IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) , THE DAY OF TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE P.S.NARAYANA WRIT PETITION NO : 26441 of 2007 Between: M/s. Act Marine Rep. by its Proprietor S.Kartikeyan S/o. late Sri. J.Sundara Moorthy R/o. D.No. 3-18-A-3, Ayodhya Nagar, Road No.3, Kakinada 533 003, East Godavari District. ..... PETITIONER AND 1 The Union of India, rep. by its Senior Divisional Commercial Manager, Divisional Office, South Central Railway, Vijayawada. 2 South Central Railway, Rep. by its General Manager, Secunderabad. 3 Kakinada Seaports Ltd., Rep. by its General Manager (Logistics), 2nd Floor, Port Administrative Building, Beach Road, Kakinada 533 007. 4 M/s. Mothra Shiping Services & Gupta Trading Co. Pvt. Ltd., Rep. by its Manager, Pallamraju nagar, Kakinada. 5 M/s. ZANN Commodities Pvt. Ltd., Rep. by its authorised representative Mr.Haq Assadi H.No.3-3-2579/1, Near Bunts Hostel, Mangalore 575 003. 6 M/s. S.S. Maritime, Rep. by its Managing Director, 1st Floor, Matias Building, Urva's Stores, Mangalore 575 006. .....RESPONDENT(S) Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to to issue a Writ of Mandamus or any other appropriate writ, order or direction declaring the impugned action of the 1st Respondent in high-handedly proceeding to recover alleged punitive charges from the Petitioner firm through its notice No. B/C. 419/PC/I dt. 21.11.2007 and earlier connected notices said to have been given, if any, instead of recovering the same from the 4th Respondent, without any jurisdiction and authority and without following the due process of law as illegal, arbitrary and violative of principles of natural justice etc and consequently declare that the petitioner firm is not liable for the alleged claim of punitive charges of Rs.7,44,968/- or part thereof by setting aside the notice of the 1st REspondent No. B/C. 419/PC/I dt. 21.11.2007 and grant such other relief or reliefs. Counsel for the Petitioner:MR.N.V.ANANTHA KRISHNA Counsel for the Respondent No.: MR.R.S.MURTHY The Court made the following : 1. This Court issued Rule Nisi on 24.12.2007. A Counter affidavit is filed by respondents 1 and 2 and additional affidavit is also filed by the petitioner. 2. Heard Sri Ananta Krishna, counsel representing the petitioner and Sri T.S. Venkata Ramana, learned Standing Counsel representing the respondents 1 and 2. 3. The Writ Petition is filed for a Writ of Mandamus or any other appropriate Writ, order or direction declaring the impugned action of the first respondent in highhandedly proceeding to recover alleged punitive charges from the petitioner firm through its notice No. B/C.419/PC/1 dt. 21.11.2007 and earlier connected notices said to have been given, if any, instead of recovering the same from the fourth respondent, without any jurisdiction and authority and without following the due process of law as illegal, arbitrary and violative of principles of natural justice and consequently declare that the petitioner firm is not liable for the alleged claim of punitive charges of Rs. 7,44,968/- or part thereof by setting aside the notice of the first respondent No. B/C. 419/PC/1 dt. 21.11.2007. 4. Sri Ananta Krishna, learned counsel representing the writ petitioner had taken this court through the contents of the affidavit filed in support of the Writ Petition, counter affidavits of respondents 1 and 2 and also the contents of the additional affidavit filed by the petitioner. The counsel also had taken this Court through Sections 72,73,74,75 and 83 of the Railways Act, 1989 (hereinafter in short referred to as ‘the Act’ for the purpose of convenience) and also would maintain that the impugned action cannot be sustained since the ingredients of Section 83 of the Act are not satisfied. The learned counsel also had taken this Court through Section 36 of the Act and would maintain that the same is not applicable to the facts of the case. The learned counsel would maintain that when once the goods had been delivered to the petitioner, the respondents concerned have no authority or jurisdiction to initiate the impugned action and hence, the Writ Petition to be allowed. The learned counsel also would maintain that even otherwise the impugned action is in violation of principles of natural justice and on that ground also the Writ Petitioner is bound to succeed. The learned counsel placed strong reliance on JYOTI ENTERPRISES VS. UNION OF INDIA AND OTHERS[1]. 5. Per contra Sri T. S. Venkata Ramana, learned Standing Counsel representing R1 and R2 had taken this Court through the contents of the counter affidavit and would maintain that inasmuch as in the light of the respective stands taken by the parties, there are certain factual controversies the same cannot be effectively agitated in a writ petition. The learned Standing Counsel also would submit that in the light of the clear language of Section 83 of the Act, the impugned action cannot be found fault with. At any rate, the remedy by way of Writ Petition is a misconceived remedy and the Writ Petitioner is entitled to file a suit or invoke Section 36 of the Act. The learned Standing Counsel also had drawn the attention of this Court to Commercial Circular No. 06/2006. 