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HIGH COURT OF GAUHATI
KARDAK ETE, J
M/S SADGURU ENGINEERS AND ALLIED SERVICES PVT LTD AND ANR - Appellant
Versus
THE UNION OF INDIA AND 4 ORS - Respondent
WP(C) 7096 / 2021
Decided On : 29-01-2025
(A) Railway Claims Tribunal Act, 1987 - Section 13 - Railways Act, 1989 - Section 36 - Demurrage Charges - Petitioners challenged the imposition of Penal Demurrage Charges amounting to Rs. 5,15,970/- for not releasing wagons within the permissible time, citing violation of Railway Board Circulars regarding notice and publicity. The court found that the petitioners had an alternative remedy under the Railway Claims Tribunal Act for their grievances. (Paras 2 , 5 , 29 )
(B) Natural Justice - The imposition of charges without adhering to the required procedures violates principles of natural justice. (Paras 9 , 30 )
(C) Procedural Violations - Courts must lean towards substantial justice over procedural violations unless they cause serious prejudice. (Paras 25 )
Facts of the case:
The petitioners, appointed as Carrying & Forwarding Agents for IOCL, were charged Penal Demurrage for delays in unloading Bitumen wagons, citing Covid-19 restrictions and lack of proper notice.
Findings of Court:
The court determined that the petitioners should seek remedy through the Railway Claims Tribunal, as the imposition of charges did not follow required procedures.
Issues: The main issues were whether the imposition of Penal Demurrage Charges was lawful and whether the petitioners had an alternative remedy.
Ratio Decidendi: The court ruled that the petitioners must pursue their grievances through the Railway Claims Tribunal, as the imposition of charges lacked proper notice and publicity.
Result: Writ petition disposed of, with liberty to approach the Railway Claims Tribunal.
JUDGMENT :
KARDAK ETE, J.
Heard Ms. M. Sharma, learned counsel for the petitioners. Also heard Mr.B. Sharma, learned Standing Counsel for the Railway.
2. By filing this writ petition, the petitioners have challenged the impugned Demurrage Charge Bill statements dated 19.10.2021 issued by the Chief Goods Superintendent, Salchapara and the impugned Demand Notice/Letter dated 22.11.2021 issued by the Divisional Railway Manager (C) Lumding, whereby, the petitioners have been directed to pay of Rs. 5,15,970/-(Rupees Five Lakh Fifteen Thousand Nine Hundred Seventy) only as Penal Demurrage Charge.
3. The brief facts of the case are that pursuant to the Public Tender dated 17.07.2018, the petitioner no.1 was approved by the Indian Oil Corporation Limited (hereinafter referred to as IOCL in short) for operation and handling of Packed Bitumen depot of IOCL located on land to be leased by IOCL for a period of 10 years at Silchar, Assam. The petitioner was appointed as Carrying & Forwarding Agents (in short CFA) for operation and handling on land leased to the IOCL at NH-53, Village-Rajnagar, near Srikona Brick Industries at Silchar. Upon appointment at CFA and in terms of the appointment letter and work order dated 29.11.2019 and 01.09.2020, the petitioner has entrusted a consignment “Bitumen” to the Railways in 42 wagons vide electronically transmitted Railway Receipt (et-RR) dated 09.09.2021 from Haldia Dock Complex Bulk, 19-West Bengal for the destination of Salchapara. The said consignment of 42 wagons was arrived and placed at destination Salachapara on 14.09.2021 at 19.40 hours and delivered to IOCL under clear receipt.
4. The Chief Goods Superintendent, Salchapara, had directed the petitioner to make payment of Rs. 7,14,420/-(Rupees Seven Lakhs Fourteen thousand Four Hundred Twenty) only as Penal Demurrage Charge for not releasing 42 wagons within the permissible free time period i.e. 9 hours relying on the Railway Board Circular No. 74 of 2005, which provides the permissible free time for unloading the goods is 9 (nine) hours.
5. Being aggrieved of the said demand, the petitioner had issued a letter dated 16.09.2021 to the Divisional Railway Manager(C), Lumding, for a revision of Demurrage Charge to the tune of Rs. 7,14,420/-(Rupees Seven Lakhs Fourteen thousand Four Hundred Twenty) only accrued against consignment of Bitumen. As the demand of Penal Demurrage Charges which is 6 (six) times of Normal Demurrage Charge is not applicable to the case of the petitioner because as per the Railway Board Circular dated 23.10.2008, the penal/higher rates are to be implemented in case of excessive congestion at any terminal and only after giving wide publicity and due notice of 48 hours.
6. It is the contention of the petitioners that the demand has been issued without giving wide publicity and due notice of 48 hours in violation of the Railway Board Circular dated 23.10.2008. It is also contended that the Railway Authority has violated the mandatory conditions as required under the Railway Board Guidelines dated 01.09.2021 regarding round the clock working at railway terminals.
7. The petitioners contend that the transaction involves are a higher volume of traffic which contains 11642 drums of Bitumen in 42 wagons where the total freight charged by the Railway is Rs. 66,30,413/- (Rupees Sixty Six Lakh Thirty Thousand and Four Hundred Thirteen) only and under such circumstances, the Railways must take up the matter on priority basis but on the contrary the Railway in-charge expressed his inability to give permission for unloading the consignment on the ground that the yard has to remain clear for next rake to be placed, which is unfair, arbitrary and illegal on the part of the respondent authorities in demanding penal Demurrage Charge amounting to Rs. 5,15,970/- (Rupees Five Lakh Fifteen Thousand Nine Hundred Seventy) only as Penal Demurrage Charge.
8. It is contended that due to seco
The imposition of Penal Demurrage Charges without adhering to required notice and publicity violates procedural fairness, necessitating recourse to the Railway Claims Tribunal.
The main legal point established in the judgment is that administrative instructions cannot override statutory rules, and the court declared that the circular could not override Rule 126(1)(b) of the....
Unilateral deductions of demurrage charges from a contractor's bills are impermissible without proper determination of liability as per contractual obligations.
The court emphasized strict adherence to statutory provisions and the necessity of relying on current circulars, ruling that the applicant was not entitled to the claimed freight concession.
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