UNION OF INDIAversusM/S KAMAKHYA TRANSPORT PVT. LTD. ETC. ETC.

                  [2025] 7 S.C.R. 346 : 2025 INSC 805

                         Union of India
                               v.
             M/s Kamakhya Transport Pvt. Ltd. Etc. Etc.
                  (Civil Appeal No(s). 7376-7379 of 2025)
                                 05 June 2025
           [Sanjay Karol* and Prashant Kumar Mishra, JJ.]


                            Issue for Consideration
       Whether the Courts below had rightly held that the Railway authorities
       could not have raised the demand notice after the delivery of goods.

                                   Headnotes†
       Railways Act, 1989 – s.66 – Power to require statement
       relating to the description of goods – Appellant raised demand
       notices alleging misdeclaration of goods, for consignments
       sent through the Railways – Respondents paid the demands
       raised but sought refund of the amount paid contending that
       the demand notices issued after the delivery of the goods
       were illegal – Claim allowed by Railway Tribunal – Appeals
       dismissed by High Court – Interference with:
       Held: A consignee/owner of goods/person having charge of goods
       who has brought goods for the purpose of carriage has to give the
       Railway authorities a written statement regarding the description
       of the goods, to enable them to charge the appropriate rate of
       carriage – Under sub-sec.(4), if the statement is found to be
       materially false, the Railway authority is empowered to charge the
       goods at the required rate – No reference is made to the stage
       at which such a charge can be made, i.e., either before or after
       delivery – Thus, the legislative intent is to permit levy of charge
       under this Section, at either stage and not at a specific one – High
       Court erred in holding that penal charges can only be applied prior
       to the delivery of goods – Impugned order set aside – Railway
       Claims Tribunal Act, 1987. [Paras 14, 18, 20]

                                Case Law Cited
       Jagjit Cotton Textile Mills v. Chief Commercial Superintendent N.R.
       and Ors. [1998] 2 SCR 1065 : (1998) 5 SCC 126 – referred to.
       Union of India v. Megha Technical & Engineers Pvt. Limited, Decision
       of Gauhati High Court in W.A. Nos. 71-74 of 2013 – referred to.
* Author
[2025] 7 S.C.R.                                                         347

      Union of India v. M/s Kamakhya Transport Pvt. Ltd. Etc. Etc.


                               List of Acts
     Railways Act, 1989; Railway Claims Tribunal Act, 1987.

                            List of Keywords
     Description of goods; Misdeclaration of goods; Consignments sent
     through the Railways; Demand notices; Demand notices issued
     after the delivery of the goods; Goods for carriage; Appropriate
     rate of carriage; Levy of charge; Stage of levy of charge; Before
     or after delivery; Railway authorities; Railway Claims Tribunal;
     Refund; Punitive charges after delivery of goods; Consignee;
     Owner of goods; Person having charge of goods; Penal charges;
     Prior to the delivery of goods.

                           Case Arising From
     CIVIL APPELLATE JURISDICTION: Civil Appeal No(s). 7376-7379
     of 2025
     From the Judgment and Order dated 20.12.2021 passed by the
     Gauhati High Court in MFA Nos. 80 and 57 of 2016 and MFA Nos.
     29 and 28 of 2017

                        Appearances for Parties
     Advs. for the Appellant:
     K.M. Nataraj, A.S.G., Amrish Kumar, Mrs. Ameyavikrama Thanvi,
     Vatsal Joshi, B.k.satija, Chinmayee Chandra, Gaurang Bhushan,
     Sudarshan Lamba.
     Advs. for the Respondents:
     Divyansh Rathi, Himanshu Makkar, Gunjan Kumar.

                Judgment / Order of the Supreme Court

                               Judgment

     Sanjay Karol, J.

     Leave granted.
2.   The present appeals arise from the final judgment and order dated
     20th December 2021 passed by the Gauhati High Court in MFA
     Nos.80 of 2016, 57 of 2016, 29 of 2017 and 28 of 2017 respectively,
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                                  Supreme Court Reports


       whereby the order dated 19th January 2016 of the Railway Claims
       Tribunal, Guwahati Bench in OA Nos.229/12, 184/12, 228/12 and
       185/2012 respectively came to be affirmed.

       Brief facts
3.     The brief facts giving rise to this appeal are that the Appellant raised
       demand notices of varied amounts dated 13th October 2011, 7th April
       2012, 29th October 2011, as also 7th April 2012 respectively against
       the respondents, alleging mis-declaration of goods; for consignments
       sent through the Indian Railways. The respondents paid the demands
       raised and thereafter, preferred separate claim petitions under Section
       16 of the Railway Claims Tribunal Act, 1987, before the Railway
       Claims Tribunal1, Guwahati Bench, seeking a refund of the amount
       paid. It was stated therein that the demand notices being issued
       after the delivery of the goods were illegal in view of Sections 73
       and 74 of the Railways Act, 19892.
4.     The Tribunal, allowed the claim petitions vide a common order dated
       19th January 2016, and directed for refund of the amount paid in the
       following manner, along with interest @ 6% per annum :

