Indian Oil Corporation Limited vs Union Of India

In view of the good grounds shown, the delay of about 150 days in preferring the appeal is condoned and the appeal is taken on record.

The appeal arises out of an order dated September 14, 2018 passed by the Railway Claims Tribunal. Unfortunately, this is another case of both the tribunal and court time being wasted by one arm of the Central Government fighting another.

The appellant in this case is the Indian Oil Corporation Limited (IOCL). According to the appellant, it maintains several railway sidings and when goods are despatched on the railways from any terminal or siding owned by IOCL to a destination terminal or siding also owned by IOCL, terminal charges cannot be charged by the railways since such terminals or sidings are maintained and operated by IOCL.

Indeed, the position is clear from the railway board circular of September 8, 2007 as referred to in the order impugned. Such circular, bearing no.TCR/1078/2007/16 stipulates that terminal charges would be levied only on Indian Railways owned terminals and sidings and it will not be leviable on terminals owned by customers.

In the instant case, several railway receipts were carried by IOCL to the tribunal claiming that terminal charges had been included in the railway receipts which IOCL was constrained to pay so as to ensure that the carriage of the goods was not affected. IOCL claimed it was entitled to refund of the same since the charges were sought because of some mistake on the part of the railways.

The tribunal referred to the submission made on behalf of the railways that railway receipts are computer-generated and upon the particulars of a forwarding note being received from IOCL, the particulars would be fed into the computer and the rest of the railway receipts would be generated by the computer itself. The insinuation was that since the forwarding notes addressed by IOCL referred to destinations and such destinations had only railway sidings or terminals, the destination terminal charges (DTC) were charged in the relevant railway receipts.

It is now submitted by the railways by referring to a few of the railway receipts, that the originating terminal charges (OTC) had not been charged since the goods covered by the relevant railway receipts were despatched from one or the other IOCL siding.

Thus, the disputes boil down to whether the goods were despatched to or were unloaded by the consignees at terminals or sidings which were owned by the railways. That is essentially a question of fact.

It appears from paragraph 6.1 of the order impugned that the matter would have been clear to the tribunal if the corresponding forwarding notes were before it. The tribunal held that since the claimant had failed to produce the forwarding notes and the claim was of the claimant, the claim ought to fail in such circumstances. Unfortunately, forwarding notes are prepared on prescribed forms and are forwarded to the railways and, as such, the relevant forwarding notes will be available with the Railways and not with the consignor or the relevant client. Though it is possible that the consignor or the client may make copies of the forwarding notes and retain them, the actual forwarding notes received by the railways and on the basis of which railway receipts have been prepared would, obviously, be in the exclusive possession of the railways.

The tribunal erred in failing to appreciate that in such circumstances, it was incumbent on the railways to produce the forwarding notes and, in the absence of such forwarding notes being produced by the railways, an adverse inference had to be drawn against the railways. The tribunal has referred to the three-letter station codes implying that all the goods covered by the relevant railway receipts were discharged at railway sidings, since the railway receipts carried such three-letter codes of railway stations owned by railways. What the tribunal may have failed to appreciate was the submission on behalf of the railways that the railway receipts were computer-generated and upon the destination being typed, the computer would itself indicate the charges for the consignment. In such a situation, it was possible that the forwarding notes may have indicated the discharge terminal or the destination of the consignment to be a particular siding at a particular station which may have been owned by IOCL, but during the typing of the station by the railway employee, it may have been overlooked that the goods were to reach an IOCL siding.

The other issues that have been decided against the appellant herein by the tribunal appear to be completely flawed. Under Section 74 of the Railways Act, 1989, the property in the goods pass from the consignor to the consignee upon the consignment being booked. That would imply that the property in the goods that were despatched under the several railway receipts passed to the relevant consignees and IOCL as consignor did not retain any interest therein. However, to the extent of IOCL paid the fare for the transportation of the consignments and IOCL may have been overcharged by the railways in such regard, it cannot be the consignee which would claim the refund. The refund may only be claimed by the consignor, which is IOCL in this case. The tribunal clearly misread Section 74 of the said Act and its applicability to the claim carried by IOCL in this case.

In view of the above, the order of the tribunal dated September 14, 2018 cannot be sustained and the same is set aside. The matter is remanded to the tribunal for fresh consideration. The tribunal is requested to ensure that the railways produce the relevant forwarding notes pertaining to the bills in respect of which the claim has been made by IOCL.

It will be open to IOCL to produce copies of the forwarding notes, if retained or if available.

FMA 1168 of 2019 and CAN 8128 of 2019 stand disposed of, but without any order as to costs.

The tribunal is requested to ensure that the matter, now remanded back to it for its fresh consideration on merits, is taken up and disposed of as expeditiously as possible and without granting unnecessary adjournments to the parties.

Certified website copies of this order, if applied for, be urgently made available to the parties upon compliance with the requisite formalities.