Supreme Court: While deciding an appeal arising from the rejection of a claim for shortage of goods during railway transit, a Division Bench of Sanjay Karol* and Vipul M. Pancholi, JJ., held that where goods are booked at “owner’s risk”, liability of the Railway Authorities can be fastened only upon proof of negligence or misconduct under Section 97, Railways Act, 1989. The Court observed that in cases where the consignment is not verified by Railway employees, the burden of proving the quantity of goods lies upon the consignor, consignee or endorsee under Section 65(2) of the Act. Finding that the goods were loaded without railway supervision, the sender’s weight was accepted, and the railway receipt contained a “said to contain” endorsement, the Court held that the appellant failed to establish negligence on the part of the Railways and dismissed the appeal.
Background
The present appeal arose from the concurrent dismissal of the appellant’s claim by the Railway Claims Tribunal, Guwahati Bench and the Gauhati High Court. The appellant had entrusted a consignment of 40,444 bags of salt for transportation from Chirai Junction, Gujarat to Dharmanagar, Assam on 10 November 2009. Upon arrival at the destination, only 38,702 bags were delivered, resulting in a shortage of 1742 bags. The Railway Authorities issued a shortage certificate dated 19 March 2010, following which the appellant filed a claim notice seeking compensation of ₹3,48,400 at the rate of ₹200 per bag.
The claim was rejected by the Railway Claims Tribunal, against which the appellant preferred an appeal before the Gauhati High Court under Section 23, Railway Claims Tribunal Act, 1987. The High Court dismissed the appeal, noting that the goods were loaded directly from the consignor’s vehicle into the railway wagons by the consignor’s employees without supervision by railway staff, the consignor’s weight declaration was accepted, the packing conditions were not compliant, and the railway receipt contained a “said to contain” endorsement. Aggrieved by the concurrent findings, the appellant approached the Supreme Court.
Analysis
The Court examined the liability of the Railway Authorities under Sections 93, 97 and 65(2), Railways Act, 1989 in respect of a consignment booked at “owner’s risk”. The Court held that where goods are booked at owner’s risk, the non-obstante clause contained in Section 97 excludes the general liability under Section 93, and the Railways can be held liable only upon proof of negligence or misconduct on the part of the Railway Authorities or their employees. The Court observed that the burden of proving negligence or misconduct lies upon the person making such allegation.
The Court further held that the proviso to Section 65(2) places the burden of proving the quantity and particulars of the consignment upon the consignor, consignee or endorsee where the goods have not been checked, counted or weighed by Railway employees. In the present case, the goods were loaded directly by the consignor’s employees without supervision of any Railway staff, the sender’s weight was accepted, and the railway receipt contained the endorsement “said to contain”. Therefore, the appellant failed to discharge the initial burden of proving the quantity of goods entrusted for carriage.
Rejecting the appellant’s contention that issuance of the shortage certificate amounted to an admission of liability, the Court held that such certificate by itself could not fasten responsibility upon the Railways. The Court observed that in the absence of any evidence showing that Railway employees had participated in the counting, weighing or verification of the consignment, no duty of care could be attributed to them. Consequently, the appellant failed to establish any negligence or misconduct on the part of the Railway Authorities to attract liability under Section 97, 1989 Act.
Decision
Accordingly, the Court dismissed the appeal and upheld the concurrent findings of the Railway Claims Tribunal and the Gauhati High Court rejecting the appellant’s claim for compensation.
Also Read: Jhar HC | Responsibility of Railways administration after termination of transit, under Railways Act, 1989: Compensation for damage of goods granted
[Bajaj Trading Co. v. Union of India, 2026 SCC OnLine SC 1343, decided on 16-7-2026]
*Judgement authored by: Justice Sanjay Karol,
Advocates who appeared in this case:
For the Appellant: Gunjan Kumar, AOR
For the Respondent: Archana Pathak Dave, ASG