6. Heard the learned counsel and perused the respective stands taken by the parties, the affidavit filed in support of the Writ Petition, the counter affidavits filed by R1 and R2 and also the additional counter affidavit filed by the petitioner as well. 7. M/s Act Marine represented by its Proprietor S.Kartikeyan filed the present Writ Petition questioning the impugned action of the first respondent in highhandedly proceed to recover the punitive charges from the petitioner through its notice No. B/C.419/PC/1 dt. 21.11.2007 and for certain other appropriate reliefs. 8. The said impugned proceeding reads hereunder: “South Central Railway Divisional Office, Commercial Branch, Vijayawada, Dated: 21.11.2007 To M/s ACT MARINE, F2, Santhosh Appartments, Road 3, Kakinada -533 003. Dear Sir/Sirs, Sub: Non-payment of Punitive charges accrued at KSLK Siding/Kakinada Port Railway Station in respect of inward Iron Ore consignment. *** Iron Ore Consignments transported form BSGH to KSLK siding of South Central Railway thorough Railway Goods Wagons were delivered to your firm as an endorsed consignee in between 10.11.2005 and 14.11.2005. The Station records of KSLK Siding/Kakinada Port Railway Station have been showing the following amounts as outstanding i.e. due towards Punitive charges on the said inward iron Ore Consignment. Sl.No. Due on account of Number of Rakes involved Amount in Rupees. 1 Punitive Charges KSLK siding, COA 3 7,44,968/- The punitive charges imposed basing on the weighment particulars of weigh bridge/Guntakal (West), wherein incidence of over-loading of some wagons detected. A statement showing details of invoices/RRs/Rakes attracted such Punitive charges is enclosed herewith for information and ready reference. It is reported that the concerned Station Staff had already advised you to pay due charges from time to time with full details. In view of the above, you are hereby advised to clear all the above dues immediately on receipt of this letter, failing which the same shall be realized duly invoking powers conferred under ‘the Railway Act’ 1989’ including Section 83 of the aforesaid Act. Encl: as above. Yours sincerely (B. Vijaya Bhaskar) Union of India rep by Sr. Divl. Comml.Manager, S.C.Rly, Vijayawada. NOO: Copy to M/s Bothra Shipping Services and Gupta Trading Co., Pvt. Limited, the consignment booked under 1) RR No. 461279 of 7.11.2005; 2) RR No. 461281 of 6.11.2005 and 3) RR No. 461284 of 12/11/2005 booked ex. BSGH to KSLK siding, Kakinada and attracted Punitive Charges amounting to Rs. 7,44,968. A statement showing details of punitive charges is enclosed. You are well aware that the consignor is also liable to pay charges due to the Railway Administration. At present, the Railway Administration is making efforts to clear the dues by the endorsed consignee. In case, the endorsed consignee fails to clear the due, you are liable to pay the said dues. Hence, it is advised to expedite necessary steps and impress upon the endorsed consignee to clear the dues at the earliest. Assuring you o our best services” 9. It is stated that the petitioner firm acts as a handling agents or labour contractors of various shipping firms to take delivery of the various consignments on their behalf at Kakinada port on commission basis and transport to the vessels on the high seas at Kakinada port on their behalf. It is the business practice that certain exporters who export their goods through Kakinada and located in various parts of the country take the services of the petitioner firm and other firms engaged in similar activity. The practice is that the consignees get goods from consignors and the consignor himself endorses the delivery instructions as “to X, consignee or Y or Z, Endorsee” on the railway receipts or other goods transit receipts to enable these handling agents/labour contractors like the petitioner firm to receive the goods. It is stated that there is no ‘endorser-endorsee’ relationship as contemplated by the Contract Act, and the only relationship exists is that of a ‘Principal-Agent’. 10. Further it is averred that the fourth respondent consigned goods to 5th respondent, who in turn appointed 6th respondent as his handling agent to transmit the goods to Kakinada. 