IN THE HIGH COURT AT CALCUTTA APPEAL FROM CONSTITUTIONAL WRIT JURISDICTION (ORIGINAL SIDE) 1. APO2322015 W.P. 336/2009 Bagadiya Brothers Pvt. Ltd. & Anr. Vs. U.O.I. & Ors.
2. APO2332015 WP3432009 Anurag Agarwal Vs. U.O.I. & Ors.
3. APO2482015 WP9652008 Skylark Fiscal Services (P) Ltd. Vs. U.O.I. & Ors.
4. APO2472015 WP10702009 S.K. Sarawagi & CO. Pvt. Ltd. Vs. U.O.I. & Ors. Present : The Hon’ble Justice Rakesh Tiwari And The Hon’ble Justice Mir Dara Sheko For the Appellants : Mr. S. Sarkar, Sr. Adv. Mr. R.A. Agarwalla. Adv. Mr. K. Gupta, Adv. Mr. R. Dhara, Adv. Mr. R.K. Gupta, Adv. For the respondents : Mr. A.K. Ghosal, Sr. Adv. Mr. R. Chaturvedi, Adv. Heard on : Judgment on : November 18, 23, 25, 2016 30.01.2017 Rakesh Tiwari, J.
1. Heard learned Counsel for the parties and perused the record.
2. The present appeal has been preferred by the appellants abovementioned challenging the correctness of Judgment dated May 12, 2015 passed in APO2322015 Bagadiya Brothers Pvt. Ltd. & Anr. Vs. Union of India & Ors. with three connected writ petitions, namely, (1) APO2332015 Anurag Agarwal Vs.Union of Inida & Ors. (2) APO248 2015 in the case of skylark Fiscal Services (P) Ltd. Vs. Union of India & Ors., (3) APO2472015 S.K. Sarawagi & Co. Pvt. Ltd Vs. Union of India & Ors. By the impugned judgment the writ petitions preferred by the appellants/writ petitioners herein as aforesaid have been dismissed.
3. Since these four appeals arise out of the same common judgment and order dated 12.05.2009 and are entwined by same common questions of facts and law, except the difference in number of wagons booked by the appellants in each of the cases, their corresponding Railway Receipts numbers (hereinafter referred to as “RR”.) and amount of undercharge claimed by the Railways from each one of the appellant/petitioner as such APO No.232 of 2015 is taken up as the leading case for hearing. It is being decided along with all the other three connected appeals together by this common judgment.
4. Appellant/Petitioner No.1 Bagadiya Brothers Pvt. Ltd is a Company incorporated under the Companies Act, 1956 (hereinafter referred to as the “Company”.) having its registered office at 402, Maker Chamber V, 221, Nariman Point, Mumbai - 21. It is engaged in business of export of variety of goods including iron ore fines. Petitioner/appellant No.2 is manager (Operation) of the ‘company’ and is an aggrieved person under Article 226 of the Constitution of India. He had initially preferred the writ petition in the leading case from which this appeal arises. Background of the case:
5. The appellants/writ petitioners challenge the alleged arbitrary action of respondents by which the Railways in purported exercise of powers, not vested in it, under the provisions of the Railways Act, 1989 (hereinafter referred to as the Act of 1989 and rules framed thereunder, have illegally withheld the refundable amount of the appellant/petitioners in the garb of alleged undercharge amount claimed to be due to it from them. This demand of alleged under-charge amount is claimed by the Railways under the Rationalisation Scheme issued under Section 71 of the Act of 1989 read with special rates circular, both as amended from time to time and Boards circular letter dated 22.03.2007. It is challenged by the appellants as to be in violation of Articles 14, 19 (1)(g), 301 and 304 of the Constitution of India.
