The main legal point established in the judgment is that the claim for refund of illegally recovered freight amount was not barred by limitation as it was a case of illegal realization of freight, not overcharge, based on the interpretation of Section 106(3) of the Railways Act, 1989 and relevant case law.

ORDER :

1. Leave granted.

2. The challenge in the present appeals is to the order of the High Court of Punjab and Haryana at Chandigarh dated 31st March, 2016 by which the rejection of the claim of amount paid in excess by the appellant to the respondent – railways between the period 1st April, 2008 to 30th September, 2010 by the Railway Claims Tribunal, Chandigarh has been upheld by the High Court.

3. The core facts that will be required to be noticed are as follows:

The appellant, a public sector organization, had dispatched various petroleum products through Railway Tank Wagons of the respondent from Asaudah Railway Station, District Rohtak, Haryana to Partapur, District Meerut, Uttar Pradesh and to some other destinations located in different parts of the country. The freight was paid by the appellant as per the notified distance i.e. 125 kilometers, so notified by the Chief goods Supervisor, the competent authority at the relevant point of time. The dispatch of the petroleum products continued for a long period between the year 2008 and 2011 and the freight charges were paid according to the distance between the destinations as notified by the competent authority of the respondent. When the manual system of generating railway receipts was discontinued and the respondent had installed computerized railway freight charges system called Terminal Mechanism Railway (TMS) at Asaudah Railway Station, the distance between Asaudah Railway Station, District Rohtak, Haryana and Partapur, District Meerut (Uttar Pradesh) was notified as 100 kms. instead of 125 kms. This was on 27th February, 2011.

Thereafter, it appears, that the appellant issued a notice/letter dated 30th March, 2011 seeking refund/return of the illegally recovered freight amount for extra distance(s) charged against manually generated railway receipts during the period between 1st April, 2008 and 27th February, 2011. While the claim of the appellant for the period from 1st April, 2008 to 30th September, 2010 was rejected on the ground that the same was beyond the six months’ period prescribed under Section 106(3) of the Railways Act, 1989, the claim for the period from 1st October, 2010 to 27th February, 2011 was entertained and an amount of Rs.3.81 crore was paid by the respondent to the appellant. Aggrieved, the appellant filed a total number of 1648 applications before the Railway Claims Tribunal, Chandigarh along with delay condonation applications in respect of 1041 claims which were dismissed by the learned Tribunal on the ground of non-compliance with the requirement of notice under Section 106(3) of the Railways Act, 1989. The order of the learned Tribunal was taken in appeals before the High Court and the appeals having been dismissed, the present appeals have been filed upon grant of special leave under Article 136 of the Constitution of India.

4. We have heard the learned counsels for the parties.

5. The submission advanced by Shri K.V. Vishwanathan, learned Senior Counsel appearing for the appellant has been short and precise. Referring to the provisions of Section 106(3) of the Railways Act, 1989, the learned Senior Counsel has urged that requirement of giving notice within six months from the date of such payment or the date of delivery of such goods at the destination station, whichever is later, is only in cases of overcharge by the Railways. The present, according to the learned Senior Counsel, is not a case of overcharge but is one of illegal realization of freight. This, learned Senior Counsel contends, is on account of the fact that the freight was paid as per the fixed rate on the basis of the notified distance(s). There was really no overcharge. Subsequently, the distance was corrected and re-notified which would make the realization an illegal one and not one of overcharging.

6. Learned Senior Counsel has relied on a decision of this Court in Union of India and others vs. West Coast Paper Mills Ltd. And another, (2004) 3 SCC 458 to contend that the di