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IFB Agro Industries Limited & Another v/s The Chief Commercial Manager (Fm), Eastern Railway & Others


Company & Directors' Information:- IFB INDUSTRIES LTD [Active] CIN = L51109WB1974PLC029637

Company & Directors' Information:- IFB AGRO INDUSTRIES LTD. [Active] CIN = L01409WB1982PLC034590

Company & Directors' Information:- R K B AGRO INDUSTRIES LIMITED [Active] CIN = L17100KA1979PLC003492

Company & Directors' Information:- J R AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U15342UP1982PTC005792

Company & Directors' Information:- B M AGRO INDUSTRIES LIMITED [Active] CIN = U74899DL1992PLC049988

Company & Directors' Information:- R S AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U15319DL1998PTC097025

Company & Directors' Information:- S N T AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U01122DL1997PTC086925

Company & Directors' Information:- D D AGRO INDUSTRIES LIMITED [Active] CIN = U24219PB1999PLC022487

Company & Directors' Information:- S S D AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U15100MH1998PTC113744

Company & Directors' Information:- S. A. B. INDIA AGRO INDUSTRIES LIMITED [Active] CIN = U01403UP2009PLC038365

Company & Directors' Information:- U K AGRO INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U15114UP2003PTC028107

Company & Directors' Information:- R. K. AGRO INDUSTRIES PRIVATE LIMITED [Under Process of Striking Off] CIN = U15410WB2012PTC180269

Company & Directors' Information:- R J AGRO INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U15311KA2005PTC035485

Company & Directors' Information:- S O I AGRO INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U15310GJ2010PTC059966

Company & Directors' Information:- COMMERCIAL INDUSTRIES (INDIA) PVT LTD [Strike Off] CIN = U93000TG1930PTC000574

Company & Directors' Information:- G L INDUSTRIES EASTERN LIMITED [Active] CIN = U24219AS1989PLC003246

Company & Directors' Information:- S I P AGRO INDUSTRIES LIMITED [Strike Off] CIN = U01403WB2012PLC188362

Company & Directors' Information:- S. S. AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U15490PN2013PTC146574

Company & Directors' Information:- J J AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U15130MH1980PTC023302

Company & Directors' Information:- A R AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U74899DL1992PTC050526

Company & Directors' Information:- G S AGRO INDUSTRIES PVT LTD [Active] CIN = U01132WB1990PTC049960

Company & Directors' Information:- D V AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U74899DL1993PTC051892

Company & Directors' Information:- P AND G AGRO INDUSTRIES P LTD [Strike Off] CIN = U99999UP1985PTC007509

Company & Directors' Information:- R. K. G. S. AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U15100UP2017PTC097391

Company & Directors' Information:- V G AGRO INDUSTRIES LIMITED [Strike Off] CIN = U01400DL1993PLC051666

Company & Directors' Information:- T S AGRO INDUSTRIES PVT LTD [Strike Off] CIN = U15209UP1987PTC008974

Company & Directors' Information:- EASTERN COMMERCIAL CORPN PVT LTD [Strike Off] CIN = U28932WB1959PTC024112

Company & Directors' Information:- B AND P AGRO INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U01110MH1972PTC015574

Company & Directors' Information:- EASTERN COMMERCIAL CORPORATION LIMITED [Strike Off] CIN = U99999KA1943PLC000304

Company & Directors' Information:- P V R K AGRO INDUSTRIES PVT LTD [Strike Off] CIN = U01119AP1988PTC008395

Company & Directors' Information:- K R P AGRO INDUSTRIES PVT LTD [Active] CIN = U01110MH1991PTC062304

Company & Directors' Information:- EASTERN COMMERCIAL CORPORATION LIMITED [Dissolved] CIN = U99999MH1920PTC000696

Company & Directors' Information:- COMMERCIAL AND INDUSTRIES CORPORATION LIMITED [Dissolved] CIN = U99999MH1944PTC004198

    W.P. No. 479 of 2009

    Decided On, 08 August 2014

    At, High Court of Judicature at Calcutta

    By, THE HONOURABLE MR. JUSTICE TAPABRATA CHAKRABORTY

    For the Petitioners: Shyamal Sarkar, Bidyut Dutt & Bijan Datta, Advocates. For the Respondents: Malay Kr. Das & S. Ghosh, Advocates.