6. The movement of goods traffic by respondent railways, is subject to applicability of the Rationalisation Scheme, being General Order No.1/2007 effective from 1.04.2007. It is reproduced below for ready reference:“No.2006/TT.III/27/1 New Delhi Dt. 22.03.2007 The General Managers (operating)/(Commercial) All India Railways GENERAL ORDER
NO12007 (RATIONALISATION SCHEME) (EFFECTIVE FROM14.2007) Whereas in the opinion of the Railway Board it is necessary so to do the public interest: Now, thereof, in exercise of the powers conferred by Section 71 of the Railways Act, 1989(24 of 1989) read with notification of the Government of India in the Ministry of Railways number G.S.R. 53(E) dated the 23rd January, 1995, the Railway Board hereby directs that all Railway Administration shall carry, unless it is necessary to divert such wagons for operational convenience after the consignments are booked any goods or class of goods by such route or routes as specified in this order. From To Route via 1. East Coast Railway 1.1 All goods traffic station reached via Barang Via Cuttack Kaplas road By pass avoiding Cuttack.”
.
7. The aforesaid General Order as amended vide Amendment No.3 reads:“Government of India Ministry of Railways(Rail Mantralaya) (Railway Board) AMENDMENT No.3 SUB:- RATIONALISATION SCHEME GENERAL ORDER
No.1/2007 AMENDMENT THERETO. Refer Boards Circular letter of even number dated 22.03.2007, issuing Rationalisation Scheme General Order No.1/2007 along with amendments. Now as it is necessary so to do in the public interest read the existing paras 1.1., 3.1 and 3.2 and add para 3.3 of said General Order No.1/2007 as under: EAST COAST RAILWAY: FROM PARA No.1.1 All goods traffic TO Stations reached via Via Barang Cuttack except Kapllas stations on NergundiRoad Cuttack-Paradip Bypass Station. avoiding Cuttack SOUTH-EASTERN RAILWAY PARA No.FROM31 Iron ore traffic from Barsuna Bondamunda section of S.E. Rasilway VIA TO VIA (a) to stations Via tatanagar for which route Kharagpur, Bhadrak is either via Kapllas Raod Barand Jharsuguda , avoiding Cuttack Sambalpur or subject to observing Jaroll Jakhpura Para No.1.1 above These order will be applicable with immediate effect. Acknowledge Receipt, Sd/(Sanat Kumar) Dy. Director Traffic Trans. (S) Railway Board”.
8. The special rate Circular No.RA/1B/Pt.VIII, issued vide serial No.73(G)/2007 dated March 27, 2007 and its amendment vide serial No.178(G)/2007 dated August 10, 2007 by the Chief Commercial Manager, South Eastern Railway, Kolkata read with Railway Board letter No.2006/TT-III/27/1 dated March 22, 2007 and amendment thereof dated August 3, 2007 is also said to be applicable to the appellant for the purpose of claim of undercharge by the Railway.
9. The procedure for movement of rake is that intending consignor, upon allotment of rake by the railway authorities contacts the respondents at the loading station for movement/transportation of their goods on Railway wagons the freight charge is calculated by the concerned person in railway office on basis of the route of movement of goods and it informs to the intending consignor, for its deposit. On deposit of the freight charge, Railway Receipt is issued by the Railways to the consignor at the loading station showing the route of consignment to its destination. The rakes are then loaded by the consignor at the loading station for its destination station. After the rake reaches its destination station, the commodities booked by the consignor against the ‘RR’ are released/delivered to him on completion of formalities. The contract between the parties then stand concluded.
10. Appellants/petitioners, in their usual course of business, booked and loaded a rake of iron ore fines at Barsuna railway station under South-Eastern Railway for its delivery at Vishakhapatnam Port the destination station. The concerned authority booked goods of the petitioner in accordance with the route mentioned and terms and conditions specified in the ‘RR’. After payment of freight charge as calculated by the railways on the basis of movement of the rake via Jharsuguda. The consigned goods were delivered by the Railways to the appellant at the destination station on 17th October, 2007, on completion of all the formalities, without any objections or demand whatsoever of undercharge Railways/respondents at that time. by the 11. Four months after delivery of the goods, a demand notice dated May 31st, 2008 was served by the office of respondent No.6 upon the appellants raising a claim of undercharge amount said to have issued in terms of the directions of the Head Quarters letter dated May 10, 2008 in pursuance of the rationalisation scheme issued by General Order No.1/2007 reproduced above.
