ELECTROSTEEL CASTINGS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The writ petitioners claim refund of Registration Fee and excess Land Licensing Fees procured by respondent, South Eastern Railway in connection with construction and commission of a private siding on railway land at Barajamda Railway Station in Jharkhand. The claim for refund arose out of the Railways granting an in-principle approval for the said siding on 6/2/2006 and furnishing a clearance and approval of a Detailed Project Report on 25/10/2007. The construction was carried out by the petitioners pursuant to such approval. The Railways however refused to commission the siding thereafter and threatened to withdraw the permission granted to the petitioners unless the Registration Fee and the Land Licensing Fees were paid by the petitioners to the extent of the demand of the Railways. The petitioners were hence forced to pay substantial amounts to the Railways, namely, Rs.10.00 Crore towards Registration Fee and Rs.15,91,46,429.00 towards Land Licensing fees.

(2.) The adjudication of the petitioners' claims shall be decided under the following headings and based on undisputed facts :-

(3.) The demand for an imposition of the Registration Fee by the Railways was based on an erroneous interpretation of the Freight Marketing (FM) Circular dtd. 28/8/2008. The said Circular was however withdrawn on 17/11/2014 by the Ministry of Railways - reference: Circular of 29/9/2014 clarifying that sidings that were given approval prior to the 2008 Circular would be governed by the siding policy prevalent at that time and investors who had deposited registration fee and were given approval before issue of the 2008 Circular will be refunded by way of rebate of 10% in freight for loading which has to be done after issue of the amendment. The petitioners thus, became entitled to refund of the Registration Fee of Rs.10.00 Crore by way of rebate of 10% in freight for loading which was done by the petitioners on and from 29/9/2014. In fact, the petitioner No. 1 had paid freight worth Rs.349,15,38,189.00 for loading after 29/9/2014. However, no part of Rs.10.00 Crore was refunded to the petitioners towards Registration Fee for the last seven and a half years. At a meeting held between the parties on 18/12/2020 and attended by senior officials of the Railways, the Railways acknowledged that the registration Fee was to be refunded and the petitioners were shown a letter dtd. 25/6/2019 where the Railways had admitted and acknowledged that the Registration Fee of Rs.10.00 Crore should be refunded by way of rebate of 10% in freight for loading. This letter was produced by the Railways pursuant to an order of 4/2/2022 and it contains an admission of the indebtedness of the Railways with regard to Rs.10.00 Crore. The letter also records that the registration Fee of Rs.10.00 Crore was deposited by the petitioners under protest. The letter further records the changed policy with regard to construction of sidings brought about by the FM Circular of 29/9/2014. From the letter, which contains an unqualified admission of the liability of the railways with regard to refund of Rs.10.00 Crore as Registration Fee, the claim of the petitioners stands confirmed and shows that the Railways have deprived the petitioners of the said sum from 2014 onwards. This Court finds substance in the arguments of learned counsel appearing for the petitioners that once the claim of the petitioners is admitted, the Railways cannot dictate the terms of the refund, more so, when the Railways have wrongfully held on to Rs.10.00 Crore for more than seven and a half years.