The Rajasthan High Court has upheld a compensation award against the Railways, holding them responsible for damage caused to a large consignment of fertilisers due to improper handling and exposure to rain. The court ruled that once goods remain under railway custody, the responsibility to protect them cannot be shifted to the consignor.
The judgment was delivered by Justice Anoop Kumar Dhand while dismissing an appeal filed by the Union of India challenging a 2012 order of the Railway Claims Tribunal.
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Background of the Case
The dispute arose from a consignment of 51,756 HDPE bags of DAP fertiliser booked by Gujarat State Fertilizer and Chemical Limited in September 1999. The goods were transported from Moti Khavdi to Gangapur City under six railway receipts.
According to the claimant, when the consignment reached its destination, the wagons were placed in an open area with no covered shed. The bags were unloaded on uneven ground and were exposed to rain, leading to extensive damage.
The company alleged that despite requests, the Railways failed to conduct a joint inspection or prepare a panchnama to assess the loss. As a result, the firm approached the Railway Claims Tribunal seeking compensation.
In 2012, the Tribunal allowed the claim and directed the Railways to pay ₹9.93 lakh with 9% interest, holding them responsible for negligence.
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Railways’ Argument Before the High Court
Challenging the Tribunal’s decision, the Railways argued that:
- The goods had already been delivered to the claimant.
- The claimant himself unloaded the consignment.
- Any damage occurred after delivery due to rainfall.
- The Railways could not be held liable once delivery was completed.
They contended that the Tribunal ignored these aspects and wrongly fastened liability on the Railway Administration.
Court’s Observations
After examining the records, Justice Anoop Kumar Dhand rejected the Railways’ arguments.
The court noted that the railway receipts clearly showed that the consignment was booked “at railway risk.” It also found no proof that delivery had been properly completed or that the claimant had taken charge of the goods before the damage occurred.
“The burden lies on the Railways to prove that reasonable care was taken to protect the consignment,” the court observed.
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The judge pointed out that:
- The bags were kept in an open area without any protective covering.
- No evidence was produced to show that it had not rained.
- No proof was shown that tarpaulin or any safety measure was arranged.
- The Railways failed to demonstrate that delivery had been formally completed.
The court further held that under Section 93 of the Railways Act, 1989, the Railway Administration remains responsible for loss or damage during transit and till proper delivery is made.
Court’s Final Decision
Upholding the Tribunal’s findings, the High Court ruled that the Railways were clearly negligent in handling the consignment.
“The Railways failed to exercise reasonable care and cannot escape liability merely by claiming that the goods were unloaded,” the court observed.
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Finding no error in the Tribunal’s reasoning, the court dismissed the appeal and affirmed the compensation award of ₹9.93 lakh with interest.
The court also directed that the case records be sent back to the Tribunal for execution of the award and that a copy of the judgment be served on the claimant for information.
Case Title: Union of India v. Gujarat State Fertilizer and Chemical Ltd.
Case Number: S.B. Civil Misc. Appeal No. 4253/2012
Decision Date: 23 January 2026
