TaxTMI 
TaxTMI 
2026 (9) TMI 1131
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....e writ petition, under challenge were letters dated April 3, 2024 and April 4, 2024, whereby, the Railway Authorities had sanctioned revival of a Way Leave Permission in favour of the respondent no. 6 in the writ petition being the appellant herein, for constructing and running a water-pipeline under railway property. Appellant's submission: - 2. Appearing for the appellant, Mr. S. N. Mookherjee, learned Senior Advocate, submitted as follows:- (i) On July 10, 2007, Ramsarup Lohh Udyog Ltd. was granted a Way Leave Permission by the Railways, for construction of a water-pipeline for usage at its plant in Kharagpur, West Bengal, for 10 years. (ii) On June 30, 2008, Ramsarup Lohh Udyog Ltd. stood amalgamated with the appellant. All licenses, permissions etc. stood transferred in the name of the appellant. (iii) In June 2010, the appellant was shut down and all its plants became non-operational. (iv) On November 7, 2012, the appellant's management made a reference to the Board for Industrial and Financial Reconstruction (in short, 'BIFR') under the Sick Industrial Companies Act, 1985 (in short, 'SICA'), based on the company's audited balance she....
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....s etc. granted in favour of the appellant, which were in place on the shutdown date shall be deemed to continue without disruption for the benefit of the appellant for a period of 12 months from the completion date or until renewal by the relevant authorities, whichever is later. Therefore, the Way Leave Permission dated July 10, 2007, was still valid and subsisting. (xv) OMPL had also submitted a resolution plan. While approving the resolution plan of the consortium, NCLT recorded that OMPL's plan stood rejected. OMPL was declared as the H-2 bidder/unsuccessful Resolution Applicant. (xvi) OMPL had tried to derail the implementation of the consortium's resolution plan by filing applications for liquidation of the appellant company, which had been noted by the NCLAT. Such conduct of the OMPL would show that it has not approached this Court with clean hands. (xvii) In or around July, 2020, the construction of the RUB in respect of Route 1 was completed by OMPL and the same was made operational. The RUB was constructed by cutting through the appellant's existing water pipeline. It is pertinent to note that Clause 22 of the agreement dated February 27, 2019, ....
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....urther period of 10 years or more to meet its water requirements. (xxvi) On April 27, 2023, the appellant submitted approved drawing to the Railways. (xxvii) On June 16, 2023, the Railways instructed ADE to visit the site for joint inspection and to verify the drawings. On June 22, 2023, ADE, Railways, wrote to four departments of the Railways for conducting a joint inspection towards revival of Way Leave Permission to lay down the pipeline. On June 24, 2023, joint inspection was conducted and drawings were approved. (xxviii) On July 11, 2023, further request was made by the appellant, forwarding drawings and other technical details, to restore the Way Leave Permission. (xxix) On August 8, 2023, drawing was submitted for checking technical viability. Between August 10 and August 22, 2023, technical evaluation of the drawings was made by officers from five different departments of the Railways. (xxx) On December 11, 2023, technical viability check was forwarded to various departments of the Railways for final signatures. On December 21, 2023, technical viability check was made by all departments. On December 22, 2023, DRM Engineering sign....
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....he appellant sought the co-operation and help of the District Magistrate, Paschim Medinipur, for undertaking the repair work of its existing water pipeline. (xxxviii) By a letter dated April 8, 2024, addressed to the Railway Authorities, OMPL alleged that due to low quality of the pipeline material used by the appellant and the sub-standard installation/operational process, there may be accidental damage to the RUBs of OMPL. On that ground, OMPL called for re-examination of the alignment of the proposed water pipeline. (xxxix) On April 9, 2024, a joint survey report was prepared and issued by the concerned Railway Authorities/ Engineers. The appellant was granted permission to execute only repair work on the said pipeline except the subway part. OMPL filed the present writ petition on April 10, 2024, inter alia, seeking cancellation of the appellant's Way Leave Permission dated April 3/4, 2024. (xl) On April 17, 2024, the appellant submitted drawing through a reputed consultant. On April 18, 2024, the drawing was re-submitted with modification. On April 23, 2024, structural drawings with certification by qualified engineers were submitted by the appellant....
