D.G. Raj Commercial PVT. LTD. vs. The Union Of INDIA And 10 Ors.

Held

The Court held that the respondent NF Railways are directed to release and allow the unloading of the petitioner's consignment of 4 VPHs of PCET that reached New Guwahati on 04.04.2022 from Alwar, forthwith. This decision is based on the finding that the security deposit of Rs. 87,10,313/- made by the petitioner is still lying intact with the respondent Railways. The Court noted that the Railways failed to place any material before it to establish that this security deposit was not available. Therefore, the demand for an additional bank guarantee of Rs. 27,45,927/- was not substantiated. The Court reiterated its earlier interim order dated 08.04.2022, directing the release of the consignment upon furnishing a bank guarantee if the security deposit was insufficient, but in this instance, found the security deposit to be sufficient. The Court also considered the communication from the Senior Divisional Commercial Manager of North Western Railways, Jaipur, which suggested that the detention of the consignment and the demand for debit were not justified. The Arbitral Award and the subsequent legal challenges were noted as background but did not form the primary basis for this specific direction, which focused on the availability of the security deposit.

Facts

The petitioner, D.G. Raj Commercial Pvt. Ltd., filed a writ petition challenging the Railways' action of withholding its consignments and demanding an amount of Rs. 27,45,927/-. The Railways, specifically NF Railway, sought to recover this amount from the petitioner's security deposit of Rs. 87,10,313/-. The petitioner argued that this security deposit was still intact and available. The dispute originated from a contract for leasing a Parcel Cargo Express Train (PCET) from Alwar to New Guwahati. The Railways had placed a rake for loading despite a prior communication from Eastern Railways suggesting otherwise, and subsequently detained the petitioner's consignment, demanding payment. The petitioner had also challenged an Arbitral Award related to the contract, which was initially set aside by a Commercial Court, and an appeal against this order was pending before the Rajasthan High Court.

Key Issues

1. Whether the respondent Railways are justified in withholding the petitioner's consignments and demanding an amount of Rs. 27,45,927/- from its security deposit, particularly in light of the pending legal proceedings concerning the Arbitral Award and the status of the security deposit? Petitioner's arguments: - The security deposit of Rs. 87,10,313/- is still intact with the respondent Railways and has not been adjusted or utilized. - The demand for Rs. 27,45,927/- is unjustified, especially considering the ongoing litigation regarding the Arbitral Award. - The placement of the PCET rake by NF Railway was arbitrary, as it was done despite a communication from Eastern Railways advising against further rakes until an NOC was issued. - The detention of the consignment is not justified in light of the communications between the Railways and the petitioner. Revenue/State's arguments: - The judgment records no specific arguments presented by the respondent Railways regarding their justification for withholding the consignments or demanding the amount.