The Supreme Court has held that railway authorities cannot be held responsible for shortages in transit unless the consignor establishes negligence or misconduct on the part of the Railways or its employees.
The bench of Justice Sanjay Karol and Justice Vipul M. Pancholi undertook an extensive examination of the statutory framework governing railway liability under the Railways Act, 1989.
The dispute arose from the transportation of 40,444 bags of salt booked by M/s Bajaj Trading Company from Chirai Junction in Gujarat to Dharmanagar in Assam in November 2009. Upon arrival of the consignment, only 38,702 bags were delivered, resulting in a shortage of 1,742 bags.
Buy Now: Supreme court Judgements E-Compilation – JUNE 2026
Following the shortage, the Railway authorities issued a shortage certificate, after which the consignor sought compensation of ₹3.48 lakh, valuing the missing bags at ₹200 each. The Railway Claims Tribunal, however, rejected the claim, holding that the evidence did not conclusively establish that the quantity claimed had in fact been loaded or that the shortage occurred due to any lapse attributable to the Railways. The Gauhati High Court subsequently affirmed this finding, prompting the appeal before the Supreme Court.
The Tribunal had examined the transshipment tallies produced by the Railways and noticed inconsistencies in the number of bags found in different wagons during transit. Some wagons contained more bags than recorded in the railway receipt, while others contained fewer.
According to the Tribunal, these discrepancies suggested either improper loading at the origin or interference during transit that could not be satisfactorily explained. Consequently, it held that the consignor had failed to establish that the quantity mentioned in the forwarding documents was actually loaded into the wagons. Since the foundational fact of the quantity entrusted to the Railways itself remained unproven, the Tribunal concluded that no case of short delivery had been made out.
Before the Supreme Court, the appellant argued that the Railways owed a statutory duty of care under Section 93 of the Railways Act, 1989, irrespective of the booking being made at the owner’s risk rate.
It was contended that railway officials were required to supervise loading under the Indian Railway Commercial Manual. The Railways could not rely upon the “said to contain” endorsement to escape liability. Even where goods are booked at owner’s risk, Section 97 of the Railways Act preserves liability where negligence is established. The issuance of the railway receipt mentioning the quantity should have been treated as sufficient proof of the goods entrusted to the Railways.
The Union of India argued that the shortage certificate merely acknowledged that fewer bags were delivered and did not amount to an admission regarding the quantity originally loaded.
The Railways further relied upon the proviso to Section 65(2) of the Railways Act, which provides that where railway staff do not verify the weight or number of packages and the railway receipt records this fact, the burden of proving the quantity rests upon the consignor or consignee.
Since the goods had been booked at the owner’s risk rate and no negligence or misconduct by railway personnel had been established, the Railways contended that no liability could arise.
The Court explained that Section 93 ordinarily imposes responsibility upon railway administrations for loss, destruction, damage, deterioration or non-delivery of goods during transit. However, Section 97, which specifically governs consignments booked at the owner’s risk rate, contains a non-obstante clause overriding the general rule.
Accordingly, once goods are booked at the owner’s risk rate, the Railways become liable only if the claimant proves negligence or misconduct on the part of railway employees. The Court observed that the legislative scheme intentionally places a higher burden on claimants in such cases.
The Court placed considerable emphasis on the proviso to Section 65(2) of the Railways Act.
It observed that where railway employees do not verify the quantity loaded and a corresponding endorsement is made in the railway receipt, the burden of proving the quantity entrusted to the Railways squarely rests upon the consignor, consignee or endorsee.
In the present case, the appellant failed to produce supporting records demonstrating that the claimed number of salt bags had actually been procured, processed and loaded for transportation. Without discharging this statutory burden, the appellant could not seek to shift responsibility onto the Railways.
The Supreme Court also undertook a detailed discussion on the concept of negligence, referring to dictionary definitions as well as several judicial precedents explaining the principles governing negligence and duty of care.
The Court observed that negligence presupposes the existence of a legal duty. Such a duty could arise only if railway officials had themselves counted, weighed or verified the goods while accepting the consignment.
Since the railway staff had not verified the quantity loaded in the wagons, they had no corresponding duty to ensure delivery of the exact quantity claimed by the consignor. Consequently, no negligence could be inferred merely because a shortage was reported at the destination.
The judgment also examined the significance of the “said to contain” endorsement appearing in railway receipts.
The Court noted that under the Indian Railway Code for Traffic (Commercial) Department, such endorsements are issued where railway staff do not check the weight or number of packages loaded. In these circumstances, the statutory burden of proving the quantity transported continues to rest upon the consignor.
The Court held that this endorsement, read together with Section 65(2), reinforced the conclusion that the appellant had failed to establish the factual basis necessary for fastening liability upon the Railways.
Finding no infirmity in the reasoning adopted by either the Railway Claims Tribunal or the Gauhati High Court, the Supreme Court dismissed the appeal.
The Court held that before alleging negligence against the Railways in owner’s risk consignments, the consignor must first establish the quantity actually entrusted for transportation. Since that foundational burden remained undischarged in the present case, the question of negligence or misconduct on the part of the Railways did not arise.
Membership Required to Access Case Details & Order Copy
To view the complete Case Details and Download Order Copy, you must have an active membership. Please subscribe to continue.
