Ganga Carrier Private Limited V. The Union of India through the Secretary, Ministry of Railway, Government of India, New Delhi and The General Manager, East Central Railway, Hajipur and The Chief Commercial Manager, East Central Railway, Hajipur and The Divisional Railway Manager, East Central Railway, Danapur and The Senior Divisional Commercial Manager, East Central Railway, Danapur and The Goods Shed Supervisor, East Central Railway, Danapur

CWJC/14780/2011

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The case involves M/S Ganga Carrier Private Limited, which filed a writ petition against the Union of India and various railway authorities challenging the imposition of demurrage charges amounting to Rs.6,80,400.00 for a delay in unloading a cement consignment. The petitioner argued that the order for demurrage charges was issued without notice and a pre-decisional hearing, and that adverse weather conditions on the unloading dates prevented the timely unloading of the cargo. The respondents contended that a prior notice was issued and that the petitioner had opportunities to contest the charges under the applicable railway circular. The court found procedural flaws in the issuance of the demurrage order, leading to its quashing.

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 803477 (HC-PATNA)
• Appeal Type: Others
• Pronouncement Date: 13-10-2011
• Assessment Year: misc
• Other Referred Cases: Sahara India (Firm), Lucknow Versus Commissioner of Income Tax, Central-I and another, Maya Devi (Dead) through LRS. Versus Raj Kumari Batra (Dead) through LRS. And others
• Laws Referred To: Companies Act, 1956
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: BINDHYACHAL SINGH; RAM BINOD SINGH; VIPIN KUMAR SINGH
• Assessee Lawyers: GAUTAM KEJRIWAL; PRABHAT RANJAN
• Keywords: Demurrage charges; Natural Justice; Non-speaking order; Pre-decisional hearing
• Section: 142(2)(a)

