IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF MAY, 2019 BEFORE THE HON'BLE MR.JUSTICE ASHOK G. NIJAGANNAVAR M.F.A. NO.11407 OF 2012 (RCT) BETWEEN:
THE UNION OF INDIA, REPRESENTED BY GENERAL MANAGER.
(i) SOUTH WESTERN RAILWAY, HUBLI.
(ii) SOUTH CENTRAL RAILWAY, RAIL NILAYAM, SECUNDERABAD. …APPELLANTS (BY SMT.KAVITHA H.C, ADVOCATE) AND:
M/S MINERAL ENTERPRISES PVT. LTD., COMPANY REGISTERED UNDER THE COMPANY’S ACT, REPRESENTED BY ITS HEAD LOGISTICS, MR.SRINIVAS MURTHY, S/O P.V.NARASHIMHAM, AGED AOBUT 43 YEARS, M/S MINERAL ENTERPRISES PVT. LTD., NO.300/1B, 16TH CROSS, SADASHIVANAGARA, BENGALURU – 560080. ...RESPONDENT (BY SRI.ADITYA NARAYAN, ADVOCATE) **** THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER SECTION 23(1) OF RAILWAY CLAIMS TRIBUNAL, AGAINST THE JUDGMENT AND AWARD DATED 15.06.2012 PASSED IN OA III 1/2009 ON THE FILE OF THE RAILWAY CLAIMS TRIBUNAL, BANGALORE, BENCH, BANGALORE, AWARDING COMPENSATION OF RS. 8,85,830/- WITH INTEREST @ 6% P.A. FROM THE DATE OF APPLICATION TILL THE DATE OF ORDER AND @ 9% FROM THE DATE OF ORDER TILL ACTUAL PAYMENT.
THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT, COMING ON FOR PRONOUNCEMENT OF JUDGMENT, THIS DAY ASHOK G. NIJAGANNAVAR J., PRONOUNCED THE FOLLOWING:
JUDGMENT Though this appeal is coming on for admission, with the consent of the learned counsel for the appellants and the respondent, arguments are heard on merits.
2. The respondent before the Tribunal is the appellant in this appeal. This appeal is filed for setting aside the impugned order dated 15.6.2012 in O.A. No.III 1/2009 passed by the Railway Claims Tribunal, Bengaluru Bench at Bengaluru.
3. The appellant is the Union of India represented by (i) the General Manager, South Western Railway, Hubli, (ii) South Central Railway, Secunderabad. The facts briefly stated are that the respondent M/s Mineral Enterprises Pvt. Ltd., was transporting the minerals through the appellant railways from Ammasandra to Panamburu as per the rates fixed for transportation of the consignment. The distance from Ammasandra Railway Station to Panamburu was calculated as 365 Kms. and freight was charged as per the rate fixed by the railways. The freight charges were dependent on the distance between the place of loading and unloading of consignment. Later, on enquiry it was learnt that the actual distance between Ammasandra Railway Station to Panamburu post is only 359 Kms. and not 365 Kms. as charged by the appellant railways. Therefore, the respondent Company made correspondence with the railways through letters dated 3.10.2006, 5.5.2007 and 20.07.2007 requesting to take corrective action. The appellant railways settled the claim of respondent Company in respect of excess freight charges which were within the limitation period and the remaining excess charges were not paid on the reason that they are barred by limitation. Being aggrieved by the repudiation of claim for remaining excess freight charges by the railways, the respondent filed a claim petition before the Railway Claims Tribunal.
