1. Yes very much valid and you will share berth with co-passenger, TTE if found drop outs/absentees try to provide you full berth.
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2.Sorry to say that since its a CNF ticket you are not eligible for cancellation of ticket, beyond charting time i.e., 4 Hrs before Dep of train. Since its a problem happened to you which is out of Rlys hands they are helpless. In short can say nil refund for you.
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Surprising to see that counter people have said statement cancel it in morning this rule was available earlier but not now, also in places such as NDLS you cancel at current booking counters also. Now with new rules no refund for CNF ticket beyond specified time limits.
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Rule says as below:
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Cancellation charge per passenger on confirmed (reserved) tickets:-
(i). 48 hours before the scheduled departure of the train minimum cancellation charge
1st AC/executive class: Rs. 240
2 AC/1st Class : Rs. 200
3AC/ACC/3A economy: Rs. 180
Second sleeper class : Rs. 120
Second class : Rs. 60
(ii). Between 48 hours and 12 hours before the scheduled
departure of the train @ 25% subject to minimum charge as per (i) above.
(iii) between 12 hours and 4 hours before the scheduled departure of the train @ 50% subject to minimum charge
as per (i) above.
(iv) No refund after the above prescribed time limit.