The Railways had their own paramilitaries also
A rather modern word for what was - at least at the start of the war, the Indian Volunteer Force.
The railway companies did indeed have battalions of Volunteers associated with their railways.
Many of the other ranks of the Railway Battalions were Anglo-Indian railway employees (also referred to in earlier times as 'Eurasians'). Often these men came from Railway villages built by the Railway companies along the line and populated virtually exclusively by Anglo-Indian families.
Officers would be drawn from the managers of the railway company - chiefly railway engineers.
The units were used to secure the internal lines of communication (the railways) in the event of a popular uprising. They were occasionally called out "in support of the civil power" to deal with local riots.
In 1917 the Indian Volunteer Force was re-organised as the Indian Defence Force and then in 1920 (if memory serves me) into the Auxiliary Force (India).
Natives of India ("Indians") could not join the Volunteer Force before 1917. When the Indian Defence Force came into being, some openings were made for them.
I have never yet heard of someone being sent to work on the Bengal Railway, if by 'sent' you mean ordered or posted.
But grandfather could have been recruited to work on the railways and perhaps joined a Battalion of the Volunteer Force / IDF as a volunteer.
British War Medals, 1914-18 are known to the Volunteers. They also qualified for Long Service medals after 20 years' service.