court and after

identifying as many as 9 points for consideration, the Supreme Court

held that the consignee is liable to pay the penal charges. He refer to

para 3, 9, 52, 53 and 54 of the judgment in support of his submission.

7. On the other hand, the learned counsel representing the

plaintiff contends that the Indian Railways is not liable to refund the

penal charges, particularly when the goods have already been delivered

to the consignee.

8. The learned counsel representing the Indian Railways also

relies upon the judgment passed in Jagjit Cotton Textile Mills's case

(supra).

9. This Court has considered the submissions made by the

learned counsel representing the parties.

10. The Hon'ble Supreme Court in para 9 has identified the

following points for consideration:-

"(1) What is the distinction between the words 'maximum carrying capacity' used in section 53(1) of old Act (section 72(1) of new Act), 'normal carrying capacity used in section 53(2) (section 72(2) of new Act' and 'permissible carrying capacity' used in Rule

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161A of the Indian Railway Conference Associationt (section 73 of the new Act)?

(2) Whether Rule, 161A of the Indian Railway Conference Association is inconsistent with section 53 of the old Act?

(3) Whether Rule 161A is ultra-vires of the Railways Act , 1890?

(4) Do Rules 6, 29 of Eastern Railways Coal Tariff confer any right on the consignees which excludes or overrides Rule 161A?

(5) Are the charges levied under Rule 161A of the Indian Railway Conference Association or under section 73 of the new Railways Act, 1989 (read with Railway (punitive charges for overloading of Wagons ) Rules, 1990 penal in nature or are also compensatory? Are they arbitrary and violative of Article 14 of the Constitution of India as they permit the Railways to recover the penal charges from the consignees who, according to the appellants/petitioners, are not responsible for the overloading of the coal beyond the permissible limits in the wagons at the colliery siding and are not 'delinquents'?

(6) What is the effect of delivery of the Railway Receipt to the consignee under the Railways Act, 1890 and the Railways Act, 1989 and does it have the effect of transferring all the cosignee, including the liability to pay penal charges at the time of delivery of the overloaded goods to the consignee? (7) In any event, does the Railways not have a lien for collection of the penal charges from the consignee because of section 55 of the Railways Act, 1890 or section 83 of the Railways Act, 1989? (8) Can the consignees (except the appellant in CA No. 7514 of 1995 and CA No. 4266 of 1996) seek refund from the Railways without pleading and proving that they have not passed on the burden of the penal charges to their consumers? (9) Are the consignees entitled to any direction that the Railways should not, in future, collect these penal charges from the consignees?"

11. Ultimately, the Supreme Court held that the penal charges

are recoverable from the consignee.

12. It may be noted here that before the trial court, the

plaintiff's entire focus was to recover the amount from the Indian

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Railways. Defendant no.3 was impleaded as party, however, there was

no distinct issue in between the plaintiff and defendant no.3. The

plaintiffs have not produced inter se contract between the plaintiff and

defendant no.3. The Supreme Court has held that the consignor works

as agent on behalf of the consignee.

13. Keeping in view the aforesaid facts, the First Appellate

Court has erred in recording a finding that defendant no.3 is liable.

14. With respect to counter claim, the matter in issue is covered

against the consignee in view of the Supreme Court judgment.

Moreover, para 1877 of the Indian Railway Manual which has been

reproduced by the First Appellate Court reads as under:-

"(a) When, as result of weighment a wagon is found to be over-loaded beyond the permissible limits, the railway reserves the right to have the excess weight removed. A separate record should be maintained whenever excess weight is off- loaded.

(b) The railway administration may dispose of such excess weight, if off-loaded by public auction after following the prescribed procedure.

Sale proceeds will first be adjusted against railway dues which may include the freight due on the off- loaded consignments upto the point of off-loading, cost of detention to wagon and expenses incurred on off-loading of the excess consignments and its auction and the balance if any, may be paid to the consignor/consignee entitled thereto.

load the excess weight on operational consinderations and to save detention to wagons or for other reasons, and allow the wagon to move to destination as it is, it will be within its right to recover penal charges for excess loading as provided in the Goods Traffic."

From clause 'c', it is clear that the Railways has the right to recover the

penal charges.

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15. Hence, the judgment passed by the First Appellate Court is

set aside and the appeal by the consignee is allowed whereas the cross

objections filed by the plaintiff are dismissed. Resultantly, the plaintiff's

suit shall stand dismissed.

16. All the pending miscellaneous applications, if any, are also

disposed of.



10.04.2024                                      (ANIL KSHETARPAL)
rekha                                                 JUDGE
Whether speaking/reasoned :         Yes/No
Whether reportable :                Yes/No




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