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2011 DIGILAW 436 (GAU)

Union of India v. S. M. Enterprises

2011-05-19

AMITAVA ROY

body2011
1. The instant appeal witnesses a challenge to the judgment and order dated 18.11.2010 rendered by the learned Railway Claims Tribunal, Guwahati Bench, Guwahati ('the Tribunal') in Claim Application No. OA.I/GHY/2007/1239 (Old No. OA 1239/07). 2. I have heard Mrs. U. Chakraborty, learned Standing Counsel, NF' Railway for the appellant and Mr. A Goyal, learned counsel for the respondent. 3. The learned counsel for the parties having been heard at length for the admission of the instant appeal, it is considered appropriate to dispose of the same at this stage. 4. The respondent had approached the learned Tribunal claiming refund of freight under the Incentive Scheme for Incremental Traffic ('the Scheme') envisaged in the package of Freight Incentive Schemes of the Railways as well as for freight over charge due to wrong distance vis-a-vis its consignments. It pleaded that being encouraged by the scheme circulated by the Circular No. TCR/1078/2006/4 dated 28.3.2006 and the Corrigendum dated 19.5.2006 assuring freight incentives thereunder it booked consignments covered by various invoices during 1.6.2006 to 27.3.2007 to different destinations. It, thereafter, applied to the Divisional Railway Manager, NF Railway, Rangiya Division on 10.7.2006 and also the Chief Commercial Manager (Rates), NF Railway, Maligaon on 16.8.2006 indicating its participation in the scheme so as to be extended the benefit thereunder. According to the respondent, the Railways accepted its enlistment but dithered to arrive at an appropriate decision in its favour. The respondent on 13.11.2006 submitted a reminder to the CCM (Rates) reiterating its request for the incentives under the Scheme. According to it, the details of the consignments covered by the Scheme for which it was entitled to the benefit under the Scheme were also furnished. The respondent in the application before the learned Tribunal, inter alia, disclosed it to be a "new customer" as contemplated in the Corrigendum dated 19.5.2006. It also laid claim before the learned Tribunal on the failure of the Railways to refund freight on account of its mistake at the booking station vis-a-vis the distance to be covered by the corresponding 18 coal rakes resulting in excess charge therefor. In all, on both these/ counts the respondent claimed an amount of Rs. 39,43,569 as its dues together with litigation costs and interest thereon. 5. In all, on both these/ counts the respondent claimed an amount of Rs. 39,43,569 as its dues together with litigation costs and interest thereon. 5. The Railways in its written statement raised a preliminary objection with regard to the jurisdiction of the learned Tribunal to entertain the claim contending it to be beyond the purview of its functions as outlined by the Railway Claims Tribunal Act, 1987 ('the Act'). It pleaded as well that though the respondent had vide its letters dated 10.7.2006 and 16.8.2006 applied to the Divisional Railway Manager, NF Railway, Rangiya Division and the Chief Commercial Manager (Rates), Maligaon respectively to avail the concession under the Scheme, it was not entitled to any as the commodity 'coal' was excluded from the domain thereof. The Railways, therefore, questioned the validity of the respondent's claim for freight refund under the Scheme. Vis-a-vis its claim on account of mistaken realization for wrong distance, it contended that for the omission on the part of the respondent to furnish the necessary particulars the competent authority of the NF Railway had repudiated the claim and that, therefore, its grievance to that effect was also not sustainable in law and on facts. 6. The learned Tribunal by the impugned judgment and order on a consideration of the pleadings of the parties and the documents introduced in evidence allowed the claim of the respondent to the extent of Rs. 38,44,936 together with interest at the rate of 6% per annum from the date of filing of the application before it. It ordered payment of the amount awarded within three months with the rider that on the failure to do so, the same would carry interest at the rate of 7% per annum till realization. Litigation cost of Rs. 21,000 and legal practitioner's fee of Rs. 3,000 was also awarded. 7. Mrs. Chakraborty has emphatically urged that as in terms of the Act the learned Tribunal has no jurisdiction to examine and entertain the claim of refund of freight under the Scheme, the impugned judgment and order is non-est in law and is liable to be adjudged as such. 21,000 and legal practitioner's fee of Rs. 3,000 was also awarded. 7. Mrs. Chakraborty has emphatically urged that as in terms of the Act the learned Tribunal has no jurisdiction to examine and entertain the claim of refund of freight under the Scheme, the impugned judgment and order is non-est in law and is liable to be adjudged as such. Referring to the Scheme, the learned Standing Counsel has argued that the eligibility to avail the benefits thereunder is not a matter of course and that as the concerned authority of the Railways had not determined the respondent to be so, the learned Tribunal had fallen in error in concluding to the contrary. She insisted that 'coal' was not covered by the Scheme for according the benefit of incentives thereunder and, thus, the respondent's claim was misconceived. As the learned Tribunal had overlooked this vital aspect of the matter, the impugned judgment and order ought to be annulled, she urged. Apart from contending that the claim is per se unsustainable for want of prior valid notice to the Railways, the learned Standing Counsel has also submitted that as several invoices were involved, a common application was not maintainable in law and that on that count as well, the impugned judgment and