Raichand Amulakh Shah Vs. Union of
India  INSC 208 (21 October 1963)
21/10/1963 SUBBARAO, K.
AYYANGAR, N. RAJAGOPALA MUDHOLKAR, J.R.
CITATION: 1964 AIR 1268 1964 SCR (5) 148
RF 1973 SC1281 (8)
Indian Railway Act, 1890, s. 26--Construction
of--Suit for refund of Wharfage and demurrage charges--If barred--"
Wharfage" and "demurrage" meaning of--If terminals.
Suits were filed against the Union of India
representing the Western Railway for the refund of amounts collected by the
Western Railway as wharfage and demurrage charges from the appellants. It was
alleged in the plaint that Railway notifications and rules under which the
Railway had charged the wharfage at two annas to four annas per maund per day
were illegal and ultra rites and that in any view the railway had no power
under the rules to collect charges from appellant-firm for the "free
time" under the head of wharfage charges. The respondent pleaded that
Civil Court had no jurisdiction to entertain the suits and that rules were not
ultra rites and money was not collected against the rules. Suits were dismissed
by the trial court on the ground that they were barred under s. 26 of the
Indian Railways Act. Revisions were also dismissed by the High Court. The
appellants came to this Court by Special Leave.
Accepting the appeals, Held, that s. 26 of
the Indian Railways Act is not a bar to the maintainability of a suit for the
refund of what fage or demurrage charged in excess. The bar under s. 26 is not
comprehensive. It is limited by the opening words "Except as provided in
the Act" in the section. Two conditions must be complied with before
applying s. 26. The railway administration should have done an act or omitted
to do an act in contravention of the provisions of Chapter V of the Indian
Railways Act and the Act should provide a remedy in respect of that act or
omission. In the present case, the Act does not provide for any remedy for an
aggrieved party to approach the Tribunal appointed under s. 34 of the Act for
the refund of the amount collected in excess by the Railway Administration by
way of wharfage or demurrage.
The Tribunal has no jurisdiction to decide
whether the rules empowering the administration to collect wharfage or
demurrage charges are ultra vires or the amounts collected are in excess of
what is leviable under the rules.
Wharfage and demurrage are charges in respect
of goods unloaded from wagons and kept at the station and also in respect of the
goods kept on a platform of the station, beyond the free time allowed for
clearance under the rules.
The said charges 149 can certainly be
described as charges in respect of the station and are terminals within the
meaning of the definition of the term in the Act.
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 149 to 154 of 1959.
Appeals by special leave from the judgment
and order dated February 25, 1958 of the former Bombay High Court at Rajkot in
Civil Revision Applications Nos. 46, 49,55, 57, 58 and 59 of 1958.
S.P. Sinha, Shahzadi Mohiuddin and M.L
Khowaja, for the appellants.
N.S. Bindra and R.N. Sachthey, for the
October 21, 1963. The Judgment of the Court
was delivered by SUBBA RAO J.--These six appeals filed by special leave raise a
common question, namely whether the suits filed against the Western Railway for
the refund of amounts collected from the appellant firm as wharfage or
demurrage would lie in a Civil Court.
Civil Appeals Nos. 152 and 153 of 1959 arise
out of the suits filed for the recovery of the amounts collected from the
appellant-firm by way of demurrage and the other appeals are filed for the
recovery of amounts collected from the said firm by way of wharfage charges. It
would be enough if we gave the particulars of the claim in one of the suits,
for it was stated at the Bar that the claims for refund were similar in all the
other suits. Excepting the plaint in Civil Suit No. 109 of 1957, the other
plaints are not placed before us. We are, therefore, proceeding on the
assumption that the relevant allegations in all the plaints are similar,
particularly as the assertion of learned counsel for the appellants to the said
effect was not questioned by learned counsel for the respondent.
Civil Suit No. 109 of 1957 was filed by the
appellants in Civil Appeal No. 149 of 1959 for recovery of a sum of Rs.
