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M/S Bajaj Trading Company v. Union of India

Civil Appeal · 2026 INSC 711Decided 16 Jul 2026
C.A. No.-009020-009020 - 2026
Justice Sanjay Karol · Justice Vipul M. Pancholi · Justice Nongmeikapam Kotiswar Singh

Background

The appellant had booked 40,444 bags of salt for transport by rail from Gujarat to Assam in 2009. On arrival, only 38,702 bags were delivered (a shortage of 1,742 bags) and the appellant claimed compensation of about Rs. 3.48 lakh. The Railway Claims Tribunal and later the Gauhati High Court rejected the claim, noting the goods were loaded by the consignor's own employees without railway supervision and booked under a "said to contain" / owner's risk arrangement.

Decision Breakdown

The Supreme Court examined the Railways Act, 1989, particularly Section 97, which is a special provision (overriding the Railways' general liability under Section 93) that shields the Railways from liability for goods carried at "owner's risk" unless negligence or misconduct by railway staff is proved. Since the loading here was done by the consignor's own workers, unsupervised by any railway official, the Railways never had a duty of care that could be breached, and the burden was on the appellant to prove negligence, which it failed to do. The appeal was dismissed.

Lesson Learnt

When goods are shipped at "owner's risk" and loaded without any railway supervision or verification, the shipper bears the burden of proving negligence to claim compensation for shortage: a shortage certificate alone is not proof of railway fault.

Official source (sci.gov.in)View Judgment (PDF)

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