order ought to be set aside. Mrs. Chakraborty has further argued that as the respondent had not paid the aggregate freight of Rs. 50 crore in the year preceding the one of booking of the consignments, it was even otherwise not eligible for the freight refund benefits under the Scheme and that the finding to the contrary of the learned Tribunal is, thus, patently flawed and is liable to be interfered with. 8. Mr. Goyal, in reply, has argued with reference to the Scheme as circulated by the Circular No. TCR/1078/2006/4 dated 28.3.2006 and the Corrigendum dated 19.5.2006 that the respondent having staked its claim for the freight benefit under the Scheme as a 'new customer' the condition precedent of payment of aggregate freight of Rs. 50 crores in the preceding year is not attracted. As the Railways admittedly had failed to communicate its decision rejecting the respondent's claim for the benefit under the Scheme as required under clause 9 of the Circular dated 28.3.2006, it was open for it to approach the learned Tribunal, the cause of action therefor having arisen for such failure of the Railways. As the Railways admittedly had failed to communicate its decision rejecting the respondent's claim for the benefit under the Scheme as required under clause 9 of the Circular dated 28.3.2006, it was open for it to approach the learned Tribunal, the cause of action therefor having arisen for such failure of the Railways. According to Mr. Goyal, both in the Circular dated 28.3.2006 as well as the Corrigendum dated 19.5.2006, coal in covered wagons booked by the NF Railway was well within the purview of the Scheme and, thus, the plea to the contrary is wholly misconceived. Further, this being the only ground taken in the written statement by the Railways to resist its claim, it is estopped from raising any other plea in the instant appeal. The Railways having admitted receipt of the application dated 10.7.2006 of the respondent intending to participate in the process envisaged under the Scheme and the consignments being within the domain thereof, the learned Tribunal rightly awarded its claim on the two counts to the extent as indicated in the impugned judgment and order. 9. The pleadings of the parties with the essential documents as referred to hereinabove as well as the arguments have received the due consideration of this court. The preamble to the Act proclaims it to be an enactment for the establishment of a Railway Claims Tribunal for inquiring into and determining claims against a railway administration for loss, destruction, damage, deterioration or non-delivery of animals or goods entrusted to it to be carried by railway or for the refund of fares or freight or for compensation for death or injury to passengers occurring as a result of railway accidents (or untoward incidents) and for matters connected therewith or incidental thereto. Section 13 which finds place under Chapter-Ill of the Act with the caption "Jurisdiction, Powers and Authority of Claims Tribunal" enjoins that the Tribunal would exercise, on and from the appointed day, all such jurisdiction, powers and authority, as were exercisable immediately before that day by any civil court or a Claims Commissioner appointed under the provisions of the Act, amongst others, in respect of claims for refund of fares or part thereof or for refund of any freight paid in respect of animals or goods entrusted to a railway administration to be carried by railway. 10. 10. In view of the above categorical and unambiguous mandate of the legislation, the plea of want of jurisdiction of the learned Tribunal, in the opinion of this court, is wholly unconvincing and is, thus, rejected. 11. Admittedly, the consignments of coal were booked between 1.6.2006 and 27.3.2007. The respondent had applied for the benefit under the Scheme on 10.7.2006. The learned Tribunal, therefore, rightly excluded the consignment loaded against invoice Nos. 9 to 12 dated 1.6.2006 from the range of its claim. 12. Vis-a-vis the objection with regard to the single application before the learned Tribunal seeking relief under the Scheme for several consignments covered by multiple railway receipts, it held with reference to a decision rendered by a Division Bench of the learned Tribunal on 24.6.2010 that the determination made therein requiring the application fee to be calculated on the basis of the claim on the individual railway receipts and not on the aggregate that it was to have a prospective effect. Thereby, the learned Tribunal rejected this objection raised before it while answering Issue No.2 to this effect. 13. The learned Standing Counsel has not been able to draw the attention of this court to any verdict of the learned Tribunal or of any other higher forum to the contrary to render this finding untenable. In this view of the matter, the objection against maintainability of the claim before the learned Tribunal vis-a-vis multiple consignments covered by several railway receipts through a single application also does not appeal to this court. 14. That a notice under section 106 of the Railways Act, 1989 was not an essential pre-condition for laying the instant claim was held by the learned Tribunal, amongst others, with reference to the Railway Board's letter No.TCIV/2001/4700/8/Refund dated 15.5.2002 which is extracted hereinableow : "The matter has been examined in this Ministry in consultation with Legal Adviser, Railway Board. It is clarified that the provisions of section 106(3) of the Railways Act, 1989 will not be applicable in case of rebate which is specifically granted in specific conditions and consequently question of such claims of refund of rebate becoming the suit-barred or time-barred will not be governed by the provision of this section of the Railways Act as the same are granted in accordance with specific administrative instructions issued from Railway Board from time-to-time." 15. It further referred to clause 3(10) of the Circular dated 18.3.2006 to conclude that in the facts and circumstances of the case the concerned authorities of the Railways were aware of the fact that the respondent was transporting coal in a covered wagon. It also took note of the fact that the respondent had by its notice dated 24.7.2007 informed the Railways of such transportation. According to it, the Railways having acknowledged receipt of this notice, no other information/notice was required. This finding, considering the materials forming the foundation thereof needs no interference. 