Carriage of Goods by Rail

The Railway Act, 1989 came into force on July 1, 1990 superseding the
erstwhile Indian Railway Act, 1890. Carriage of Goods has been dealt with in
inter alia Chapter IX-XI of the Act (Sections 61-112). The Act provides for inter
alia responsibilities, duties and liabilities of the Indian railway administration
as a carrier of goods, provision for rates and procedure required to be complied
with and redressal mechanism for grievances related to carriage of goods.
The Railway Claims Tribunal Act, 1987 provides for the establishment of a
Railway Claims Tribunal for enquiring into and determining claims against a
railway administration for loss, destruction, damage, deterioration or non-
delivery of animals or goods entrusted to it and connected matters. This Act
has an overriding effect. Section 15 read with Section 13 of the Railway Claims
Tribunal Act, 1987 bars the jurisdiction of civils courts.
By virtue of the above sections read with Section 11 of the Commercial Courts
Act, 2015, Commercial Courts will not have jurisdiction over disputes arising
out of carriage of goods by railway administrations.

Summary of More Important Provisions The carriage of goods by rail is

regulated by the Railways Act, 1989. Some of the more important provisions
contained in the Act are summarised below:
1. Maintenance of rate books, etc., for carriage of goods (Section 61). Every
railway administration shall maintain, at each station and to such other
places where goods are received for carriage, the rate books or other
documents which shall contain the rate authorised for the carriage of
goods from one station to another and make them available for the
reference of any person during all reasonable hours without payment of
any fee.
2. Provision of rate risks (Section 63). Where any goods are entrusted to a
railway administration for carriage, such carriage shall, except where
owner’s risk rate is applicable in respect of such goods, be at railway risk
rate. Any goods, for which owner’s risk rate and railway risk rate are in
force, may be entrusted for carriage at either of the rates and if no rate is
opted, the goods shall be deemed to have been entrusted at owner’s risk
rate.
3. Forwarding note (Section 64). Every person entrusting any goods to a
railway administration for carriage shall execute a forwarding note in
such form as may be specified by the Central Government. The consignor
shall be responsible for the correctness of the particulars furnished by
 him in the forwarding note. He shall indemnify the railway
administration against any damage suffered by it by reason of the
incorrectness or incompleteness of the particulars in the forwarding note.
4. Railway receipt (Section 65). A railway administration shall issue a
railway receipt in such form as may be specified by the Central
Government:
(a) in a case where the goods are to be loaded by a person entrusting
such goods, on the completion of such loading; or
(b) in any other case, on the acceptance of the goods by it.
A railway receipt shall be prima facie evidence of the weight and the
number of packages stated therein.
5. Carriage of dangerous or offensive goods (Section 67). No person shall
take with him on a railway or require a railway administration to carry
such dangerous or offensive goods, unless (i) he gives a notice in writing
of their dangerous or offensive nature to the railway servant authorised
in this behalf; and (ii) he distinctly marks on the outside of the package
containing such goods their dangerous or offensive nature.

6. Liability of railway administration for wrong delivery (Section 80). Where

a railway administration delivers the consignment to the person who
produces the railway receipt, it shall not be responsible for any wrong
delivery on the ground that such person is not entitled thereto or that
endorsement on the railway receipt is forged or otherwise defective.
Responsibility of a Railway Administration as a Carrier of Goods.
Sections 93 to 112 of the Railways Act, 1989 contain provisions on this
subject. These provisions are summarised below.
1. General responsibility of a railway administration as carrier of goods
(Section 93). A railway administration shall be responsible for the loss,
destruction, damage or deterioration in transit, or non-delivery of any
consignment (goods entrusted to a railway administration for carriage),
arising from any cause except the following, namely:
(i) an act of God;
(ii) an act of war;
(iii) an act of public enemies;
(iv) arrest, restraint or seizure under legal process;
(v) orders of restrictions imposed by the Central Government or a
State Government or by an officer or authority subordinate to
 the Central Government or a State Government authorised by it
in this behalf;
(vi) act of omission or negligence of the consignor or consignee
endorsee or the agent or servant of the consignor or the
consignee or the endorsee;
(vii) natural deterioration or wastage in bulk or weight due to
inherent defect, quality or vice of the goods;
(viii) latent defects;
(ix) fire, explosion or any unforeseen risks.
Liability of a common carrier vis-a-vis the liability of a railway
administration.
The liability of a railway administration is the same as that of a common
carrier. In other words, even where any loss, destruction, damage,
deterioration or non-delivery is proved to have arisen from any one or more
of the aforesaid nine cases, a railway administration shall not be relieved
of its responsibility unless it further proves that it has used reasonable
foresight and care in the carriage of the goods [Union of India v Orissa
Textile Mills, AIR (1979) Ori. 165].
A railway administration, like a common carrier, is bound to carry the
goods of every person who is willing to pay the freight and comply with
other requirements.
2. Delay or retention in transit (Section 95). A railway administration shall
be responsible for the loss, destruction, damage or deterioration of any
consignment proved by the owner to have been caused by the delay or
detention in their carriage. The railway administration can, however,
avoid liability if it proves that the delay or detention arose for reasons
beyond its control or without negligence or misconduct on its part or on
the part of any of its servants.

