Case at a Glance
A trader sent 40,444 bags of salt by rail from Gujarat to Assam in November 2009 at “owner’s risk”; 1,742 bags were found short and it claimed ₹3,48,400. The Railway Claims Tribunal and the Gauhati High Court rejected the claim, and the Supreme Court agreed. It held that the non-obstante clause in Section 97 of the Railways Act, 1989 displaces the general carrier liability in Section 93 for owner’s-risk goods, so the Railways are liable only if negligence or misconduct is proved. Since railway staff neither counted nor weighed the bags, no duty of care arose, and the consignor had not discharged its burden under Section 65(2).
On 10 November 2009, Bajaj Trading Company booked 40,444 bags of salt from Chirai Junction in Gujarat to Dharmanagar in Assam, at owner’s risk. Delivery recorded 38,702 bags, a shortage of 1,742; a shortage certificate dated 19 March 2010 was issued, and by notice dated 6 April 2010 the trader claimed ₹200 a bag, or ₹3,48,400.
The Railway Claims Tribunal, Guwahati rejected the claim on 3 September 2012, finding from transshipment tallies that wagon-level counts varied (one wagon held fewer bags than loaded, another more), pointing to improper loading or criminal interference rather than proven short delivery. The Gauhati High Court dismissed the appeal on 17 December 2024, noting that the consignor’s own staff loaded the wagons without railway supervision, the sender’s weight was accepted, packing was non-compliant and the receipt carried a “said to contain” remark.
The Key Question Before the Court
When goods are booked by rail at owner’s risk, does the Railways’ general liability as a carrier under Section 93 still apply, or must the consignor prove negligence or misconduct under Section 97?
Section 97 overrides Section 93 for owner’s-risk goods
Tracing the law from the Carriers Act, 1865 and the common-law duty of carriers discussed in Irrawaddy Flotilla Co. Ltd. v. Bugwandass, the Court explained the 1989 scheme. Section 93 makes the Railways liable for loss subject to listed exceptions, which they must prove; Section 97 excludes liability for owner’s-risk consignments except where negligence or misconduct is proved, and “a burden of proof for negligence/misconduct lies on the person making the allegations.” Applying the rule on non-obstante clauses in Mohd. Abdul Samad v. State of Telangana, A.G. Varadarajulu v. State of T.N. and Chandavarkar Sita Ratna Rao v. Ashalata S. Guram, it held that Section 97 excludes the general obligations of Section 93.
On negligence, drawing on Poonam Verma v. Ashwin Patel, Rajkot Municipal Corpn. v. Manjulben Jayantilal Nakum and Jay Laxmi Salt Works (P) Ltd. v. State of Gujarat, the Court noted that allegations of broken seals and open wagons did not establish misconduct by railway employees. “For it to be established that the Railway authorities were negligent, it has to be shown that they had a duty of care” — and under the proviso to Section 65(2), such a duty would arise only if the Railways had counted or weighed the goods, which they had not. The trader also failed to produce documents showing how many bags were procured and loaded, so its burden under Section 65(2) was never discharged.
What the Court Actually Held
- For goods booked at owner’s risk, the non-obstante clause in Section 97 displaces the general liability under Section 93 of the Railways Act, 1989.
- The Railways are liable for loss of owner’s-risk goods only if negligence or misconduct of the Railway or its servants is proved, and the burden lies on the claimant.
- Where railway staff did not count or weigh wagon-load goods, the burden under Section 65(2) rests on the consignor; here it was not discharged.
- The claim for 1,742 short bags failed and the appeal was dismissed.
Why This Judgment Matters
- It clarifies a recurring question for traders who ship bulk goods by rail at the cheaper owner’s-risk rate.
- It confirms that a shortage certificate alone does not establish railway liability.
- It ties the duty of care to whether railway staff actually counted or weighed the consignment.
What Should Advocates Take Away From the Judgment?
For Traders & Consignors
- Booking at owner’s risk shifts the burden to you: you must prove railway negligence or misconduct for any loss.
- Keep loading records, counts and procurement documents; without them a shortage claim is unlikely to succeed.
- Where possible, have railway staff count or weigh the goods at loading.
For Counsel
- In owner’s-risk claims, plead and prove specific negligence or misconduct, not just shortage.
- Examine whether the Section 65(2) proviso applies — who loaded, who counted and what the receipt records.
Key Takeaways
- Section 97 overrides Section 93 for goods carried at owner’s risk.
- The claimant must prove negligence or misconduct by the Railways.
- No duty of care arises where the Railways never counted or weighed the goods.
- A shortage certificate is not by itself proof of railway liability.
Frequently Asked Questions
What does booking goods at owner’s risk mean for a claim?
The Railways are then not liable for loss, destruction or deterioration except on proof of negligence or misconduct by them or their servants, and the burden of proving it is on the claimant.
Does Section 93 of the Railways Act still apply to owner’s-risk goods?
No. The Court held that Section 97’s non-obstante clause excludes Section 93’s general obligations for such consignments.
Why did the shortage certificate not help the trader?
Because the trader still had to discharge its burden under Section 65(2) and prove negligence; with no railway counting or weighing at loading and no documents of the bags procured, it could not.
Conclusion
The ruling draws a clear line: when a consignor chooses owner’s-risk carriage and loads the wagons itself, the Railways do not become insurers of the count, and a claim needs proof of fault.
Practical takeaway: If you ship at owner’s risk, document every stage of loading and get railway verification where you can — otherwise a shortage claim will founder on the burden of proof.
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