2026 INSC 711
M/s Bajaj Trading Company v. Union of India
HEAD NOTES
A. Railways Act, 1989 — Sections 65(2), 93 & 97 — Goods booked at owner's risk rate — Burden of proof — Railway liability.
(Paras 9 to 15)
Held, where goods are booked at the owner's risk rate, the general responsibility of the Railway Administration under Section 93 stands displaced by Section 97. The Railway is liable only upon proof that loss, shortage or non-delivery resulted from negligence or misconduct of the Railway Administration or its servants.
B. Railways Act, 1989 — Section 65(2) Proviso — Railway receipt — "Said to contain" endorsement — Effect.
(Paras 10, 14 & 15)
Held, where the Railway does not verify the quantity or weight of goods at the time of booking and the railway receipt carries the appropriate endorsement, the burden of proving the quantity actually entrusted to the Railway rests upon the consignor, consignee or endorsee. Failure to discharge such burden disentitles the claimant from seeking compensation for alleged shortage.
C. Railways Act, 1989 — Section 97 — Owner's risk booking — Negligence — Proof required.
(Paras 11 to 15)
Held, mere proof of shortage at destination does not establish negligence on the part of the Railway Administration. Before liability can be fastened under Section 97, the claimant must first establish the quantity entrusted to the Railway and thereafter prove negligence or misconduct attributable to the Railway or its employees.
D. Railway Claims — Shortage Certificate — Evidentiary value.
(Paras 3 & 5)
Held, issuance of a shortage certificate by the Railway Administration is not, by itself, an admission of liability or proof that the shortage occurred due to negligence of the Railway. Such certificate merely records the shortage noticed at destination and does not dispense with the claimant's burden of proof under the Act.
E. Railways Act, 1989 — Sections 65(2) & 97 — Duty of care — Scope.
(Paras 13 to 15)
Held, a duty of care on the part of the Railway Administration regarding the quantity of goods entrusted arises only where Railway personnel have actually verified, counted or weighed the goods at the time of booking. In the absence of such verification, negligence cannot be inferred merely because shortage is reported at destination.
F. Negligence — Essential ingredients — Railway claims.
(Paras 12 to 15)
Held, negligence signifies breach of a legal duty of care. In claims arising from owner's risk consignments, negligence cannot be presumed from loss or shortage alone but must be affirmatively established by proving breach of a duty owed by the Railway Administration to the consignor.
Analysis of Facts
The appellant consigned over forty thousand bags of salt through the Railways from Gujarat to Assam under an owner's risk booking. On arrival, the consignee reported shortage of 1,742 bags, whereupon the Railway Administration issued a shortage certificate.
The appellant sought compensation before the Railway Claims Tribunal. The Tribunal found that the goods had been loaded by the consignor without verification by Railway staff and that the railway receipt carried the necessary endorsement indicating that the contents had not been checked. The Tribunal further noticed discrepancies in the transshipment tallies and concluded that the appellant had failed to establish the actual quantity entrusted to the Railway.
The High Court affirmed the Tribunal's decision. Before the Supreme Court, the appellant contended that the Railways remained liable under Sections 93 and 97 of the Railways Act and had failed to supervise loading as required under the Railway Manual.
The Supreme Court held that the consignment having been booked at the owner's risk rate, Section 97 governed the liability. Since the appellant failed to prove the actual quantity loaded and entrusted to the Railway, the statutory burden under the proviso to Section 65(2) remained undischarged. Consequently, no case of negligence or misconduct against the Railway Administration was established.
Analysis of Law
The Court reaffirmed the following principles:
Section 97 of the Railways Act overrides the general liability under Section 93 in cases of owner's risk consignments.
The proviso to Section 65(2) places the burden of proving the quantity entrusted upon the consignor where Railway staff have not verified the goods.
A "said to contain" endorsement in the railway receipt shifts the evidentiary burden to the consignor regarding the quantity of goods loaded.
A shortage certificate merely records shortage and does not amount to admission of negligence by the Railway Administration.
Negligence under Section 97 must be affirmatively proved and cannot be presumed solely from shortage or non-delivery.
The Railway Administration owes a duty regarding the quantity entrusted only where its officials have actually verified, counted or weighed the goods at the time of booking.
Ratio Decidendi
Where goods are booked at the owner's risk rate and the railway receipt records that the quantity was not verified by Railway staff, the proviso to Section 65(2) of the Railways Act casts the burden upon the consignor to establish the quantity actually entrusted for carriage. Unless such burden is discharged and negligence or misconduct of the Railway Administration is affirmatively proved as required under Section 97, the Railway cannot be held liable for shortage merely because a shortage certificate has been issued at destination.
