Consignor Bears Burden of Proof For Shortage In 'Said To Contain' Railway Bookings: SC

The Supreme Court has fortified the statutory immunity of the Railway Administration against claims of cargo shortage when goods are shipped under 'said to contain' remarks without official supervision, ruling that the burden of proving actual weight or quantity rests solely on the consignor. This decision clarifies that general carrier responsibilities are strictly overridden by specific 'owner’s risk' provisions, effectively shielding the Railways from liability unless explicit negligence or misconduct is established by the claimant.

A bench comprising Justice Sanjay Karol and Justice Vipul M. Pancholi heard the appeal arising from a dispute where 1742 bags of salt were allegedly missing from a consignment transported from Gujarat to Assam. The appellant challenged the concurrent rejection of their claim by the Railway Claims Tribunal, Guwahati Bench and the Gauhati High Court, which had dismissed the appeal under Section 23 of the Railway Claims Tribunal Act, 1987.

The Primacy of Section 97 and Owner's Risk

The Court examined the interplay between general liability and special risk categories under the Railways Act, 1989. It was observed that when goods are booked at 'owner's risk', the expansive responsibilities otherwise cast upon the administration are limited. The bench noted that the appellant's goods were loaded directly by the consignor's employees without supervision by railway staff, and the railway receipt bore the critical 'said to contain' remark.

The Court, in its reasoning, observed: "In view of the above discussion, the non obstante clause contained in Section 97 would exclude the general obligations cast on the Railway by Section 93. Since, in the present case the goods were booked at ‘owner’s risk’, if liability is to be fastened on the authorities, it can only be done if negligence or misconduct on its part or its employees."

Failure to Discharge Burden of Proof under Section 65

Addressing the evidentiary requirements, the bench pointed to Section 65(2) of the Railways Act, 1989, which mandates that if the railway does not check the consignment, the burden of proving the quantity lies on the consignor. The Court emphasized that a shortage certificate does not equate to an admission of liability or an acknowledgement of the initial quantity loaded.

The Court further clarified the standard for establishing negligence, citing precedents like Mohd. Abdul Samad v. State of Telangana and Madhav Rao Jivaji Rao Scindia v. Union of India to define it as the omission to do something which a reasonable man would do. In the absence of proof that the Railways were involved in counting or weighing at the start, no duty of care regarding the total quantity could be fastened upon them.

Final Decision

The Court has the following directions:
"The appeal is dismissed. Pending application(s) if any stands disposed of."

Key Takeaways:

Overriding Effect of Section 97

Section 97 of the Railways Act acts as a potent non-obstante clause that excludes general carrier liabilities under Section 93 when goods are transported at 'owner's risk'.

Consignor's Evidentiary Burden

In 'said to contain' bookings, the claimant must provide primary evidence (such as procurement and processing documents) to prove the initial quantity loaded; mere shortage certificates from the destination are insufficient.

Narrow Scope for Negligence

Liability for shortage in railway transhipment cannot be presumed; it requires affirmative proof of negligence or misconduct by railway employees, which is difficult to establish if loading was unsupervised.

Statutory Bailment Limitations

While the Railways act as a bailee under the Indian Contract Act, 1872, this responsibility is heavily modified by the specific provisions of the Railways Act regarding risk rates and check-lists.

Ratio Decidendi:

In cases where a railway receipt contains a 'said to contain' remark and the consignment is carried at 'owner’s risk' rate, the non-obstante clause in Section 97 of the Railways Act, 1989, overrides the general liability of the railway administration under Section 93. Consequently, the burden of proof regarding the initial quantity and the existence of negligence or misconduct lies squarely on the consignor or consignee as per the proviso to Section 65(2) of the Act.

Background:

The appellant, M/S Bajaj Trading Company, entrusted 40,444 bags of salt to the Railways in 2009. Upon reaching the destination at Dharmanagar, a shortage of 1,742 bags was recorded. The Railway Authorities issued a shortage certificate but denied the claim for compensation. The Railway Claims Tribunal rejected the claim on the grounds that the transhipment tallies suggested improper loading or criminal interference during transit that made the initial count doubtful. The Gauhati High Court upheld this, noting that the sender's weight was accepted without railway supervision. The Supreme Court, after analysing the Railways Act, 1989 and the Railway Claims Tribunal Act, 1987, found no reason to interfere with the lower court's findings, concluding that the appellant failed to discharge the burden of proof required for unsupervised 'said to contain' shipments.

Case Details:
Case No.: Civil Appeal No. of 2026 (SLP (C) No.22748 of 2025)
NeutralCitation: 2026 INSC 711
Case Title: M/S Bajaj Trading Company v. Union of India
Appearances:
For the Petitioner(s): Mr. Gunjan Kumar, Advocate on Record
For the Respondent(s): Ms. Archana Pathak Dave, learned ASG

Source: 2026 CaseBase(SC) 664