6th respondent in turn took services of the petitioner’s firm as handling contractors. So the petitioner would be receiving goods on behalf of various firms and it is answerable to such of those firms, who take its services as handling agents in transporting the goods on to the vessels anchored at Kakinada port. 11. It is also stated that somewhere during November 2005 it had handled goods belonging to the 5th respondent consignee received from 4th respondent consignor through the sixth respondent handling agent. The first respondent did not raise any objection or indicated about the over weighmnt of the iron are at the time of delivery. It is pertinent to note that the railway receipts (RR) issued by the Railways are ‘Paid’ railway receipts and not ‘to pay’ receipts. When a RR is issued as ‘paid’ then the freight would have been paid by the consignor himself at the time of booking the goods. The responsibility of the consignee or his agents is not at all there. The excess or shortfall is always the responsibility of the person who is liable to pay the freight. In this case it is on the fourth respondent. 12. It is also averred that on 18.1.2007 for the first time the Chief Goods Supervisor of the SC Railway gave a lette No. KSL/COA/OL/Peace Committee/2005/5 dated 20.1.2006 demanding payment of Rs. 7,44,968/-. It is pertinent to note that though the letter was dated 20.1.2006 conspicuously the letter was delivered on 18.1.2007 after a lapse of almost one year. Inasmuch as the consignment was a ‘paid’ consignment, the same was immediately endorsed to the 4th respondent for necessary action. Thereafter no correspondence was received by the petitioner. 13. It is also stated that the first respondent through impugned notice No. B/C 419/PC/I dt.21.11.2007 called for payment of punitive charges. This letter is totally silent about details of any of the previous notices or letters in this regard. This itself amply demonstrates that the first respondent has not taken any action till issuance of the letter or an ante- dated letter delivered in January 2007. 14. It is pertinent to note that the first respondent though aware that the RRs are ‘paid’ RRs, did not raise the demand on the 4th respondent. He did not raise any demand on the 5th respondent consignee. Curiously, he endorses this letter to the 4th respondent stating that consignor is also liable to pay charges due to railways and that railway administration is making efforts to clear the dues by the endorsed consignee and that he is advised to expedite steps to impress on this petitioner to clear the dues at the earliest. 15. Further it is stated that on receipt of the impugned notice, the petitioner addressed a reply to the first respondent through letter dated 3rd December 2007, submitted to the Senior Commercial Divisional Manager on 4.12.2007 furnishing the addresses of the 5th and 6th respondents and also making the position of the petitioner and status and relationship with the other unofficial respondents. The petitioner requested the first respondent to drop all further actions to recover the said amount from the petitioner. There is no response from the first respondent to this letter. 16. The said letter dated 3rd December 2007 submitted to the Senior Commercial Divisional Manager on 4.12.2007 reads as under: “Dated 3rd December 2007 From S. Karthikeyan (Act Marine) F2, Santosh Apartment, Road No. 3, Pallam Raju Nagar, Kakinada -533 003. To Sri B. Vijaya Bhaskar Sr. Divisional Commercial manager, SC Railways, Vijayawada. Respected Sir, Representation submitted by ACT Marine of Kakinada. Ref: Your letter dated 21.11.2007 This is to bring to your kind notice that you have issued the above referred letter to me with regard to the payment of punitive charges which is to a tune of Rs. 7,44,968/-. At the outset I may be permitted to inform you the facts. I submit that I am the handling agent who involves in the unloading of goods. I submit that one M/s Bothra Trading Services and Gupta Trading Company Pvt. Ltd as consignor consigned the Cargo to M/s Zann Commodities; they in turn endorsed the consignment to S.S. Maritime at Kakinada. So the custodians of the consignment are Bothra Shipping Services, Gupta Trading Co Ltd., and Zann Commodities and S.S. Maritime Mangalore. So except unloading the consignment I am no way concerned with the ownership or custody of the goods. I am not also a beneficiary for the goods. So the claim may be made against the consignor or consignee. I am herewith enclosing the address of the consignee and their agents. I am only an handling agent and I am also not getting any benefit except the paltry commission given to me by the consignees handling agents. So I request your good self not to take any action against me for recovery of punitive charges. Please consider my representation and relive me from the charges. Thanking you, Yours faithfully, S.KARTHIKEYAN. The address particular of the Consignee: 1) HAQ ASSADI, Zann Commodities Pvt Ltd, 3-31-2579/1, Near Bunts Hostel, Mangalore- 575003. Tel: 0824-2494661, 0824-5270047 e-mail: zanncommodities @ touchtellindia.nt assadi@satyam.net.in The address particulars of the