Recovery of undercharged freight must occur before delivery of goods; demands made post-delivery are invalid under Railways Act, 1989.

JUDGMENT :

M.A. ABDUL HAKHIM, J.

1. The parties and the issues are the same in both these Writ Petitions, and hence I dispose of these Writ Petitions by a common judgment.

2. In both these Writ Petitions, the Petitioner challenges the demands issued by the Railway authorities alleging undercharging of freight for the consignments transported through the railways to the petitioner. In W.P.(C) No.33189/2007, the impugned orders are Exts.P5, P8, and P9. Exts.P5 and P8 relate to a demand of Rs.54,77,275/- with respect to twenty-three numbers of Railway Receipts. Ext.P9 relates to a demand of Rs.1,49,429/- with respect to one Railway Receipt. In W.P.(C) No.4264/2008, the impugned orders are Exts.P6, P8, and P10 demanding an amount of Rs.84,128/- with respect to four Railway Receipts.

3. The basis for the demands made by the Railway authorities is that the freight for the goods transported to the petitioner, namely, 'De-oiled Rice Bran', should have been charged under Classification No.110 instead of Classification No.100 under which the goods were charged when they were transported.

4. The Petitioner is a public limited company engaged in the business of manufacturing ready-mix cattle feed. The petitioner has manufacturing units at various places, including Irinjalakuda in Thrissur District and Swaminathapuram in Dindigul District in Tamil Nadu. The Petitioner used to purchase raw materials for the manufacturing of cattle feed from other States and to transport the same through the railways. It is the case of the Petitioner that the Petitioner purchased raw materials from the consignor as per Free on Rail (F.O.R.) Contracts by which it is the burden of the consignor to pay the freight charges. Since the railway freight is borne by the consignor, the petitioner fixed the purchase price in the contract after taking into account the tariff prescribed for the transportation of goods. No freight is payable alleging wrong classification or error after the delivery of the goods, and if at all any additional freight is payable, the same is to be paid by the consignor who has transported the goods to the petitioner through railways under an F.O.R. Contract.

5. The Respondents have filed Counter Affidavits and Additional Counter Affidavit in these cases.

6. I heard the learned Senior Counsel for the petitioner, Adv. Sri. E.K. Nandakumar, instructed by Adv. Smt. Ramola Nayanpally, and the learned Standing Counsel for the Railways, Sri. T.C. Krishna.

7. The contention of the learned Senior Counsel for the Petitioner is that the goods happened to be wrongly classified by the Railways on account of the mistake committed by its own employees, and the Petitioner is not in any way responsible for the mistake committed by the Railway authorities. The Railway authorities have no case that either the consignor or the Petitioner has made any misdescription of the goods. The present demands are issued long after the delivery of the consignments. The contracts between the consignor and the Petitioner with respect to the goods covered by the disputed Railway Receipts are governed by the F.O.R. Contract, by which the consignor alone is responsible for making payment of the freight charges. If any amount at all is due to the Railways, the Railways has to proceed against the consignor in the disputed Railway Receipts. The re-classification of the goods after completion of the transport and delivery is clearly unjustifiable. The learned Senior Counsel invited my attention to Section 78 of the Railways Act, 1989 (for short, the Act), and contended that it is impermissible for the Rai