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2007 DIGILAW 685 (ORI)

Anurag Ferro Products Pvt. Ltd. v. Union of India

2007-09-05

I.M.QUDDUSI, SANJU PANDA

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JUDGMENT I. M. QUDDUSI, J. : This writ petition has been filed chal¬lenging the demand of Rs.26,95,058/- raised by the Senior Divi¬sional Commercial Manager, Chakradharpur of South Eastern Railway from the petitioner as wharfage charge of the five wagons of consignment from 16.5.2006 to 27.9.2006 which was detained by them due to alleged failure to comply with the demand for clear¬ance of arrears of earlier consignment. 2. The brief facts of the case are that the petitioner-company has a factory in which scrap iron is used as raw material and the petitioner usually purchases the scrap iron from Rourkela Steel Plant, which are transported through Railways. The goods are unloaded at Kalunga Railway Station which is received by the representative of the petitioner-company from there and the same is thereafter transported to the site of the petitioner’s facto¬ry. 3. As per Railway Board’s circular, after arrival of the consignments, it is necessary to take delivery of the same at the receiving place within the free time and if there is any delay in receiving the same by the consignee, wharfage charges are levied at the rate prescribed by the Railways. Otherwise due freight charges are to be paid if the consignee receives the delivery within 24 hours after the consignment reaches at the station of destination and the same becomes ready. 4. The petitioner had booked certain consignment in the month of August, 2005 to April, 2006 on different occasions and delayed receipt of delivery for a few days for which it paid the wharfage according to the old rate. But thereafter the Station Manager of Kalunga Railway Station, South Eastern Railway re¬ceived revised rates of wharfage charges vide circular No.R/CON/67/479(C-4) dated 28.6.2005 revising the rates with effect from 1.7.2005. From this it is clear that no demand at the enhanced rate was made or asked to be deposited by the petitioner at the time of taking the delivery of those consignments. Howev¬er, when subsequently the petitioner booked five consignments on 31.3.2006 and when the representative of the petitioner reached at Kalunga Railway Station to receive the consignment, he was not given the same and he was informed that the same has been de¬tained due to the non-payment of the differential amount of wharfage in accordance with the revised rates. Howev¬er, when subsequently the petitioner booked five consignments on 31.3.2006 and when the representative of the petitioner reached at Kalunga Railway Station to receive the consignment, he was not given the same and he was informed that the same has been de¬tained due to the non-payment of the differential amount of wharfage in accordance with the revised rates. Thereafter, the Station Manager, South Eastern Railway,Kalunga vide his letter dated 25.4.2006 called upon the petitioner to pay Rs.21,26,612/- towards short collection of wharfage charges according to the enhanced rates for the period with effect from 1.7.2005 before taking delivery of subsequent consignment on which the petitioner had sent a protest letter on 1/6.5.2006 to the Station Manager inter alia indicating therein that they had paid wharfage as charged by the Station Manager and lifted the materials during the period 1.7.2005 to 9.4.2006 and further from 10.4.2006 till date they paid wharfage as charged by him and lifted the materi¬als. However, the Station Manager refused to release the goods on payment of freight and wharfage unless clearance is made of earlier additional wharfage. 5. Being aggrieved, the petitioner challenged the letter of demand of the Station Manager by filing a writ petition before this Court, which is registered as W.P.(C) No.10504 of 2006. However the said writ petition was dismissed on the ground that the petitioner had already moved the Consumer Disputes Redressal Commission, which has dismissed its complaint, but the petitioner has not chosen to avail the opportunity of filing an appeal against such order before the appropriate forum and otherwise also no merit was found in the case. However on the submission of the learned counsel for the petitioner that it has already depos¬ited with the opposite parties the entire dues by way of bank draft on 25.9.2006 and as such the goods should be released with¬out further delay, a direction was issued that if the petitioner has deposited the entire charges towards wharfage or deposits the balance, if any, as submitted then the opposite parties, more particularly, opposite party No.3 should release the goods in favour of the petitioner by 26th of October, 2006. 6. 