4. On appearance the appellant railways filed reply statement contending that the letter correspondence made in respect of the alleged refund of excess freight charges do not reflect or indicate that the applicant has made the claim within the period of six months. The applicant had sought the clarification only with regard to the distance from Ammasandra Railway Station to Panamburu vide their letter dated 03.10.2006, but has not made any claim in respect of the refund of excess freight charges alleged to have been paid by the applicant. The Senior Division Commercial Manager has appropriately replied the applicant about the actual distance between Ammasandra to Panamburu. The consignment of iron ore booked are charged as per the rate list of railways. On the claim of refund of the difference in freight is required to be made within six months from the date of booking of consignment, whereas the applicant has submitted the claim only on 22.8.2007 after the lapse of six months in respect of 22 RRs out of 30 RRs which has been repudiated under the letter dated 18.1.2008 whereas the balance 8 RRs were considered by the railways and refunded a sum of Rs.2,78,860/-. The freight applicable for the consignment booked by the applicant was calculated as per the distance of 365 Kms. and not 358 Kms. and the said rate was accepted by the applicant at the time of booking consignment. Thereafter the applicant has only sought for clarification with regard to the distance from Ammasandra Railway Station to Panamburu Railway Station vide their letter dated 3.10.2006 . But they have not made any claim in respect of refund of excess freight charges alleged to have been paid.
5. Based on the aforesaid pleadings the Railway Claims Tribunal has framed the following issues:
i. Whether the claim is barred by limitation ?
ii. Whether the applicant is entitled for refund of Rs.8,85,173/- with interest from the respondent ?
iii. To what relief ?
6. The representative of the respondent Company was examined as AW.1 and the documents were marked as A1 to A11. The Commercial Inspector / CCO (O) SBC Railways was examined as RW.1 and the documents were marked as R1 to R23.
7. On appreciating the oral and documentary evidence placed on record the Railway Claims Tribunal allowed the petition directing the appellant railways to refund the excess freight charges of Rs.8,85,830/- along with simple interest at the rate of 6% p.a. from the date of claim petition till the date of actual payment.
8. Being aggrieved by the said order the appellant railways has preferred the appeal on the grounds that the Railway Claims Tribunal has erred in allowing the claim based on the respondents’ letter dated 3.10.2006 marked as A1 and has erroneously considered the said letter as notice under Section 106 of the Railways Act. In the letter dated 3.10.2006 no claim whatsoever for refund was made. The claim for refund is made only after reply dated 24.7.2007 which is given by the appellants. The Tribunal has failed to consider that as per Section 106 (3) of Railways Act, a person shall not be entitled to a refund of an overcharge in respect of goods carried by railway unless a notice therefore has been served by him or on his behalf to the railway administration to which the overcharge has been paid within six months from the date of such payment or the date of delivery of such goods at the destination station, whichever is later. The Tribunal has erroneously applied the principle of unjust enrichment. The letter correspondence do not make out a case that all claims were within the limitation period. The evidence placed by the appellant railways has not been properly appreciated. The Tribunal has not considered the same in a proper perspective. Thus, it has resulted in miscarriage of justice.
9. Heard, perused the impugned judgment and all relevant oral and documentary evidence to which my attention was specifically drawn.
10. Reiterating the contentions made in the appeal memo, the counsel for the appellant would strenuously contend that the documents at A1, A2 and A3 and other letter correspondences cannot be construed as notice for refund of the excess charges within limitation period. Some of the claims regarding excess charges have been settled by the railways which were within the limitation period. But the claims which were beyond limitation period could not be settled as they were barred by limitation. In view of Section 106 of the Railways Act, the claims which are not within the prescribed limitation period cannot be entertained. The reasoning of the Tribunal and the finding that the letter dated 3.10.2006 should be treated as notice are erroneous and not justified. The repudiation of the claim by the appellant railways was perfectly justified. As such there are valid grounds for interference and setting aside the impugned order. In support of said contention the learned counsel has relied on a decision reported in 1995(2) SCC 493.
11. Per contra, the learned counsel for the respondent submitted that the recitals and the contents in EXs.A1, A2, A3 clearly indicates that the railways was requested to take corrective action. But the railways did not give the reply regarding the actual distance between Ammasandra and Panamburu. No specific notice for refund was made. But as far as A1, A2 and A3 are concerned, there was a clear request for corrective action namely, the refund of excess charges. Thus the Railway Claims Tribunal has rightly come to the conclusion that the respondent Company was entitled for refund of excess charges. In support of the said contention the learned counsel has relied on three decisions reported in AIR 1962 SC 1879, AIR 1969 SC 23 and 1995 SCC Online Ker 265.