3. Owner’s risk rate or railway risk rate (Section 97). A consignment may be
carried by a railway administration either at owner’s risk rate or railway
risk rate. Owner’s risk rate is a special reduced rate whereas railway risk
rate is an ordinary tariff rate. Owner’s risk rate is lower than the railway
risk rate for the simple reason that the goods in this case are carried at
the owner’s risk. In case of owner’s risk rate, the railway administration
is not responsible unless it is proved that any loss, destruction, damage
or deterioration or non-delivery of goods arose from negligence or
misconduct on the part of the railway administration or its servants.
4. Liability for damage to goods in defective condition or defectively packed
(Section 98). Goods tendered to a railway administration to be carried by
railway may be (a) in a defective condition or (b) defectively packed. As a
result of these, goods are liable to damage, deterioration, leakage or
wastage. If the fact of such condition or defective or improper packing
has been recorded by the sender or his agent in the forwarding note, the
railway administration is not responsible for any damage, deterioration,
leakage or wastage unless negligence or misconduct on the part of the
railway administration or of its servants is proved.

5. Liability after termination of transit (Section 99). Whether the goods are
carried at owner’s risk rate or railway risk rate, the liability of the railway
administration for any loss of goods within a period of seven days after
the termination of transit is that of a bailee under Sections 151, 152 and
161 of the Indian Contract Act, 1872. But where the goods are carried at
owner’s risk rate the railway administration is not liable for such loss,
destruction, damage, deterioration or non-delivery of goods except on
proof of negligence or misconduct on the part of the railway
administration or any of its servants.

After seven days from the date of termination of transit the railway
administration is not liable in any case for any loss of such goods.
Notwithstanding this provision, the railway administration is not
responsible after the termination of transit for the loss, destruction,
damage, deterioration or non-delivery of articles of perishable goods,
animals, explosives and other dangerous goods.

6. Responsibility as carrier of luggage (Section 100). A railway

administration shall not be responsible for the loss, destruction, damage,
deterioration or non-delivery of any luggage unless a railway servant has
booked the luggage and given a receipt therefore. Also it is to be proved
that the loss, etc., was due to the negligence or misconduct on the part of
the railway administration or on the part of any of its servants.
In the case of luggage which is carried by the passenger in his own
charge, the railway administration shall not be responsible for the loss,
etc., unless it is proved that the loss, etc., was due to the negligence or
misconduct on the part of the railway administration or on the part of
any of its servants.
7. Responsibility as a carrier of animals (Section 101). A railway
administration shall not be responsible for any loss or destruction of, or
injuries to, any animal carried by railway arising from fright or
restiveness of the animal or from overloading of wagons by the consignor.

8. Exoneration from liability in certain cases (Section 102). A railway

administration shall not be responsible for the loss, destruction, damage
or deterioration or nondelivery of any consignment —
(i) when such loss, etc., is due to the fact that a materially false
description of the consignment is given; or
(ii) where a fraud has been practised by the consignor or the
endorsee, or by an agent of the consignor, consignee or the
endorsee; or
(iii) where it is proved by the railway administration to have been
caused by, or to have arisen from –
(a) improper loading or unloading by the consignor, or the
consignee or the endorsee, or by an agent of the consignor,
consignee or the endorsee;
(b) riot, civil commotion, strike, lock-out, stoppage or restraint
of labour from whatever cause arising whether partial or
general; or
(iv) for any indirect or consequential loss or damage or for loss of
particular market.