Judgment Text

Tapabrata Chakraborty, J:

This writ application has been preferred challenging, inter alia, the impugned demand of the respondents for demurrage charges on train-load basis from the petitioner no.1 up to September 8, 2008 including the letters dated January 5, 2009, January 19, 2009, January 22/27, 2009 and April 20, 2009 being Annexure - "P-8" to the petition.

In the writ application it has, inter alia, been averred that the petitioner no.1 carries on business as manufacturer of Rectified Spirit which is made out of molasses. The entire production of Rectified Spirit is requisitioned by the State Government who directs the petitioner no.1 to supply the entire quantity of Rectified Spirit to Bottlers and is approved and licensed by the State Government. The petitioner no.1 imports molasses by railway rakes. The petitioner no.1 has a storage facility at Budge Budge in the land belonging to Kolkata Port Trust near the Budge Budge siding. Two railway tracks from the Budge Budge railway yard passes the said storage installation of the petitioner no.1 up to certain distance and the said tracks are used for unloading of their cargo by the petitioner no.1. Prior to September, 2008 the said two tracks could accommodate only 17 wagons. Subsequent thereto, such accommodation was extended for accommodation of 36 wagons but that was only half a rake since 65 wagons make a rake. The railways do not allow freight on rake-load basis but on wagon- load basis which is much higher than rake-load basis. In respect of demurrage, the railways have charged the petitioner on train- load/rake-load basis. From December, 2005 till February, 2009, the railways levied demurrage charges on train-load/rake-load basis amounting to Rs.47,59,505/-. According to the petitioners, the said demurrage ought to have been calculated on wagon-load basis and upon such calculation, the demurrage charge would have been Rs.9,51,291/-.

According to the petitioners since they have brought molasses on wagon-wise, para 2.1.2 of the Rates Circular No.74 of 2005 dated 19th December, 2005 was applicable. The said para 2.1.2 runs as follows :-

"The entire group of wagons placed for loading/unloading shall be treated as one unit for the purpose of levy of demurrage charges i.e. even if one wagon out of the group is detained for loading/unloading beyond the prescribed free time, demurrage will be leviable on all the wagons in the group."

The petitioners have relied upon a memorandum dated 16th February, 2006 wherein it has been categorically stated that demurrage charges should be calculated as per the Railway Board's circular dated 19th December, 2005.

According to the petitioners a combined reading of the Rates Circular No.74 of 2005, the circular dated 16th February, 2006 and Rates Circular No.106 of 2006 would reveal that the rules relating to demurrage are as follows :-

"a. Rules for levy of demurrage on "wagons" and demurrage on a "rake" are different.

b. Rules for levy of demurrage on "wagons" is provided in para 2.1.2 of the Rates Circular No.74 dated 19.12.2005.

c. Rules for levy of demurrage on a "rake" was provided in para 2.2.2 of the Rates Circular No.74 dated 19.12.2005, which was amended by Rates Circular No.106 of 2006 dated 15.12.2006.

d. Para 2.1.2 of the Rates Circular No.74 dated 19.12.2005 was neither amended nor deleted and is the only rule for levy of demurrage where goods are moved wagon-wise (i.e. upon payment of wagon-load freight).

e. The Eastern Railway on a true and proper understanding of the Rates Circular No.74 dated 19.12.2006 issued a Circular dated February 16, 2006 that for import of molasses at BGB Goods shed, Para 2.1.2 was applicable. The said circular is still valid and subsisting."

