The first train in India ran from Bombay to Thane in 1853 covering a distance of 34 Kms.India has the largest Railway networks in the world including the short distance and long distance rail systems. Being a state owned Railway Company of India, for a very long time the Indian Railways maintained a monopoly in the Indian Transport Industry. The Indian Railways spread all over the country covering a distance of 63000 Kms. The Steering Committee set up by the Planning Commission seeking recommendations for policy matters on Railways has observed that ‘the growth in railway traffic – both freight and passenger - has been exceeding the GDP growth rate. The outlook for the future is bright and opportunities for growth are abundant. But the challenges are equally formidable, although admittedly, challenges of growth are always preferable to challenges of maintaining status quo’. The first legislation aiming to govern matters relating to Indian Railways was the Indian Railways Act, 1890. After independence the Railways Act, 1989 was enacted with some significant changes. Railways were re-constituted in zones with a General Manager for each zone. The Central Government has been empowered to fix the rates of carriage of passengers and goods. There are provisions of compensation by Railways due to loss, damage of goods, accidental deaths and injury. Special provisions were introduced regarding monetary liability of railways as carriers of goods. The Railway Claims Tribunal Act, 1987 was enacted to provide for the establishment of a Railway Claims Tribunal for inquiring into and determining claims against Railway Administration.