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High Court Of Delhi
SARDAR CARBONIC GAS COMPANY - Appellant
Versus
SHER-I-PUNJAB TRADING COMPANY - Respondent
Original suit 141 of 1976
Decided On : 08/06/1976
BAILMENT - SUB-BAILMENT - OWNERSHIP OF GAS CYLINDERS - APPOINTMENT OF RECEIVERS - JURISDICTION - MAINTAINABILITY OF SUIT - CONTRACT ACT, SECTION 167 - ORDER 20, RULE 10 OF THE CODE OF CIVIL PROCEDURE.
Fact of the Case:
The plaintiff, a company that supplied carbonic gas, filed a suit against defendants 1 and 2 for recovery of Rs. 2,21,977.26 and for mandatory injunction directing the defendants to return and deliver back 584 gas cylinders. The plaintiff also sought a prehibitory injunction restraining the defendants from transferring, disposing, dealing, or using the gas cylinders in any manner whatsoever. The plaintiff claimed ownership of the cylinders and alleged that defendants 1 and 2 were holding the cylinders as trustees or bailees and were liable to return them in good condition. The defendants claimed that they had purchased 500 cylinders from the plaintiff and that the remaining cylinders were given to them on bailment. The plaintiff also filed an application for appointment of receivers to take immediate possession of the cylinders lying stored at various places.
Finding of the Court:
The court found that the plaintiff had a prima facie case for ownership of the gas cylinders and that the defendants were liable to return them. The court also found that the plaintiff had given his consent to sub-bailment and that the defendants 3 to 11 were also liable to return the cylinders to the plaintiff. The court further found that Section 167 of the Contract Act was not applicable to the present case and that the suit was maintainable under Order 20, Rule 10 of the Code of Civil Procedure.
Issues: 1. Whether the plaintiff was the owner of the gas cylinders in dispute? 2. Whether the defendants were liable to return the gas cylinders to the plaintiff? 3. Whether the plaintiff had given his consent to sub-bailment? 4. Whether the defendants 3 to 11 were also liable to return the cylinders to the plaintiff? 5. Whether Section 167 of the Contract Act was applicable to the present case? 6. Whether the suit was maintainable under Order 20, Rule 10 of the Code of Civil Procedure?
Ratio Decidendi: 1. The court held that the plaintiff had a prima facie case for ownership of the gas cylinders based on the documentary evidence produced on record, including confirmation memos and letters admitting the outstanding amount and the number of cylinders in the plaintiff's possession. 2. The court held that the defendants were liable to return the gas cylinders to the plaintiff as they were holding them as trustees or bailees and were bound to return them in good condition. 3. The court held that the plaintiff had given his consent to sub-bailment based on the course of business and the knowledge of the defendants 3 to 11 of the bailment in favor of defendants 1 and 2. 4. The court held that the defendants 3 to 11 were also liable to return the cylinders to the plaintiff as they were sub-bailees with the plaintiff's knowledge and consent. 5. The court held that Section 167 of the Contract Act was not applicable to the present case as it deals with claims by third persons other than the bailor and not with sub-bailment. 6. The court held that the suit was maintainable under Order 20, Rule 10 of the Code of Civil Procedure as the plaintiff was not required to state the money value to be paid to him in the alternative if delivery could not be had.
Final Decision: The court made the ad-interim order appointing joint receivers absolute and dismissed the defendants' application to stay the operation of the ad-interim order. The court also directed the parties to appear before the Deputy Registrar for further directions in the suit.
( 1 ) THIS order will dispose of LA. 444 of 1976 filed by the plaintiff under order 40 rule 1 and Section 151 of the Code of Civil Procedure for appoiltment of receivers for taking immediate possession of the cylinders lying stored at various places mantioned in the application, as well as LA. 468 of 1976 filed on behalf of defendant No. 1 for staying operation of the ad-interim order dated February 26, 1976 passed in LA. 444 of 1976 filed on behalf of the plaintiff.
( 2 ) THE plaintiff had filed the aforesaid application for appointment of receivers during the pendancy of the suit filed by them, against defendant Nos. 1 and 2 for recovry of Rs. 2,21, 977. 26 and for mandatory injunction directing the defendants to return and deliver back 584 cylinders and not to obstruct the plaintiff to have access to the said gas cylinders and to take them in its possession and also for prehibitory injunction restraining the defendants from transferring, disposing, dealing or using them in any manner whatsoever with the said gas cylinders. It was played in the alternative that in case mandatory injunction cannot be granted, a decree for delivery of the gas cylinders may be passed in favour of the plaintiff.
( 3 ) THE case of the plaintiff is that vide agreement of June, 1965, defendants I and 2 started purchasing carbonic gas from the plaintiff in the gas cylinders belonging to ihe plaintiff company against the deposit of security for due performance of the agreement. Defendants continued to purchase gas from the plaintiff upto March 1968 when another agreement dated April 1, 1968 known defendants 1 and 2. The terms of the agreement are in para 5 of the plaint. According to the terms of the agreement, the plaintiff is the owner of the cylinders and defendants 1 and 2 shall have no right, title or interest in the cylinders. They are to hold the same as trustees or bailees and shall not mortgage, the same or hypothecate the cylinders entrusted to them by the plaintiff and to return the same to the plaintiff in good condition at the factory premises of the plaintiff. The plainiiff shall have full and unrestricted access to the cylinders and take possession thereof froem any premises, place or places where the cylinders are lying stored. In addition to the said two agreements, another agreement dated October 1, 1970 known as "short term agreement" without deposit was also executed between the plaintiff and defendants 1and2. The terms of the said agreement are also similar to the aforesaid two agreements. The relevant terms are reproduced in para 7 of ihe plaint.
( 4 ) IT is the further case of the plaintiff that defendants 1 and 2 have from time to time deposited a total sum of Rs. l,15,000. 00 as security amount for due performance of ihe agreements for supply of gas. Defendants 1 and 2 on various occasions confirmed the statements of accounts pertaining to the amount relating to the price of gas supplied and the number of cylinders of different sizes and capacities lying in the custody. Paragraph 11 of the plaint gives the account of the cylinders of various cap: cities and sizes which defendants 1 and 2 confirmed to be in their possession as trustees or bailees for and on behalf of the plaintiff as on January 31, 1976.
( 5 ) DEFENDANTS 1 and 2 acknowledged and confirmed a sum of Rs. 2. 207,873. 70 to be due from them to the plaintiff company as on January 31. 1976. In paragraphs 17 to 21 of the plaint, the plaintiff vis-a-vis defendants 1 and 2 and also vis-a-vis defendants 3 to 11. It is pleaded that the cylinders belonging to the plaintiff are lying in the custody of the defendant as trust property of the plaintiff to which the defendants have no right, title or interest and that the defendants are liable as per terms of the said agreements or even otherwise to return back 584 cylinders of the plaintiff company at its factory at their cost and expense. In paragraph 19 of the plaint, it was expressly pleaded that the plaintif
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