The grievance of the petitioners is that the railways have illegally charged demurrage on the basis of para 2.2.2 of the Rates Circular No.74 of 2005 as amended by the Rates Circular No.106 dated 15th December, 2006 and have issued the letters dated 5th January, 2009, 19th January, 2009, 22/27 the January, 2009 and 20th April, 2009, demanding an amount of Rs.42,09,505/- towards demurrage charges pertaining to the period from March, 2008 to December, 2009.

Mr. Sarkar, learned advocate appearing for the petitioners submits that the impugned demand of demurrage charges on train- load basis is absolutely illegal and without jurisdiction and that the railway authorities have adopted a different yardstick towards collection of freight charges and demurrage charges.

According to him, the railways have demanded the demurrage charges without considering the representations made by the petitioners and without issuing any show-cause and without granting any opportunity of hearing and that as such, the demand of demurrage charges is unsustainable in law.

He further argues that the circular dated 16th February, 2006 constitutes a contemporaneous exposition of understanding of the rules by the parties and that the respondents could not have applied the provisions of the Rates Circular No.106 of 2006 dated 5th December, 2006 when by a prior circular dated 16th February, 2006 it has been categorically observed that the demurrage charges should be calculated as per para 2.1.2. of the Rates Circular No.74 of 2005.

According to him, the demand of demurrage charges contained in the letter dated 20th April, 2009 on train-load basis is contrary to and violative of the directives contained in the circular dated 16th February, 2006.

He further submits that the said circular dated 16th February, 2006 decides the issue and that the said circular has not been withdrawn or superseded and is still in force and is binding upon the railways.

In support of the proposition that the circular dated 16th February, 2006 is binding upon the railways, Mr. Sarkar relies upon the following judgments :-

1. State of Kerala & Ors. -vs- M/s Kurian Abraham Pvt. Ltd. & Anr., reported in (2008) 3 SCC 582. (Para.25)

2. Steel Authority of India Limited -vs- Collector of Customs, Bombay, reported in (2001) 9 SCC 198.

(Para.3) Mr. Das, learned advocate appearing for the respondents, submits that the petitioners' objection towards imposition of demurrage charges on molasses tank wagon was considered and replied to by a letter dated 19th March, 2008 issued by the respondent no.5 wherein it has been categorically specified as follows :-

"Demurrage Charge rule is independent and has no connection/relation with freight charging. Irrespective of whether the consignments are booked in trainload class or wagon load class, procedure of demurrage charge, rate etc. are same. It has revealed that the computation of chargeable hours for demurrage is in accordance with Railway Board's extant guidelines".

According to him, the petitioners are trying to confuse the issue placing reliance upon a communication dated 16th February, 2006, which was erroneously issued. The said memorandum dated 16th February, 2006 would reveal that the same is nothing but an internal advice to the Goods Shade Superintendent. The same has no statutory force and the same cannot be construed to be a notification binding upon the railways and that the same cannot override the Railway Board Circular No.106 of 2006.

He further submits that paragraph 2.6 and 2.7 of the Rates Circular No.39 of 2004 confer right upon the petitioner to apply for waiver of demurrage charges. According to Mr. Das para 2.2.2 of Rates Circular No.74 of 2005, as amended by the Rates Circular No.106 of 2006 is relevant for calculation of demurrage charges and in strict compliance of the same the authorities have quantified the demurrage charges, as disclosed in the memorandum dated 20th April, 2009 at page 84 of the writ application.

He further points out that the petitioners have paid the outstanding demurrage charges for the months of March 2007 and April 2007 for an amount of Rs.5,50,000/- without raising any objection and that the mode of quantification of such demurrage charge has also been applied towards quantification of the charges demanded for the months of March 2008 to January 2009 and that the petitioners having paid the earlier amount cannot turn back and challenge the subsequent bills.

