Indian Railways Not Liable For Cross-Border Cargo Loss Unless It Occurred On Its Network: P&H High Court Rejects Appeal After 34 Yrs
The Punjab and Haryana High Court has dismissed an appeal filed by The Oriental Insurance Co. Ltd. challenging the rejection of its compensation claim by the Railway Claims Tribunal in a case involving shortage of goods in a cross-border consignment from Pakistan in 1990.Justice Pankaj Jain said, "where the goods are being carried from a place outside India to a place in India by the railway,...
The Punjab and Haryana High Court has dismissed an appeal filed by The Oriental Insurance Co. Ltd. challenging the rejection of its compensation claim by the Railway Claims Tribunal in a case involving shortage of goods in a cross-border consignment from Pakistan in 1990.
Justice Pankaj Jain said, "where the goods are being carried from a place outside India to a place in India by the railway, the administration can be held responsible under the provisions of Chapter VII of 1890 Act for loss, destruction, damage or deterioration of goods only if it is proved by the owner of the goods that such loss, destruction, damage or deterioration arose on the railway of the railway administration."
It was incumbent upon the appellant to prove that the loss occurred on the railway of Indian Railways. Once wagon was received by Indian Railways in Indian Territory, it was incumbent upon the railways to check whether original wagon seals are intact or not, it added.
The Court noted that the counsel for the appellant has not disputed the findings recorded by the Tribunal that original wagon seals were produced.
The case arose from a consignment of 106 bags of copper scrap dispatched from Lahore in May 1989. Upon arrival at Amritsar, nine bags were found missing, several were tampered with, and a shortage of 1104 kg was recorded. The insurer had indemnified the consignee and sought recovery from the Railways after the claim was rejected.
Before the High Court, the insurer argued that the Railways were liable unless they proved that reasonable care had been taken during transit. However, the Court clarified that the dispute was governed by the Indian Railways Act, 1890, as the transaction predated the 1989 Act.
Relying on Section 76(E) of the 1890 Act, the Court held that in cases involving goods transported from a place outside India to a place within India, the burden lies on the claimant to prove that the loss occurred on the railway system administered by Indian Railways.
The Court noted that the wagon had arrived with seals intact and there was no evidence to show that the loss occurred within Indian territory. In the absence of such proof, liability could not be fastened on the Railways.
Finding no infirmity in the Tribunal's reasoning, the Court dismissed the appeal, affirming that the insurer had failed to discharge the burden required under law.
Mr. R.C. Gupta, for the appellant.
Mr. Harneet Singh Oberoi, Advocate (through V.C.) and Ms. Anmolpreet Kaur, Advocate for the respondent.
Title: The Oriental Insurance Co. Ltd. v. Union of India