Union Of India vs Indian Oil Corporation

Bivas Pattanayak, J

This appeal is preferred against the judgment dated 20th January, 2015 passed by the Railway Claims Tribunal, Kolkata Bench, Kolkata in Claim Application No. REF/105/2007 allowing the claim of the applicant and directing the respondent-Union of India to pay to the applicant a sum of Rs. 10,57,41,541.20/-together with refund of application fee of Rs. 23,89,881.00/- and advocate’s fee of Rs. 10,000/- along with interest @ 6% per annum on the amount of Rs. 10,57,41,541.20/- from the date of filing of the claim application till the date of order and thereafter @ 9% per annum till date of realisation under Section 16 of the Railway Claims Tribunal Act, 1987.

The applicant’s case in nutshell is as follows:

(i) The applicant Indian Oil Corporation Limited booked several consignments of LPG tank wagons for transporting from GAIL-VIJAPUR on Central Railway to Durgapur Bottling Plant during the period from 1997 to 2001 through the respondent-railway authorities.

(ii) The wagons were booked in one rake/train load basis at the originating booking point under prepaid railway receipts.

(iii) Before booking the consignments, the applicant in the forwarding notes clearly mentioned their intention to book the consignment on train/rake basis.

(iv) The railway authorities agreed for booking the consignments on train/rake basis and accordingly calculated the freights and issued receipts.

(v) The railway authorities exercised absolute control and description so far as the mode and pattern of the movements of the wagons of the rake is concerned and the rakes were placed by the shunting staff at the siding as per the instructions of the officials of the railway authorities with regard to the local condition and infrastructural facilities.

(vi) The railway authorities constructed SPURS inside the private premises as per their operational convenience and the applicant cannot alter the length of the siding, number of sidings or gradient of the sidings, which were constructed as per the convenience and requirement of the railway authorities.

(vii) The splitting of full rake length siding into 3 or 4 SPURS is the decision taken by the railway authorities for which the applicant cannot stand to make any overcharges.

(viii) The Durgapur Bottling Plant siding is having full rake unloading facilities where 36 BTPGLN wagons can be placed at a time for unloading.

(ix) By letter No. TS/550/2/10/Vol.VII dated 15th November, 1995, the COM/Eastern Railway/Calcutta issued instructions regarding the names of the points/stations including Durgapur Bottling Plant of Indian Oil Corporation where train load class rate is applicable.

(x) Despite prevalence of such instructions as aforesaid, the railway authorities collected overcharges of Rs. 10,57,41,541.20/- calculating the freight on wagon load basis and recovered the said amount as per POL Bill C07 on 27.02.2004, 01.03.2004 and 02.03.2004.

(xi) The applicant served notice under Section 106 of the Railways Act, 1989 upon the respondent within the stipulated period of six months from the date of recovery/adjustment of overcharges.

(xii) Since the railways authorities did not settle such claim, the applicant filed claim application for refund of the amount recovered towards overcharges and for interests.

The railway authorities filed its written statement denying and disputing the claim of the applicant and contended as follows:

(i) In terms of letter No. TCR/1015/82/45 dated 8th December, 1982 of the Railway Board, train load rate for LPG rakes was permissible when loading/unloading was done in one placement. However, in the present case unloading was done at the private siding of Durgapur Bottling Plant in multiple placements for the reason that the said siding did not have full length line for single placement and consisted of four short length dead-ended lines which had to be utilised to place one full-length rake.

(ii) The subject rakes were booked on train load basis as booking staff of the forwarding station was not aware of the layout, placement capacity of the destination station at the time of booking.

(iii) As per para 115 of Goods Tariff No.39 Part-I, Vol-I, the Railways authorities can charge and realise the correct freight in respect of due classification of charging even at the destination station and the freight charges for the period from 1st April, 1997 till the 2nd April, 2001 has been correctly determined as per due classification and realisation.

(iv) The applicant’s intention in the forwarding note to book the consignment on train/rake basis does not confer any right on the consignor to have the freight charged on train/rake basis.

(v) The Durgapur Bottling Plant is a private siding constructed by the railway authorities on the request of the applicant, the cost of which was borne by the applicant and the siding was commissioned in its existing form with the acceptance and approval of the applicant.

(vi) Although the Durgapur Bottling Plant of Indian Oil Corporation was included in the list of stations and sidings having capacity to handle full rake, but there was no reference of placement being made in one or more than one shunts.

