CHAPTER XXIV

SCRAP AND AUCTION SALES

2401. Meaning of Scrap.—There accumulates on every Railway a large quantity of

material of different kinds which is no longer useful for the purpose for which it was
originally procured. Such material is generally called "Scrap" and should be
distinguished from other stores and component parts which can be utilised after repair
or renovation. Scrap also consists of empties, turnings, borings, cut odds and ends of
metal, sweepings, foundry ashes etc. which accumulates in Railway Workshops.
Occasionally scrap may consist of second-hand or even new material which the
Railway can neither consume itself nor can dispose of to other Railways. These stores
may be in excellent repair and command a fair price in the market not associated with
scrap.

2402. Schedule of Scrap.—A detailed schedule of scrap should be maintained by each

Railway Administration under group 98 of the State Railway Classification of Stores.
In preparing the schedule the use to which the material could be put by the likely
purchasers should be kept in view, so that the items may fetch a reasonable price in the
auction sales. Scrap of different metals and alloys should be scheduled as far as
possible under separate main headings, with suitable sub-headings describing the form
in which the material is put up for sale.

2403. Collection of Scrap.—(1) Except for those items of scrap which the consuming
departments have been authorised to dispose of, the Stores department should arrange
for regular collection of all items of scrap from the consuming departments and for its
disposal. If the scrap is to be disposed of by public auction, arrangements should be
made for its collection at convenient points for the purpose of such sales, determined
largely by the freight charges to be met, the room available for storage and the
proximity to a market for such scrap.
(2) The Controller of Stores may however decide to dispose of any particular item of
scrap at site or at the point of generation of scrap, it is more advantageous to do so.

2404. "Scrap for Workshop use".—Scrap suitable for use as raw materials for
foundries & c. in railway workshops should invariably be reserved for such use, only
the excess over such requirements being sold.

2405. In the case of despatches of scrap from out stations, arrangements should be
made to see that double handling is avoided and that the scrap is sent, as far as
possible, direct to the stores depot attached to the workshop concerned or to the depot
at which scrap sales are conducted as the case may be.

2406. Sorting and Storage of Scrap.—When scrap is returned to the stores depot, the
Officer or subordinate returning it, should see that it is sorted out according to the
correct nomenclature of the Price List before it is actually despatched. On receipt in the
stores depot, the scrap should be further sorted out, if found necessary.

2407. Suitable arrangement should exist in the stores depot to ensure that the scrap
ready for sales is not mixed with other scrap that is being received. For this purpose,
there should be kept, if it is possible to do so, two sets of scrap bins or dumps for each
kind of scrap, so that the scrap accumulated in one set of bins or dumps could be set
apart at any time for the purpose of auction sale and pending such sale, the other set of
bins will be used for accumulating further scrap for the next auction.

2408. Auction sale of scrap at Stores Depots:- Before any item of stores can
be sold as 'scrap', it should be declared as such by Survey Committee appointed
by the General Manager of the Railway and the sanction of the competent
authority obtained to such sale excepting where such sanction has already been
obtained in terms of Para 2228.S. The General Manager may relax this rule in the
case of known items of scrap of small value including the items generally sold to
Railway Employees. However this dispensation is subject to furnishing of a
certificate by concerned departmental officer not below the level of JA
Grade that the item being offered have been inspected by him personally
and found unserviceable & unfit for any further use on the Railways.

(Authority Board's letter No. 98/RS (G)/779/10(CS) dated 14 -01-2009).

2409. Scrap will be sold generally by auction but the administration considers that
more advantageous prices are likely to be obtained, other ways of disposal enumerated
in para 2302.S may be adopted.

2410. "Lot" Register for Scrap.—All scrap material accumulated for the purpose of
auction sale should be separated into convenient 'lot' of a size that would suit the
bidders at auctions. A 'Lot' Register should be maintained showing the following
particulars :
(1) 'Lot' Number
(2) P.L. No.
(3) Description of material.
(4) Approximate quantity
(5) Book Rate
(6) Rate in previous auction
(7) Sanction reference of Survey Sheet
(8) Rate at which sold
(9) Name of the purchaser
(10) Total value at auction rate.
(11) Remarks.