Agents of consignee: 1) S. Mahadevan, Managing Director, S.S.Maritime, 1st floor, Matias Building, Urva’s Stores, Mangalore -575006 Tel: 0824-2452440, 0824-2458809” 17. Further it is stated that while things stood thus the petitioner received a letter dated 29.11.2007 from the third respondent stating that they have received a copy of the impugned notice and also a request letter to stop lifting the stocks lying in the sidings of the third respondent and cooperate in recovery of dues. 18. The said letter reads as under: “29th November 2007 M/s Act Marine, F2, Santosh Apartment, Road No.3, Pallamraju Nagar, Kakinada-3. Dear Sirs, Sub: Non-Payment of Punitive Charges raised for over loading of wagons carrying Iron Ore consignment-weighed on weigh Bridge/Guntakal West. *** Please find enclose herewith copies of two letters received from Sr. Divl. Commercial Manager, SC Railway, Vijayawada, vide reference Nos: B/C.419/Punitive Charges/06, dated 21.11.2007 & B/C 419/PC/I dated 21.11.2007. You are requested to immediately contact the Railways and settle the issue at the earliest. Please let us know the action taken per return. Thanking You, Yours faithfully, For Kakinada Seaports Ltd., M. Muralidhar General Manager (Logistics)” 19. It is pertinent to note that the provisions of Section 73 of the Act get attracted only when there is a violation of provision of Section 72 of the Act. Section 72 deals with overloading beyond the permitted capacity of the wagon or truck. The case of the first respondent is that of excess weighment than the booked quantity and in this case, the Railway administration is entitled for recovery of freight of the differential weight and not punitive charges. Section 73 also contemplates that the railway may ‘in additional to freight and other charges’ recover from consignor, the consignee or endorsee, ‘as the case may be’, charges by way of penalty. This clearly indicates that the person who is liable to pay the freight has to in addition to that shall pay the punitive charges. So there is no option of collecting form any of them but it is only from ‘such person as the case may be’. The contention of the phrase ‘as the case may be’ is totally ignored and the same is sought to be recovered from the petitioner. 20. Further it is stated that Section 83 of the Act also states that “Lien for freight or any other sum due:- (1) if the consignor, the consignee or the endorsee fails to pay on demand any freight or other charges due form him in respect of any consignment, the railway administration may detain such consignment or part thereof or, if such consignment is delivered, it may detain any other consignment of such person which is in, or thereafter comes into its possession, so in the present case also, as the freight was due and payable by the 4th respondent, even in the unlikely event of the amount claimed is to be paid, and it is for the 4th respondent and not this petitioner. Hence, the first respondent can invoke the provisions of Section 83 only in respect of 4th respondent. 21. It is also stated that when the first respondent is well aware about the liability of the fourth respondent, and also chose to persuade him to assist in recovery from this petitioner, why a demand was not raised on them. It appears that the first respondent and the fourth respondent are hand-in-glove in unlawfully penalizing the petitioner. No personal hearing was afforded. The basis for weight and rates not furnished. When excess is found during transit, why the first respondent did not detain the goods as per the Act is not explained. There is no scope left with the petitioner to disprove the liability and opportunity for cross checking the alleged claims. Certain further facts also had been narrated in the affidavit filed in support of the Writ Petition. 22. In the counter affidavit filed by respondents 1 and 2, it is averred that in terms of Section 36 of the Act, the complaint against the railway administration lies to Railway Rates Tribunal and on this ground alone, the Writ Petition is liable to be dismissed. Further it is averred that the imposition of punitive charges occurred on account of over loading and carriage of Iron Ore consignment in ‘Railway Goods Wagons’ than permitted quantity in some ‘wagons’ detected during weighment of Rakes (Goods Trains) at ‘Electronic In- motion Weigh Bridge’ at Guntakal (West). The said consignment was booked under RR No. 461279 dated 7.11.2005, RR No. 461281 dated 9.11.2005 and RR No. 461285 dated 12.11.2005 Ex. M/s BSS & GTC Siding/Hagari to Kakinada Sea Ports Siding/Kakinada. 