Judgement Text

" IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.14780 of 2011 M/S Ganga Carrier Private Limited, a company incorporated under the Companies Act, 1956 having its office at 309, Ashiana Towers, Exhibition Road, Patna-800 001 through its authorised signatory, Shri Ashish Poddar, son of Shri Sajan Kumar Poddar, resident of 3-B, Radha Kunj, A.N.Path, Boring Road, Patna. ……..Petitioner. Versus 1. The Union of India through the Secretary, Ministry of Railway, Government of India, New Delhi. 2. The General Manager, East Central Railway, Hajipur. 3. The Chief Commercial Manager, East Central Railway, Hajipur. 4. The Divisional Railway Manager, East Central Railway, Danapur. 5. The Senior Divisional Commercial Manager, East Central Railway, Danapur. 6. The Goods Shed Supervisor, East Central Railway, Danapur. …. Respondents. ----------- For the petitioner : M/s. Gautam Kejriwal & Prabhat Ranjan, Advocates. For the respondents : M/s Bindhyachal Singh, Ram Binod Singh & Vipin Kumar Singh, Advocates. ---------- 05/ 13.10.2011 Heard learned counsel for the petitioner and learned counsel for the respondents. 2. This writ petition has been filed by the petitioner for the following reliefs: (i) For issuance of a writ in the nature of certiorari for quashing of the bill/demand dated 20.08.2011 for demurrage charges imposed and raised by the respondents, especially the respondent no.6- the Goods Shed Supervisor, East Central Railway, Danapur (hereinafter referred to as “the G.S.S.”) whereby the petitioner has been called upon to pay a sum of Rs.6,80,400.00 (Six lakhs eighty thousand four hundred) against the demurrage charges on account of delay caused in unloading of the rake of cement consisting of 42 wagons carrying cement consignment of the petitioner from Jojobera Railway Siding, Jamshedpur to Danapur Railway Siding at Patna; - 2 - (ii) For issuance of a writ in the nature of mandamus directing the respondents, especially the G.S.S. to consider the objections raised by the petitioner on 17.08.2011 illegally refused by the said respondent, which was subsequently sent through registered process for consideration and also other objection dated 18.08.2011 also served through registered process on 19.08.2011 and pass a speaking order regarding the liability of the petitioner insofar as the imposition of demurrage charges is concerned in accordance with the rules and regulations in force; (iii) For issuance of a writ in the nature of a declaration that the impugned bill/demand of demurrage charges being not a speaking order of demand not dealing with any of the facts and circumstances prevailing at the time of placement of rack of cement consignment of the petitioner on 17.08.2011, the condition of the Railway Siding at Danapur on 17.08.2011 to 19.08.2011 and also objection raised by the petitioner deliberately refused by the respondent-G.S.S. on 17.08.2011 is illegal, arbitrary and unsustainable in the eye of law; (iv) For grant of any other relief(s) to which the petitioner is found entitled to in the facts and circumstances of the present case. 3. The claim of the petitioner is that on account of delay in unloading of rack of cement of 42 wagons from Jojobera Railway Siding, Jamshedpur to Danapur Railway Siding at Patna, the impugned order dated 20.08.2011 (Annexure-3) was issued by the Goods Shed Supervisor, Danapur levying heavy demurrage charges. 4. Learned counsel for the petitioner states that the said order is an absolutely non-speaking order passed without any notice to the petitioner and without any opportunity for pre- decisional hearing in the matter, especially when civil liability was - 3 - going to be imposed by the said order. Hence he claims that the principles of equity and natural justice have been violated. 5. Learned counsel for the petitioner further submits that admittedly there was heavy rain fall on 17th and 18th of August, 2011 and there was no shed on the platform due to which cement loaded on the wagons could not be removed. He further states that wharf was also in water full of ditches and therefore unloading was not at all possible but without considering the aforesaid facts, the impugned order had been passed levying demurrage charges. 6. Learned counsel for the petitioner also states that he filed an application before the Goods Shed Supervisor, Danapur on 17.08.2011 (Annexure-1) itself, but when he refused to receive the same, the petitioner sent the same representation to the said authority by registered post on the next date, i.e. 18.08.2011 (Annexure-1/A), but inspite of that no step was taken by the authorities concerned with respect to the impugned order. 7. On the other hand, learned counsel for the respondents submits that a prior notice dated 10.08.2011 (Annexure-B) was sent by the authorities which was duly received by the petitioner in the receipt book (Annexure-C). Hence there was already a prior notice but inspite of that the petitioner did not unload its goods within the time prescribed and hence there was no question of any violation of the rule of equity or natural justice. He further submits that rule of natural justice is not a straight jacket formula, rather it is flexible and due to the said earlier general - 4 - notice rule of natural justice and equity has been fully followed. 8. Learned counsel for the respondents further states that the petitioner had an opportunity under clause 1.0 of the Rate Circular RB (Goods) 58 of 2004 dated 19.10.20004 (Annexure-A) issued by the East Central Railway in which it was provided that Divisional Railway Manager was authorised to consider the application for waiver of such demurrage charges, but the petitioner neither filed any such application before the said authority within the period of limitation prescribed in clause 2.3 and hence no order could be passed by the authority concerned, namely Divisional Railway Manager, against which the petitioner could have filed an appeal as provided under clause 3.1 of the said Circular. 9. Learned counsel for the respondents further states that although it was raining on the dates concerned, but the shed was not a problem in unloading as the petitioner could have carried his goods to the wagon as had been done by another concern. He also argued that under same condition another concern, namely M/s Anil Onions were levied demurrage charges which were duly paid by them, but the petitioner has approached this court although in his objection dated 17.08.2011 (Annexure-1) there is no mention regarding absence of any shed at the place concerned. 