2411. Survey Sheets for Scrap.—(1) Particulars of each lot should then be entered on
the Survey Sheets (S. 2227) which are submitted to the Survey Committee as
explained in paragraph 2227. It is one of the important duties of the survey committee
to inspect each lot and record its recommendations on the survey sheets. The
Controller of Stores should then obtain the sanction of the competent authority to the
sale of such articles by auction, if he finds he is unable to dispose of the same by
transfer or sale to other railways, Government departments & C. excepting where such
sanction has already been obtained in terms of Para 2228-S.
(2) Reserve Price.—Reserve prices based on the bids obtained at past auctions and any
other information available should be fixed by the Controller of Stores or the depot
Officer for such item of scrap to be sold in order that the item may be withdrawn from
the sale, if the bids are found unsatisfactory. Bids lower than the reserve prices may,
however, be accepted by the Depot Officer where found expedient provided the Depot
Officer doing so records his reasons in writing.

AUCTION SALES
2412. Agency for Auction Sales.—A Railway Administration may either conduct its
auctions itself or enter into agreement with an auctioneering firm of repute and
financial standing to handle the sale of railway materials by auction.

2413. Legal Position of Anctioneer.—The position of an auctioneer upto the fall of the
hammer is that of an agent for the vendor, that is, the Railway Administration. The
auctioneer thereafter becomes the agent of the highest bidder (the purchaser) as well,
and a proper contract must be made to bind both parties i.e., the Purchaser and the
Railway Administration. The Conditions of Sale should therefore, be drawn up before
the sale. The auctioneer has no authority as the agent of the Railway Administration to
warrant the goods, and he cannot add to or alter the particulars of Conditions of Sale
by any verbal declaration made in the auction room at the time of the sale.

2414. Agreement and Conditions of Sales.—A skelton form of agreement between a

railway administration and a firm of auctioneers is illustrated in Appendix, IX
Appendix 'X' indicates the "General Conditions of Sales by Auction" which may be
adhered to with advantage.

2415. Samples for Assay & c.—Small quantities of scrap required by prospective
biders for purposes of assay or other tests may be sold to them at schedule rates out of
materials prepared into lots for auction.

2416. Auction Arrangement at Stores Depot.—No auction should actually be started

without the prior permission of the Controller of Stores. The Controller of Stores while
according such permission, should examine whether there is going to be any over-
lapping of auctions by the same auctioneer, either in respect of deliveries or payment
of sale proceeds or both. Such ; overlapping shall be avoided as far as possible. When ,
however, this is unavoidable, the Controller of Stores should consider carefully to see
that the interests of the Administration are not jeopardised in any way.

2417. The Depot Officer or any other Officer nominated by the Controller of Stores to
supervise the auction will be responsible for the conduct of the auction.

2418. Presence of an Accounts Representative at Auction Sales.—The Accounts

Officer (Stores) who should have received timely intimation of the auction should
depute an Inspector of Stores Accounts or a Stock Verifier as an Accounts
Representative to witness the auction sale.

2419. From the catalogue and the Survey Sheets prepared for the auction, the Stock
verifki witnessing the sales should post a manuscript register containing the following
particulars :
(1) Date of auction
(2) "LOT" Number
(3) P.L. Number
(4) Description of the material
(5) Approximate quantity
(6) Book rate
(7) Book value
(8) Sanction ref. of the Survey Sheet
(9) Name & address of the purchaser ' Wt[
(10) Auction Bid rate
(11) Delivery Order No. & date
(12) Quantity delivered
(13) Value
(14) Loss or gain on sale.
(15) Issue Note No. & date
(16) Gate Pass Number & date
(17) Wagon Number
(18) Railway Receipts No. & date
(19) Loading charges
(20) Ground Rent recovered, if any
(21) Remarks
(22) Countersignature of Depot Officer

2420. Columns (1) to (8) should be posted before the sale. As lots are sold, columns
(9) & (10) will be written up by the Stock-Verifier and at the end of the day the entries
in his register will be compared with those in the auctioneer's (or Yard Foreman's)
statements The rest of the columns in the Register should be filled up by the Stock
Verifier from his Field Book (S. 2428 which will be his initial record in which the
deliveries of such materials as they are affected will be noted.

2421. Material should not be sold at rates per lot but bids should be registered by a
number or weight unit so that a complete check on the quantity delivered can be
exercised, at any time

2422. The Sock Verifier should see that the Conditions of Sale are being observed and
that stores are not being sold at obviously low prices. If he thinks that any irregularity
is taking place or proper prices are not being obtained, he should bring the matter
immediately to the notice of the Officer in charge of the sale and report the case in
writing to the Accounts Officer, Stores.

2423. Deliveries of Stocks.—The Depot Officer should arrange for the deliveries being
effected according to the agreement and terms and conditions of sale and such other
specific or general instructions as may be issued by the Controller of Stores. He should
take every possible step to expedite delivery of the auctioned materials.