16. With regard to the respondent's entitlement to the incentives under the Scheme, the learned Tribunal took notice of the application dated 10.7.2006 submitted by it expressing its intention to participate in the process envisaged thereunder. It recorded that the respondent followed-up the said application by one dated 16.8.2006 to the same effect to the Chief Commercial Manager (Rates), NF Railway, Maligaon and that though the said request was processed, it remained pending with the Railway Board, The following extract from the written statement of the Railways was quoted : "That applicant vide his letter dated 10.7.2006 applied to the Divisional Railway Manager, N.F. Railway, Rangiya Division for getting concession under freight incremental scheme and to the Chief Commi. Manager, N.F. Railway under long-term special incentive. As per Para 4.0(1) of Rates Circular No. 25 of 2006 under incentive scheme for incremental traffic, the coal consignments are completely excluded from granting of concession. As such, the claim application for the benefit of freight incentive on the coal consignment under long-term special incentive scheme is not maintainable and liable to be dismissed." 17. Vis-a-vis the respondent's eligibility, the learned Tribunal referred to a letter dated 2.4.2009 of the Government of India, Ministry of Railways, Railway Board to the following effect : "As per the instructions in Rates Circular No. 44 of 2006, the under Long-term Special Incentive Scheme was applicable to coal loaded in North East Frontier Railway in covered wagons only. It was not available for coal loaded in open wagons. Coal has been excluded from the purview of Long-term Special Incentive Scheme w.e.f. 1.4.2007." 18. It was not available for coal loaded in open wagons. Coal has been excluded from the purview of Long-term Special Incentive Scheme w.e.f. 1.4.2007." 18. The learned Tribunal noticed that the Railways had not denied that the respondent had booked the consignments and transported the coal in covered wagons and that in view of the Scheme circulated by the Circular dated 28.3.2006 and the Corrigendum dated 19.5.2006 he was entitled to the refund of freight. That the Railways had admitted the correct distance between JPZ to SEB and JPZ to KEI to be 917 Km and 1002 km., respectively vide letters dated 1.7.2010 and 6.7.2010 issued by the CCM/FM, NFR/MLG was also brought on record. The respondent's claim to the exclusion of the one relatable to the consignments covered by invoice Nos. 9 to 12 dated 1.6.2006 was, thus, allowed. 19. The findings and reasonings recorded by the learned Tribunal are apparently borne out by the materials on record and can by no means be repudiated as absurd or in defiance of logic. The applicability of the Long-term Special Incentive Scheme as contemplated under the Circular dated 28.3.2006 extends to all terminals with the exception of coal, raw materials to steel plants and iron ore, however, with the rider that coal from NF Railway in covered wagons would stand retained within the scope of the benefits thereof. The said relaxation was carried over by the Corrigendum dated 19.5.2006. As at all relevant times the Circular dated 28.3.2006 and the Corrigendum dated 19.5.2006 held the field and it being admitted by the Railways that the consignments involved (except the one covered by invoice Nos. 9 to 12 dated 1.6.2006) had been transported in covered wagons, the respondent's entitlement to the benefit under the Scheme in absence of any other overwhelming material on record cannot be doubted. 20. According to Mr. Goyal, the respondent had registered its claim for the benefit under the Scheme in the category "All other customers including new customers". The Corrigendum dated 19.5.2006 apparently conceives of two categories of such beneficiarie's under the Scheme (i) those who had given freight earning of more than Rs. 50 crores in the previous financial year; and (ii) other residuary group including new customers. The Corrigendum dated 19.5.2006 apparently conceives of two categories of such beneficiarie's under the Scheme (i) those who had given freight earning of more than Rs. 50 crores in the previous financial year; and (ii) other residuary group including new customers. Vis-a-vis the second group, their entitlement to the benefit under the Scheme on BG systems is discount in freight rates upto 5% in the Busy Season and upto 10% in the Lean Season for a duration upto 3 years. The Corrigendum was supposed to be in force with effect from 1.6.2006. Admittedly, the Circular dated 28.3.2006 was to remain in force for a period of three years. The respondent's claim for the benefit under the Scheme was, thus, squarely within the period of validity thereof. A plain glance of the computation made by the learned Tribunal to quantify the relief awarded to the respondent would demonstrate that the same had been consciously done by bearing in mind the respondent's entitlement under the Scheme in the second category as enumerated hereinabove. 21. On a totality of the considerations as above, I am of the unhesitant opinion that the impugned judgment and order does not warrant any interference in the instant appeal. 22. The appeal lacks in merit and is, therefore, dismissed. No costs.