Railways Not Liable For Short Delivery Of Consignment Booked At Owner's Risk Unless It Counted Or Weighed Goods: Supreme Court

The Supreme Court has held that the Railways cannot be held liable for the short delivery of a consignment booked at the "owner's risk" rate unless it had itself counted or weighed the goods before transportation, thereby assuming a duty of care over the quantity entrusted to it.

A Bench of Justice Sanjay Karol and Justice Vipul M. Pancholi dismissed an appeal filed by M/s Bajaj Trading Company, which sought compensation for the alleged shortage of 1,742 bags of salt transported from Gujarat to Assam. The Court upheld the concurrent findings of the Railway Claims Tribunal and the Gauhati High Court rejecting the claim.

The dispute arose after the appellant booked 40,444 bags of salt from Chirai Junction in Gujarat to Dharmanagar in Assam in November 2009. On arrival, only 38,702 bags were allegedly delivered. Although the Railways issued a shortage certificate, it disputed liability on the ground that the consignment had been booked at the owner's risk rate and carried a "said to contain" endorsement, indicating that railway staff had not verified the quantity loaded.

The appellant argued that the Railways remained bound by the general responsibility imposed under Section 93 of the Railways Act, 1989, and that railway officials ought to have supervised the loading process. It also contended that the "said to contain" endorsement could not absolve the Railways of liability.

Rejecting these submissions, the Court held that Section 97 of the Railways Act, which governs consignments carried at the owner's risk rate, overrides the general liability under Section 93. Consequently, the Railways can be made liable only upon proof of negligence or misconduct on its part.

The Bench held that such negligence could arise only if railway authorities had verified the quantity of goods before transit.

"Had they, at any stage been involved in the noting, counting or weighing of goods, thereby being actively aware of the amount being transported by them, then, it could be said that they had duty to ensure that the total amount that they have counted or weighed, was the amount they ought to safely transit to the end destination. This was not the case," the Court observed.

The Court pointed out that under the proviso to Section 65(2) of the Railways Act, where railway employees do not verify the number of packages and a corresponding endorsement is made in the railway receipt, the burden of proving the quantity rests on the consignor, consignee or endorsee.

It found that the appellant had failed to discharge this burden by producing documentary evidence showing the quantity of salt procured, processed and dispatched.

"The appellant has not provided any documents to show that a particular number of bags were procured and processed and then were being further sent for iodisation. In other words, the burden of proof as per the proviso to Section 65(2) was not discharged," the Court observed.

Holding that no negligence on the part of the Railways had been established, the Supreme Court dismissed the appeal.

Case : M/s Bajaj Trading Company v. Union of India

Citation : 2026 LiveLaw (SC) 685

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