Calcutta High Court Upholds Railway’s Termination Of Parcel Contract | Overloading By 134 Percent Posed Serious Safety Risk | No Violation Of Natural Justice Found
Safiya Malik
The High Court at Calcutta Single Bench of Justice Partha Sarathi Chatterjee dismissed a writ petition challenging the termination of a lease contract by the Railway Authority and upheld the forfeiture of the associated security deposit. The Court concluded that the decision to terminate the contract and impose penalties did not suffer from procedural irregularities or violate the principles of natural justice. It held that the petitioner had no enforceable claim under public law and that the impugned actions fell within the domain of contract law. The Court declined to interfere in the decision-making process, stating that no prejudice was caused to the petitioner either due to the omission of re-weighment of parcels at the relevant station or the absence of prior notice before contract termination.
An e-auction was conducted by the Eastern Railway, Howrah Division, on 6 June 2023 for leasing parcel space in SLR-F1 of Train No. 12311 Netaji Express, from Howrah to Kalka. The parcel space, of 4 metric tonnes capacity for 731 trips over two years, was allotted to the petitioner, a recent entrant into railway-based trading. The petitioner, having emerged as the successful bidder, entered into a formal contract governed by the Special and Standard Conditions of Contract.
On 11 August 2023, during the 52nd trip of the train, the Railway authorities detected a consignment weighing 8,344 kg in the FSLR-I compartment at Deen Dayal Upadhyaya (PDDU) station. This was significantly above the permissible limit of 4,000 kg. The Train Examiner found that the buffer height of the overloaded wagon was unusually low compared to the locomotive, posing a safety risk. The train was halted, the goods were unloaded and weighed in the presence of Parcel Staff, Railway Protection Force (RPF), and the Chief Loco Inspector.
The petitioner alleged that the weighment was conducted in his absence and that the penalty of Rs. 1,29,371/- was deposited under coercion. On 17 August 2023, the Railway authorities terminated the contract and forfeited the security deposit of Rs. 7,71,975/-. A fresh e-auction was floated the same day.
According to the petitioner, the goods were never properly weighed in his presence and the termination relied on Clauses 28.3 and 17.3, which did not exist in the relevant contractual terms. The petitioner cited Clause 14.3 of the Special Conditions which allows termination only after three instances of overloading beyond the tolerance limit. He also claimed the appeal process was flawed and that the appellate order dated 11 October 2023 was never served.
The respondents maintained that the weighment and termination were done as per Freight Marketing Circular No. 11 of 2022. They relied on Clause 18.1, which permits termination without prior notice in cases of serious misconduct. They stated that the consignment exceeded the permissible limit by 134%, leading to a safety risk, a 2-hour train delay, and violation of multiple clauses of the contract.
The petitioner filed a previous writ petition (WPA 21549 of 2023), which was disposed of with liberty to seek alternative remedies. A subsequent representation dated 21 August 2023 was filed, leading to a hearing on 12 September 2023 and an appellate order on 11 October 2023. The Railway affirmed that the appeal was disposed of and the order sent via speed post.
The Railway cited Item No. 65 of the Schedule of Powers (SOP) 2018 to justify re-inviting bids through e-auction upon termination. The petitioner was eligible to participate in the new auction held on 4 September 2023.
The petitioner insisted that the overloading allegation stemmed from a technical malfunction due to defective buffers, not excess cargo. He argued that Clause 10.4 made the Railway responsible for sealing the van post padlocking, and hence, the overloading claim was unreliable. The petitioner further argued that penalties were imposed thrice for a single alleged offence: monetary penalty, contract termination, and forfeiture of deposit.
The Court observed "the scope of judicial review in contractual matters is limited" and that "interference in writ jurisdiction in contractual matters is permissible only if public law element is involved." The contract in question was found to be governed by specific clauses which the petitioner voluntarily accepted.
On the nature of the contract, the Court recorded: "the responsibility for carrying out loading and unloading operations within the available time at the originating and destination stations, rests solely with the contractor." It further held that "the role of the Railway staff is limited to sealing the brake van after the completion of these operations."
Regarding the core dispute on overloading, the Court noted: "Clause 14.3...stipulates that if overloading...is detected more than twice...the contract shall be terminated...upon the third such instance." However, it clarified: "Clause 14.3 applies in cases where overloading is within 5%... In cases of overloading by 134%...this clause cannot be invoked."
The Court relied on Clause 18.1 which allows termination for serious misconduct. It recorded that "such excessive overloading could have led to a serious accident involving the passenger train." It also noted that the contractor provided inaccurate declarations in the manifest.
The Court held: "this Court is not a fact-finding authority, and the scope of judicial review is confined to examining the decision-making process." It further stated: "the petitioner failed to produce any material to contradict the appellate order's finding that his representative did not request re-weighment."
On the issue of natural justice, the Court recorded: "the principles of natural justice cannot be put into a strait-jacket formula." It quoted precedent: "principles of natural justice do not supplant the law, but supplement the law." Noting that the petitioner had contractually agreed to termination without notice, the Court stated: "no prejudice was caused to the petitioner either due to the omission of re-weighment...or the absence of any prior notice before termination."
The Court found no merit in the allegations of coercion regarding the penalty payment, as "no contemporaneous complaint was filed with any authority." It also recorded: "in the present case, the petitioner’s legal or fundamental rights, if any, arise from the terms of the contract."
It concluded: "no real prejudice was caused... and the punishment was not disproportionate."
The Court concluded that "the petitioner’s contentions are without merit." It found no procedural irregularity or arbitrariness in the Railway Authority's actions. The Court recorded: "I find no infirmity in the decision-making process, nor any perversity in the decision of the Railway authorities to terminate the contract and forfeit the Security Deposit."
Accordingly, the writ petition was dismissed. The Court did not award any costs.
Advocates Representing the Parties:
For the Petitioners: Mr. Milan Chandra Bhattacharjee, Learned Senior Advocate; Ms. Sulagna Bhattacharya
For the Respondents: Mr. Soumik Nandi, Learned Senior Advocate; Mr. Pradyut Saha
Case Title: Mohammed Sabir vs. Union of India & Ors.
Case Number: WPA 8641 of 2024
Bench: Justice Partha Sarathi Chatterjee
