IN THE HIGH COURT AT CALCUTTA

CIVIL APPELLATE JURISDICTION

(APPELLATE SIDE)

MAT 944 of 2024

With

CAN 1 of 2024

With

CAN 2 of 2024

Ramsarup Industries Ltd.

-Vs.-

Orissa Metaliks Pvt. Ltd. & Ors.

Before: The Hon’ble Justice Arijit Banerjee

&

The Hon’ble Justice Om Narayan Rai

For the Appellant : Mr. S. N. Mookherjee, Sr. Adv.,

Mr. Ratnanko Banerji, Sr. Adv.

Mr. Soumya Majumdar, Sr. Adv.

Mr. N.G. Khaitan, Adv.

Mr. Shounak Mitra, Adv.

Mr. Zulfiqar Ali Alquaderi, Adv.

Mr. Yash Singhi, Adv.

Ms. Akshita Bohra, Adv.

For the Respondent no. 1

:

Mr. Ranjan Bachhawat, Sr. Adv.,

Mr. Jishnu Chowdhury, Sr. Adv.

Mr. Raghunath Ghosh, Adv.

Mr. S. Mukherjee, Adv.

Mr. Debrup Bhattacharya, Adv.

Mr. B. Kumar, Adv.

Mr. Aayush Lakhotia, Adv.

2

For the Union of India : Mr. Ashok Bhowmik, Adv.,

Mr. Sourav Sengupta, Adv.

For Judgment on : 09.09.2026

Arijit Banerjee, J. :-

1. This appeal is directed against a judgment and order dated May 10,

2024, passed by a learned Judge of our Court disposing of a writ petition of

the respondent no. 1 herein, being WP No. 10441 of 2024. In the 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. sto od

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.

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(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 sheet for the year

2011-2012. The reference was registered as Case No. 67/2012.

(v) On February 19, 2014, upon hearing the appellant and its

secured financial creditors, the BIFR ordered abatement of the

reference in terms of the 3

rd

proviso to Section 15(1) of SICA.

(vi) The appellant challenged the order of BIFR before the Appellate

Authority for Industrial & Financial Reconstruction (in short, ‘AAIFR’)

which set aside the order of BIFR and remanded the matter back to

BIFR for reconsideration.

(vii) On November 25, 2016, SICA was repealed and all proceedings

before the BIFR/AAIFR stood abated with effect from December 1,

2016. However, any company whose reference was pending before the

BIFR/AAIFR at the time of repeal, was permitted to file an application

before the National Company Law Tribunal (in short, ‘NCLT’) within a

period of 180 days from the commencement of the Insolvency and

Bankruptcy Code, 2016 (in short, ‘IBC’).

(viii) On December 1, 2016, the IBC came into force.

(ix) On May 2, 2017, an application was made by the respondent

no. 1/ writ petitioner, Orissa Metaliks Private Limited (in short, ‘OMPL’)

to the Railways for Road Under Bridge permission.

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(x) On May 18, 2017, a resolution was passed by the appellant’s

Board of Directors for filing an application under Section 10 of the IBC

before the NCLT. Such application was filed on May 25, 2017.

(xi) On June 8, 2018, the appellant was admitted to the Corporate

Insolvency Resolution Process (in short, ‘CIRP’) by NCLT.

(xii) On February 1,2019, OMPL obtained a Way Leave Permission

for construction of a Road Under Bridge (in short, ‘RUB’) under the

railway track between the stations Girimaidan and Gokulpur on

Kharagpur-Medinipur Section of Kharagpur Division, for transportation

of vehicles (Route 1).

(xiii) On February 27, 2019, an agreement in respect of Route 1 was

executed between the Railway Authorities and OMPL.

(xiv) On September 4, 2019, a resolution plan submitted by a

consortium for revival of the appellant herein, was approved by NCLT.

Clause 15.13 of the plan provided that all statutory rights, licenses,

agreements, registrations or other similar approvals will be valid and in

complete force. Clause 15.14 (ii) (b) provided that all consents, licenses,

approvals, rights, entitlements, benefits, privileges 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.

