DATE:16.07.2026
COURT: Supreme Court of India
BENCH: Justice Sanjay Karol and Justice
Vipul M. Pancholi
FACTS:
The appellant
consigned 40,444 bags of salt from Chirai Junction, Gujarat to Dharmanagar,
Assam on 10th November 2009. Upon arrival at the destination, only 38,702 bags
were delivered, resulting in a shortage of 1,742 bags. The Railways issued a
Shortage Certificate. The appellant filed a claim for Rs.3,48,400/-. The
Railway Claims Tribunal dismissed the claim application, noting discrepancies
in the transshipment tallies which showed variations in the number of bags in
different wagons, suggesting improper loading or interference during transit.
The Tribunal gave credence to the transshipment tallies prepared by railway
officials and held that the appellant failed to prove the actual quantity
loaded as per the Railway Receipt.
The appellant’s
statutory appeal before the Gauhati High Court was also dismissed. The High
Court noted that the goods were loaded directly from trucks by the consignor’s
employees without supervision by railway staff, the sender’s weight was
accepted, packing conditions were not compliant, and the Railway Receipt
contained the remark “said to contain”. Aggrieved by the concurrent findings,
the appellant approached the Supreme Court.
ISSUES:
The main issues before
the Supreme Court were whether the Railways could be held liable for the
shortage of salt bags when the consignment was booked at “owner’s risk” rate,
whether the appellant had discharged the burden of proving the actual quantity
loaded in view of the “said to contain” remark and the proviso to Section 65(2)
of the Railways Act, 1989, and whether there was any negligence or misconduct
on the part of the Railways or its servants that would fasten liability despite
the owner’s risk booking.
JUDGEMENT WITH REASONING:
The Supreme Court
dismissed the appeal. It upheld the concurrent findings of the Railway Claims
Tribunal and the Gauhati High Court, holding that the Railways were not liable
for the shortage of consignment booked at owner’s risk, as the appellant failed
to prove negligence or misconduct on the part of the Railways.
The Court extensively
examined the scheme of the Railways Act, 1989, particularly Sections 65, 93,
and 97. Section 93 imposes general responsibility on the Railways as a carrier,
subject to exceptions. However, when goods are booked at “owner’s risk” rate,
Section 97 (which contains a non-obstante clause) limits the liability of the
Railways only to cases where negligence or misconduct on their part or on the
part of their servants is proved. The Court held that the non-obstante clause
in Section 97 excludes the general liability under Section 93. In this case,
the consignment was booked at owner’s risk, the loading was done by the
consignor without railway supervision, and the Railway Receipt carried the
“said to contain” remark. As per the proviso to Section 65(2), the burden of
proving the weight and number of packages lay on the consignor/consignee. The
appellant failed to discharge this burden.
The discrepancies
highlighted in the transshipment tallies further weakened the appellant’s case.
The Court clarified that mere issuance of a Shortage Certificate does not
amount to an admission of liability. Since no evidence of negligence or
misconduct by the Railways was established, and the appellant could not prove
the actual quantity loaded, the claim was rightly rejected by the Tribunal and
the High Court. The appeal was accordingly dismissed.
ANALYSIS:
This Supreme Court
judgment clarifies the interplay between general carrier liability under
Section 93 and the limited liability regime under Section 97 of the Railways
Act, 1989, when goods are booked at “owner’s risk” rate. The Court has
authoritatively held that the non-obstante clause in Section 97 significantly
restricts the Railways’ liability, making it contingent upon proof of
negligence or misconduct by the Railways or their servants. The decision
underscores the importance of the proviso to Section 65(2), which places the
burden of proving the actual weight and number of packages on the
consignor/consignee when the Railway Receipt contains a “said to contain”
remark and loading is not supervised by railway staff. It also highlights that
transshipment tallies prepared by railway officials carry significant
evidentiary value and that issuance of a Shortage Certificate does not
automatically constitute an admission of liability by the Railways.
The ruling is
significant for commercial and logistics law as it strengthens the position of
Indian Railways in cases involving owner’s risk consignments, particularly
where loading is done by the consignor. It serves as a clear guideline that
claimants must first discharge the initial burden of proving the actual
quantity dispatched before any question of railway negligence arises. The
judgment balances the public carrier obligations of the Railways with practical
realities of bulk consignments and protects the Railways from unwarranted
claims arising from improper loading or transit discrepancies not attributable
to their fault. This decision is likely to reduce frivolous claims and encourage
consignors to opt for railway-supervised loading or higher-risk-rated bookings
where greater protection is desired.
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