2424. Auctioneer's Delivery Order.—Before material is loaded for delivery, the

purchaser has to present to the Depot Officer a Delivery Order, made out by the
auctioneers authorizing Stores Department to make such delivery. The Delivery Order
should show the following particulars :
(1) Lot number
(2) Description of material
(3) Purchaser's name and address
(4) Approximate quantity in the lot
(5) Rate at which sold
(6) Value realized
(7) Reference to the Cash Remittance Note under which the amount shown in column
6 was remitted to the Railway's Cashier or Treasurer
(8) Chief Cashier or Treasure's Receipt Note and date
(9) Amount of loading charges recovered by the Depot Officer.

Note.—(i) Columns 1 to 8 will be filled in by the Auctioneers, and column 9 by the

Depot Officer.
(ii) An auctioneer's delivery order is not necessary when the auctioneer does not
function as the Agent of the purchaser. The delivery may be made to the purchaser or
his agent on the strength of the Cashier's Receipt.
2425. Ground Rent should be charged if the material is not removed within the
stipulated time and the Accounts Representative will be responsible for seeing that
where Ground Rent has become due, it is recovered by the Depot Officer before
delivery of the Stores. The amount realized as Ground Rent should be noted in the
Issue Note by the depot and certified by the Stock Verifier. The Depot Officer will be
responsible to remit the cash to the Divl. Cashier or the local Station Master. In
exceptional circumstances and when the Earnest Money paid by the purchasers is
sufficient for the purposes, Ground Rent, i.e. Storage Charges may be recovered after
the delivery of the stores.

2426. Weighment and Delivery.—All materials sold shall be weighed or counted

before delivery, this being supervised by :
(1) Stock Verifier
(2) Stores Supervisor of rank not less than D.S.K. Gr. III
(3) Representative of the purchaser (if he cares to be present)
(4) Representative of the Auctioneer (if he cares to be present)
(5) Weighment should also be witnessed by the authorised representative of RPF.

(Authority Rly Bds. letter No.98/RS(G)/779/10(CS) dt.07.09.2000) acs no.3

2427. The Stock Verifier should count, measure or weigh each lot or part of a lot after
comparison of the description and quantity shown in the sale catalogue to ensure that
only such kinds and quantities of materials as have been shown in the catalogue are
being issued; he should sign the gate passes and Issue Notes in token of such check.

2428. The Stock Verifier should maintain a Field Book (S 2428) which will be his
initial record for recording therein :

(a) The lot number

(b) Description

(c) Rate

(d) Cart or wagon number, carrying capacity, and owning railway

(e) Gross Weight, actual tare or wagon or cart

(f) Net Weight

(g) Purchaser's name and address

(h) Particular of realization of value

(i) Amount of Loading Charges recovered

(j) Issue Note number and date

(k) Gate-Pass/Railway Receipt number & date and

(l) Amount and particulars of remittance of Ground Rent, if any.

2429. He should sign the issue note after fully satisfying himself that entries made
therein agree with those in the field book. The field book should be attested by the
Stores Representative making delivery of the goods in token of his having accepted the
correctness thereof.

2430. In giving delivery of scrap material, scrap of non-ferrous items should be

weighed on electronic weighing scales and the weight of each consignment should be
recorded in detail by the stock verifier in his field book.

(Authority Rly Bds. letter No.98/RS(G)/779/10(CS) dt.13.02.2007)--acs no.4

2431. For giving delivery of ferrous scrap empty wagons need not be weighed and the
marked are of the wagons should be taken as the weight of the empty wagons. The
loaded wagons should be passed over the weighbridge and the difference between the
two weights will give weight of the scrap. In his field book, the Stock Verifier who
should be present all the time, record the number, carrying capacity and the owning
railway (marked) take, gross weight and net weight of the wagons used. He should
then seal up the wagons with the special seal supplied to him for the purpose.
Particulars of the Railway receipt under which loaded wagons are booked will be
recorded subsequently.

2432. In cases where local delivery is given, the empty and loaded trucks or carts
should be weighed and instead of Railway Receipt, particulars of the Gate Pass issued
will be recorded. The Issue Note and the Gate Pass should be countersigned by the
Stock Verifier.

2433. Loading.—The loading of the sold materials should be done under the
supervision of the Depot Officer or his Assistant, not below the rank of D.S.K. Gr. III
and should be witnessed by the Stock Verifier. The Depot Officer will be responsible
for realising loading charges if any, from the purchaser. The Purchaser should not
ordinarily be allowed to use his own labour for loading as the Railway's have little
control on such labour.