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(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. Su ch 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 cutti ng through the

appellant’s existing water pipeline. It is pertinent to note that Clause

22 of the agreement dated February 27, 2019, executed by and between

OMPL and the Railways, obliges OMPL to make good any damage to or

loss of Railway/Third-Party property due to the presence of its facility.

Hence, OMPL cannot object to the restoration/revival of the appellant’s

water pipeline.

(xviii) By an order dated April 19, 2022, while dismissing all the

appeals filed against rejection of OMPL’s application for liquidation of

the appellant, the NCLAT observed the conduct of OMPL in trying to

acquire the appellant company, through ulterior modes, since it was

declared as an unsuccessful Resolution Applicant in the CIRP.

(xix) On June 1, 2022, OMPL obtained a Way Leave Permissio n for

construction of a RUB under the railway track between station

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Gokulpur Outer Cabin and Gokulpur on KGP Division for

transportation of vehicles (“Route 2”).

(xx) On June 2, 2022, an agreement in respect of Route 2 was

executed between the Railway Authorities and OMPL.

(xxi) In August, 2022, the RUB in respect of Route 2 was constructed

and made operational by OMPL. Again, the said RUB was constructed

by cutting through the appellant’s existing water pipeline.

(xxii) On October 4, 2022, the Ministry of Railways (Railway Board)

issued a Master Circular on ‘Policy for Management of Railway Land’.

OMPL relies on Clauses 7.4 and 7.5.2 of the said Circular. However,

Clause 7.4 does not bar application for renewal of Way Leave

Permission which expired prior to issuance of the said circular.

Similarly, Clause 7.5.2 does not say that it would only apply to Way

Leave Permission subsisting as on the date of issuance.

(xxiii) OMPL relies on Clause 1033 (12) of the Indian Railway Code for

Engineering Department, alleging that overhead pip elines are not

permitted. However Clause 1033 (4) of that Code permits Way Leave

Permissions in genuine cases. Clause 1033 (12) permits overheads as

well as overhead pipelines so long as the Railway Authorities give

express permission for the same.

(xxiv) Further, more than 98% of the concerned pipeline of the

appellant is underground. The overhead structure has been

necessitated by reason of OMPL cutting through the appellant’s

pipeline which the appellant is now trying to restore.

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(xxv) After approval of the resolution plan by NCLT, on March 27,

2023, the appellant applied for grant/revival of the Way Leave

Permission for a further 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 signed the

technical viability check.

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(xxxi) Therefore, between August 10, 2023 and December 22, 2023, a

plan dated July 21, 2023, was prepared and approved by 7 Railways

officers/engineers over a period of four months after detailed scrutiny.

(xxxii) By a letter dated January 11, 2024, OMPL informed the

Railway Authorities that it had reasons to believe that the appellant’s

pipeline will compromise the safety of OMPLs RUBs and the boundary

wall of its industrial unit.

(xxxiii) On February 9, 2024, the appellant entered into an agreement

with Kharagpur Municipality, inter alia, for supply of a specified

quantity of water per day to its factory at Kharagpur.

(xxxiv) On March 18, 2024, the appellant, under protest, deposited a

sum of Rs 2,16,62,573/- towards Way Leave Permission fee for revival

of its water pipeline. On March 27, 2024, the appellant submitted a

Bank Guarantee for Rs 5,00,000/- valid for a period of one year as

required by the Railways.

(xxxv) On April 3, 2024, pursuant to Way Leave Permission, an

agreement was executed by and between the Railway Authorities and

the appellant for laying down a water pipeline at Section Kharagpur-

Medinipur through Railway land for a length of 2250 meters. The

agreement was to be valid for 10 years from the date of signing of the

agreement. On the same day, a letter was issued by DRM Engineering

to the appellant intimating Way Leave Permission for 10 years with

effect from 2017-18. Such permission stipulated that the work will have

to be undertaken as per drawing and design after completing all

formalities with the Railway departments and in the presence of

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Railway Engineers. It further provided that the structural drawing and

design with respect to the construction at the subway location (OMPL’s

RUBs) should be approved by reputed organisations/engineers.