6. The petitioner deposited through different DDs a total sum of Rs.25,82,446/-, i.e. the under charges on the wagons received between August, 2005 to 9.4.2006, in favour of opposite party No.4 as per demand made by him in shape of endorsement on the letter dated 20.9.2006. In spite of that the opposite parties detained the goods i.e. five number of wagons on the ground that the current wharfage charge to the tune of Rs.26,95,058/- for the period from 16.5.2006 to 27.9.2006 is also liable to be paid. 7. Being aggrieved, the petitioner has filed the instant writ petition raising a question that the consignment detained by the opposite parties are not subject to payment of wharfage. 8. Before proceeding further, it is necessary to peruse the definition of ‘freight’, ‘wharfage’ and provisions of Section 83 given in the Railway Act. According to Section 2(17) of the Railway Act (hereinafter referred to as “the Act”), ‘freight’ means the charge levied for the carriage of goods including transshipment charges, if any. Definition of wharfage has been given in Section 2(41), which reads ‘wharfage’ means the charge levied on goods for not removing them from the railway after expiry of the free time for such removal. Section 83 of the Act is reproduced as under: “83. Lien for freight or any other sum due :- (1) If the consignor, the consignee or the endorse fails to pay on demand any freight or other charges due from him in re¬spect of any consignment, the railway administration may detain such consignment or part thereof to, if such consignment is deliv¬ered, it may detain any other consignment of such person which is in, or thereafter comes into, its possession. (2) The railway administration may, if the consignment detained under Sub-section (1) is - (a) Perishable in nature, sell at once; or (b) Not perishable in nature, sell, by public auction, such consignment or part thereof, as may be necessary to realize a sum equal to be freight or other charges; Provided that where a railway administration for reasons to be recorded in writing is of the opinion that it is not expedient to hold the auction such consignment or part thereof may be sold in such manner as may be prescribed. (3) The railway administration shall give a notice of not less than seven days of the public auction under clause(b) or Sub-section (2) in one or more legal newspapers or where there are no such newspapers in such manner as may be prescribed. (4) The railway administration may, out of the sale, pro¬ceeds received under Sub-section (2), retain a sum equal to the freight and other charges including expenses for the sale due to it and the surplus of such proceeds and the part of the consign¬ment, if any, shall be rendered to the persons entitled thereto.” 9. It is a fact that after giving notice to the petition¬er, opposite party No.4 did not auction the consignment. Now it is a matter of consideration that non-delivery of the consignment is possible for two reasons. The first is that the consignee does not turn up to take delivery of the consignment and second may be that the Railways itself detained the consignment for some reasons one of which may be due to the damaged condition of the consignment and the damages are to be assessed meaning thereby that some consignment may not be ready for delivery or may be detained by the Railways at their own due to non-payment of previous dues. 10. Now it is to be considered whether ‘wharfage’ is liable to be paid in both the situations or only in one situation where the consignee himself does not turn up to take the delivery or fails to pay the freight or other charges at the time when he comes to take delivery of the consignment. 11. In the above regard, it is necessary to peruse the definition of the ‘wharfage’ as quoted above and according to which it is the charge levied on goods for not removing them from the Railway after the expiry of the free time for such removal. Therefore, in case a consignee comes to take delivery but the Railway itself detains the same and does not deliver the consign¬ment, whether in that situation wharfage is liable to be paid ? In our opinion, it is not the fault of the consignee when he comes and desires to take the delivery of the consignment and the same is not given to him due to detention of the Railways itself. In our opinion, it is not the fault of the consignee when he comes and desires to take the delivery of the consignment and the same is not given to him due to detention of the Railways itself. In such a situation, it cannot be said that the consignee is at fault and, therefore, no such wharfage is liable to be paid in such a situation. 12. In the instant matter, the subsequent consignment of the petitioner was detained by the opposite parties under Section 83 of the Act. After such detention, when the opposite parties had given sale notice, there cannot be two different norms after that, i.e., to charge wharfage if the auction is not held and secondly to charge no wharfage when auction is held. Therefore, if auction is held nothing could be charged and in case auction is not held no charge could also be levied as on the expiry of the period of notice issued under Sub-section (3) of Section 83, the consignment is vested at the discretion of the Railways. 