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2026 Supreme(Cal) 44

IN THE HIGH COURT AT CALCUTTA
Biswaroop Chowdhury, J.
Indian Oil Corporation Ltd. - Appellant
Versus
Union of India - Respondent
F.M.A. 271 of 2024
Decided On : 22-05-2026

Advocates:
Advocate Appeared:
For the Appellant : Mr. Amit Kumar Nag, Adv. Mr. Partha Banerjee, Adv.
For the Respondent/UOI (South Eastern Railway): Mr. Pinaki Bhattacharyya, Adv. Mr. Partha Chakraborty, Adv.

A circular mandating the replacement of 'Owner Risk' with 'Railway Risk' precludes a 20% surcharge. Separate transport agreements constitute distinct causes of action, thus separate claims for different consignments do not violate the procedural rule against the splitting of claims.

Headnote:(A) Railway Claims Tribunal Act, 1989 - Section 16 - Code of Civil Procedure, 1908 - Order 2 Rule 2 - Refund of surcharge - Levy of 20% surcharge on freight - Interpretation of circular regarding risk rates - Concept of Owner’s Risk (OR) versus Railway Risk (RR) - Replacement of OR with RR and its effect on surcharge - Whether multiple suits for distinct consignments are barred by Order 2 Rule 2 - Procedural rules in specialized tribunals. (Para 7-8, 14-18)

(B) Order 2 Rule 2 CPC - Scope and ambit - Intention to prevent multiplicity of suits - Principle that a second suit is barred only when based on identical cause of action - Each consignment agreement constitutes a separate and distinct cause of action - Specialized tribunals are governed by principles of natural justice and not by rigid technical procedures. (Para 18-20)

Facts of the case:
The appellant sought a refund of an additional 20% surcharge levied on the transportation of a chemical product by rail. The appellant contended that a government circular had mandated the replacement of the 'Owner’s Risk' category with 'Railway Risk', which excluded the levy of the additional surcharge. The respondent contested the claim, arguing that the appellant had previously filed a separate suit on the same day for a different consignment, thus violating the provisions against splitting claims under Order 2 Rule 2 of the Code of Civil Procedure.

Findings of Court:
The court observed that the circular clearly mandated the replacement of the risk category, rendering the imposition of the additional surcharge invalid. Regarding the procedural objection, the court held that since the disputes arose from different consignments booked on different dates, they constituted distinct causes of action. Consequently, the prohibition against splitting claims was found inapplicable to these separate commercial transactions.

Issues: The main issues were whether the additional 20% surcharge was legally leviable under the applicable government circular and whether the initiation of two separate claim cases for two different consignments was barred by the rule against splitting of claims.

Ratio Decidendi: The court established that circulars mandating the substitution of risk classifications in freight tariffs preclude the additional surcharge on the specified commodities. It further clarified that every distinct consignment agreement creates an independent cause of action; therefore, separate claims for separate shipments do not fall under the bar of Order 2 Rule 2 of the Code of Civil Procedure.

Result: Appeal allowed. The impugned award was set aside, and the respondent was directed to refund the additional surcharge with interest.

Table of Content
1. procedural context for appellate review of statutory tribunal awards. (Para 1 , 4 , 5 , 6)
2. contention regarding the legality of surcharge imposition and procedural bar under order 2 rule 2 cpc. (Para 2 , 3 , 7 , 8 , 9 , 10 , 11)
3. statutory application of railway circulars for commodity freight surcharge exemption. (Para 12 , 13 , 14 , 15 , 16 , 17)
4. distinct cause of action doctrine for separate consignment agreements under order 2 rule 2. (Para 18 , 19 , 20)
5. remedial order for recovery of illegally levied freight charges. (Para 21 , 22 , 23)

Judgment :

Biswaroop Chowdhury, J.

1.The appellant before this Court was an applicant under Section 16 of the Railway Claim Tribunal Act 1989 and is aggrieved by the Judgement and Award dated 21-06-2016 passed by Learned Railway Claims Tribunal, Kolkata Bench in claim Application No. OA(III)/Kol/2013/0034 filed by the applicant/appellant.

2. The case of the applicant/appellant before Learned Tribunal may be summed up thus:

3. One racket of Naptha was loaded and booked EX-HDCB to I.O.C/Bahauli from 17-07-11 to 29.10.11 vide RRs. The local booking authority charged 20/RR surcharge whimsically total amounting to Rs. 8,67,595/-. Inspite of several letters representation and protest by IOCL authority to the Railway authorities against the said erroneous RR Surcharge the Railway authority did not consider IOCL against the illegal deduction of RR and regret the IOCL justified demand. Getting no other alternative to get the refund of illegally deducted 20/RR, Surcharge amounting to Rs. 86,7595/-, the applicant prayed for passing an award of Rs. 8,67,595/- with cost and interest 15% per annum from 17-07-11 till finalization of the case along with application fees Rs. 6805/- and advocate fees etc.

4. The Respondent Union of India contested the case by filing written statement. ISSUES were framed and evidence was adduced. Learned Tribunal upon considering the evidence and upon hearing the Learned Advocates for the parties by Judgment and Award dated 21-06-2016 was pleased to dismiss the claim case.

5. The appellant/applicant being aggrieved by the Judgment and Award passed by the Learned Tribunal has come up with the instant appeal.

6. Heard Learned Advocates for the parties. Perused the evidence adduced and materials on record.

7. Learned Advocate for the appellant submits that the Railway Circular dated 16-10-2007 applies to the case of the appellant. As per Goods Tariff No. 45, Part-I (VOL-II) which was given effect from 1st April 2007 in clause 12.0 thereof the abbreviation “OR” in Column No. 6 (Captioned as 'Risk Rate') was defined as 'Owner Risk'. As opposed to the same the expression 'RR' was defined as Railway Risk'. The concept was that if the consignment was booked with the endorsement 'OR' in the Risk Rate Column (Column No.6) the risk for the same would be covered by the owner, whereas if the booking was with the endorsement 'RR' under Column No.6 the risk would be of the Railways for which payment of 20% surcharge was levied by Railways.

8. Learned Advocate further submits that during the subsistence of Good Tariff No. 45, Part-I (VOL-III) the Railway Board issued circular dated 16th October 2007, universally replacing the endorsement'OR' with 'RR'. As such from the said date there would be no option for the consigns to book a consignment by depicting 'OR' under the Risk Rate Column but the consignor would be compulsorily have to book the goods as 'RR'. In the said circular the product Petroleum Products and Gases, under which the commodity-in- question (Naptha) falls is under the 'General Tariff Lines.' Therefore as per the Circular the consignment had to be booked with endorsement 'RR' in Column-6 and would be free from levy of additional 20% surcharge. Learned Advocate also submits that the application does not fall within the purview of Order 2 Rule 2 of the Code of Civil Procedure 1908. The appellant has filed two claim case before the Railway claim Tribunal for two

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