12. The main contention of the counsel for the respondent is that EX.A1 which is the letter dated 3.10.2006 has to be considered as a notice for refund of excess freight charge, and the appellant railways is under the obligation to repay the claim of Rs.8,85,000/- towards excess freight charges.
13. In view of the rival contentions the only question that arises for consideration is, whether the learned Railway Claims Tribunal has committed error in allowing the claim for refund of excess charges ?
14. It is an admitted fact that the respondent Company had transported the iron ore fines/minerals through the railways for the period from 25.05.2006 to 04.01.2007 at the rates fixed by the railways. The main controversy was in respect of refund of excess freight charges said to have been collected by the railways than the prescribed rates fixed on the basis of distance. In that connection the respondent Company had sought for clarification about the actual distance for which the appellant railways gave the reply. As could be seen from the records the actual distance between Ammasandra to Panamburu is 358 kms., whereas the railways had calculated the distance as 365 kms., but they have collected the rates applicable for the distance above 360 Kms. It is an admitted fact that after clarification regarding actual distance, the railways had settled some of the claims of the respondent Company regarding excess charges which were within the limitation period. Some of the claims to an extent of Rs.8,85,000/- were rejected on the reason that they were barred by limitation. Under these circumstances, it is necessary to ascertain whether the repudiation of claims regarding Rs.8,85,000/- was justified.
15. Section 106 of the Railways Act reads as under :
106. Notice of claim for compensation and refund of overcharge – (1) A person shall not be entitled to claim compensation against a railway administration for the loss, destruction, damage, deterioration or non-
delivery of goods carried by railway, unless a notice thereof is served by him or on his behalf – (a) to the railway administration to which the goods are entrusted for carriage; or (b) to the railway administration on whose railway the destination station lies, or the loss, destruction, damage or deterioration occurs, within a period of six months from the date of entrustment of the goods.
(2) Any Information demanded or enquiry made in writing from or any complaint made in writing to, any of the railway administrations mentioned in sub-section (1) by or on behalf of the person within the said period of six months regarding the non- delivery or delayed delivery of the goods with particulars sufficient to identify the goods shall, for the purpose of this section, be deemed to be a notice of claim for compensation.
(3) A person shall not be entitled to a refund of an overcharge in respect of goods carried by railway unless a notice therefor has been served by him or on his behalf to the railway administration to which the overcharge has been paid within six months from the date of such payment or the date of delivery of such goods at the destination station, whichever is later.
16. Section 78 (B) of Old Act reads as under:
Notification of claims to refunds of overcharges and to compensation for losses: - A person shall not be entitled to a refund of an overcharge in respect of animals or goods carried by railway or to compensation for the loss, destruction, damage, deterioration or non-delivery of animals or goods delivered to be so carried, unless his claim to the refund or compensation has been preferred in writing by him or on his behalf.
(a) to the railway administration to which the animals or goods were delivered to be carried by railway, or (b) to the railway administration on whose railway the destination station lies, or the loss, destruction, damage or deterioration occurred, within six months from the date of the delivery of the animals or goods for carriage by railway:
Provided that any information demanded or inquiry made in writing from, or any complaint made in writing to, any of the railway administrations mentioned above by or on behalf of the person within the said period of six months regarding the non-delivery or delay in delivery of the animals or goods with particulars sufficient to identify the consignment of such animals or goods shall, for the purposes of this section, be deemed to be a claim to the refund or compensation.
17. Section 78(B) of Old Act is corresponding Section of Section 106 of the New Act.
18. The documentary evidence produced by the respondent M/s. Mineral Enterprises Pvt. Ltd., namely, the EXs.A1, A2 and A3 are the letters. The recitals of EX.A1 are as under:
MINERAL ENTERPRISES LIMITED 300/1B, 16TH CROSS, SADASHIVNAGAR, BANGALORE – 560080 INDIA Tel: 2361 2569, 2361 3182 Fax: 2361 2737 E-mail:minent@blr.vsnl.net.in TO, DATE: 03.10.06 SENIOR DIVISIONAL COMMERCIAL MANAGER, South Western Railways, Mysore Division, Irwin Road, Mysore.