(vii) The circular permitting grant of train load for LPG tank wagons when unloading is done in two placements is effective from 11th April, 2001 and the same does not cover the earlier period.

On the basis of pleadings of both the parties, the Hon’ble Tribunal framed the following issues:

Whether the claim application is maintainable?

Whether the case is barred by mis-joinder and non-joinder of parties?

Whether the title of the application under Section 74 of Railway Claims Tribunal Act, 1989 is correct?

Whether the forwarding station was aware of the lay out placement capacity etc. of the destination station at the time of the booking of subject train load rakes?

Whether the train load class rate was mentioned in the forwarding note?

Whether the respondent issued prepaid railway receipts as per train load class?

Whether the destination Durgapur qualified notified for allowing train load class rate?

Whether any overcharges were collected by the railway and whether it was legal and valid? Is the defence plea of correct charges of freight as alleged correct?

Whether adjustment of purported overcharges by the respondent from applicant’s fuel bill is correct or not?

Whether cause of action arose on 27.02.2004, 01.03.2004 and on 2.03.2004 when respondent recovered overcharges as per POL Bill Co7?

Whether four spurs at destination were constructed by the respondent railway as per their own convenience and requirements or not?

Whether shunting and operation process was carried by respondent’s staff and engines or not?

Whether the respondent collected shunting charges from applicant or not?

Is the applicant entitled to refund of overcharges as claimed?

Is the Railway Board circular TCR/1015/82/45 of 8th December, 1982 binding on the parties?

Is the applicant entitled to refund of application fee, advocate fee and pendent lite interest and, if so, at what rate and sum?

To what over relief, if any, is the applicant entitled.

Upon considering the materials on record, the Hon’ble Tribunal allowed the claim application of the applicant and directed the respondent-Union of India to pay to the applicant a sum of Rs. 10,57,41,541.20/-together with refund of application fee of Rs. 23,89,881.00/- and advocate’s fee of Rs. 10,000/- along with interest @ 6% per annum on the amount of Rs.10,57,41,541.20/- from the date of filing of the claim application (i.e. 22. 01.2007) till the date of order and thereafter @ 9% per annum till date of realisation.

Being aggrieved by and dissatisfied with the impugned judgment and award of the Railway Claims Tribunal, railway authorities have filed the present appeal.

Mrs. Aparna Banerjee, learned advocate for the appellant-Union of India submitted that in the case of subject wagons at the destination namely the private siding of Durgapur Bottling Plant, unloading had to be done in multiple placements due to the constraint imposed by the nature of the private siding which does not have any full length line for single placement but consists of four short length dead-ended lines which were utilised to place one full length rake, however, freight charge was calculated on train load basis since the booking staff of the forwarding station was not aware of the lay out placement capacity of the destination station at the time of booking of the subject rakes. In terms of para 115 of Goods Tariff No.39 Part-I, Vol-I, the appellant-railway authorities have the right to charge and realise the correct freight as per due classification of charging even at the destination station and as such the freight charge was calculated as per due classification pertaining to the period from 1st April, 1997 to 2nd April, 2001 and such amount was correctly realised. Further she submitted that in terms of Railway Board’s letter No. TCR/1015/82/45 dated 8th December, 1982, train load rate for LPG rakes was permissible when loading/unloading was done in one placement. Moreover, the circular No. TS/550/2/10/Vol.VII dated 15th November, 1995 though indicates the list of stations and sidings capable for handling full length which includes Durgapur Bottling Plant, but the same is without any reference of placement being made in one or more than one shunts and that the grant of train load is dependent on fulfilling of various conditions and is not dependent solely on the fact that station/siding has been notified as capable of handling full length. In light of her aforesaid submissions, she prayed for setting aside of the impugned judgment and award of the Railway Claims Tribunal.

