Railways picked four wickets for 36 runs in the final session to hurt Punjab's hopes of a decisive first innings lead at the PCA stadium here.
At stumps, the hosts were struggling at 159 for four, a long way from a strong 102 for no loss inside the 35th over.
Stand-in captain Pankaj Dharmani was batting on 24 with Muneesh Sharma on 13.
Madan Yadav picked two for 25 and gave the visitors the first break with the wicket of Reetinder Singh Sodhi.
Sodhi was unlucky to fall hit wicket for 51 (102b, 8x4) which also saw the end of his opening stand with Ravneet Ricky who was bowled by Yadav for 47 seven runs later.
Harvinder Singh and Kulamani Parida rubbed salt into Punjab's wounds, removing A Kakkar and G Gupta respectively.
Punjab are 196 runs behind with six wickets in hand, and Railways would settle for it after being bowled out for 355.
Resuming at 287 for five, Railways lost their remaining wickets for the addition of 68 runs.
Raja Ali's 193-ball 80 with 10 fours was instrumental in giving the former champions a semblence of respectability.
Ali added 53 runs for the seventh wicket with Sudhir Wankhede (35) before the last four wickets fell for 10 runs.
Vineet Sharma grabbed five for 91 for the hosts.