               Claimant                         O.A. number    Amount refunded
          (Respondent herein)
        C.M. Traders                                  184/12    Rs. 4,47,965/-
        Vinayak Logistics                             185/12    Rs. 4,97,342/-
        Kamakhya Transport                            228/12    Rs. 3,07,902/-
        Pvt. Ltd.                                     229/12    Rs. 15,12,959/-

5.     The Tribunal placed reliance on the judgment of the Gauhati High
       Court in Union of India v. Megha Technical & Engineers Pvt.
       Limited3, whereby the Court had held that a demand under Section 83
       of the Act has to be raised before delivery of the goods, to conclude
       that the Appellant could not have imposed punitive charges, after
       delivery of goods to the consigner and if such action was required,
       then the principles of natural justice have to be followed.


1    Hereafter “the Tribunal”
2    Hereafter “the Act”
3    W.A. Nos. 71 – 74 of 2013, Gauhati High Court.
[2025] 7 S.C.R.                                                          349

        Union of India v. M/s Kamakhya Transport Pvt. Ltd. Etc. Etc.


6.    Aggrieved thereof, the appellant, preferred an appeal before the High
      Court of Gauhati, stating therein that the Tribunal failed to consider
      that the consignments were booked by declaring the items to be
      one category, however, the loaded items were found to be different
      from the category declared.
7.    The High Court, vide its impugned judgment and order, dismissed the
      appeals of the appellant. The Court made the following observations :
      (a)    Both Section 74 of the Act and Rule 1820 of the Railway
             Commercial Manual II, 1991, permit recovery of dues before
             the delivery of goods.
      (b)    The scope of Section 83 of the Act has been dealt by this
             Court in Jagjit Cotton Textile Mills v. Chief Commercial
             Superintendent N.R. and Ors.4, wherein it was held that punitive
             charges are required to be raised by the Railway authorities
             before delivery is caused.
      (c)    From a perusal of Sections 73 and 78 of the Act, it is revealed
             that penal charges can be claimed prior to the delivery of goods,
             but not thereafter.
8.    Dissatisfied, the appellant-Railway authorities are now before us. We
      have heard the learned Additional Solicitor General for the appellant
      and the learned counsel for the respondents.

      Case of the Appellant - Railway Authorities
9.    The significant point raised by the appellant is that the Courts below
      have erroneously treated the dispute at hand, as one dealing with
      overloading of the wagon which is governed by Section 73 of the Act.
      Meanwhile, the case of the appellant is that the consignments were
      found to be different, from what had been declared, and, consequently,
      the appellant imposed a penalty under Section 66 of the Act.
10. Furthermore, the High Court’s reliance on Jagjit Cotton Textile
    (supra), is erroneous, since the factual matrix of that case pertained
    to overloading of the wagon and right to lien. Moreover, the High
    Court has failed to take into consideration, the plain language of
    Section 83, which permits detainment of goods after delivery.


4    (1998) 5 SCC 126.
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       Case of the Respondents
11. We have perused the written submissions filed by the respondents.
    The significant point raised by the respondents is that since the
    demand notices were raised after the delivery of goods, Section
    66 of the Act would not be applicable, and the Courts below have
    rightly held in favor of the Respondents.

       Issue for consideration
12. In the attending facts and circumstances, the question which arises
    for consideration before this Court is whether the Courts below have
    rightly held that the Railway authorities could not have raised the
    demand notice after the delivery of goods.

       Our view
13. As per the appellant - the Railway authorities, Section 66 is applicable
    which is found in Chapter IX of the Act, which seeks to regulate the
    carriage of goods. Section 66 reads as follows:
           “66. Power to require statement relating to the
           description of goods.—
           (1) The owner or a person having charge of any goods
           which are brought upon a railway for the purposes of
           carriage by railway, and the consignee or the endorsee of
           any consignment shall, on the request of any railway servant
           authorised in this behalf, deliver to such railway servant
           a statement in writing signed by such owner or person
           or by such consignee or endorsee, as the case may be,
           containing such description of the goods as would enable
           the railway servant to determine the rate for such carriage.
           (2) If such owner or person refuses or neglects to give the
           statement as required under sub-section (1) and refuses
           to open the package containing the goods, if so required
           by the railway servant, it shall be open to the railway
           administration to refuse to accept such goods for carriage
           unless such owner or person pays for such carriage the
           highest rate for any class of goods.
           (3) If the consignee or endorsee refuses or neglects to
           give the statement as required under sub-section (1) and
[2025] 7 S.C.R.                                                           351

      Union of India v. M/s Kamakhya Transport Pvt. Ltd. Etc. Etc.


