The Punjab and Haryana High Court has dismissed an appeal filed by an insurance company regarding a shortage in a consignment of copper scrap shipped from Lahore, Pakistan, to Amritsar.
The Court clarified that in cases of international rail transport, Indian Railways can be held liable only if it is proven that the shortage or loss of goods occurred within the jurisdiction of Indian Railways.
While dismissing the appeal filed by Oriental Insurance Company Limited, Justice Pankaj Jain upheld the decision of the Railway Claims Tribunal, Chandigarh. According to the case details, M/s World Wide Traders, based in Lahore, Pakistan, had dispatched 106 bags of copper scrap to Amritsar on May 4, 1989, under Railway Receipt No. 00124. Upon the consignment’s arrival in Amritsar, nine bags were found missing, while seven to eight bags were found open.
Upon weighing, a total shortage of 1,104 kilograms of material was recorded. Railway officials had also issued a shortage certificate in this regard on May 31, 1990. Since the goods were insured, the insurance company paid ₹36,732 to the concerned party and filed a claim against the Railways to recover this amount, based on a letter of subrogation and a special power of attorney. After the Railways rejected the claim, the matter reached the Railway Claims Tribunal, where the insurance company again failed to secure relief. In its response, the Railways stated that the wagons had been sealed at Lahore station in the presence of the applicant and had arrived in Amritsar without any tampering.
**Loss of Goods Within Railway’s Jurisdiction Not Proven**
As the original seals remained intact, it could not be proven that the loss of goods occurred within the territory of Indian Railways. The High Court observed that since the goods were booked on May 4, 1989, and the shortage certificate was issued on May 31, 1990, the Indian Railways Act, 1890, would apply to the case—not the new Act of 1989, which came into effect on July 1, 1990.
Citing Section 76-E of the Indian Railways Act, 1890, the Court stated that in the case of goods arriving in India from abroad, the railway administration would be held liable only if the owner of the goods proved that the loss occurred within the jurisdiction of the Indian Railways. Justice Pankaj Jain remarked that the burden of proving that the shortage of copper scrap occurred within Indian territory lay with the insurance company.
No negligence by Indian Railways: High Court
The Court held that, in such circumstances, there was no basis to conclude that the shortage of goods resulted from negligence on the part of the Indian Railways or occurred within an area under its control. Therefore, the decision of the Railway Claims Tribunal to dismiss the insurance company’s claim was entirely correct. With these observations, the High Court dismissed the appeal—filed in 1992—deeming it devoid of merit.