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....e proceeding. (iv) An agreement dated June 2, 2022, was executed between the Railways and OMPL with respect to the second RUB. At that stage also, evidently the Railways treated the appellant's license as being non-existent. (v) The agreement dated April 3, 2024, that was entered into by and between the appellant and the Railways purporting to renew Way Leave Permission with retrospective effect, was executed behind the back of OMPL, in an extremely hurried manner and without giving an opportunity of hearing to OMPL, despite valuable rights having accrued in favour of OMPL in the meantime. (vi) It is clear from the Report filed by the Railways that the safety aspects relating to the RUBs of OMPL were never considered at all. (vii) No technical assessment was made pre-revival. Post-revival, only drawings were approved. It will appear from the drawings disclosed that pillars of the appellant's pipeline are dangerously close to OMPL's RUB (less than 1 meter) and the entire area up to OMPLs RUB was excavated despite OMPL's objection. (viii) Fresh permission for over ground pipeline was granted to the appellant despite the prohibition in Clau....
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....ed by efflux of time long time back, could not be renewed. Only a fresh license could be granted. Learned Judge then held that in the communications emanating from the Railways including the letter dated April 4, 2024, as well as in the agreement dated April 3, 2024, entered into by and between the present appellant and Railways, an impression has been sought to be given that permission was being given for reviving an underground water pipeline. The said attempt is evidently to bypass the effect of sub-clause (12) of clause 1033 of the Railway Engineering Code, which provides that in all cases of Way Leave facilities (except ROBs/RUBs and underground pipelines), no construction (whether permanent, quasi-permanent or temporary) other than a Kuchcha or Pucca road in cases the facility is expressly given for the same, is to be permitted on Railway land. If any such construction comes up subsequently, the same should be immediately removed as soon as noticed and the Way Leave facility discontinued with. 9. Learned Judge also observed that the efforts on the part of the Railway Authority and the present appellant reeks of surreptitious and mala fide effort to bypass the Railway Engin....
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....tioner to an illegal attempt by the respondent no.6 (present appellant) to create rights where there do not exist any. The very attempt to package the unlawful grant of new Way Leave Permission directly in derogation of the rights already conferred on the writ petitioner by the Railways, as a 'renewal', is itself mala fide and fraudulent, being contrary to the Engineering Code of the Railway itself and the Master Circular. 13. Regarding the argument of the present appellant that the structure of the appellant would not in any manner affect the rights of the writ petitioner, the learned Judge came to the conclusion that the Railways did not conduct a proper safety audit prior to granting the impugned permission to the present appellant. It was not considered as to whether or not the new construction which the Railways were permitting the appellant to make would adversely affect the underpass constructed by OMPL pursuant to permission granted by the Railways. Learned Judge finally observed that the action of public authorities of the stature of the Railways has to be transparent and above board and cannot be actuated by petty profit-motives, giving a go-bye to safety standards and....
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....ompany. Such mala fide act has been prompted by the fact that OMPL's Resolution Plan was not accepted by NCLT. (v) No case of fraud was pleaded or argued by the OMPL. Therefore, the finding of collusion and fraud on the part of the appellant's officers and the concerned Railway officials is completely unwarranted. 17. Insofar as the point of locus standi is concerned, I find no merit therein. At a point of time when the Way Leave Permission that had been granted to the appellant stood expired by efflux of time, the Railways granted permission to OMPL to construct two underpasses at the concerned location. Pursuant to such permission, OMPL constructed such underpasses and made the same operational. The contention of the OMPL is that the permission that has been granted by the Railways to the appellant, ostensibly for revival of the water pipeline entails new construction which would have serious adverse impact on the underpasses constructed by OMPL. Two agreements were entered into between OMPL and the Railways on February 27, 2019 and June 2, 2022 respectively, regarding construction of two Railway RUBs by OMPL. The apprehension of OMPL that revival of the water pipelin....
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....g and design of our steel factory. Therefore, we express our deep concern, with dismay that due to lack of prior knowledge of the underground water filled pipeline which is now unearthed by Railway administration, now we are at the risk for an imminent Industrial disaster. e) It is needless to emphasize that such pipe parallel to track of long length laid under the policy of 'way leave permission' adjacent to track is not in accordance with the Railways policy. We would like to bring it to your knowledge the contents the KGP division's letter (Copy enclosed), where in the proposal laying of water pipeline along the track beside railway boundary from Kansaboti river was not accepted on the grounds as there is no existing policy. f) We cite the reference of the letter (Copy enclosed) given by our company, on the objection raised when an attempt is made to carry out the work on the said pipeline, without any 'authority to work' duly issued by the Division. We would like to state that had if not be for our timely intervention, the JCB employed by of RLUL working at the vicinity, would have damaged the RUB. g) The water pipeline is stated to be originating....