           refuses to open the package containing the goods, if so
           required by the railway servant, it shall be open to the
           railway administration to charge in respect of the carriage
           of the goods the highest rate for any class of goods.
           (4) If the statement delivered under sub-section (1) is
           materially false with respect to the description of any goods
           to which it purports to relate, the railway administration
           may charge in respect of the carriage of such goods such
           rate, not exceeding double the highest rate for any class
           of goods as may be specified by the Central Government.
           (5) If any difference arises between a railway servant and
           such owner or person, the consignee or the endorsee, as
           the case may be, in respect of the description of the goods
           for which a statement has been delivered under sub-section
           (1), the railway servant may detain and examine the goods.
           (6) Where any goods have been detained under sub-
           section (5) for examination and upon such examination it
           is found that the description of the goods is different from
           that given in the statement delivered under sub-section (1),
           the cost of such detention and examination shall be borne
           by such owner or person, the consignee or the endorsee,
           as the case may be, and the railway administration shall
           not be liable for any loss, damage or deterioration which
           may be caused by such detention or examination.”
                                                 (Emphasis supplied)

14. It is borne from the above that a consignee/owner of goods/person
    having charge of goods who has brought goods for the purpose
    of carriage has to give the Railway authorities a written statement
    regarding the description of the goods, to enable them to charge the
    appropriate rate of carriage. Under sub-section (4), if the statement
    is found to be materially false, the Railway authority is empowered
    to charge the goods at the required rate. No reference is made to
    the stage at which such a charge can be made, i.e., either before
    or after delivery. Consequently, it can be seen that the legislative
    intent had to be, to permit levy of charge under this Section, at either
    stage and not at a specific one.
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15. Meanwhile, the High Court has considered Sections 73 and 78 of the
    Act, relating to the overloading of the wagon. They read as follows :
          “73. Punitive charge for overloading a wagon.—Where a
          person loads goods in a wagon beyond its permissible
          carrying capacity as exhibited under sub-section (2) or sub-
          section (3), or notified under sub-section (4), of section 72,
          a railway administration may, in addition to the freight and
          other charges, recover from the consignor, the consignee
          or the endorsee, as the case may be, charges by way of
          penalty at such rates, as may be prescribed, before the
          delivery of the goods:
          Provided that it shall be lawful for the railway administration
          to unload the goods loaded beyond the capacity of the
          wagon, if detected at the forwarding station or at any place
          before the destination station and to recover the cost of
          such unloading and any charge for the detention of any
          wagon on this account.
          .....
          78. Power to measure, weigh, etc.—Notwithstanding
          anything contained in the railway receipt, the railway
          administration may, before the delivery of the consignment,
          have the right to— (i) re-measure, re-weigh or re-classify
          any consignment; (ii) re-calculate the freight and other
          charges; and (iii) correct any other error or collect any
          amount that may have been omitted to be charged.”
                                                  (Emphasis supplied)

16. We have perused the demand notices annexed as Annexure P-1
    dated 13th October, 2011, Annexure P-2 dated 29th October, 2011,
    Annexure P-3 dated 7th April, 2012 and Annexure P-4 dated 7th April,
    2012. It is evident from the contents thereof that the demand was
    raised for misdeclaration by the respondents. No reference has been
    made to the overloading of wagon, to which Section 73 applies.
    More so, even the claim petitions do not propose that the demand
    notices have been for the overloading of wagon. T herefore, in our
    view, Section 66 applies to the present lis.
17. Furthermore, we are not inclined to accept the submission of the
    respondents that the demand notices annexed to the petition are not
[2025] 7 S.C.R.                                                           353

         Union of India v. M/s Kamakhya Transport Pvt. Ltd. Etc. Etc.


     genuine in nature. No evidence has been led to that effect and, more
     over, the claim petitions are silent on such averments. Therefore, in
     the absence of evidence to the contrary, we are inclined to find the
     demand notices to be genuine.
18. Before parting with the appeals at hand, we notice that the High
    Court has held that penal charges can only be applied prior to the
    delivery of goods on the basis of the exposition in Jagjit Cotton
    Textile (supra). The respondents have also placed reliance on the
    same judgment to submit that penal charges can be imposed only
    prior to the delivery of goods. We find such an approach to be
    erroneous and not in furtherance of the exposition in Jagjit Cotton
    Textile (supra). The relevant paragraph, as relied upon by the
    respondents, is as follows :
             “22. Again Section 54(1) states that the Railway
             Administration may impose conditions not inconsistent
             with the Act or with any general rules made thereunder,
             “with respect to the receiving, forwarding or delivery of
             any animal or goods”. In our view one such “condition”
             could be by directing that penal charges could be collected
             before delivering the goods.”
19. From a perusal of the above, it is clear that when this Court observed
    “one such ‘condition’ could be by directing that penal charges could be
    collected before delivering the goods”, it was a suggestion, to explain
    the conditions that could be imposed by the Railway Administration
    under Section 54(1). Moreover, the above exposition in Jagjit Cotton
    Textile (supra), was made in the context of Section 54 only, while
    the facts of this case pertain to Section 66 of the Act.
20. In view of the above, the impugned order dated 20th December, 2021
    passed by the Gauhati High Court in MFA Nos.80 of 2016, 57 of
    2016, 29 of 2017 and 28 of 2017, is hereby set aside. In the attending
    facts and circumstances of this case, the civil appeals are allowed.
     Pending applications, if any, shall stand disposed of.

     Result of the case: Appeals allowed.



     †
         Headnotes prepared by: Divya Pandey