Contract of bailment

2017 PLD 276 KARACHI-HIGH-COURT-SINDH Judicial Precedent

Ss. 148 & 150Suit for recovery of money and damagesBailor and baileeRelationshipContract of bailment

Plaintiff corporation handed over stocks of rice to defendant company and the same were accepted by defendant on the basis of 'Book Balance'

Plaintiff alleged that defendant company failed to exercise all care in respect of stocks and sought recovery of cost of deficient stocks and damages

Validity

To constitute effective bailment contract, it was obligatory on the part of bailor to put bailee in possession of the goods

Actual tender and delivery of goods and acceptance thereof by bailee must be there, and must be actual and physical transfer of possession

Merely putting into possession of documents of title did not constitute bailment of goods

Contact was awarded to defendant on 'Book Balance' basis without any physical verification of stock of rice which was lying in godown in dumped position

Such stock could not be assumed that a proper account could be made without physical verification of stock, which was not done, despite various requests and letters by defendant

In the grain handling contract there was inherent risk of diminishing quantity and quality of food grains and ratio of the losses was inversely proportionate to the nature of storage, which could vary from case to case basis

Longer the duration, greater the quantum of losses

Crops in question were related to year 1988-89, handling contract of which was earlier awarded to some other persons and on their failure the left over stocks were entrusted to the defendant through subject contract

Stock in question was lying in the godown of plaintiff in a dumped condition for a considerable period of time

Every possibility existed that stocks in question had diminished quantity and quality due to infestations and other factors

Defendant apprehending such facts informed plaintiff at the very outset of the contract but plaintiff did not pay any heed and took no step to safeguard the stocks to mitigate the losses

Suit was dismissed in circumstances.