THROUGH CHIEF GOODS SUPERVISIOR/ AMMASANDRA SIR, Subject: Excess Fare charged at Ammasandra Station.
This has reference to the above cited, we had started loading rakes from Ammasandra to Panambur post commissioning of Hassan Mangalore line we notice from our RR’s that we have been charged for 365 kms as against the actual distance of 359 kms.
In view of the above and also considering our potential to move large quantities from Ammasandra, we kindly request you to look into the matter and take necessary corrective action.
Thanking you For M/s Mineral Enterprises Ltd.
Sd/-
AUTHORIZED SIGNATORY 19. The contents of EX.A2 and A3 are also similar to that of EX.A1. As far as the aforesaid recitals stated in EX.A1 is concerned, there is no specific request or demand for refund of excess freight charges. It is only a clarification sought regarding the distance between Ammasandra to Panamburu. Likewise even contents of EX.A2 and A3 are only regarding the subject excess fair charged at Ammasandra Station and the discrepancy in the calculation of distance from Ammasandra to Panamburu. The evidence placed on record indicate that as on the date of writing these letters, the respondent Company was not aware of actual distance between Ammasandra and Panamburu. Therefore, he had sought for the clarification.
20. EX.A5 is the letter dated 22.8.2007 which was sent by the respondent Company for refund of excess freight between 25.5.2006 to 19.07.2007 from Ammasandra station. Thus the main controversy would be whether the claim for refund of excess freight charge from 25.05.2006 to 19.7.2007 is within the prescribed limitation period as provided under Section 106 of the Railways Act of Section 78(B) of the Old Act.
21. The next contention of the respondent’s counsel is that even though there are no specific recitals for claiming the refund of excess charges when there was a request for corrective action to be taken that itself is sufficient to substantiate the claim of the respondent Company to recover the excess freight charges paid by them. In this connection three decisions have been cited namely, (1) In the case of Jetmull Bhojraj vs. Darjeeling Himalayan Railway Co. Ltd., and others reported in AIR 1962 SC 1879.
“Railway Act (9 of 1890), S.77 – (as it stood prior to amending Act of 1961) – Notice under – Object of – Construction of notice – Liberal construction favoured – Letter briniging to notice of railway administration non delivery of part consignment and also requesting it ot take appropriate action without delay – Sufficient notice for purpose of S.77 – Claim for compensation must be deemed to be implied in notice.”
The aforesaid decision was pertaining to a dispute of a claim for compensation in respect of the damage to the goods delivered ; considering the factual aspects of the said case it was held that the letters for enquiry may be construed as notice.
(2) In the case of Union of India vs. M/s India Cements Ltd., reported in AIR 1995 SCC Online Ker 265.
In the aforesaid decision AIR 1962 SC 1879 is relied and it was held that the mere fact that the former claim notice was sent subsequently beyond six months from the date of booking the goods will not be a bar to the maintainability of proceeding on the ground of limitation. In the said case the claim was for compensation towards the damages said to have been caused to the consignment of cement sent through railways. Based on the facts pertaining to the said dispute it was held that the proceedings for claiming compensation are maintainable even beyond six months of limitation period.
(3) In the case of Niranjanlall Agarwalla vs. Union of India reported in AIR 1969 SC 23.
Even in this decision the earlier decision of AIR 1962 SC 1879 was relied on and it was held that the point of limitation is not of any substance. The dispute involved in the said case was regarding compensation of the short delivery of the goods and the Certificate of Shortage was issued to the plaintiff by the railways. Considering the factual aspect it was held that notice under Section 77 should be liberally construed.