(xxxvi) On April 4, 2024, the Railway Authorities issued a

communication informing the concerned officers that an agency has

found some damage in the concerned pipeline from the Jharia

pumphouse to the appellant’s plant which needs repair work. On the

same date, the appellant informed the concerned Railway department

that the repair work on the damaged portions of the water pipeline

shall be undertaken in the presence of the Railway Engineers on April

9, 2024.

(xxxvii) By a letter dated April 5, 2024, the 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

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. On

the same day i.e., April 23, 2024, final permission was granted by the

Railways to the appellant to carry out repair works in respect of its

pipeline.

(xli) The writ petition was disposed of by a judgement and order

dated May 10, 2024 setting aside the appellant’s Way Leave Permission

dated April 3/4, 2024 and quashing all consequent steps taken in

pursuance thereof.

(xlii) On May 13, 2024, the present appeal was filed. By an interim

order, a Division Bench called for a report from the Railways. On

August 19, 2024, the Railways filed a report. OMPL filed its Exception

to that report on September 2, 2024. On September 24, 2024, the

Railways filed an affidavit in response to the Exception of OMPL. OMPL

filed its rejoinder on November 12, 2024.

3. Learned Senior Counsel for the appellant relied on the following

decisions: -

(i) Gujarat Urja Vikas Nigam Ltd. v. Ami t Gupta & Ors., reported at

(2021) 7 SCC 209. Paragraph 74.

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(ii) Municipal Corporation of Greater Mumbai & Ors. v. Rafiqunnisa M.

Khalifa (Deceased) Through His Legal Heir Mohd. Muqueen Qureshi &

Anr. reported at (2019) 5 SCC 119. Para 26.

(iii) Union of India v. M/S. Chaturbhai M. Patel & Co., reported at

(1976) 1 SCC 747. Para 7.

Submission on behalf of the respondent no. 1:-

4. On the factual score, apart from what has been noted above, learned

Senior Counsel for the respondent no. 1 added the following: -

(i) On July 9, 2017, the Way Leave Permission granted to the appellant

expired since the license expired and no money was paid for renewal thereof.

The pipeline had not been in use for 7 years.

(ii) On February 1, 2019, OMPL was granted permission for construction of

the first RUB. At this stage, the Railways obviously treated the appellant’s

license as non-existent and, therefore, gave permission to OMPL.

Accordingly the agreement dated February 27, 2019 was entered into an

agreement between OMPL and the Railways in respect of the first RUB.

(iii) The Resolution Plan of the appellant that was approved by the NCLT on

September 4, 2019, could not and did not create any right in the appellant’s

pipeline. The permission of the appellant had already expired/lapsed pre-

CIRP. A Resolution Plan cannot create a new right. Such right could only

have been granted by the Railways or by the Civil Court in an appropriate

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.

12

(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 Clause 14 (b) under para 1033 of the Indian

Railways Engineering Code, which reads as follows: -

“14. (b) Way leave permission in respect of open drainage and

surface/overhead pipelines should be allowed only in unavoidable

cases. In any case, fresh permission for this in favour of private

parties should not be given. All efforts may also be made to have

the existing open drainage and surface/overhead pipelines

replaced by underground installations at the earliest.

(ix) It was submitted that no unavoidable case has been made out by the

appellant justifying grant of permission in respect of overhead pipelines.

13

Other organizations like Tata Steel, etc., were denied such permission. Such

organizations have arranged water supply from river Kangsabati.

5. Learned Senior Counsel for OMPL relied on the following decisions: -

(i) Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta & Ors. (Supra)

(ii) Hardesh Ores (P) Ltd. v. Hede & Company, reported at

(2007) 5 SCC 614.

(iii) Corporation of Kochi v. Elamkulam Village Cooperative

Society Ltd. & Anr., reported at (2006) 7 SCC 708.

(iv) General Manager , Electrical Rengali Hydro Electric

Project, Orissa & Ors. v. Giridhari Sahu & Ors. , reported at

(2019) 10 SCC 695.

(v) B. Subramanyam & Anr. v. B.M. Chandra Gowda & Anr.,

reported at (2017) SCC OnLine Kar 6985 .

Judgement and Order of Learned Single Judge: -

6. Learned Single Judge framed the issue as to whether the grant of

renewal of the Way Leave Permission to respondent no. 6 (present appellant)

which had expired in the year 2017, is valid in the eye of law and/or

interdicts the rights conferred in the meantime on the petitioner (present

respondent no.1) in any manner.