In reply to the contentions raised on behalf of the appellant-Union of India, Mr. Amit Kumar Pan, learned advocate for respondent-applicant submitted that, as per the Circular No. TS/550/2/10/Vol.VII dated 15th November, 1995, Durgapur Bottling Plant has been listed under the points/stations where train load class rate is applicable. Such circular has been issued by the railway authorities after proper inspection and, therefore, the ground taken by the appellant-Union of India that the booking staff of forwarding station was unaware of the lay out and placement capacity of the destination station at the time of booking does not stand to reason. He further submitted that by para 115 of Goods Tariff No.39 Part-I, Vol-I, the railway authorities reserves the right for re-measurement, re-weighment, re-classification of goods and re-calculation of rates in case of any discrepancy, however, it does not deal with the issue as to whether the charges in respect of LPG tank wagons would be on the basis of train load or wagon load basis. Moreover, no demand has been raised by the railway authorities with regard to any re-measurement, re-weighment of re-classification of goods and, therefore, said para of Goods Tariff is not attracted to the facts of the case. Further he submitted that the charges of freight have not been duly explained by the authorities concerned. In view of his aforesaid submissions, he prayed that the impugned judgment and award of the Hon’ble Railway Claims Tribunal should be affirmed in the interest of justice.

Having heard learned advocates for respective parties, following issues have fallen for consideration:

Firstly, whether the destination station namely Durgapur Bottling Plant siding had the facility for unloading train/rake load in one placement.

And secondly, whether the recovery of undercharges by the railway authorities collecting the freight on wagon load basis, which was initially calculated on train load basis, was justified.

With regard to the first issue as to whether the destination station namely Durgapur Bottling Plant siding had the facility for unloading train/rake load in one placement, it is contended by the appellant-Union of India that the Durgapur Bottling Plant siding is a private siding of the applicant and the said siding was not having the facility for unloading of full length rake at a time for which reason the consignment had to be unloaded by splitting rakes into 3 or 4 SPURS and thus the consignments were eligible for charging on wagon load basis instead of train load basis. On the contrary, Mr. Pan, learned advocate for respondent-Indian Oil Corporation referring to the circular issued by Chief Operational Manager, Kolkata being No. TS/550/2/10/Vol.VII dated 15th November, 1995 submitted that such circular lists the siding of Durgapur Bottling Plant for application for freight charges on train load basis. On perusal of the aforesaid circular available in the lower court records, it is found that such circular has been issued by the railway authorities showing fresh list of stations and sidings which has existing facility for capable of handling of full length. The list of stations and sidings having such facility is appended to the said circular. The said list of stations and sidings shows that the LPG Bottling Plant, Durgapur within Asansol Division is also included in the list at item no.8 of sidings of Asansol Division. Mrs. Aparna Banerjee, learned advocate for appellant-Union of India has strenuously argued that though the list of stations/sidings were notified for having facility to handle full length rake but it is without any reference of placement being made in one or more than one shunts. It is pertinent to note that the list of stations and sidings appended to the aforesaid circular dated 15th November, 1995 provides that such list of stations/sidings on Eastern Region was cleared for train load traffic (in one placement). Thus, the argument advanced on behalf of the appellant-Union of India that the list of stations/sidings were notified in the circular without any reference of placement being made in one or more than one shunts falls short of merit. 10.1. It is further argued on behalf of the appellant-Union of India that the booking staff at the originating railway station GAIL-VIJAPUR was not aware of the unloading facilities available at the destination station which led to booking of the consignment on train load basis due to lack of awareness. It is not in dispute that the Durgapur Bottling Plant siding is a private siding of the applicant which was constructed by the railway authorities at the cost of the applicant. Accordingly, the railway authorities cannot raise the issue that it was not aware of the infrastructural facilities available at the siding for loading and unloading. The subject consignments were booked, transported and unloaded during the period from 1997 to 2001 which is subsequent to the issuance of the circular dated 15th November, 1995. Therefore, the contention that the booking staff was not aware of the unloading facilities available at the destination station bearing in mind the circular dated 15th November, 1995, which was in force since 2 years before the relevant period, cannot be accepted. Therefore, the issue that Durgapur Bottling Plant siding did not have the facility for unloading of full length rake at a time in one placement does not stand to reason.