22. It is pertinent to note that all the aforesaid decisions are in respect of claims made for the compensation either for the damage caused to the consignment or short delivery. But the facts of the case on hand are different. Thus, the said decisions are distinguishable. According to the claimant – respondent the letter dated 3.10.2006 was required to be considered as a notice and the claims should have been settled holding that they were within the limitation period. But Section 106 of Railways Act clearly contemplates that knowledge or no knowledge the claim must be preferred within the limitation prescribed from the date of booking the consignment. Thus, in my humble opinion the aforesaid decisions are not aptly applicable to the facts of this case.
23. The learned counsel for the appellant railways has relied on a decision in the case of Birla Cement Works vs. G M, Western Railways and another reported in (1995) 2 SCC 493, wherein the Hon’ble Supreme Court has held under:
“ Railways - Railways Act, 1890 – S.78.B – Railway Claims Tribunal Act, 1987 – S 16 - Limitation - Computation of – Claim to refund of excess freight notified under S.78- B beyond the statutory time-limit on discovering the mistake from railway authorities’ letter – Rightly held by the Tribunal and the High Court to be time- barred – Further held, provision in.
XXX 4. Section 78-B of the Act provides that a person shall not be entitled to refund of overcharge or excess payment in respect of animal or goods carried by Railway unless his claim to the refund has been preferred in writing by him or on his behalf to the Railway Administration to which the animals or goods were delivered to be carried by Railway etc. within six months from the date of the delivery of the animals or goods for carriage by railway the proviso has no application to the fact of this case. An overcharge is also a charge which would fall within the meaning of Section 78-B of the Act. Since the claims were admittedly made under Section 78-B itself but beyond six months, by operation of that provision in the section itself, the claim becomes barred by limitation. Therefore, the Tribunal and the High Court have rightly concluded that the petitioner is not entitled to the refund of the amount claimed. ”
24. In the aforesaid case the principal contention raised by the petitioner was that the claimant had discovered the mistake when the railway authorities confirmed by their letter that they had committed a mistake in charging excess freight on wrong calculation of distance. As such, the limitation starts running from the date of discovery of mistake and therefore stands excluded by the operation of Section 17(i)(c) of Limitation Act and that Section 78(B) has no application to the facts in this case. But it was held that Section 17(i)(c) of Limitation Act, 1963, would apply only to a suit instituted or an application made in that behalf in the civil suit but whereas the Tribunal is the creature of statute, therefore it is not a civil court nor the limitation act has application, even though it may be held that the petitioner discovered the mistake committed in paying the over charges, the limitation is not saved by operation of Section 17(i) (c) of the Limitation Act.
25. The facts of the case on hand are exactly similar to that of the facts involved in the aforesaid decision. The Hon’ble Supreme Court in the said situation has held that the claims made under Section 78(B) are barred by limitation. As such, they cannot be entertained. The aforesaid decision was not at all referred or considered in the decisions relied on by the counsel for the claimant – respondent. The doctrine of binding precedent is of utmost importance in the administration of judicial system. It brings certainty and consistency in judicial decisions. The judicial consistency promotes confidence in the system. The ratio laid down in the aforesaid decision ((1995) 2 SCC 493) is aptly applicable to the facts of this case. As such, the claims which are barred by limitation in view of Section 106 of the Railways Act (78(B) of the Old Act) cannot be entertained.
26. Another contention of the learned counsel for the respondent is that even if the claim is held to be barred by limitation, the relief for refund of excess charges collected by the Railways may be granted by applying the principles of unjust enrichment.
27. The learned Tribunal has relied on a decision in the case of Mahabir Kishore and others v. State of M.P. reported in AIR 1990 SC 313, wherein it is observed as under:
(A) Contract Act (9 of 1872), S.72 – Unjust enrichment – Ingredients.
“ The principle of unjust enrichment required; first, that the defendant has been enriched by the receipt of a benefit; secondly, that this enrichment is at the expense of the plaintiffs; and thirdly, that the retention of the enrichment be unjust. This justifies restitution. Enrichment may take the form of direct advantage the recipients wealth such as by the receipt of money or indirect one for instance where inevitable expense has been saved. ”
(B) Contract Act (9 of 1872), S.72 – Money paid under mistake of law – Suit for refund – Limitation – Starting point.