7. Learned Judge held that when the petitioner was granted such

permission there was no existing Way Leave Permission operating in favour

of OMPL. Such permission having expired almost two years prior thereto,

was in no manner subsisting at the juncture when the petitioner’s rights

were created.

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8. In so far as the document dated April 3, 2024, is concerned, learned

Judge held that the description of a fresh Way Leave Permission as ‘renewal’

was a fraud practiced upon the writ petitioner in collusion between the

Railway Authorities and the present appellant as well as fraud on the

applicable Laws and Regulations. A license that stood expired 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 Engineering Code as well as the Master

Circular operating in respect of Railway lands, which comprise a policy

decision taken by the Railway Authorities and have the status of statutory

guidelines.

15

10. Learned Judge further held that the structure shown in the map

submitted by the appellant contemplates an overhead construction over the

Railway property. Such attempt is barred firstly, because Clause 1033, sub-

clause (12) of the Railway Engineering Code debars any such overhead

construction; secondly, the Way Leave Permission sought to be given is a

fresh Way Leave Permission in the garb of a ‘renewal’, which cannot now be

given in view of the intervening underpass of the writ petitioner, regarding

which two sets of Way Leaves and agreements subsist between the writ

petitioner and the Railways; and thirdly, the effect of the impugned grant of

permission cannot be ‘renewal’ as described in the permission since the

tenure of the previous Way Leave Permission expired long seven years back

in 2017 and there was never any application for renewal filed or pending at

any point of time.

11. The learned Judge negated the argument advanced on behalf of the

present appellant that the writ petitioner was trying to frustrate the

Resolution Plan which has been approved in connection with the CIRP

initiated by the present appellant. His Lordship held that the Resolution

Process commenced on January 8, 2018, whereas the Way Leave Permission

of the present appellant for its previous pipeline had expired in July, 2017.

Hence, even at the inception of the CIRP, there was no ‘subsisting’

permission or license in favour of the present appellant. The Resolution Plan

was approved much later and as such, the already expired W ay Leave

Permission of the present appellant could not come within the purview of

such ‘subsisting’ approvals/licenses/permissions. Further, it was held that

no new rights could be created in favour of the present appellant merely by

16

virtue of approval of the Resolution Plan. In this connection, learned Judge

referred to the Supreme Court decision in the case of Embassy Property

Developments Pvt Ltd. v. State of Karnataka and Ors, reported at

(2020) 13 SCC 308.

12. It was observed that the failure of the writ petitioner in the Resolution

Process has no bearing on the present dispute and as such, mala fides

cannot be read into the resistance of the writ petitioner 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 b y petty profit-

motives, giving a go-bye to safety standards and violating existing valid

agreements with third parties. Accordingly, the learned Judge set aside the

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Way Leave Permission granted to the present appellant by the letters dated

April 3, 2024 and April 4, 2024. All consequential steps taken in terms of

such permission, were also quashed. The respondents in the writ petition

were directed to take immediate steps to reverse any action taken pursuant

to the quashed Way Leave and ‘revival’ permission. The present appellant

was directed to restore, at its own cost, the property adjoining the location

underneath which the writ petitioner’s underpass runs, which has been dug

up and/or on which full or partial construction has been made by the

present appellant. It was directed that the site shall be restored to its

original position as it stood before the commencement of construction and

allied work by the present appellant and its agents.

14. Being aggrieved, the respondent no.6 in the writ petition is before us

by way of this appeal.

Court’s view

15. The material facts of the case, as noted above, are not in dispute. To

avoid undue prolixity, I do not reiterate the same.

16. The main points urged by the appellant are as follows: -

(i) OMPL has no locus standi to challenge the permission granted

by the Railways to the appellant since no legal right of OMPL has

been infringed thereby.

(ii) The permission was granted by the Railways after carrying out

necessary groundwork, scrupulously examining the construction

plans submitted by the appellant and after complying with all

procedural formalities as were necessary. The permission has

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not been granted in violation of any law or in derogation of any

clause of the Railway Engineering Code.

