Holding

The claim for refund of over‑charges is barred; the six‑month limitation in Section 78‑B is exclusive and the Limitation Act does not apply to the Railway Claims Tribunal.

Summary

Birla Cement Works, a cement manufacturer, paid excess freight charges after a gauge conversion added 34 km to the railway distance. The company discovered the mistake when the railway admitted the error on 12 Oct 1990 and claimed a refund under Section 78-B of the Indian Railways Act. The Railway Claims Tribunal dismissed the claim as barred by the six‑month limitation in Section 78-B, a decision upheld by the High Court and the Division Bench. The Supreme Court held that the Tribunal, being a creature of the statute, is not a civil court and the Limitation Act, 1963 does not apply; the six‑month period in Section 78‑B is exclusive and the claim is therefore time‑barred. Consequently, the petitioners' claim for refund was rejected and the appeal dismissed.

Issues considered

Whether Section 17(1)(c) of the Limitation Act, 1963, which starts the limitation period from the date of discovery of the mistake, applies to claims before the Railway Claims Tribunal.
Whether the six‑month limitation period prescribed in Section 78‑B of the Indian Railways Act, 1890, is the sole limitation provision for refund of over‑charges, rendering the claim time‑barred.

Legislation cited

Indian Railways Act, 1890s. 78-B
Limitation Act, 1963s. 17(1)(c)

Subjects

limitation periodover‑chargerefund claimIndian Railways ActRailway Claims TribunalStatutory limitationDiscovery rule

Judgment

BIRLA CEMENT WORKS A
v.
G.M. WESTERN RAILWAY AND ANR.

JANUARY 2, 1995

[K. RAMASWAMY AND N. VENKATACHALA, JJ.j B

Limitation Act, 1963-S. 17( l)(c)--lndian Railways Act, 1890-S.78-B:
Limitation for claiming refund of over charges or excess payment-Claim for
refund of over charge or excess payment under section 78-B of Indian Railways
Act beyond six months would fall within the meaning of Section 78-B of the C
Act and claim ba"ed by operation of the Proviso of Section 78-B. 17(1)(c)
of Limitation Act-No application.

The petitioner is a manufacturer of cement in Rajasthan. Petitioner
got the cement transported through meter gauge from the railway siding
at Chandina prior to 3.9.1989. After conversion of meter guage into broad D
guage additional 34 kilometers distance was added to levy freight charges.
Thereafter various consignments booked by the appellant and transported
the cement to diverse destination and paid the freight charges between
May-June 1989 and March 1990.
E
A notice was sent to the Western Railway by the appellant under
section 78-B of the Indian Railways Act, 1890 claiming refund of different
accounts. On its rejection a claim under section 16 of the Act made before
the Railway Claims Tribunal. The principal contention raised by the
petitioner was· that it had discovered the mistake when the railway
authorities have confirmed by their letter dt. 12.10.1990 informing that F
they have committed mistake in charging excess freight charges on wrong
calculation of distance. It was therefore claimed that the limitation starts
running from the date of discovery of mistake and therefore stood excluded
by operation of Section 17(1)(c) of the Limitation Act, 1963 in this case.

The Railway Tribunal dismissed the petition holding as being barred
G
under section 78-B of the Indian Railways Act, 1890. Appeal to Single
Judge of the High Court was dismissed. On further appeal, the Division
Bench confirmed the same. Hence this Appeal.

Dismissing the appeal, this Court H
5
6 SUPREME COURT REPORTS [1995] 1 S.C.R.

A HELD : 1. The Tribunal is the creature of the Statute. Therefore, it
is not a Civil Court nor the Limitation Act has application even though it
may beheld that the petitioner discovered the mistake committed in paying
'over charges' and the limitation is not saved by operation of Section
17(l)(c) of the Limitation Act [7-D]

B 2. An over charge is also charge which would fall within the meaning
of Section 78-B of the Indian Railways Act itself but beyond six months,
by operation of that provision in the section itself, the claim become.s
barred by limitation. Therefore, the Tribunal and the High Court have
rightly concluded that the petitioner is not entitled to the refund of the y
C amount claimed. (7-F]

CIVIL APPELLATE JURISDICTION : Special Leave Petitions (C)
Nos. 21448 of 1994 etc. etc.

