The court determined that penal charges under the Railways Act can be levied even after delivery, contrary to prior assertions that such charges must be applied beforehand.

1. Leave granted.

2. The present appeals arise from the final judgment and order dated 20th December 2021 passed by the Gauhati High Court in MFA Nos.80 of 2016, 57 of 2016, 29 of 2017 and 28 of 2017 respectively, whereby the order dated 19th January 2016 of the Railway Claims Tribunal, Guwahati Bench in OA Nos.229/12, 184/12, 228/12 and 185/2012 respectively came to be affirmed.

3. Brief facts
The brief facts giving rise to this appeal are that the Appellant raised demand notices of varied amounts dated 13th October 2011, 7th April 2012, 29th October 2011, as also 7th April 2012 respectively against the respondents, alleging mis - declaration of goods; for consignments sent through the Indian Railways. The respondents paid the demands raised and thereafter, preferred separate claim petitions under S.16 of the Railway Claims Tribunal Act, 1987, before the Railway Claims Tribunal (Hereafter "the Tribunal"), Guwahati Bench, seeking a refund of the amount paid. It was stated therein that the demand notices being issued after the delivery of the goods were illegal in view of S.73 and S.74 of the Railways Act, 1989 (Hereafter "the Act").

4. The Tribunal, allowed the claim petitions vide a common order dated 19th January 2016, and directed for refund of the amount paid in the following manner, along with interest @ 6% per annum :

5. The Tribunal placed reliance on the judgment of the Gauhati High Court in Union of India v. Megha Technical & Engineers Pvt. Limited, W.A. Nos. 71 - 74 of 2013, Gauhati High Court, whereby the Court had held that a demand under S.83 of the Act has to be raised before delivery of the goods, to conclude that the Appellant could not have imposed punitive charges, after delivery of goods to the consigner and if such action was required, then the principles of natural justice have to be followed.

6. Aggrieved thereof, the appellant, preferred an appeal before the High Court of Gauhati, stating therein that the Tribunal failed to consider that the consignments were booked by declaring the items to be one category, however, the loaded items were found to be different from the category declared.

7. The High Court, vide its impugned judgment and order, dismissed the appeals of the appellant. The Court made the following observations :
(a) Both S.74 of the Act and Rule, 1820 of the Railway Commercial Manual II, 1991, permit recovery of dues before the delivery of goods.
(b) The scope of S.83 of the Act has been dealt by this Court in Jagjit Cotton Textile Mills v. Chief Commercial Superintendent N.R. and Ors., (1998) 5 SCC 126 , wherein it was held that punitive charges are required to be raised by the Railway authorities before delivery is caused.
(c) From a perusal of S.73 and S.78 of the Act, it is revealed that penal charges can be claimed prior to the delivery of goods, but not thereafter.

8. Dissatisfied, the appellant - Railway authorities are now before us. We have heard the learned Additional Solicitor General for the appellant and the learned counsel for the respondents.

9. Case of the Appellant - Railway Authorities
The significant point raised by the appellant is that the Courts below have erroneously treated the dispute at hand, as one dealing with overloading of the wagon which is governed by S.73 of the Act. Meanwhile, the case of the appellant is that the consignments were found to be different, from what had been declared, and, consequently, the appellant imposed a penalty under S.66 of the Act.

10. Furthermore, the High Court's reliance on Jagjit Cotton Textile (supra), is erroneous, since the factual matrix of that case pertained to overloading of