In reply to the specific averments made in the affidavit-in- opposition, the petitioners contend that the said amount of demurrage charges as collected for the months of March 2007 and April 2007 was without jurisdiction and that the payment was made by the petitioners under protest and accordingly the respondents are liable to refund the excess.

I have heard the submissions made by the learned advocates appearing for the respective parties and I have considered the materials on record.

The entire claim of the petitioners' hinges on the issue as to whether the memorandum dated 16th February, 2006 can be ignored by the respondents towards quantification of the demurrage charges. According to the petitioners, the same has statutory force and is binding upon the respondents. A perusal of the said memorandum dated 16th February, 2006 reveals that the same is a reply to a letter dated 3rd February, 2006 containing an advice to the effect that the demurrage charges should be calculated as per para 2.1.2 of Rates Circular No.74 of 2005. There is no indication in the said communication that the same has been issued by any competent authority, deriving such authority from any statutory provision and or on the basis of any Railway Board's Circular. The communication appears to be nothing but an inter departmental communication and the same has no statutory force.

In my opinion, any inconsistency or any contradiction generated by the said communication cannot confer any right upon the petitioners to deny payment of the demurrage charges quantified on the basis of the Railway Board's Circulars.

In the case of State of Kerala and others (supra) the circular considered was issued by the authority who was entrusted with the power to give effect to the provisions of the concerned Act. In the case of Steel Authority of India (supra) the Customs authorities issued a trade notice and though the said notice was given effect to in a particular State, the same was not being accepted in another State.

The judgments delivered in State of Kerala and others (supra) and in Steel Authority of India (supra) are distinguishable on facts and the same cannot have any application in the instant case.

In Jaya Sen vs. Sujit Kumar Sarkar, reported in AIR 1998 Cal 288, it has been, inter alia, held as follows :-

"It is now well known that a decision is an authority for what it decides and not what can logically be deduced therefrom. It is also well known that even a slight distinction in fact or an additional fact may make a lot of difference in decision -making process. See Quinn vs. Lealhain (1900-1903) AER (Rep) 1, Krishna Kumar vs. Union of India, 1990 (4) SCC 207, (AIR 1990 SC 1782), Commissioner of Income Tax vs. Sun Engineering Co. Ltd., reported in AIR 1993 SC 43; (1993 Tax LR 58), Regional Manager vs. Pawan Kumar Dubey, reported in AIR 1976 SC 1766, and Municipal Corporation of Delhi vs. Gurnam Kaur, reported in 1988 (1) SCC 101 : (AIR 1989 SC 38)."

In reply to Mr. Das's submission to the effect that the petitioners are at liberty to apply for waiver of demurrage charges in terms of the provisions of the Rates Circular No.39 of 2004, Mr. Sarkar has submitted that any application made by the petitioners for waiver of demurrage charges on the basis of Rates Circular No.39 of 2004 would tantamount to an admission on the part of the petitioners that the demurrage charges have been rightly quantified by the respondents.

The records, however, reveal that the petitioners did apply to the re

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spondent no.5 by a letter dated 18th July, 2008 and the subject of the said letter categorically reveals that the same was an appeal on the part of the petitioners for waiving 100% demurrage and that the said communication was replied to by the respondents through a letter dated 11th August, 2008 stating inter alia that application for condonation of delay in preferring an appeal for waiver of demurrage, shall be entertained only after the demurrage charges have been paid in full and the application is supported with proof of such payment. In the backdrop of the said records, this Court is unable to accept that the petitioners, having appealed for waiver of the demurrage charges and having not proceeded with the same, can approach this Court for challenging the demand towards demurrage charges through the instant application under Article 226 of the Constitution of India. For the reasons stated above, no interference is called for and the writ application is, accordingly, dismissed and all interim orders are vacated. In the facts of the present case, there shall be no order as to costs. Urgent Photostat certified copy of this judgment, if applied for, be given to the parties, as expeditiously as possible, upon compliance with the necessary formalities in this regard.
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