From the Judgment and Order dated 3.10.94 .of the Rajasthan High
D Court in C. Spl. A No. 76 of 1994.

A.K. Chitale, Praveeen Kumar and Virendra Kaushal for the
Petitioner.

The following Order of the Court was delivered :
E
The petitioner is a manufacturer of cement at Chittorgarh in Rajas-
than. It had transported cement to various destinations through railway
carriages. Prior to 3.5.1989, the petitioner got the cement transported
through meter gauge from the railway siding at Chanderia. After conver-
F sion into broad gauge ·the railway siding was at Difthkola Chittor Broad
Gauge Rail Link. In consequence 34 kilometers' distance was added to levy
freight charges. Thereafter, between May-June, 1989 and March, 1990 the
petitioner had, various consignments, booked and transported the ¢ement
to diverse destinations and paid the freight charges. Later, on January 21,
1991, the petitioner has sent a notice to the Western Railway under Section
G 78-B of the Indian Railway Act, 1890, (for short, 'the Act'), claiming refund
of different amounts. Since it was rejected, on 23.12.1991 the petitioner laid
the claim under s.16 of the Act before the Railway Claims Tribunal at
Jaipur, which by its Order dated 25.11.1992, dismissed the petition holding
as being barred under s. 78-B the Act. When it was challenged in Civil
H Appeal No. 84/93 and batch the Single Judge of the High Court by his
BIRLA CEMENT WORKS v. WESTERN RLY. 7
~
order dated 25.1.1994 dismissed the same. On further appeal No. 76/94, A
the Division Bench by order dated 3.10.94 confirmed the same. Thus, these
Special Leave Petitions.

The principal contention raised by the petitioner is that it had

- .....
discovered the mistake when the railway authorities hav~ confirmed by
their letter dated 12.10.1990 that they have committed mist"'ke in charging
excess freight on wrong calculation of distance. The limitation starts run-
B

ning from the date of discovery of mistake and, therefore, stands excluded,
by operation of s.17(1)(c) of the Limitation Act, 1963 Act 21of196-3 and
that s. 78-B has no application to the facts in this case. In consequence,
the High Court and the Tribunal have committed error of law in rejecting c
the claim for refund. We find no force in the contention.

Section 17(1)(c) of the Limitation Act, 1963, would apply only to a
suit instituted or an application made in that behalf in the civil suit.· The
" Tribunal is the creature of the statute. Therefore, it is not a civil court nor
the Limitation Act has application, even though it may be held that the r:
petitioner discovered the mistake committed in paying 'over charges' an<l
the limitation is not saved by operation of. s.17(1)(c) of the Limitation Act.
...
Section 78-B of the Act provides that a person shall not be entitled
to refund of over-charge or excess payment in respect of animals or goods
:E
carried by railway unless his claim to the refund has been preferred in
writing by him or on his behalf to the railway administration to which the
animals or goods were delivered to be carried by railway etc. within six
months from the date of the delivery of the animals or goods for carriage
by railway. The proviso has no application to the facts .of this case. Aii. over
charge is also a charge which would fall within the meaning of s.78-B of I
the Act. Since the claims were admittedly made under s.78-B itself but
beyond six months, by operation of that proVision in the section itself, the
claim becomes barred by limitation. Therefore, the Tribunal and the High
Court have rightly concluded that the petitioner is not entitled to the
..>/.,
refund to the amount claimed.
c
We do not find any ground for our interference with the orders
"' challenged in S.L.Ps. The Special Leave Petitions are accordingfy dis-
missed.

K.S.D. i>etitions dismisstd.
1·