The section is having Automatic signalling, which failed since morning (i.e all signals were at ON position/Red signal). All trains were working on paper clearance.

The rule of paper clearance is:
A train (say a) can NOT be given paper clearance from a station (say x), until the train in front (say B) of it has completely arrived at the station...
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in advance (say y). After the above formality is over, the Station master of station y will give line clear with a private number to Station master of station x . Then the SM of station x will give paper clearance to a train to proceed to station y.

Here the Goods train (say a) seems to be given paper clearance, much before 13174 (say b) was received in the station in advance. Hence the drivers of the goods thought the section is clear & kept passing all signals at ON position until it dashed in rear of 13174. This is my assumption & the actual reason will be given in CRS report.

Paper clearance types for auto signal:
i) T/A 912: authority to pass auto signals during short time signal failure & other criterias present
ii) T/D 912: authority to pass auto signals during long time signal failure & other criterias present.