23. Further it is stated that in reply to paragraphs 2 to 4 the averments are not correct and misleading. The petitioner taken delivery of the consignment at Kakinada transported under R.R No. 461279 dated 7.11.2005, RR No. 461281 dated 9.11.2005 and RR No. 461285 dated 12.11.2005 on the strength of endorsement made at reverse side of the RRs, and thus the petitioner becomes ‘endorsed consignee’, and liable to pay charges in terms of Sections 73 & 74 of Railway Act 1989. Either 4th respondent or the petitioner is liable to pay the said due ‘punitive Charges’ as far as Railways are concerned. 24. It is further averred that the relationship exists among the private respondents and the petitioner is in no way connected to Railways. As per railway record, the petitioner received the consignment on the strength of an endorsement made at back-side of RRs. Thus the petitioner becomes an ‘endorsed consignee’ and is liable to pay due punitive charges. It is submitted that either 4th respondent (consignor) as well as the petitioner (endorsed consignee) is liable to pay the said due ‘punitive charges’. The staff at destination station had raised punitive charges on the receipt of weighment advices from weigh-Bridge i.e. Guntakal West. 25. It is also averred that though the impugned letter did not quote earlier correspondence, but impugned letter provided all relevant details including number of wagons attracts ‘punitive charges’ out of 3 Goods Rakes (Goods Train) and amount of ‘punitive charges’. Further, nothing prevented the petitioner to approach destination station to get other minute details. The averments in paragraph 8 also had been denied. 26. Further, it is averred that following are the relevant rules for carriage of Goods in Goods Wagons and brief facts involved in the case : “(a) Before accepting the consignment for carriage, the consignors required to execute a forwarding note with Railway Administration in terms of Section 64 of the Railway Act, which will detail the name of consignor, consignee, destination station, description of the consignment, and its weight. Sendor or his agent required to sign the said Forwarding Note. Further, Forwarding Note also carries a put note that ‘the attention of the sender or his agent is invited to the principal terms and conditions applying to carriage of goods by Railway which are set forth in the Railways Goods and Coaching Tariff in force at the time of booking----“. The Goods Tariff and connected Rate Circulars are being available for reference at all stations dealing with goods ‘Traffic’. In other words, the Consignor accepts conditions laid for carriage of goods on Railways. (b) the carrying capacity of ‘Railway Goods Wagons’ is being exhibited in a conspicuous manner on the outside of every such wagon in terms of Section 72 of the Railway Act. As stated supra, the acceptance of goods for carriage by Railway Goods Wagons is subjected to the terms and conditions enumerated in the ‘the Goods Tariffs’ published from time to time. The Goods Tariff prescribes method of calculation of freight for different the consignments as well as permissible carrying capacity of each type of wagon in relation to each commodity. In terms of provisions of Section 78 of the Railways Act 1989 read with Goods Tariff Provisions, the Railways Administration has empowered to “(i) re-measure, re-weigh, or re-classify any consignment; (ii) re-calculate the freight and other charges; and correct any other error or collect any amount that may have been omitted to be charged”. Section 83 of the said Act empowers the railway administration to detain and auction any consignment, in case the consignor, the consignee or the endorsed consignee failed to pay the amounts due to the administration. If the Railway Administration detects any over-loading beyond permissible load during weighment at Weigh-Bridge, it will raise punitive charges basing on the policy and the Consignees (endorsed consignee) or Consignors are being advised to pay the same. In this connection, the Central Government has published rules called ‘the Railways (Punitive Charges for overloading of wagons) rules, 1990”. The said rules were superseded by “the Railways (Punitive Charges for overloading of wagon) Rules, 2004” vide Gazettee Notification dated 18.10.2004, and these were further modified as ‘the Railways (Punitive Charges for overloading of wagons) Rules, 2005”. 27. Further, it is averred that the petitioner contended that the 4th respondent had transported Iron Ore from M/s BSS & GTC Siding/Hagari (South Western Railway) to M/s Kakinada Sea Port Siding /Kakinada (South Central Railway) and 5th respondent is the consignee. In fact, on the strength of endorsement made out by the petitioner on the reverse side of the Railway Receipts, the petitioner was permitted to take delivery of the consignment as “Endorsed Consignee”. In terms of Section 74, the endorsee shall have all the rights and liabilities of the consignor. 28. It is also stated that in fact the consignment is Iron Ore and is in loose condition, the railway receipts issued to 4th respondent (consignor) reveals that “Loading not supervised by Railway Staff,