1. The parties and the issues are the same in both these Writ Petitions, and hence I dispose of these Writ Petitions by a common judgment.

2. In both these Writ Petitions, the Petitioner challenges the demands issued by the Railway authorities alleging undercharging of freight for the consignments transported through the railways to the petitioner. In W.P.(C) No.33189/2007, the impugned orders are Exts.P5, P8, and P9. Exts.P5 and P8 relate to a demand of Rs.54,77,275/- with respect to twenty-three numbers of Railway Receipts. Ext.P9 relates to a demand of Rs.1,49,429/- with respect to one Railway Receipt. In W.P.(C) No.4264/2008, the impugned orders are Exts.P6, P8, and P10 demanding an amount of Rs.84,128/- with respect to four Railway Receipts.

3. The basis for the demands made by the Railway authorities is that the freight for the goods transported to the petitioner, namely, 'De-oiled Rice Bran', should have been charged under Classification No.110 instead of Classification No.100 under which the goods were charged when they were transported.

4. The Petitioner is a public limited company engaged in the business of manufacturing ready-mix cattle feed. The petitioner has manufacturing units at various places, including Irinjalakuda in Thrissur District and Swaminathapuram in Dindigul District in Tamil Nadu. The Petitioner used to purchase raw materials for the manufacturing of cattle feed from other States and to transport the same through the railways. It is the case of the Petitioner that the Petitioner purchased raw materials from the consignor as per Free on Rail (F.O.R.) Contracts by which it is the burden of the consignor to pay the freight charges. Since the railway freight is borne by the consignor, the petitioner fixed the purchase price in the contract after taking into account the tariff prescribed for the transportation of goods. No freight is payable alleging wrong classification or error after the delivery of the goods, and if at all any additional freight is payable, the same is to be paid by the consignor who has transported the goods to the petitioner through railways under an F.O.R. Contract.

5. The Respondents have filed Counter Affidavits and Additional Counter Affidavit in these cases.

6. I heard the learned Senior Counsel for the petitioner, Adv. Sri. E.K. Nandakumar, instructed by Adv. Smt. Ramola Nayanpally, and the learned Standing Counsel for the Railways, Sri. T.C. Krishna.

7. The contention of the learned Senior Counsel for the Petitioner is that the goods happened to be wrongly classified by the Railways on account of the mistake committed by its own employees, and the Petitioner is not in any way responsible for the mistake committed by the Railway authorities. The Railway authorities have no case that either the consignor or the Petitioner has made any misdescription of the goods. The present demands are issued long after the delivery of the consignments. The contracts between the consignor and the Petitioner with respect to the goods covered by the disputed Railway Receipts are governed by the F.O.R. Contract, by which the consignor alone is responsible for making payment of the freight charges. If any amount at all is due to the Railways, the Railways has to proceed against the consignor in the disputed Railway Receipts. The re-classification of the goods after completion of the transport and delivery is clearly unjustifiable. The learned Senior Counsel invited my attention to Section 78 of the Railways Act, 1989 (for short, the Act), and contended that it is impermissible for the Railways to re-classify any consignment, re-calculate the freight or other charges, and correct any other error or collect any amount that may have been omitted to be charged after the delivery of the consignment. The learned Senior Counsel further pointed out Clause Nos.1427, 1446(c)(3) and 1820 of the Indian Railway Commercial Manual Volume II, which relate to goods traffic. Clause No.1427 provides that the freight charges should be invoiced on the sender's declared weight, and it will be the duty of the destination station to weigh all such consignments and recover undercharges, if, due before delivery of goods. Clause No.1446(c)(3) provides that the Railways have the right of re-measurement, re-weighment, re-classification, and re-calculation of rates and other charges and of collecting, before goods are delivered, any amount that may have been omitted or undercharged. Clause No.1820 provides that before delivery of goods, it should be seen that all railway dues and other charges have been paid; that wharfage and demurrage charges should be levied under tariff rules and recovered, from the consignees/endorsee before the removal of goods from railway premises; and that all undercharges noticed as a result of check of invoices, weighment of goods, etc., should be recovered from the consignees/endorsee before delivery of goods. The learned Counsel relied on the decision of the Jharkhand High Court in Jyoti Enterprises v. Union of India and Others [AIR 2003 Jharkhand 48], the decisions of Calcutta High Court in Ultra Tech Cement Ltd. v. Union of India (UOI) and Others [MANU/WB/0016/2010] and Bagadiya Brothers Pvt. Ltd. and Others v. Union of India and Others [MANU/WB/1480/2017], the decision of the Orissa High Court in Union of India v. M/s. Radha Krishna Enterprises and Others [Order dated 01.12.2022 in F.A.O. No.81/2016] and the decision of the Hon'ble Supreme Court in Union of India v. M/s. Kamakhya Transport Pvt. Ltd. Etc. Etc. [Civil Appeal Nos.7376-7379 of 2025] in support of his contentions.

