UNION OF INDIA vs M/s. UDHO RAM & SONS

The Supreme Court held that under Section 72 of the Indian Railways Act, 1890, the railway's liability for loss of goods in transit is subject to the provisions of Section 151 of the Indian Contract Act, 1872. The Court established that the railway, as a bailee, must exercise the care of an ordinary prudent person regarding the goods entrusted to it. Since the loss was attributed to the negligence of railway servants, the Court upheld the High Court's decision, holding the railway liable for the damages incurred by the respondent.