295 from the Union of India representing the
Western Railway. The appellants are 150 a firm doing business in Surendranagar.
The said firm received a consignment of 125 bags of rice booked -from Belanganj
to Surendranagar railway station. At the time of effecting delivery of the said
consignment, the Station Master at Surendranagar recovered a sum of Rs. 275-7-O
from the appellant-firm as wharfage charges. It is alleged in the plaint that
the railway notifications and rules under which the railway had charged the
wharfage at two annas to four annas per maund per day were illegal and ultra
vires and that in any view the railway had no power under the rules to collect
charges from the appellantfirm under the said rules for the "free
time" under the head of wharfage charges. On those allegations the suit
was filed for the refund of the amount collected by the said railway. The
defendant denied either that the rules were ultra vires or that it collected
the amount contrary to the rules. It pleaded that the civil court had no
jurisdiction to entertain the suit. Similar suits were filed in respect of
other amounts and similar contentions were raised. The learned Civil Judge
dismissed all the suits on the ground that they were barred under s. 26 of the
Indian Railways Act, 1890 (Act IX of 1890), hereinafter called the Act. The
said firm in all the suits preferred revisions against the judgment of the
Civil Judge to the High Court of Bombay at Rajkot. The High Court agreed with
the view of the Civil Judge and dismissed the revisions. Hence the appeals.
The only question raised before us is whether
s. 26 of the Act is a bar against the maintainability of the said suits in a
civil court for refund of the said amounts collected from the appellant-firm by
way of wharfage and demurrage charges.
To appreciate the contentions of the parties
it is necessary to notice the relevant sections of the Act. At the outset it
may be mentioned that in the present appeals the amounts were collected between
the years 1953 and 1955 and, therefore, we will be ignoring the later
amendments made in the Act for the purpose of the present enquiry.
151 Section 3(14) "terminals"
includes charges in respect of stations, sidings, wharves, depots, warehouses,
cranes and other similar matters, and of any services rendered thereat."
Section 26. "Except as provided in this Act, no suit shall be instituted
or proceeding taken for anything done or any omission made by a railway
administration in violation or contravention of any provision of this Chapter
(Ch. V)." Section 32. "The Central Government may, by general or
special order, fix the rates of terminal and other charges for the whole or any
part of a railway, and prescribe the conditions in which such rates will apply.
Section 34. (1) There shall be a Tribunal
called the Railway Rates Tribunal, for the purpose of discharging the functions
hereinafter specified in this Chapter.
Section 41. (i) Any complaint that a railway
administration-- (c) is levying charges (other than standardised terminal
charges) which are unreasonable, may be made to the Tribunal, and the Tribunal
shall bear and decide any such complaint in accordance with the provisions of
Section 45. Nothing in this Chapter shall
confer jurisdiction on the Tribunal in respect of scales of charges levied by a
railway administration for the carriage of passengers and their luggage,
parcels, military traffic and traffic in railway materials and stores, and
demurrage charges, except on a reference made to the Tribunal by the Central
Section 46A. The decision of the Tribunal
shall be by a majority of the members sitting and shall be final.
152 Provided that where a single member of
the Tribunal has heard and decided any matter, he may, ,in his discretion, give
leave to any party to appeal to the Full Bench; and if an appeal is filed in
pursuance of such leave, the decision of the Full Bench or of a majority of the
members thereof, as the case may be, shall be final.
Section 46B. The Tribunal may transmit any
order made by it to a Civil Court having local jurisdiction and such Civil
Court shall execute the order as if it were a decree.
Section 46C. In this Chapter, unless there is
anything repugnant in the subject or context,-- (d) "demurrage" means
the charge levied after the expiry of the free time allowed for loading or
unloading a wagon.
The scheme of the said provisions is clear.