8. Per contra, the learned Standing Counsel for the respondents - Railway authorities contended that the undercharging of freight for the goods transported through the Railways happened only on account of a bona fide mistake committed by the Reservation Clerk applying the wrong classification for the goods transported. There could not be any quarrel that the goods should have been classified under classification No.110 instead of classification No.100 under which the freight was charged wrongly. If the Railway authorities are not permitted to recover the deficit freight charges, it will amount to a loss of public money legitimately due to the Railway and undue enrichment to the Petitioner. The contract between the consignor and the consignee is not binding on the Railway. The liability out of the goods covered by the Railway Receipts is governed by Section 74 of the Act, which specifically provides that the consignee shall have all the rights and liabilities of the consignor on delivery of the Railway Receipt to him. Here, apart from the delivery of the Railway Receipt, the Petitioner, as consignee, has taken possession of the goods covered by the Railway Receipts. Hence, the Petitioner alone is liable to make payment of the freight charges as per the correct classification. When the Railways raised demands against the Petitioner, the only contention raised by the Petitioner was that it is the consignor who is liable to pay the freight charges, and hence, the Railways could not proceed against the Petitioner. The right of the Railways to recover the deficit freight charges, applying the correct classification of goods, was not questioned by the petitioner. Section 78 of the Act does not in any way prevent the Railways from recovering the freight charges on account of undercharging of the same as per a wrong classification. Section 78 of the Act is incorporated in the Act in order to enable the Railway Authorities to do the things stated therein before the delivery of the consignment, and it does not prevent recovery of the amount due to the Railways in accordance with law. Section 78 of the Act is incorporated in order to enable the Railways to have a lien on the goods before delivery of the same. The learned Counsel concluded his arguments by contending that, at any rate, a Writ Petition under Article 226 of the Constitution of India is not maintainable since the dispute arises out of a private commercial contractual matter.

9. I have considered the rival contentions.

10. The learned Standing Counsel for the Respondents raised an objection as to the maintainability of the Writ Petitions. These Writ Petitions have been pending in this Court for the last nearly 18 years with an unconditional interim order staying the demands made by the Railways. The issue involved in these cases is to be decided on the admitted facts. It is not proper to dismiss these Writ Petitions at this stage, relegating the Petitioner to an alternative remedy. Hence, I consider these Writ Petitions on merits.

11. The transport of the goods covered by the disputed Railway Receipts, charging of freight under a wrong classification and issuance of demands alleging deficit freight charges after delivery of the goods are admitted facts in these Writ Petitions. It is also an admitted fact that the wrong classification of the goods was made by the Railway servants, and neither the consignor nor the Petitioner, as a consignee, is responsible for it.

12. The first question to be answered in these Writ Petitions is whether the petitioner, as consignee, is liable to pay the demands of the Railways. The contention of the Petitioner that even if the Railways is entitled to recover the deficit freight charges, the Railways can proceed only against the consignor could not be accepted in view of the specific provision under Section 74 of the Act that the property in the consignment covered by a Railway Receipt shall pass to the consignee or the endorsee, as the case may be, on delivery of such Railway Receipt to him and he shall have all rights and liabilities of the consignor. Thus, even if the liability to pay the freight charges is on the consignor as per the terms of the contract between the consignor and the petitioner as consignee, in view of the statutory provision under Section 74 of the Act, the Railways can proceed against the consignee on delivery of the Railway Receipt to the consignee. In this case, admittedly, the consignee has taken delivery of the goods also covered by the disputed Railway Receipts. If there is any provision in the contract between the consignor and consignee that it is the obligation of the consignor to pay the freight charges, the consignee is at liberty to claim the same from the consignor after payment of the same to the Railways as per Section 74 of the Act.

13. The next question to be answered in these Writ Petitions is whether the Railways can claim recovery of the freight which was undercharged by the Railways after delivery of the goods.

14. It is apposite to extract Section 78 and Section 83(1) of the Act hereunder:

               “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.”

               “83. Lien for freight or any other sum due

               (1) If the consignor, the consignee or the endorsee fails to pay on demand any freight or other charges due from him in respect of any consignment, the railway administration may detain such consignment or part thereof or, if such consignment is delivered, it may detain any other consignment of such person which is in, or thereafter comes into, its possession.”

15. Let me consider the decisions cited by the learned Senior Counsel for the Petitioner.

16. In Jyoti Enterprises (supra), the questions considered were - (i) whether the re-weighment en route of the consigned goods behind the back of the consignee/endorsed consignee is violative of the principles of natural justice and (ii) whether the lien provided under Section 83 of the Indian Railways Act can be exercised by the respondents without compliance of the statutory provisions. The Jharkhand High Court answered that there was a violation of principles of natural justice and that a lien is not available since the requisites provided under the Act and the Rules have not been complied with. The question whether the Railway can demand freight after delivery is not considered with reference to Section 78 of the Act.

17. In Ultra Tech Cement Ltd. (supra), the Calcutta High Court held that Sections 73, 78, and 79 of the Railways Act provide for weighment, re-measurement, and re-calculation of freight of the loaded goods, and for recovery of additional charges if it is found that the goods loaded on the wagons were in excess of their carrying capacity and that these charges can be recovered before the delivery of the goods.