(iii) As on the date of filing of the application under Section 10 of

the IBC before the NCLT, i.e., May 18, 2017, the Way Leave

Permission dated July 10, 2007, was still subsisting. On

January 8, 2018, the appellant was admitted to CIRP by NCLT.

Such order of admission related back to the date of filling of the

application under Section 10 of the IBC thereby, preserving the

Way Leave Permission. Hence, there was no irregularity in the

Railways renewing such permission on a later date.

(iv) The writ petition filed by OMPL is a mala fide effort on its part to

render nugatory the Resolution Plan passed by NCLT for revival

of the appellant company. 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

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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 pipeline passing over the RUBs constructed by OMPL will

compromise the safety of that area in many ways and have immediate

adverse effect on the RUBS and the industrial boundary wall of OMPL’s

industry unit, was communicated by OMPL by its letter dated January 11,

2024 to the Divisional Railway Manager (Engineering), South Eastern

Railway, Kharagpur. The reasons for such apprehension would appear from

the said letter which is extracted hereunder: -

“Dear Sir,

Apropos to the above subject matter it may be noted that M/s

Ramswarup Loha Udhyog Limited (RLUL) is trying to revive an old

underground water pipe which is running parallel to the track and also

alongside the boundary wall of OMPL plant, and it is cutting across the

RUB constructed by the Company. We have reasons to believe that this

pipeline will compromise the safety of this area in many ways including

immediate adverse effect on the RUB and the boundary wall of our

industrial unit. Moreover, the Railway Main line may also get impacted

by the waterline passing parallel to the track. The reasons for the

objection can be summarized as under:

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a) Potential risk of boundary wall collapsing as the pipeline

installation is being carried out just adjacent to the boundary

wall of our plant unit, under at an estimated depth of 6-7

Meters.

b) If an eventuality of pipeline burst occurs and leakage of water

towards the adjacent Railway track, it would endanger the

Railway Safety, due to subsidence, and slips of embankment.

c) Orissa Metaliks Private Limited is built up in the year 2016

when the existence of such pipe line was ineffective since RLUL

was locked down, since declared bankrupt and whereabouts

were not known. Subsequently, we have our plant alongside this

concealed pipeline of RLUL. Now, we strongly appeal against the

work of pipeline restoration, as it will cause grave impact on

OMPL’s infrastructure. Our sophisticated electrical equipment is

susceptible and prone to the dangers of water logging. In such

case, factory operations will collapse and production gets

impacted. This is a cause of concern foreseeing the pecuniary

losses to the company and also adverse impact on Ra ilway

traffic.

d) Had we known the existence of such big pipe line in the

vicinity of the Railway track, we would have taken necessary

safety precautions in the past with proper planning and design

of our steel factory. Therefore, we express our deep concern,

with dismay that due to lack of prior knowledge of the

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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 from water

source of Kharagpur Municipality, and we find that there is an

attempt to revive the water supply by M/s RLUL from same

source. We came to know, through a copy of RTI letter

addressed to Shri Rajkumar Das by Kharagpur Municipality

(Copy enclosed), where in it is mentioned that they have no

agreement at present with M/s RLUL for supply of water due to

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scarcity. In the prevailing situation, the revival of the said

pipeline doesn’t have proper sanctity and justification.

We therefore request you good self to look into the matter and order

immediate action, so that it doesn ’t become problematic to our

company as well as to the Railways.

Enclosed: As above

Your Faithfully,

(RN Yadav)

Director (Projects)

For Orissa Metallks Private Limited”

18. By another letter dated April 8, 2024, OMPL requested the Divisional

Railway Manager (Engineering), South Eastern Railway, Kharagpur to re -

examine the permission granted to the appellant herein for renewal of Way

Leave Permission for revival of water pipeline. The reasons prompting OMPL

to write that letter would appear from the letter itself which is extracted

hereunder: -

“Sir,

Sub: Re-examination of the permission granted to M/s. Ramsarup

Industries Limited for renewal of way leave permission for revival of

water pipe line

1.0 Came to know through a reliable source that permission is being

granted to M/s. Ramsarup Industries Limited for renewal of way leave

permission for revival of water pipe line of 500 mm dia beside the

railway track line connecting Gokulpur and Kharagpur.