The Central Government fixes the rates of terminal and other charges for the
whole or a part of a railway. If a railway administration levies charges other
than the standardised terminal charges which are unreasonable, an aggrieved
party may file a complaint against the administration before the Railway Rates
Tribunal. The decision of the Tribunal is final. In regard to 'demurrage
charges mentioned in s. 45 of the Act, the Tribunal has no jurisdiction to
entertain a claim in respect thereof, except by a reference made to the
Tribunal by the Central Government. Section 26 bars the jurisdiction of
ordinary civil courts to entertain a suit or a proceeding for anything done or
any omission made by the railway administration in violation or contravention
of any of the provisions of Chapter V. In regard to such violation, an
aggrieved party can only proceed in the manner provided by the Act.
The short question, therefore, is whether the
said claims for refund are covered by the bar imposed by s. 26 of the act. As
s. 26 bars the jurisdiction of civil courts, its provisions must be strictly
construed. The bar is in respect of anything done or an omission 153 made by
the railway administration in violation or contravention of any provisions of
Chapter V of the Act. If the opening words "Except as provided in this
Act" in s. 26 of the Act are ignored, the bar appears to be comprehensive,
for it may take in its sweep any dereliction of duty by the railway
administration in respect of matters covered by the provisions of the said
chapter. But such an intention to give a blanket licence to the railway
administration to contravene the provisions of Chapter V of the Act shall not
be attributed to the Legislature unless the section is very clear to that
effect. The opening words "Except as provided in this Act" limit the
operation of the bar. It can reasonably be interpreted to mean that the bar of
a suit is limited to matters in respect whereof the Act has provided a remedy.
So construed, before we apply the provisions of s. 26 of the Act, two
conditions shall be complied with, namely, (i) the railway administration shall
have done an act or omitted to do an act in contravention of the provisions of
Ch. V and (ii) the Act has provided a remedy in respect of that act or
omission. It was argued that the charges levied by the railway administration
under the heads of "wharfage" and "demurrage" are
"terminals" in regard whereof rules were framed by the Government
under s. 32 of the Act, that the complaint of the appellants was that the rates
were collected in excess of those prescribed under the rules and that,
therefore, s. 26 bars a suit for recovery of the same.
The first question, therefore, is whether
wharfage and demurrage charges are "terminals". "Terminals"
has been defined by s. 3(14) of the Act to include charges in respect of
stations, sidings, wharves, depots, warehouses, cranes and other similar
matters, and of any services rendered thereat. Under s.32 of the Act the
Central Government may, by general or special order, fix the rates of terminal
and other charges for the whole or any part of a railway, and prescribe the
conditions in which such rates will apply. In order to find out whether
wharfage and 154 demurrage charges come under the definition of
"terminals", it is necessary to ascertain the meaning of the words
"wharfage" and "demurrage" as understood by the Act and the
rules made thereunder. There is no definition of "wharfage". in the
Act. But s. 46C(d) defines demurrage to mean the charge levied after the expiry
of the free time allowed for loading or unloading a wagon. But the rules,
presumably made under the Act, give a clear idea of the meaning of these words.
The relevant rule is r. 85 and it reads:
"The actual wharfage and demurrage rules
locally in force on different railways are published in each Railway's Tariffs
and may be ascertained on application at stations.
The following wharfage and demurrage rules
were in force on the B.B. & C.I. Railway, which is now named as the Western
Railway. Clauses (A) and (B) thereof give the rates of wharfage and demurrage
and clause (C) defines "demurrage" and "wharfage". Clause
(i) When wagons required to be unloaded by
consignees are not unloaded within the free time of six day-tight hours, after
being placed in position for unloading, demurrage as per clause (B) (ii) above
will be charged for such time above six daylight hours, as the goods remain in
the wagon, and wharfage at the rate notified as applicable at the station will
be charged if the goods are not removed from the railway premises by the end of
the day following that on which they are unloaded." (ii) When wagons
requiring to be unloaded by consignees are unloaded within the free time of six
daylight hours, after being placed in position for unloading, wharfage at the
rate notified as applicable at the station will be charged if the goods are not
removed from the railway premises by 155 the end of the day following that on
which the free time of six daylight hours, expires.
