Case: U O I  Vs. West Coast Papers Mills Ltd

2. On 24th June, 1963, West Coast Paper Mills Limited filed a complaint (registered as Complaint No. 4/1963) against the Railway Administration complaining of illegality on account of contravention of the provisions of Section 28 of the Indian Railways Act, 1890 (hereinafter referred to as the Act) and of unreasonability on the part of the Railway Administration in charging the freight at the impugned rates. The period for which the complaint related was 26th April, 1963 to 1st October, 1966 (both dates inclusive and inclusive of the period introduced into the complaint by way of amendment). By order dated 18th April, 1966, the Tribunal held that in devising the freight rates the Railway Administration had contravened the provisions of Section 28 of the Act and the complaint i.e. the respondent West Bengal was treated with discrimination and unreasonableness. In spite of holding so, the Tribunal did not direct the amount of freight illegally and unreasonably collected by the Railway Administration, to be refunded in view of the holding of this Court in Upper Doab Sugar Mills Ltd. vs. Shahdara (Delhi) Saharanpur Light Railway Company Ltd. (1963) 2 SCR 333 wherein this Court has taken the view that the Tribunal is competent only to grant declaratory relief and there is no provisions which authorities the Tribunal to grant the consequential relief also.3. The Union of India preferred an appeal by special leave to this Court laying challenge to the decision of the Tribunal dated 18th April, 1966 under Article 136 of the Constitution of India. By judgment dated 14th October, 1970 (reported as Union of India vs. West Coast Paper Mills Limited, (1970) 3 SCC 606 , the appeal preferred by the Union of India was dismissed and the decision of the Tribunal was affirmed. During the course of its judgment, this Court also recorded a finding that the freight charges levied by the Railway Administration were in contravention of Section 28 of the Act and were unreasonable.4. Another complaint under Section 41 of the Act (registered as Complaint No. 4/1966) came to be filed before the Railway Rates Tribunal by the West Coast Paper Mills Limited and this related to the period 2nd October, 1966 to 14th August, 1972 and included certain commodities which were not the subject matter of Complaint No. 4/1963. This complaint came to be decided on 12th November, 1972. By that time, the decision of this Court dated 14th October, 1970 was available which was followed by the Tribunal and the complaint was allowed granting a declaration sought for by the complainant.5. A similar complaint was filed by Dandeli Ferro Alloys Limited registered as Complaint No. 2/1967 which too came to be decided on 12th November, 1972 following the decision of this Court as abovesaid and granting the declaration sought for by the complainant therein. Thus the three decisions by the Tribunal in the three complaints holding the freight rates applied by the Railway Administration to be illegal and unreasonable achieved a finality. The issue is no more res integra.6. On 5th January, 1972, West Coast Paper Mills Limited filed a writ petition under Article 226 of the Constitution of India seeking a writ of mandamus commanding the Railway Administration to refund the amount of freight collected by the Railway Administration to the extent it was in violation of the declaration given by the Tribunal. This writ petition, related to the period 26 April, 1963 to 1st October, 1966 and the freight realised by the Railway Administration during this period. This petition came to be dismissed on 29th October, 1973 by the High Court forming an opinion that for a money claim of the nature made in the writ petition, writ jurisdiction was not appropriate forum and the writ petitioner was at liberty to file a civil suit for the claim. The merits of the claim were not adjudged by the High Court and rightly so.7. During the pendency of the writ petition, on 5th October, 1973, West Bengal Paper Mills Limited served a notice under Section 80 of the Code of Civil Procedure, 1908 (for short the Code) on the Union of India as also on the General Manager of the Railways stating the cause of action and the relief for the period referable to 26th April, 1963 to 14th August, 1972 i.e. the periods covered by Complaint Nos. 4/1963 and 4/1966, both.8. Dandeli Ferro Alloys also filed a suit on 18th April, 1974 in respect of their claim basing the cause of action on the judgment dated 12th November, 1972 delivered by the Tribunal.9. Both the suits have been decreed by the Tribunal Court and the decrees have been upheld by the High Court. The Union of India has come up in appeals by special leave.

Court's reasoning:
According to him, the West Coast Paper Mills Limited had given gave a notice even before 14th October, 1970 and by repeating the notice under Section 80 of the Code for the second time the West Coast Paper Mills Limited cannot claim its exclusion from computing the period of limitation under Section 15(2) of the Limitation Act. We cannot agree.The issue as to the legality and reasonability of the rates charged by the Railways Administration having been finally adjudicated upon by this Court, there is nothing wrong in the respondent West Coast Paper Mills Limited having proceed on an assumption that what had remained to be done was a simple direction to the Railway Administration to refund the amount of freight to which it had already been adjudged not entitled to recover. However, the High Court was not inclined to grant such relief in exercise of its writ jurisdiction and, therefore, left open the remedy of civil suit available to the respondents. By no stretch of imagination, it can be said that the West Coast Paper Mills Limited was actuated by malafides or want of good faith in instituting the writ proceedings. In our opinion, the period lost during the pendency of the writ proceedings is liable to be excluded from computing the period of limitation under Section 14(2) of the Limitation Act. Not only we have independently arrived at this finding on the submissions made by the learned counsel for the appellant, but we may also refer to the finding recorded by theBench vide paragraphs 17th and 18 of the judgment dated 5th February, 2004 wherein it has been specifically held that the respondents were also entitled to get the period during which the writ petition was pending excluded from computing the period of limitation and in that view of the matter, the civil suit was filed within the prescribed period of limitation. The finding recorded by the Trial Court as also the High Court that the respondents were entitled to the benefit of Sections 14 and 15 of the Limitation Act, 1963 has been expressly upheld by theBench holding, We have no reason to take a different view".16. We are clearly of the opinion that the suit filed by the respondent West Coast Paper Mills Limited was within the period of Limitation.17. So far as the suit filed by Dandeli Ferro Alloys Limited is concerned, Mr. Malhotra, the learned senior counsel for the appellants very fairly conceded that in view of the decision dated 12th November, 1972 which was given by the Tribunal in favour of the respondent Ferro Alloys Limited the suit filed on 18th April, 1974 was certainly within limitation.18. So far as the plea based on Section 78B of the Act is concerned, we find no merit therein as well.In the case at hand, the freight rates notified by the Railway Administration in exercise of its statutory power to do so, so long as they were not declared illegal and unreasonable by the Tribunal under Section 41 of the Act, were legal and any one carrying the goods by rail was liable to pay the freight in accordance with those rates. The freight paid by the respondents was as per the rates notified. Thus the present one is not a case of overcharge at all. It is a case of illegal recovery of freight on account of being unreasonable and in violation of Section 28 of the Act, consequent upon such determination by the Tribunal and the decision of the Tribunal having been upheld this Court. A case of illegal charge is distinguishable from the case of overcharge and does not attract the applicability of Section 78B of the Railways Act.