Coming to the second issue relating to recovery of undercharges by calculating the freight on wagon load basis instead of train load basis which was applied initially, admittedly the respondent-Indian Oil Corporation (applicant) transported several consignments of LPG tank wagons from GAIL-VIJAPUR to Durgapur Bottling Plant siding from 1997 to 2001. The railway authorities accepted the forwarding note of applicant’s corporation for booking the consignment against the freight chargeable on train/rake load basis and such consignments were duly transported and unloaded at Durgapur Bottling Plant during the period from 1997 to 2001. Admittedly the railway authorities recovered a total of Rs. 10,57,41,541.20/- from various other bills of the applicant-Indian Oil Corporation after almost 3 years in the year 2004 claiming that the amount is payable towards undercharges since the consignment on train load basis was incorrect. The recovery of the aforesaid undercharges is squarely based on the premise that the Durgapur Bottling Plant siding did not have the infrastructural facilities for unloading the rake/train in one placement and the consignment had to be unloaded by splitting the rakes into 3 or 4 SPURS which resulted into multiple placements. Since from the aforesaid discussion and bearing in mind the circular of the Eastern Railway dated 15th November, 1995, it is already found that the Durgapur Bottling Plant has been listed by the railway authorities showing that the same has been cleared for train load traffic in one placement, the undercharges applying wagon load basis is not at all sustainable.

11.1. Mrs. Aparna Banerjee, learned advocate for appellant-Union of India referring to circular No. TCR/1015/82/45 dated 8th December, 1982 tried to impress upon the Court that the train load rate for LPG load wagons is permissible when loading and unloading is done in one placement and since there was multiple placements, the train load rate does not apply to the facts and circumstances of the case. Although the aforesaid circular of Railway Board provides as submitted, yet such circular has no relevance to the facts and circumstances to the present case since notification dated 15th November, 1995 clearly notifies the destination Durgapur Bottling Plant siding as the one which has been cleared for train load traffic in one placement.

11.2. It has further been argued by Mrs. Banerjee, learned advocate for appellant-Union of India that in terms of para 115 of Goods Tariff No.39 Part-I, Vol-I, the railway authorities have the right to charge and realize the correct freight as per due classification of charging even at the destination station. Per contra, Mr. Pan, learned advocate for respondent have argued that such provision is applicable when there is certain discrepancy with regard to the measurement, weight and classification of the goods, however, no such demand was raised by the railway authorities applying such provision of para 115. In order to appreciate such argument, it would be apposite to reproduce the relevant provision:

“115. Right to Correct Charges.–The weight, description and classification of goods and quotation of rates as given in the Railway Receipt and Forwarding Note are merely for the purposes of estimating the Railway charges and the Railway reserves the right of re-measurement, re-weighment, re-classification of goods and re-calculation of rates and other charges and correction of any other errors at the place of destination and of collecting any amount that may have been omitted or undercharged. No admission is conveyed by a Railway Receipt that the weight as shown therein has been received or that the description of goods as furnished by the consignor is correct.”

On bare perusal of the aforesaid provision, it manifests that the railways reserves the right of re-measurement, re-weighment, re-classification of goods and re-calculation of rates and other charges and correction of any other errors at the place of destination. So far as the re-measurement, re-weighment and re-classification of goods are concerned, such does not apply to the facts of the case. Now the question which arises is whether the issue involved in the present case falls within the ambit of “re-calculation of rates” and “correction of any other errors”. There is no evidence of any demand being raised in relation to para 115 of Goods Tariff No.39 Part-I, Vol-I. The only ground advanced for applying wagon load basis is that at the private siding of Durgapur Bottling Plant, unloading had to be done in multiple placements due to the constraint imposed by the nature of the private siding which does not have any full length line for single placement but consists of four short length dead-ended lines which were utilised to place one full length rake. In view of foregoing discussion, it is already found that the Durgapur Bottling Plant, as per the circular dated 15th November, 1995 of the Eastern Railways, has been cleared for train load traffic in one placement and, therefore, the question of re-calculation of rates or correction of any other error does not arise since the Durgapur Bottling Plant has been accepted by the railway authorities for unloading in one placement. Thus, the argument advanced by learned advocate for appellant-Union of India in this respect also falls short merit.

In view of the above discussion, the appeal stands dismissed. The impugned judgment and award of the Hon’ble Tribunal is affirmed. No order as to costs.

Learned Registrar General, High Court, Calcutta is directed to release the sum of Rs. 17,54,71,569/- deposited by appellant-Union of India vide OD Challan No. 3116 dated 8th February, 2018 together with accrued interest in favour of respondent-Indian Oil Corporation within a period of six weeks from date.

All connected applications, if any, stand disposed of.

Interim order, if any, stands vacated.

Let a copy of this judgment be forwarded to the Hon’ble Railway Claims Tribunal along with lower court records for information in accordance with rules.

Urgent photostat certified copy of this judgment, if applied for, be given to the parties upon compliance of necessary legal formalities.