23

2.0 It is found and observed that the pipeline is passing above the

underpass constructed by M/s. Orissa Metaliks Private Limited

(hereinafter referred as 'company' or 'us' or 'we') for movement of

materials between one plant to another plant of the company. However,

the pipeline above the underpass will have the following implications on

the company:

 Since the said pipeline will be in close vicinity of the company’s

boundary wall. there will be safety hazards for our plant &

machinery and other equipments due to low qual ity of pipeline

material, substandard installation and operation process and

hydraulic pressure from unsteady flow of water etc.

 Any accidental damage to the pipeline of M/s. Ramsarup

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

24

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, Kharagpur

2) The Chief Transport Planning Manager, South Eastern Railway

(GRC)

3) The Principal Chief Operating Manager, South Eastern Railway

(GRC)

4) The Principal Chief Engineer, South Eastern Railway (GRC)”

19. From the above, it appears that OMPL expressed apprehension of its

interests being adversely affected by the renewal of the Way Leave

Permission granted in favour of the appellant herein. It does not appear from

the records that the Railway Authorities responded to the aforesaid two

letters of OMPL. The Authorities did not deem it necessary to discuss the

matter even once with OMPL. No opportunity of hearing was afforded to

OMPL. Whether or not renewal of the Way Leave Permission in favour of the

appellant and permitting the appellant to carry out necessary

construction/re-construction/repairing work would have adverse impact on

OMPL’s RUBs, was not at all considered by the Railway Authorities.

20. Prima facie, it appears that the apprehension of the OMPL is no t

completely baseless or fanciful. When an order or an act of an Authority is

25

likely to or has the possibility of affecting a person by way of adverse civil

consequences, however remote such possibility be, the person likely to be

affected would surely have the standing to challenge such act or order of the

Authority before a competent court of law. The rule of locus standi has been

developed by the courts to weed out frivolous litigations at the instance of

busybodies who have no real interest in such litigations. However, in the

present case, it does not appear to us that OMPL can be said to be such a

busybody having absolutely no stake in the matter. Hence, I reject the

appellant’s argument that OMPL did not have the locus standi to maintain

the writ petition.

21. In this connection the appellant relied on the decision of the Hon’ble

Supreme Court in Municipal Corporation of Greater Mumbai & Ors. v.

Rafiqunnisa M. Khalifa (Deceased) Through His Legal Heir Mohd.

Muqueen Qureshi & Anr., (Supra) in support of the contention that a writ

of mandamus under Article 226 of the Constitution of India is issued only

when there is a right, contractual or otherwise, in favour of the writ

petitioner and correspondently there is a legal duty to perform. The

argument was that there is no legal or contractual right in favour of OMPL

and therefore the writ petition was 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

26

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 qu estion would be

whether a permission, which stood lapsed in 2017 could have been

revived by the railway administration retrospectively and if so,

what would be the position of the persons, who had acquired

certain rights in the interregnum. Apart from that, the Court

should be informed as to whether there was any technical

assessment done by the railway administration before revival of

permission to take the pipeline above the railway underpass,

which has been permitted to be constructed by the writ petitioner

when the permission for the pipeline was not in vogue.

5. Let a report be filed in the form of an affidavit by the highest

competent authority of the railway administration duly supported

with documents.”

23. Such a report by way of affidavit affirmed on July 5, 2024, by the

Divisional Engineer (West), South Eastern Railway, Kharagpur , who was

27

also the Divisional Railway Manager (Engineering), was filed. Various

documents have been annexed to such report. Such report along with its

annexures have been brought on record by OMPL by filing an exception to

the report in the form of an application registered as CAN 2 of 2024.

24. From the documents annexed to the said report, it does not appear

that due safety audit was undertaken by the Railway Authorities prior to

granting the impugned permission to the appellant. The safety I have in

mind is not only as regards any adverse impact on the RUBs constructed by

OMPL but in general, safety of the entire industrial area. If the

apprehensions expressed by OMPL in its two letters dated January 11, 2024

and April 8, 2024, addressed to the Railway Authorities, are correct even if

to some extent, the possibility of accidents involving loss of life and limbs

apart from property, would loom large. In our view, a comprehensive and

exhaustive safety audit was absolutely essential prior to granting the

impugned permission to the appellant, especially, in view of the contents of

OMPL’s aforesaid two letters.