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....Industries Limited will cause flood inside the underpass as well as the plant area and hence will compromise with the security of the lives of various workers and assets of the company. • This will also impact future expansion plan of the company as the pipeline will become a major bottleneck for us. • This will cause hindrance at the time of laying pipeline to bring water from Kansai River to the plant which will be constructed keeping in mind all the safety and future implications. 3.0 In view of the above, Railways may please re-examine the alignment of proposed waterline for M/s. Ramsarup Inudustries Limited. It is also pertinent to mention that neither M/s. Ramsarup Industries Limited nor Railways discussed the revival of the captioned pipeline with the representatives of the company before granting such approval. 4.0 We shall be ever grateful for your kind indulgence and due consideration of our prayer in this regard in the interest of justice. Yours faithfully, for M/s. Orissa Metaliks Private Limited (Authorised Signatory) Copy to: 1) The Division Railway Manager, South Eastern Railway,....
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....not maintainable at its instance. We are unable to accept the above argument. OMPL having constructed the RUBs pursuant to agreements entered into with the Railway Authorities, it is the duty of the Railway Authorities to ensure that any permission granted to anybody for any fresh construction or making an old construction operational, does not have any adverse impact on the RUBs constructed by OMPL. OMPL is surely entitled to approach the Writ Court praying for appropriate writs of mandamus, certiorari or prohibition. 22. When the appeal was admitted by a Co-ordinate Bench by its order dated May 21, 2024, while staying the operation of the impugned order to the extent the same directed demolition of constructions made by the appellant, the Bench had called for a report from the Railways. Paragraphs 4 and 5 of the said order read as follows: - "4. It appears that the writ petition was disposed of without calling for affidavits, more particularly, the stand taken by the railway administration was not put in writing. The question would be whether a permission, which stood lapsed in 2017 could have been revived by the railway administration retrospectively and if so, wh....
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.... IBC before the NCLT. On January 8, 2018, the appellant was admitted to the CIRP by the NCLT. As on that date there was no subsisting Way Leave Permission in favour of the appellant, the same having expired on July 9, 2017. Hence, the question of the Way Leave Permission continuing to be in force by operation of law, cannot and does not arise. 27. In any event, it is beyond the jurisdiction of NCLT to revive or renew the Way Leave Permission that was granted by the Railways in 2007. While approving the Resolution Plan on September 4, 2019, NCLT could not have renewed a Way Leave Permission which stood expired on July 9, 2017. A permission which has expired cannot be renewed as has been extensively discussed by the learned Single Judge. Only a fresh permission can be granted. It was not within the NCLT's power to grant such permission nor did it do so. 28. The decision of the Hon'ble Supreme Court in Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta & Ors., (Supra) relied upon by the appellant does not advance its case to any extent. The appellant relied on paragraph 74 of the reported judgement which reads as follows: - "74. Therefore, we hold that the RP can approach....
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.... 32. We agree with the learned Senior Counsel for the appellant that it may not have been necessary for the learned Single Judge to hold that renewal of the concerned Way Leave Permission was a result of collusion between the appellant and the Railways or amounts to fraud on the statute or on Court or on the relevant Rules or Regulations of the Railways. A verdict of fraud having been practised cannot be returned lightly. Fraud is a criminal charge and so is fraudulent collusion. Such charges must be established on proper material and beyond reasonable doubt in contradistinction to balance of probabilities which is the standard applicable in civil cases. The observations of the learned Single Judge regarding fraud on the part of the appellant and the Railways and collusion between them, stand expunged from the judgment and order of the learned Single Judge. 33. We, therefore, substantially agree with the learned Single Judge that 'renewal' of the concerned Way Leave Permission 7 years after expiry of such permission, without conducting due safety audit and completely oblivious of the adverse civil consequences that the same may have for OMPL, was not only irregular but also ille....