2434. The responsibility of the Railway ends after the consignment has been loaded
and made over to the representative of the auctioneers or purchasers and the railway
will be no party to any dispute that may arise after the loading has been completed. It
is the duty of the auctioneer to arrange for the despatch of the consignment to the
purchaser.

2435. Despatch of Auctioned Material.—In no circumstances should the Railway

Department be shown on any of the despatching documents as consignors. The
documents should be in the name of the purchaser or his duly authorised agent who
should sign them if necessary

2436. Freight Rates.—If the purchaser desires to send any of the stores by rail, they
will be carried at public tariff rates only.

2437. Deleted.

2438. Deleted.

2439. Stock Verification.—At the conclusion of the delivery of the lot or lots
pertaining to the item of scrap, any stock, left over should be verified by the Accounts
Department with the book balance and any discrepancies adjusted. Such "left over"
stock may be transferred to the bin in which fresh deliveries received since the auction
have been stored.

2440. Monthly lists of Deliveries.—The Depot Officer should submit to the Controller
of Stares and the Accounts Officer (Stores) monthly verified lists (S. 2440-
Manuscript) of materials in respect of lots delivered in fall every month and valuable
instate and stores of special sales e.g. rails, girders & c. as delivered, whether in part or
in full.

2441. Report of Completion of Auction.—On the completion of the delivery of

materials sold in each auction ,the Accounts Representative should submit a
completion report (S. 2441-A Manuscript) to the Accounts Officer, Stores bringing to
particular notice any outstanding features. The Depot Officer will submit a similar
report (S. 2441.B-Manuscript) independently to the Controller of Stores and Accounts
Officer, Stores.

Form No. S. 2441 A & B

The Completion report should show the :

(a) Date of Auction Sale

(b) Lot Nos.

(c) Description of Stores

(d) Quantity offered in the auction

(e) Quantity actually delivered

(f) Rate

(g) Value

(h) Loading charges recovered

(i) Ground rent recovered.

(j) Auctioneer's Commission

(k) Remarks

2442. Sale Accounts by Auctioneers.—The Depot Officer should see that the sale
accounts are submitted to him by the auctioneers within the prescribed period. He
should check the sale accounts, calling for the Treasurer's certificate of payment
granted to the auctioneers, for the remittance made by him. If the sale account is found
correct and the remittance has been made correctly, the Depot Officer should issue a
clearance certificate to the auctioneer in respect of that particular auction and send a
copy of the certificate to the Accounts Officer Stores. The Auctioneers' Sale Accounts
should be forwarded to the Controller of Stores for transmission to the Accounts
Officer.
Note.—There is no objection to the Sale Accounts being submitted by the Auctioneers
direct to the Controller of Stores, provided the checks devolving on the Depot Officer
are exercised in the Office of the Controller of Stores.
2443. Bills for Commission Charges.—Except in cases where the auctioeers are
permitted to deduct their commission charges from sale proceeds of the auctioned
material in terms of their agreement the bill for commission charges should be
submitted promptly to the Depot Officer concerned for verification and transmission to
the Accounts Officer, Stores, for payment, advising the Controller of Stores at the
same time.

2444. Auctions by other than the Stores Department.—The preliminary arrangements

for the auction of materials held in the Divisions or Districts should be made by the
Division or District Officers concerned under advice to the Accounts Officer, Stores,
and the Controller of Stores.

2445. In signifying his approval, the Controller of Stores should advise the Accounts
Officer, Stores, to arrange for a Stock Verifier being deputed to witness the sale. The
auctions may be held either departmentally or with the assistance of the railway
auctioneers. The detailed procedure to be followed will be the same, mutatis mutandis
as in the case of the auction sales conducted by the Stores Department (Paragraphs
2410 to 2442).

2446. Allocation of Financial Responsibility.—The financial responsibility involved in

the sale of stores by public auction, tender, or direct sale is in respect both of
expenditure and of receipts. In the assessment and collection of amounts due to the
railway, the responsibility is with the Executive. The responsibility of the Accounts
Organisation is confined to seeing that system of collection is suitable and efficient, to
verifying by test-check that such a system operates effectively in practice and to
examining that the amounts collected are properly brought into account in the railway's
books.

2447. In the matter of expenditure involved, the Accounts Department is responsible

for seeing that the expenditure is regular and proper and that the system of accounts is
such that there can be no loss of railway money, while the administrative and executive
officers will be fully responsible for the correctness of the facts in the original
documents.