In Brief
The Supreme Court held that a refund claim for excessive railway freight charges based on a corrected chargeable distance is maintainable even without timely notice under Section 106(3) of the Railways Act when the claim concerns an 'illegal charge' (inherent error in the charge itself) rather than an 'overcharge' (excess amount due to calculation mistake). The Court established a critical distinction: Section 106(3)'s 6-month notice requirement applies only to overcharges, not illegal charges. Here, freight was charged at 444 km for the Baad-Hisar route, later corrected to 333.18 km with no change in physical route. The Court found the original distance was illegal because the methodology change could not explain a 110 km difference and the railway itself granted refunds without explanation. Therefore, the refund claim succeeded without requiring timely notice.
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