The liability of a manufacturer for shortage in transit is limited to reaching the goods to the designated destination, and any shortage during transit is the responsibility of the transporter.

1. Petitioner is a Public Limited Company engaged in manufacturing of sugar in the district of Gopalganj. They have challenged the communication dated 14.3.2008 issued by the West Bengal Essential Commodities Corporation Limited by virtue of which a sum of Rs. 2,93,175.72P has been deducted from the total payment of the claim of the petitioner against supply of levy sugar to the said Corporation. According to the petitioner the deduction made against the shortage allegedly of 192.40 quintals of sugar by the respondent Corporation is beyond their ambit and scope. Liability to pay to the petitioner is absolute and if there was any shortage or short supply that would amount to transit loss and the liability would be against the transporter i.e. the Railways in this case.

2. In terms of the notification dated 15.11.2007 issued by the Ministry of Consumer Affairs, Food and Public Distribution, Government of India, the petitioner was directed to release levy sugar in favour of West Bengal Essential Commodities Supply Corporation Ltd. In terms of Annexure-2 the supplies were to be effected at two destinations which would be evident from Annexure-2. Stand of the petitioner is that the quantity so directed were duly loaded on the racks and despatched by the factory to the destinations and the above fact would be proved by the R.R. receipts issued by the Railways in this regard. Once the goods were loaded and delivered the shortage becomes the liability of the transporter and the sugar company cannot be penalised for shortages in transit. In this case West Bengal Corporation has taken an easy way-out by deducting a sum of Rs. 2,93,175/-.

3. Notices have been issued upon the respondent Corporation and had been validly served but they have not bothered to appear or defend themselves. There is apppearance on behalf of the Railways but he submits that the concerned Railways in this regard would be North Eastern Railways or North East Frontier Railway. In addition, no claim has ever been lodged before the Railways by the said Corporation at any point of time and, therefore, at this stage they have no obligation.

4. Learned Senior Counsel representing the petitioner relies on a decision in the case of Food Corporation of India and Another vs. SEIL Limited and Others reported in (2008)3 SCC 440 [: 2008(2) PLJR (SC)108]. In a similar circumstance the Honble Supreme Court had occasion to deal with an identical matter and to pronounce about the responsibility of the Mill owner and his liability arising out of the said supply. It has been categorically stated in paragraph- 14 that the obligation of the Mill owner is transportation of the commodity to the rail head and for any shortage during transit the petitioner i.e. the manufacturer has no obligation.

5. In the present case as well there is no dispute with regard to the fact that supplies have been effected by the petitioner Company as legal statutory obligation thrust upon them by the Central Government. The deductions have been made for short supply in transit. The responsibility and liability of the Company is limited to reaching the sugar to the rail head which is not disputed. If there was shortage in transit in the so-called quantity supplied by the petitioner on receipt by the respondents, then the obligation of the respondent Corporation was to claim differences from the railways and not to deduct money from the manufacturer.

6. Similar view has also been expressed in a case relating to the petitioner which is a case of Vishnu Sugar Mills Ltd. vs. Food Corporation of India and Another (Full Bench decision) reported in 1986 P.L.J.R. 1045.

7. In view of the settled law in this regard, the respondents West Bengal Essential Commodities Corporation Limited is directed to release the deducted amount in favour of the petitioner within a period of three months from the date of production of a copy of this order. If the amount is not released within that time frame, then the petitioner