Supreme Court denies salt-shortage claim, holds owner's-risk booking shifts burden to consignor
A Bench of Justices Sanjay Karol and Vipul M. Pancholi held that Section 97's non obstante clause overrides Section 93, leaving negligence unproved in an owner's-risk consignment.
The Supreme Court has dismissed a trader's claim for the value of 1,742 salt bags that went missing in rail transit, holding that when a consignment is booked at owner's risk, the burden of proving the quantity loaded rests on the consignor. Justice Sanjay Karol, writing for a Bench that also included Justice Vipul M. Pancholi, ruled on 16 July 2026 that M/s Bajaj Trading Company had failed to discharge that burden, so no liability could attach to the Railways under Section 97 of the Railways Act, 1989. The judgment reads the non obstante clause in Section 97 as excluding the general carrier obligations in Section 93 for owner's-risk bookings, leaving liability available only on proof of negligence or misconduct. The concurrent rejection by the Railway Claims Tribunal and the Gauhati High Court stood affirmed.
How the salt-shortage dispute reached the Court
Bajaj Trading entrusted 40,444 bags of salt for carriage from Chirai Junction in Gujarat to Dharmanagar in Assam on 10 November 2009. On arrival, delivery was recorded at 38,702 bags, a shortage of 1,742 bags.
The Railways issued a shortage certificate dated 19 March 2010. A claim notice dated 6 April 2010 followed, calculated at Rs.200 per bag, totalling Rs.3,48,400.
The Railway Claims Tribunal, Guwahati, rejected the claim by order dated 3 September 2012. A statutory appeal under Section 23 of the Railway Claims Tribunal Act, 1987 was dismissed by the Gauhati High Court on 17 December 2024. The trader then approached the Supreme Court.
The High Court had recorded that the goods were loaded directly from truck to wagon by the consignor's employees, without railway supervision; that the sender's weight was accepted; that packing was not compliant; and that the railway receipt carried a “said to contain” remark.
What the Court held on liability
The appellant argued that even under an owner's-risk booking, the general obligation under Section 93 survived, that loading ought to have been supervised by a Goods Clerk under Rule 1512 of the Indian Railway Commercial Manual, and that Section 97 preserved liability for negligence.
The Railways relied on Section 65(2), under which the burden of proving weight or number of packages shifts to the consignor when no railway servant has checked the goods, and on the “said to contain” endorsement traceable to Rule 1811 of the Indian Railway Code for Traffic (Commercial) Department.
The Court held that if liability was to be fastened on the Railways, it had to be located within Sections 93 and 97. Since the goods were booked at owner's risk, only proof of negligence or misconduct could sustain the claim.
Why the non obstante clause decided the case
The Court read the opening words of Section 97 as a non obstante clause overriding Section 93. Drawing on 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 explained that such a clause gives the enacting part an overriding effect in case of conflict.
Applying that, the Bench held that the non obstante clause in Section 97 excludes the general obligation cast on the Railways by Section 93. For owner's-risk goods, liability follows only from negligence or misconduct.
The Court then examined the concept of negligence, noting that there were allegations of broken seals and open carriages but no specific allegations of misconduct by railway employees. It set out the requirement of a duty of care, referring to Rajkot Municipal Corpn. v. Manjulben Jayantilal Nakum and Jay Laxmi Salt Works (P) Ltd. v. State of Gujarat.
On the older law of carriers, the judgment noted the Carriers Act No.III of 1865 and the Privy Council's statement in Irrawaddy Flotilla Co., Ltd. v. Bugwandass that a common carrier's obligation is a duty cast by law, not by contract. It also cited cargo ex sailing ship “Parchim”, where Lord Blackburn's maxim in Martineau v. Kitching that res perit domino links risk to property was quoted.
The failure to discharge the burden
The Court asked whether the Railways owed a duty of care towards the goods. Under the proviso to Section 65(2), where consignment particulars are not verified by railway employees, the burden of proof lies on the consignor, consignee or endorsee.
Had the Railways been involved in noting, counting or weighing the goods, a duty could arise to safely transit the counted quantity. That was not the case here.
The Court agreed with the Single Judge that the appellant produced no documents to show how many bags were procured and processed before dispatch. The burden under the proviso to Section 65(2) remained undischarged. Only after that burden was met could the question of negligence or misconduct by the Railways arise.
Order
The Court granted leave and dismissed the appeal. Pending applications, if any, stood disposed of. The order is dated 16 July 2026.