25. Further, the overhead structure that the Railways have permitted the

appellant to construct in aid of revival of the concerned pipeline appears to

be contrary to Clause 1033 (12) of the Railway Engineering Code as has

been rightly noted by the learned Single Judge.

26. As regards the third contention of the appellant, we do not find any

merit in that also. The Way Leave Permission was granted on July 10, 2007.

It expired by efflux of time on July 9, 2017. On May 25, 2017, the appellant

filed an application for CIRP under Section 10 of the IBC before the NCLT.

On January 8, 2018, the appellant was admitted to the CIRP by the NCLT.

28

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 NCLT for

adjudication of disputes that are related to the insolvency

resolution process. However, for adjudication of disputes that arise

dehors the insolvency of the corporate debtor, the RP must

approach the relevant competent authority. For instance, if the

dispute in the present matter related to the non -supply of

electricity, the RP would not have been entitled to invoke the

jurisdiction of NCLT under IBC. However, since the dispute in the

present case has arisen solely on the ground of the insolvency of

29

the corporate debtor, NCLT is empowered to adjudicate this

dispute under Section 60(5)(c) of IBC.”

29. As I read the said observations, the same go against the appellant’s

contention. The issue of Way Leave Permission in connection with Railway

land cannot be said to be a dispute related to the Insolvency Resolution

Process. It is a dispute dehors such process just like non -supply of

electricity as observed by the Hon’ble Supreme Court. Therefore, NCLT

would have no jurisdiction to renew or revive or preserve the Way Leave

Permission granted by the Railways in 2007 which stood expired on July 9,

2017.

30. As regards the fourth point urged before us by the appellant, we are

not impressed that any case of the writ petition being a mala fide, has been

made out by the appellant. The learned Single Judge has observed that

renewal of the Way Leave Permission in 2024, with retrospective effect from

2017 was illegal. Mala fides cannot be read into the writ petiti oner’s

resistance to an illegal attempt by the present appellant to create rights

where none exists. The mere fact that OMPL failed to take over the appellant

company in the CIRP cannot be the ground or reason to presume or infer

that the instant writ petition is mala fide.

31. As regards the fifth point of the learned Judge having come to a

finding of fraud and collusion between the officers of Railways and the

appellant, the appellant relied upon a decision of the Hon’ble Supreme

Court in the case of Union of India v. M/S. Chaturbhai M. Patel & Co.,

(Supra), in support of the contention that fraud like any other charge of a

criminal offence, whether made in civil or criminal proceedings, must be

30

established beyond reasonable doubt. However suspicious may be th e

circumstances, however strange the coincidence is and however grave the

doubt, suspicion alone can never take the place of proof.

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 appl icable 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 illegal. The least that the Railways could have done

was to carry out due safety audit and give opportunity of hearing to OMPL,

prior to granting the impugned permission to the appellant. The Railway

Authorities completely ignored the two letters dated January 11, 2024 and

April 8, 2024, addressed by OMPL to them ventilating their apprehension

regarding revival of the concerned Way Leave Permission in favour of the

31

appellant. This does raise a doubt in my mind as to whether the Railway

Authorities acted fairly, honestly and impartially, but I stop at that.

34. In the result, we affirm the judgment and order under appeal except to

the extent of expunging certain observations therefrom, as indicated above.

The judgment is a well-reasoned one and we do not find any such error

therein as would persuade us to interfere. The view of the learned Single

Judge is an eminently plausible one. It is settled law that if a learned Single

Judge’s view is a possible view, then, in an intra-court appeal, the Division

Bench will not interfere only because it may have a different view.

Interference is warranted only when the order of the learned Single Judge,

in the opinion of the Appeal Court, is ‘clearly wrong’ or palpably perverse.

35. The appeal is accordingly disposed of along with the connected

applications. The interim order that is subsisting, stands vacated.

36. Urgent Photostat certified copies of this judgement and order, if

applied for, be supplied to the parties on compliance of all necessary

formalities.

I agree.

(Om Narayan Rai, J.) (Arijit Banerjee, J.)