Imp Cases – Bailment I – Notes to Help 07/01/23, 7:20 PM

Notes to Help

Law Notes, CSE & Judicial Notes

WRITTEN BY KMAY 27, 2015

Imp Cases – Bailment I

Facts: A customer went to a restaurant to dine there. When he entered the restaurant, a waiter
without being asked for help, took his coat. The waiter, who worked in the restaurant, hung the
coat on a hook behind the customer. When the customer rose to leave, the coat was no longer there
on the hook.

Held: The waiter had merely acted in courtesy to a customer of the restaurant. However, once the
waiter took the coat in his possession, he had relieved the customer of its care. Thus, the waiter
took on the responsibility of a bailee. Further, it was the waiter who selected the place where the
coat was to be hung without any direction from the gentleman. Therefore, the restaurant keeper
was held liable for the loss of the coat.

If the customer had instructed the waiter where and how the coat should be put, the result,
perhaps, would have been otherwise.

To create a bailment, the bailee must intend to possess and in some way physically possess or
control the bailed goods or property. In a situation where a person keeps the goods in possession
of another person but in fact, continues to have control over such goods, there is no delivery for
the purpose of bailment.

2. Kaliaporumal Pillai vs. Visalakshmi AIR [1938 Mad 32]

Facts: A lady, A, gave her jewelry to a goldsmith to melt and use in making new jewelry for her.
Every evening, A received the semi-finished jewelry from the goldsmith and put it in a box in the
goldsmith’s room. Then, A would lock the box herself and leave the goldsmith’s place with the
key in her possession. One night, the box so locked was stolen from the room and the jewelry
within it was lost. A brought an action against the goldsmith.

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Held: The goldsmith was not liable as any bailment in this case came to an end when the lady
received the semi-finished jewelry from the goldsmith every evening. Leaving the locked box in
the defendant’s premises was not enough to constitute delivery under Section 149 especially since
the lady kept the keys with herself. Without legal possession, there cannot be any bailment and
there was no duty on the goldsmith to take care of the box.

3. Ram Gulam vs. Govt. Of Uttar Pradesh [AIR 1950 All 106]

Facts: Ornaments of A were stolen. Soon, the thief was arrested and the ornaments in his
possession were seized. A’s ornaments were also recovered from the thief. The ornaments were
kept in the Malkhana (police custody). The ornaments were stolen from the Malkhana. Later, A
filed a case against the government claiming that it has not taken reasonable care of the ornaments
as a bailee and was liable to make good the loss of the ornaments to A.

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Held: The obligation of a bailee is a contractual obligation and cannot arise independently of a
contract of bailment. Since the ornaments were not made over to the government under any
contract whatsoever the government never occupied the position of a bailee and is not liable as
such to indemnify A.

4. The case of Lasalgoan Merchants Bank vs. Prabhudas Hathibhai is one the first where the Courts
started imposing the obligations of a bailee even without a contract.

Lasalgaon Merchants Co-op Bank vs. Prabhudas Hathibhai [AIR 1966 Bom 134]

Facts: Some packages of tobacco were kept in a godown of a partnership firm. The packages were
pledged to the plaintiff bank. Some of the partners in the firm had failed to clear their income tax
dues. Accordingly, the Income Tax Officer ordered the seizure of the goods belonging to them and
the godown was locked by the officials of the Income Tax Deptt. The key of the godown was
handed over to the police. Then came some heavy rains. The roof of the godown leaked and the
tobacco packages were damaged.

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Held: It was the duty of the government officials to take the steps that any prudent manager
would take of the goods under him. It was held that the government did indeed stand in the
position of bailee and it had to prove that reasonable care was taken and the damage was due to
reasons or forces beyond their control. In this case, heavy rains were not necessarily amount to an
act of God and the government was held liable.

5. In State of Gujarat vs. Memom Mahomed, the Supreme Court of India accepted this view and
stated that “…Bailment is dealt with by the Contract Act only in cases where it arises from a
contract, but it is not correct to say that there cannot be bailment without an enforceable
contract.”

State of Gujarat vs. Memon Mahomed [AIR 1967 SC 1885]

Facts: Certain goods and motor vehicles of A were seized by the customs authority in India on the
grounds of non-payment of custom duty. After the case was dealt with, A came to take delivery of
the seized goods but the customs department could not return the goods. A filed a suit claiming
that the government was a bailee in this case and liable to make good the loss to him.

Held: The Indian Contract Act, 1872 deals with bailment arising out of a contract. But there can be
bailment without contract too. In case of non-contractual bailment, even the government can be
held liable for not taking reasonable care. Citing the example of how finder of lost goods is treated
as a bailee in certain cases, the learned Judge in the case stated that consent is not indispensable
for the relationship of bailment to arise. Section 148 did not apply here but government was still
held liable due to judicial interpretation. The Court also cited from Pollock and Wright that
“Bailment is a relationship sui generis and unless it is sought to increase or diminish the burdens
imposed upon the bailee by the very act of bailment it is not necessary to incorporate it into the
law of contract and to prove a consideration”

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POSTED IN CONTRACTS 2 - AGENCY AND OTHERS.TAGGED KALIAPORUMAL PILLAI VS.
VISALAKSHMI AIR [1938 MAD 32], LASALGAON MERCHANTS CO-OP BANK VS.
PRABHUDAS HATHIBHAI [AIR 1966 BOM 134], RAM GULAM VS. GOVT. OF UTTAR
PRADESH [AIR 1950 ALL 106], STATE OF GUJARAT VS. MEMON MAHOMED [AIR 1967 SC
1885], ULTZEN VS. NICOLLS [1894 1 QB 92].

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