| ASPECTS | DETAILS |
| Case Title | Union of India vs. M/s Indian Oil Corporation Ltd. |
| Introduction | Supreme Court dismisses Railways’ appeals against Indian Oil over refund of freight charge. |
| Factual Background | Indian Oil Corporation (IOC) booked consignments of furnace oil via Railways over a route. Freight was calculated based on ‘total chargeable distance’ of 444 kms. Railways later modified the method of calculating chargeable distance, but actual distance remained 333.18 km. IOC demanded refund of difference in freight charges. |
| Legal Issues | Scope of Section 106(3) of Railways Act, 1989; Difference between “overcharge” and “illegal charge”; Refund of 110 kms in freight charges. |
| Applicable Law | Railways Act, 1989; Interpretation of “overcharge” and “illegal charge”. |
| Analysis | Court clarified distinction between “overcharge” and “illegal charge”. Held that notice of claim under Section 106(3) is required only for overcharge. Rounding off of values does not make a charge illegal. Court found computation of 444 kms as chargeable distance illegal. |
| Conclusion | Court dismissed Railways’ appeals, upholding Allahabad High Court’s decision in favor of IOC. |
| Current Scenario | Railways required to refund difference in freight charges to IOC. |
CASE SUMMARY:-The Supreme Court dismissed Railways’ appeals against Indian Oil Corporation (IOC) over excess payment of freight charges. IOC had booked consignments of furnace oil, and the freight was calculated based on a chargeable distance of 444 kms. However, the actual distance was 333.18 km. IOC demanded a refund of the difference in freight charges. The Court held that the computation of 444 kms as the chargeable distance was illegal, and the Railways were required to refund the excess amount to IOC.
SOURCE- SUPREME COURT OF INDIA
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