13. A similar question came up for consideration before the Patna High Court in Probhu Narayan Sankarlal v. Union of India, representing South Eastern Railway, AIR 1961 Patna 119. Consider¬ing the question, the Court held as follows : “The main argument put forward by learned counsel on behalf of the appellant is that the defendant may be entitled to wharf¬age charges from the 27th of July, 1955 up till the 9th Septem¬ber, 1955 but not till the 4th of January, 1956, and that if the defendant had given notice under Section 55 of the Railways Act, requiring the plaintiff to remove the goods within 15 days, the defendant was detaining the goods in exercise of this lien for its own benefit and so the defendant was not entitled to claim ware-housing charges for the period subsequent to the expiry of the period of notice, namely, subsequent to the 9th of September, 1955. I think this contention is well founded and must be accepted as correct. The legal position has been fully explained in Joseph Somes v. Directors of the British Empire Shipping Co. I think this contention is well founded and must be accepted as correct. The legal position has been fully explained in Joseph Somes v. Directors of the British Empire Shipping Co. (1860) 8 HCL 338, where Lord Wensleydale laid down the principle that a person who has a lien upon chattel for a debt cannot, if he keeps it to enforce payment, add, to the amount for which the lien exists, a charge for keeping the chattel till the debt is paid. 14. The short collection of wharfage claimed by letter dated 25.4.2006 was in respect of goods received by the petition¬er during the period from August, 2005 to 9.4.2006 pursuant to revision of rate. The rate was revised by the Railway Board on 27.1.2005, which was communicated to the Railway authorities by letter dated 3rd February, 2005 again on 28.6.2005 to be effec¬tive from 1.7.2005, i.e. much prior to delivery of the consign¬ments on which there was short collection of wharfage. It is not that the charge was demanded as per the new rate and the peti¬tioner refused to pay the same while taking delivery of the earlier consignments. The last consignment out of the consign¬ments on which there was short collection of wharfage was deliv¬ered to the petitioner on 15.4.2006 as it appears from the enclo¬sures to Annexure-2. The Station Manager, Kalunga Railway Station by letter dated 25.4.2006 called upon the petitioner to clear up the differential wharfage amounting to Rs.21,26,612.00 against which the petitioner raised protest on the ground mentioned in his letter dated 1/6.5.2006 addressed to the Station Manager, Kalunga. However, the Railway issued sale notice on 3.5.2006 calling upon the petitioner to take necessary action for clear¬ance of station dues within seven days otherwise auction would be done after stipulated date, but no auction was done for the reasons best known to the authorities. They could have auctioned the consignment or any part thereof to realize the sum equal to the amount claimed under Annexure-2 or only detained such part of the consignment which would have fetched the sum equal to the amount mentioned in Annexure-2. In that case, the rest of the consignment could have been delivered to the petitioner and he would not have been liable to pay any wharfage. In that case, the rest of the consignment could have been delivered to the petitioner and he would not have been liable to pay any wharfage. It may be stated here that the earlier writ petition (W.P.(C) No.10504 of 2006) inter alia challenging the letter dated 25.4.2006 calling upon the petitioner to pay short collection of wharfage charges was filed on 7.8.2006, i.e., more than three months after the sale notice dated 3.5.2006. In the instant writ petition the petition¬er has not mentioned as to on which date it approached the Rail¬way authorities for taking delivery of the five consignments in question. However, in the counter affidavit it has been mentioned that the consignments (five wagons) were unloaded on 13.4.2006 and the petitioner approached O.P. No.4 on 15.5.2006 for delivery of the materials which was refused on the ground of non-clearance of arrear wharfage. Therefore, the Railways detained the goods of the petitioner on their own from 16.5.2006, for which they are not entitled to claim any wharfage from the petitioner after 15.5.2006 because after that it was the Railway which detained the goods in purported exercise of their lien for its own benefit without taking action as provided in Section 83. 15. Therefore, we allow this writ petition and quash the demand raised by opposite party No.3 vide impugned letter dated 25.10.2006 contained in Annexure-9. If any excess amount is found to have been paid by the petitioner after calculating the wharf¬age dues up to 15.5.2006 on the five wagons in question, the same shall be refunded to him. There would be no order as to costs. SANJU PANDA, J. I agree. Petition allowed.