LexUNION OF INDIA versus M/S INDIAN OIL CORPORATION LTD.
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* Author [2024] 3 S.C.R. 1051 : 2024 INSC 243 Union of India v. M/s Indian Oil Corporation Ltd. (Civil Appeal Nos. 1891-1966 of 2024) 21 March 2024 [J.B. Pardiwala* and Sandeep Mehta, JJ.] Issue for Consideration It is the case of the respondent company herein that at the time of booking the consignments, from Baad to Hisar via Palwal, the notified chargeable distance for calculating freight as per the Local Distance Table was 444 km, and accordingly the respondent company paid the same from time to time. However, subsequently, the appellant railways vide its letter dated 05.07.2005 changed the chargeable distance to 334 km in the revised Local Distance Table and the said revised table was to apply prospectively. The respondent’s case is that the very chargeable distance of 444 km as per the old local distance table was wrong and demanded refund of the difference of 110 km in the freight charges. The High Court directed the railway administration to refund the difference of approx. 110 km that was illegally levied towards the freight charges. The following questions arise for consideration: (i) What is the scope of Section 106 sub-section (3) of the Railways Act, 1989; In other words, what constitutes an “overcharge” within the meaning of Section 106 sub-section (3) of the Railways Act, 1989; What is the difference between an “Overcharge” and an “Illegal Charge”; (ii) Whether, the claim towards the refund of difference of 110 km in freight charges is covered by Section 106 sub-section (3) of the Railways Act, 1989; In other words, whether the claim is for a refund of an ‘overcharge’; (iii) Whether, the difference of 110 km in freight is liable to be refunded; In other words, whether the notified chargeable distance of ‘444 km’ was an Illegal Charge or not? Headnotes Railways Act, 1989 – s. 106 – Scope of: Held: Section 106 deals with notice for claim of compensation and refund of overcharge – Section 106 of the Act, 1989 is in two-parts 1052 [2024] 3 S.C.R. Digital Supreme Court Reports and deals with and encompasses two distinct types of claims that may be made or sought against the railway administration by way of a notice: - (i) First¸ the claims towards the ‘compensation’ from the railway administration which has been provided u/s.106 sub- section (1) – The compensation may be sought in respect of any loss or damage or destruction caused to the goods which were being carried by the railway – (ii) Secondly, the claims towards the refund of any ‘overcharge’ that has been levied in respect of any goods which were being carried by the railways, and this has been provided u/s. 106 sub-section (3) – Thus, Section 106 of Act, 1989 contains the statutory provisions that enables any person to make a claim from the railway administration, either for (i) compensation OR for (ii) refund of overcharge, in respect of any goods which were being carried by the railway by sending a notice of claim – A statutory time-period of 6-months has been provided for making a notice of claim u/s. 106 of the Act, 1989, and if the notice of claim is not made within the stipulated period, then the claim becomes time-barred.[Paras 34, 35, 36, 39] Railways Act, 1989 – s. 106 (3) – Meaning of Overcharge – Notice for Claim for Refund of Overcharge – Conditions: Held: The term “overcharge” has neither been defined in the Act, 1989 nor the erstwhile Act, 1890 – The term “overcharge” is derived from the word ‘charge’ prefixed by the word ‘over’ and means “something more than the correct amount or more than a certain limit” – The Supreme Court in Union of India & Ors. v. West Coast Paper Mills Ltd. & Anr. explained that an overcharge is something in excess of what is due according to law, an overcharge must be of the same genus or class as a charge, and it does not include a sum that was collected but was not due – The Supreme Court as-well as various High Courts have consistently held that the rigours of Section 106(3) of the Act, 1989 will only be applicable where the claim is for a refund of an ‘overcharge’ – Where the claim for refund is for anything but an ‘overcharge’, Section 106(3) of the Act, 1989 will not apply, and no notice of claim is required – When it comes to a Notice for Claim for Refund of Overcharge under Section 106(3) of the Act, 1989 the following conditions must be fulfilled: - a) Claim must be for refund of an ‘Overcharge’; b) Overcharge must have been paid to the R
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