12. The Railways by the notice dated 3.05.2008 directed the appellants/petitioners to arrange for payment of the demand of under-charge. Notice dated 31.5.2008 in the leading appeal reads: “S.E Rly. ‘P-3’ dated. 31-05-2008 2 3 No.BXF/VZP/9,ore/UC/2008/11 FromTo, CGS/BXF M/S Bagadiya Brothers SE Rly. Sub- Under Charge Bill of Rs. 20,29,631.00 Ref- (1) Rationalisation scheme, General Order No.1/2007 (2) No.AB/DSG/TIA/HQ/BXF/RS Scheme/UC of Frt/05/08 Dated 20.05.2008 D/ Sir, Kindly arrange to make payment U/C Rs. 20,29,631.00 earlier Bill prepared as per Hd. Quarters letter above. Detail particulars are given below:4 5 6 7 8 9 10 11 12 13 14 15 16 Commo No.or Distan Distan Class Rate dity Wgn ce Via ce should JSG be Via KGP7341150 160 713.3 212001 07.10. BXF VZP9Ore 56 Km. 0 371 07 Boxe Km. s RR No.Date From To Rate Chargea Freight Freight U/C should ble Wt. pales should Rs. be be 1083.2 3765.0 47520 6781,6 2029,6 0 66 97 31 U/C Rs. 20,29,631.00 Rupees Twenty lakh twenty nine thousand six thousand thirty one only”.
13. In the demand notice (in the leading case) for payment of under-charge amount, it is stated that the distance via Jharsuguda was 734 Kms. while the distance via Kharagpur was 1150 kms. Therefore, the rate applied ought to be Rs. 1083.20/-(One Thousand Eighty Three and Paise Twenty Only) instead of Rs. 713.30/- (Seven hundred Thirteen and Paise Thirty) Only. According to the said demand notice, the freight ought to have been Rs. 67,81,697/- (Sixty Seven Lacs Eighty One Thousand Six Hundred Ninety Seven) Only whereas the freight paid by the petitioner as per RR No.212001371 dated October 7, 2007 issued at booking station was Rs. 47,52,066/(Fourty Seven Lacs Fifty Two Thousand Sixty Six only).
14. Since the bill for undercharged amount was issued pursuant to the directions dated May 20, 2008 by the Head Quarter office at Kolkata, the appellant/petitioner represented before the loading Station Authority at Barsuan and to the Chief Commercial Manager at Kolkata. A re-presentation was also made by them in person by submitting letter dated February 16, 2009 (annexure P4 to the appeal) before the concerned respondent authority at Kolkata who assured to look into the matter and as such the appellant/petitioner did not take any further steps against them.
15. The appellant in their aforesaid representation claimed that they are entitled to refund of considerable amounts of money from the railways which had accrued in various transactions and being payable by the Railways to them before the end of the financial year ending March 31, 2009. However, the concerned office of Railways at Kolkata informed them that refund would be payable at a later date after March, 2009 as the claim would be forwarded to the authority concerned for payment only in first week of April, 2009.
16. Later on the appellants were informed by the respondent railways and their officers that refund to the appellants would not be made to them until and unless the outstanding payment to railways on account of undercharge in the demand notice would be cleared by them.
17. The petitioners, by means of their letter dated December 6, 2009, then disputed the applicability of rationalisation scheme issued by the Railway Board, circulated by the Chief Railway Commissioner Kolkata requesting to withdraw the demand/claim of undercharge as being unsustainable in law.
18. The representations of the appellants were turned down by the respondents saying that they will have to pay the freight charges for delivery of their consignment by the longer route, because of the diversion of the rakes as per the rationalisation scheme, irrespective of the fact that the goods had not been transported by the Railways on the route they were booked as mentioned in the ‘RR’.
19. Aggrieved the appellant/petitioner herein preferred writ petition No.336 of 2009, Writ Petition No.1070 of 20