Simplified Explanation of the Judgment (800+ words)
The Patna High Court recently delivered a crucial decision in CWJC No. 8848 of 2020, involving a logistics company that had been facing a long-standing demand from the Indian Railways regarding demurrage and wharfage charges. The core dispute revolved around the recovery of nearly ₹11.89 lakh by the Railways, allegedly due to delay in unloading a cement consignment at Laheriasarai Railway Siding in 2013.
The petitioner—a private logistics company—challenged the Railways’ latest attempt to auction its cement consignment for recovery of the demurrage amount. This legal battle was not new. It had already gone through two rounds of litigation, including an earlier order in CWJC No. 24766 of 2013, where the High Court had quashed the initial demand and remanded the matter to the Goods Superintendent for independent adjudication.
As per the Court’s earlier directive, the Goods Superintendent was supposed to pass an independent order based on the petitioner’s explanation. On 2 September 2014, the Goods Superintendent reviewed the facts and agreed with the petitioner’s stand, recommending waiver of the charges. However, instead of closing the matter, the Goods Superintendent erroneously forwarded the file to the Divisional Railway Manager (Commercial), who had no jurisdiction under the earlier Court order.
After remaining dormant for four years, the Railways inexplicably issued a fresh notice in 2018, reviving the original demand. This led to the second round of litigation in CWJC No. 21861 of 2018, where the Court again set aside the demand, citing violation of natural justice and asked the Railways to issue a fresh show-cause notice.
In July 2020, Railways issued a new demand notice, which again included the 2013 charges. The petitioner responded in detail, citing the earlier judgments and the fact that no fresh lawful demand had ever been raised. Despite this, the Divisional Railway Manager reiterated the old demand in September 2020, and moved forward to auction the cement bags.
The High Court took serious note of this conduct, observing that:
- The Goods Superintendent was under a clear judicial direction to independently pass a final order.
- His recommendation to a higher authority was legally unsustainable.
- The Divisional Railway Manager had no jurisdiction to revive or reassert the demand.
Ultimately, the Court held that the recommendation dated 2 September 2014 must be treated as a final order, effectively closing the issue. The demurrage demand of ₹11.89 lakh was quashed, and the scheduled auction of cement bags was also set aside.
Significance or Implication of the Judgment
This decision sends a strong signal to administrative authorities—especially government entities like Indian Railways—that once a court directs an official to pass an order independently, it must be complied with strictly. Passing the buck to a superior officer or reviving an old issue without fresh cause not only violates judicial discipline but also amounts to contempt.
For businesses, especially those relying on government logistics services, the judgment assures that bureaucratic overreach will not be tolerated. It also underscores the importance of adhering to legal procedures, principles of natural justice, and respecting prior judicial orders.
Legal Issue(s) Decided and the Court’s Decision with reasoning
- Whether the Railways could revive a demurrage demand quashed in 2014?
❌ No. The Court held that the earlier quashed demand could not be revived without lawful procedure. The Goods Superintendent’s recommendation for waiver should have been treated as a final order. - Was the Divisional Railway Manager empowered to raise the demand after 2014?
❌ No. The Court clarified that only the Goods Superintendent had jurisdiction under the earlier remand order in CWJC No. 24766 of 2013. - Could the Railways auction the petitioner’s goods to recover the demand?
❌ No. Since the very basis of the demand was found to be illegal and closed, the auction was also illegal and was quashed. - Did the Railways’ actions amount to contempt or defiance of Court order?
✅ Yes, although the Court refrained from initiating contempt proceedings, it issued a stern caution to the officials involved.
Judgments Referred by Parties
- CWJC No. 24766 of 2013 – Earlier litigation where Court had remanded the case to Goods Superintendent.
- CWJC No. 21861 of 2018 – Second round, where demand was again quashed.
- CWJC No. 433 of 2015 and LPA No. 796 of 2016 – Related matters involving similar demurrage disputes.
Judgments Relied Upon or Cited by Court
- The Court primarily relied upon its own prior orders in CWJC No. 24766 of 2013 and CWJC No. 21861 of 2018.
Case Title
M/s Ganga Carriers Pvt. Ltd. vs. Union of India & Ors.
Case Number
CWJC No. 8848 of 2020
Citation(s)
2021(1)PLJR 350
Coram and Names of Judges
Hon’ble Mr. Justice Ahsanuddin Amanullah
Names of Advocates and who they appeared for
- Mr. Gautam Kumar Kejriwal, Advocate (for petitioner)
- Mr. Bijoy Kumar Sinha, Advocate (for Railways)
Link to Judgment
https://patnahighcourt.gov.in/viewjudgment/MTUjODg0OCMyMDIwIzEjTg==-IVFuW1WI99s=
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