Owner's risk no excuse: Punjab and Haryana high court holds railways liable for pilferage losses
Chandigarh: The Punjab and Haryana high court has held the railway department liable for compensating losses due to pilferage of iron consignments even when goods were booked at "owner's risk", clarifying that this classification does not absolve railways of liability if negligence is evident.
Citing sections 79, 93, and 94 of the Railways Act, the court has emphasised the duty of the railways to account for consignments once they assume control, even if loaded at private sidings. "The refusal to allow re-weighment, a right under Section 79, was deemed a serious lapse," the court has held.
Justice Pankaj Jain passed the order while deciding a 34-year-old matter in the appeals filed by the
Steel Authority of India
Limited and Indian Iron and Steel Company Limited, challenging the dismissal of their claim petitions by the Railway claims tribunal.
The case dates back to the early 1990s, when the steel companies booked consignments of pig iron from Vishakhapatnam to Goraya, Jalandhar. Though the journey was expected to take 6–8 days, the wagons remained in transit for nearly a month. Suspecting pilferage, the consignees requested re-weighment of the goods. However, the request was repeatedly denied by the railway authorities.
The companies engaged an independent surveyor, who confirmed significant shortages in the delivered material.
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However, the railway tribunal previously rejected their claims on technical grounds, including lack of proper authorisation to file claims and failure to establish service of statutory notices under section 106 of the Railways Act.
In its detailed order released last week, Justice Jain held that the railway tribunal erred. The judge held that the regional manager legal, who filed the claim, was duly authorised under a valid board resolution.
Further, the court observed that statutory notice was served and backed by affidavit, and no evidence was produced by the railways to refute it. The single bench was also of the view that the denial of re-weighment and failure to counter the surveyor's findings pointed to such negligence.
Finally, the court ordered compensation for the claimants for the full extent of the losses suffered, with 7% interest per annum from the date of filing until actual payment.
The cause of action arose in the early 1990s, with the case pending before the high court since 1993.
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