Section 66(4) Of Railways Act Permits Railway Authority To Charge For Misdeclaration Of Goods Either Before Or After Delivery: Supreme Court
The appeals before the Supreme Court arose from the final judgment of the Gauhati High Court affirming the order of the Railway Claims Tribunal.
Justice Sanjay Karol, Justice Prashant Kumar Mishra, Supreme Court
While allowing the appeal of the Railway Authorities, the Supreme Court has explained that as per sub-section (4) of section 66, if the statement is found to be materially false, the Railway authority is empowered to charge the goods at the required rate. Such a charge can be made either before or after delivery.
The appeals before the Apex Court arose from the final judgment of the Gauhati High Court affirming the order of the Railway Claims Tribunal.
Referring to section 66 of the Railways Act, the Division Bench of Justice Sanjay Karol and Justice Prashant Kumar Mishra said, “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.”
Additional Solicitor General K.M. Nataraj represented the Appellant while Advocate Divyansh Rathi represented the Respondent.
Factual Background
The Appellant raised demand notices of varied amounts against the respondents, alleging misdeclaration 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 Tribunal 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 given Sections 73 and 74 of the Railways Act, 1989.
The Tribunal allowed the claim petitions and directed a refund of the amount paid. The High Court dismissed the appeal filed by the appellant-Railway authorities. It was in such circumstances that the matter reached the Apex Court.
Reasoning
On a perusal of the facts of the case, the Bench noted that the demand was raised for misdeclaration by the respondents. No reference had been made to the overloading of wagon, to which Section 73 applies. It was also observed that Section 66(4) permits the Railway authority to charge for misdeclaration of goods either before or after delivery
“More so, even the claim petitions do not propose that the demand notices have been for the overloading of wagon. Therefore, in our view, Section 66 applies to the present lis”, it said. In the absence of evidence to the contrary, the Bench was not inclined to accept the submission of the respondents that the demand notices annexed to the petition were not genuine.
The Bench also found the High Court’s observation that penal charges can only be applied prior to the delivery of goods to be erroneous. Thus, allowing the appeals, the Bench set aside the impugned judgment.
Cause Title: Union of India v. M/s Kamakhya Transport Pvt. Ltd. Etc.etc (Neutral Citation: 2025 INSC 805)
Appearance:
Appellant: Additional Solicitor General K.M.Nataraj, Advocates Ameyavikrama Thanvi, Vatsal Joshi, B.K. Satija, Chinmayee Chandra, Gaurang Bhushan, AOR Amrish Kumar, AOR Sudarshan Lamba
Respondent: Advocates Divyansh Rathi, K. P. Maheshwari, Divyam Rathi, AOR Gunjan Kumar
