1938 (3) TMI 23 - HC - Indian Laws

Summary

Issues:
1. Negligence in the safekeeping of silver bars by commission agents.
2. Interpretation of the contract between the parties regarding the liability of the bailees.
3. Whether a bailee can contract out of the liability as provided in Section 151 of the Indian Contract Act.

Analysis:

Issue 1: Negligence in Safekeeping
The case involved the loss of three silver bars by the defendants, who were commission agents, without any suggestion of dishonesty. The High Court agreed with the lower court that the defendants were negligent in keeping the bars. The bars were left unattended in an open pedhi in Bombay, making them susceptible to theft. The court found that the defendants did not exercise sufficient care as required of a bailee, leading to the loss of the bars. The negligence of the defendants was established based on the manner in which the bars were kept, ultimately holding them liable for the loss.

Issue 2: Interpretation of Contract
The contract between the parties was evidenced by telegrams where the plaintiffs instructed the defendants to purchase and keep the silver bars. The defendants, in acknowledging the telegrams, stated that the bars were kept "at your risk." The court analyzed the nature of the contract and held that the defendants could not add a term absolving them from the ordinary liability of a bailee. The court concluded that the contract required the defendants to keep the bars as bailees for a reasonable time and that they could not alter the terms unilaterally. The court disagreed with the lower court's interpretation that the bars were kept at the risk of the plaintiffs, emphasizing the obligations of a bailee under the contract.

Issue 3: Contracting Out of Liability
The court addressed the question of whether a bailee can contract out of the liability as provided in Section 151 of the Indian Contract Act. It was argued that a bailee cannot exclude liability for negligence. The court referred to previous judgments and held that it is permissible for parties to contract out of the obligations imposed by Section 151. However, in this case, the court found that the defendants attempted to impose an additional term regarding the risk without the plaintiffs' acceptance. The court emphasized that the defendants could not unilaterally alter the terms of the contract and concluded that the appeal must fail due to the lack of acceptance of the additional term by the plaintiffs.

In summary, the High Court upheld the lower court's decision, affirming the negligence of the defendants in safekeeping the silver bars and interpreting the contract to require the defendants to act as bailees for a reasonable time without absolving themselves from the liability as bailees. The court also clarified that a bailee cannot unilaterally contract out of the liability for negligence without the other party's acceptance.