28. The facts involved in the said case are that the appellant firm was allotted contracts for manufacture and sale of liquor for the year 1959 and for the subsequent period from 1960-1961 and the Government had charged 7.5% cess Mahuwa and Fuel cess over the auction. Later the Hon’ble High Court of Madhya Pradesh in a decision in the case of Sirajuddin v. State of M.P., reported in 1962 MPLJ 130 declared that collection of 7.5% Mahuwa and fuel cess above the auction money was illegal. On 17.10.1961 the Government of Madhya Pradesh had decided not to charge extra 7.5% cess on auction money. As such it was contended that the limitation would start from the date of the order passed by the Government of Madhya Pradesh. But the claimant – appellants in the said case after coming to know about the said decision of the Hon’ble High Court, gave a notice under Section 80 CPC before filing the suit. In the appeal before the Hon’ble Supreme Court the question of Limitation Act under Section 17(c) of the Limitation Act, had arisen for consideration and it was held that the limitation starts from the date of the judgment/order passed by the Hon’ble Court in writ petitions holding that the calculation of Mahuwa and fuel cess is illegal. The Hon’ble Supreme Court considering the facts involved in the said case has held as under:
“ It is thus a settled law that in a suit for refund of money paid by mistake of law, s. 72 of the Contract Act is applicable and the period of limitation is three years as prescribed by Article 113 of the Schedule to the Indian Limitation Act, 1963 and the provisions of s. 17(1)(c) of that Act will be applicable so that the period will begin to run from the date of knowledge of the particular law, where- under the money was paid, being declared void; and this court be the date of judgment of a competent court declaring that law void.”
And further held that the suit filed by the claimants would be within a period of limitation under Article 113 of the Schedule to the Limitation Act, 1963. The principles of unjust enrichment are also considered for granting the relief to the claimant-appellants in the said case.
29. In view of the Judgment of the High Court of Madhya Pradesh, the right had accrued to the claimant for seeking the refund of 7.5% cess. As such, the Hon’ble Supreme Court has held that the suit was within the limitation period. But in the instant case the claim for refund is specifically barred by the statute namely, Section 106 of the Railways Act, as observed in the decision in the case of Birla Cement Works vs. G.M., Western Railways reported in 1995 (2) SCC 493, wherein the Hon’ble Supreme Court has held that Section 17(i)(c) of Limitation Act, 1963 would apply only to a suit instituted or an application made in that behalf in the civil suit, but whereas the Tribunal is the creature of statute, therefore it is not a civil court nor the Limitation Act has application, even though it may be held that the petitioner discovered the mistake committed in paying the over charges, the limitation is not saved by operation of Section 17(i)(c) of the Limitation Act. When there is a specific bar under Section 78(B) of the Railways Act (Old) and Section 106 of the New Act the claims barred by limitation cannot be entertained. No doubt, the principles of unjust enrichment as observed by the Hon’ble Supreme Court in the decision in the case of Mahabir Kishore and others v. State of M.P. reported in AIR 1990 SC 313, in view of Section 72 of the Contract Act, are justified. But in view of the ratio laid down by the Hon’ble Supreme Court in a decision in the case of Birla Cement Works vs. G.M., Western Railways reported in 1995 (2) SCC 493, the claims which are barred by limitation cannot be entertained. Even if the mistake committed in paying the overcharges are discovered at a later date, the limitation is not saved. The ratio laid down is the binding precedent as the facts involved in the present case are similar to that of the facts in the said decision. Thus, the contention of the respondent claimant for refund of overcharges on the principles of unjust enrichment is not acceptable.
30. For the foregoing reasons this Court is of the opinion that the findings given by the Railway Claims Tribunal are erroneous as the claim of the respondent is barred by limitation in view of Section 106 of the Railways Act (Section 78(B) of the Old Act). Accordingly, the appeal is allowed. The judgment and order dated 15.06.2012 in O.A. No.III 1/2009 passed by the Railway Claims Tribunal, Bengaluru Branch is set aside. No order as to costs.
Sd/-
JUDGE ykl