18. In M/s. Radha Krishna Enterprises (supra), the Orissa High Court confirmed the Order of the Railway Claims Tribunal directing refund of the additional freight charges realized after delivery of the goods, finding that in terms of Section 78, Railways have the right to re-measure, re-weigh or re-classify any consignment and re-calculate the freight and other charges and to collect any amount that has been omitted from charging before the delivery of the consignment. After referring to Sections 73 and 83, it is found that none of the said provisions nor any other provision under the Railways Act authorises the Railway to revise their freight charges and to make a fresh demand after delivery of the goods consigned.

19. In Bagadiya Brothers Pvt. Ltd. (supra), the challenge was against the demand for an undercharge amount made four months after the delivery on the grounds that the goods were delivered taking resort to a longer route. The Calcutta High Court set aside the demand, finding that Section 78 of the Act provides that the Railways has the right to re-calculate the freight or correct any error before delivery of goods, and as such, any omission or mistake could have to be calculated before the delivery of the consignment, and therefore, the Railways could not have acted contrary to the provisions of Section 71 read with Section 78 of the Act by issuing the demand notice four months after the delivery of the goods.

20. In M/s. Kamakhya Transport Pvt. Ltd. (supra), the Hon’ble Supreme Court upheld the claim of the Railways for freight after the delivery of the goods finding that it is a case of misdeclaration of goods, and in such case, Section 66 of the Railways Act is applicable. Sub-Section (4) of Section 66 provides that 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. In the present case, the Railway does not have a case that there was a misdescription of the goods either by the consignor or consignee.

21. Section 78 of the Act permits the Railways to re-classify the consignment, re-calculate the freight, and correct any other error or collect any amount that may have been omitted to be charged only before the delivery of the goods. The contention of the Standing Counsel for the Respondents is that the said provision is only an enabling provision, and it is intended to create a lien on the goods. I am unable to accept the said contention. Lien on the goods is specifically dealt with under Section 83 of the Act. It provides lien on the consignment with respect to which the dues are claimed before its delivery, and if such consignment is delivered, then lien on other consignments that come into the possession of the Railways. A lien cannot be assumed or presumed from a provision of law. Lien has to be expressly stated in the provision. It is apposite to quote the principle of lien from 25 Am. & Eng. Enc. Law 662 - "Statutory liens, however, have been looked upon with jealousy, and generally will only be extended to cases expressly provided for by the statute, and then only where there has been a strict compliance with all the statutory requisites essential to their creation and existence.” When lien on the consignment before delivery is expressly provided in Section 83, it could not be said that the purpose of Section 78 is to incorporate the very same lien impliedly. Lien is a security for the claim. The right of lien comes into operation only if there is a substantive right for recovery. Lien by itself will not confer the right for recovery. Lien under Section 83 is available to the Railways only when the consignor or consignee fails to pay the freight or other charges due to them. The right of the Railways to demand freight is available only before the delivery as per Section 78. Only if the right to demand freight is available to the Railways can the Railways invoke the lien available under Section 83.

22. As rightly contended by the learned Senior Counsel for the Petitioner, Clause Nos.1427, 1446(c)(3) and 1820 of the Indian Railway Commercial Manual Volume II, which relates to goods traffic, also provide for recovery of Railway dues only before delivery. The said Clause Nos.1427, 1446(c)(3) and 1820 of the Indian Railway Commercial Manual Volume II are extracted hereunder.

               “1427. The freight charges, in the cases referred to in the pre-ceding Para, should be invoiced on the sender's declared weight. It will be the duty of the destination station to weigh all such con-signments and recover undercharges, if, due before delivery of goods.

               1446(c)(3). The Railways have the right of re-measurement, re-weighment, re-classification and recalculation of rates and other charges and of collecting, before goods are delivered, any amount that may have been omitted or undercharged.

               1820. Recovery of railway dues before delivery of goods.— Before delivery of goods, it should be seen that all railway dues and other charges have been paid. Wharfage and demurrage charges should be levied under tariff rules and recovered, from the consignees endorsee before the removal of goods from rail-way premises. Similarly, all undercharges noticed as a result of check of invoices, weighment of goods, etc, should be recovered from consignees/endorsee before delivery of goods. As regards overcharges claimed at the time of delivery, the procedure indi-cated in Chapter XXI should be followed.”

23. The aforesaid Clauses of Indian Railway Commercial Manual authorise the Railways to claim all the undercharges only before delivery of goods. In such case, the Railways cannot claim undercharges after delivery of the goods.

24. The aforesaid provisions clearly indicate that recovery of undercharges must occur before delivery of the consignment. Admittedly, the present demands are made by the Railway authorities after delivery of the consignments. Hence, the present demands are unsustainable.

25. Accordingly, I allow these Writ Petitions, issuing a writ of certiorari setting aside Exts.P5, P8, and P9 in W.P.(C) No.33189/2007 and Exts.P6, P8, and P10 in W.P.(C) No.4264/2008.