10. After hearing learned counsel for the parties and considering the materials on record, it is quite apparent that the circular of East Central Railway, Danapur dated 10.08.2011 was a general circular with regard to penal demurrage charges and it - 5 - cannot in any manner be assumed to be a notice for the instant matter. Furthermore, the said circular was dated 10.08.2011 much before the dates in question namely 17th and 18th of August, 2011 and hence it cannot be termed as a notice for pre-decisional hearing in the instant matter which occurred on 17th and 18th of August, 2011. In the said circumstances, the impugned order passed by the authority concerned is clearly without notice and also without any reasonable opportunity for a pre decisional hearing. Hence, it is a clear case of violation of the principles of equity and natural justice. 11. In this connection, reference may be made to paragraphs 30, 31 and 32 of the decision of the Apex Court in case of Sahara India (Firm), Lucknow Versus Commissioner of Income Tax, Central-I and another, reported in (2008) 14 S.C.C. 151 which read as follows:- 30. As already noted above, the expression “civil consequences” encompasses infraction of not merely property or personal rights but of civil liberties, material deprivations and non-pecuniary damages. Anything which affects a citizen in his civil life comes under its wide umbrella. Accordingly, we reject the argument and hold that since an order under Section 142(2-A) does entail civil consequences, the rule audi alteram partem is required to be observed. 31. We are also unable to persuade ourselves to agree with the proposition canvassed by learned counsel for the Revenue that since a post-decisional hearing in terms of sub-section (3) of Section 142 is contemplated, the requirement of natural justice is fully met. Apart from the fact that ordinarily a post- decisional hearing is no substitute for pre-decisional hearing, even from the language of the said provision it is plain that the opportunity of being heard is only in respect of the material gathered on the basis of the audit report submitted under sub-section (2-A) and not on the validity of the original order directing the special audit. It is well settled that the principle audi alteram partem can be excluded only when a statute - 6 - contemplates a post-decisional hearing amounting to a full review of the original order on merit, which, as explained above, is not the case here. 32. The upshot of the entire discussion is that the exercise of power under Section 142(2-A) of the Act leads to serious civil consequences and, therefore, even in the absence of express provision for affording an opportunity of pre-decisional hearing to an assessee and in the absence of any express provision in Section 142(2-A) barring the giving of reasonable opportunity to an assessee, the requirement of observance of principles of natural justice is to be read into the said provision. Accordingly, we reiterate the view expressed in Rajesh Kumar case.” 12. From the impugned order it is also apparent that it is a non-speaking order although when a civil liability is being imposed the authorities concerned should have given reasons and passed a speaking order. Mere giving a chart of calculation cannot be deemed to be legally a speaking order specially when the authority concerned was exercising a quasi judicial function. In the said circumstances, the impugned order suffers from the vice of non-speaking also. 13. In this connection, reference may be made to paragraph 28 of the decision of the Apex Court in case of Maya Devi (Dead) through LRS. Versus Raj Kumari Batra (Dead) through LRS. And others, reported in (2010) 9 SCC 486 which reads as follows:- “28. It is in the light of the above pronouncements unnecessary to say anything beyond what has been so eloquently said in support of the need to give reasons for orders made by courts and statutory or other authorities exercising quasi-judicial functions. All that we may mention is that in a system governed by the rule of law, there is nothing like absolute or unbridled power exercisable at the whims and fancies of the repository of such power. There is nothing like a power without any limits or constraints. That is so - 7 - even when a court or other authority may be vested with wide discretionary power, for even discretion has to be exercised only along well-recognised and sound juristic principles with a view to promoting fairness, inducing transparency and aiding equity.” 14. From the Rate Circular RB (Goods) 58 of 2004 dated 19.10.2004 (Annexure-A) relied upon by learned counsel for the respondents it is not at all clear as to who will be the authority who would pass such orders. Hence, the question to be seen is as to whether Goods Shed Supervisor was authorised or could have been legally authorised to exercise such quasi judicial function, especially in the manner as has been done in the instant case. 15. So far the question of absence of any shed or wharf as has been raised by the petitioner in paragraph 11 of its writ petition is concerned, there is no clear cut reply in the counter affidavit although paragraph 16 thereof is a reply to paragraph 11 of the writ petition. So far the question of other concern utilizing the opportunity of unloading their article is concerned, there is a difference between the said article which was onion and the article of petitioner which was cement. Obviously even a few drops of water on a cement bag can destroy the entire bag of cement which cannot have the same effect in case of onion. However, these are questions of facts in which this court does not intend to indulge as the basic question is the violation of rule of equity and natural justice which has been clearly committed by the authority concerned by not giving any reasonable opportunity for pre- decisional hearing by way of notice of any kind whatsoever and the - 8 - impugned order being non-speaking order which is also violative of the settled principles of law. 16. In the aforesaid facts and circumstances, the impugned order of the authority concerned dated 20.08.2011 (Annexure-3) is hereby quashed with a liberty to the authority concerned to take fresh step after issuing notice to the petitioner and giving reasonable opportunity for a pre-decisional hearing and thereafter pass a speaking order in the matter in accordance with law. Sunil (S. N. Hussain, J.) "