CANCELLATION OF RESERVATION DUE TO LATE ARRIVAL OF PASSENGER :
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If a passenger, for whom a berth or seat has been reserved, does not turn up up to 10 minutes before the scheduled departure of the train, the Railway Administration may cancel the accommodation reserved for him and allot it to the passenger on the RAC list/Waiting list accordingly on priority.
Soure: ...
more... Official site.
10 minutes BEFORE departure. Woah. Is it just me who was unaware of this rule till date? :O