Demurrage is therefore a charge levied on the
goods not unloaded from the wagons within the free time of six daylight hours
and wharfage is the charge levied on goods not removed from the railway
premises after the expiry of the free time allowed for that purpose, Indeed s.
46C(d) of the Act, which was inserted by Act 65 of 1945, has practically
adopted the definition of the word "demurrage" given in the said
rule. Wharfage and demurrage are, therefore, charges levied in respect of goods
retained in the wagons or in the railway premises beyond the free time allowed
for clearance under the rules.
The question is whether such charges are
"terminals" as defined in the Act. The expression "terminal
charges" was defined for the first time in the Indian Railways Act, 1890.
It was taken from the definition in s. 55 of
the English Railway and Canal Traffic Act, 1888. Terminal charges are of two
categories: (1) charges for services, and (2) charges for accommodation and
appliances which facilitate business. The "service terminals"
comprise of remuneration for the handling of goods at the terminal station
i.e., where the railway employees are engaged in weighing, loading, unloading,
etc. As distinguished from this "service terminals" there are
"station terminals" which are charges for providing accommodation
incidental to the business of a carrier, such as "working charges,
repairs, renewals, insurance of station buildings, sidings, sheds, platforms,
warehouses, cranes, hydraulic power, fixed appliances etc." Both demurrage
and wharfage would fall within the head of "station terminals", because
they are charges levied for the use either of the wagon or of the platform or
goods-shed after the transit or conveyance is complete and is not incidental to
the conveyance as such.
Charges levied in respect of stations are
included in the definition of "terminals" under the Act. As the
wharfage and demurrage are charges in respect of goods unloaded from wagons and
kept at the 156 station, and also in respect of goods kept on platforms of the
station, the said charges could certainly be described as charges in respect of
the station. If so, it follows that the said charges are "terminals"
within the meaning of the definition of the said expression in the Act.
Let us now see whether any remedy is provided
by the Act for an aggrieved party to ask for a refund of the charges collected
on the ground mentioned in the plaint. The Tribunal constituted under s. 34 of
the Act has jurisdiction to decide whether the charges levied by the railway
administration other than the standardised terminal charges were unreasonable.
The Act does not provide for any remedy for an aggrieved party to approach the
Tribunal for a refund of the amount collected by the railway administration by
way of wharf age or demurrage on the ground that the rules empowering the said
administration to do so are ultra vires or that the amounts so collected are in
excess of wharfage or demurrage leviable under the rules. If the impugned
charges are standardised terminal charges, the dispute in regard thereto fails
outside s. 41 of the Act. If they are charges other than the standardised
terminal charges, the jurisdiction of the Tribunal is confined only to the
question of its reasonableness. It has no jurisdiction to decide whether the
rules empowering the railway administration to levy a particular charge are
ultra vires or whether the railway administration collected amounts in excess
of the charges which it can legally levy under a rule. If so, it is clear that
no provision has been made under the Act giving a remedy to an aggrieved party
to ask for a refund of amounts, such as those alleged to have been collected
from the appellants. Section 26, therefore, cannot be a bar against the
maintainability of the suits filed by the appellants.
We do not propose to express our view in this
case, as it has not been argued before us, whether the demurrage charges in
question fell within the meaning of the expression "demurrage
charges" in 157 s. 45 of the Act and, if so, whether the jurisdiction of
the Tribunal could only be invoked in the manner prescribed there under.
For the foregoing reasons we hold that both
the High Court and the trial Court went wrong in dismissing the suits on the
ground that s. 26 of the Act was a bar against their maintainability. We,
therefore, set aside the judgment of the High Court as well as that of the
trial Court and remand the suits to the trial Court for disposal in accordance
with law. We should not be understood to have expressed any opinion on the
other questions raised in the suits. The respondent will pay the costs of the
The costs of the courts below will abide the