Railways cannot retrospectively recover enhanced licence fees absent specific contractual, statutory, or policy authority.

The petitioners occupied railway land at Manpur, Gaya, under licence arrangements and sought renewal.

In 2022, the Railways revised the licence fee and raised retrospective demands for substantial arrears, relying on revised land values and the Railway Board’s circulars dated 10 February 2005 and 8 June 2005.

In CWJC No. 14804 of 2022, the petitioner had earlier been directed to make a representation; the Railways rejected it by order dated 20 September 2022 and affirmed the demand.

Both petitioners challenged the demands and related action, including on the grounds that the prescribed procedure had not been followed and that retrospective enhancement was impermissible.

The Railways maintained that the fees were revised to regularise the occupation and protect railway revenue.

1. Whether the Railways could revise or fix the licence fee for railway land in accordance with the applicable Railway Board circulars.

2. Whether the Railways could recover the enhanced licence fee retrospectively for periods before the revised rate became legally applicable.

The Court relied on the Division Bench decision in Gopal Prasad Barbaria v. Union of India & Ors., LPA No. 112 of 2002, order dated 14 November 2003.

That decision recognises the licensing authority’s power to enhance licence fees, provided the enhancement is reasonable, non-discriminatory and not prohibited by law; absent a contractual stipulation or other applicable authority permitting retrospective recovery, enhancement operates prospectively.

The Court also referred to the Railway Board circulars dated 10 February 2005 and 8 June 2005 as the applicable instruments for determining or revising the licence fee.

Applying Gopal Prasad Barbaria, the Court held that the Railways were entitled to revise or fix the licence fee under the applicable circulars, but that entitlement did not by itself justify charging the revised rate for earlier periods.

Retrospective recovery could be sustained only if a specific contractual, statutory or policy provision authorised it.

The Court therefore directed that the petitioners’ liabilities be redetermined in accordance with the applicable circulars and that decision, without finally adjudicating the correctness of the particular calculations or setting out a fresh amount.

Both writ petitions were disposed of in terms of Gopal Prasad Barbaria, with the petitioners’ liabilities to be redetermined by the competent authority in accordance with the applicable Railway Board circulars and the stated legal principle.