During my vacation in India (2008) i booked a ticket to Hyderabad in 3 Tier AC. When i reached the station to board the train and checked my status i was auto-upgraded to 2nd AC. To non-Indian travellers:- 3AC is an air conditioned coach with 9-10 compartments. Each compartment has 6 berths (3 on each side) and 2 side berths(along the length of the coach); total 8 berths. Some might feel cramped. 2ndAC coaches have 4 berths (2 on each side) and 2 side berths; total 6. So upgrade from 3AC to 2AC was good. Out of curioucity i asked the TTE about the auto-upgrade system. He explained me that to maximize passenger capacity Indian Railways has introduced this system. This is how it happens: Usually there are some quotas in the railway booking. E.g. Foreign tourist quota, military quota, ladies quota etc etc. When these quotas are not booked then the system automatically upgrades a passenger to that particular category. Say you have booked a ticket in 3AC. If you get an auto-upgrade you will go to 2AC. The passenger in sleeper class is upgraded to 3AC and those who are in RAC/WC get a confirmed ticket. And so forth.