The main legal point established in the judgment is the bailee's duty of care, including the standard of diligence required, the presumption of negligence when goods entrusted to a bailee are lost or damaged, and the burden of proof on the bailee to show that necessary precautions were taken to avoid damage. The judgment also emphasizes the bailee's duty to take all reasonable precautions to obviate risks and to provide protection for the goods when risks are imminent or have occurred.

1. Defendant in O. S. No 84 of 1970 on the file of the Sub Court, Cochin, the Cochin Port Trust, has filed this appeal against the decree and judgment dated 15-6-1976 of the court granting a decree for Rs. 1,10,527.30 with interest at the rate of 6 percent per annum and costs in favour of the second plaintiff.

2. The first plaintiff imported 194 bales of American Cotton and the consignment reached the Cochin Port Trust by 12-5-1970. On that date, the goods were discharged into the custody of the appellant defendant, who is responsible to store the goods. The defendant acknowledged receipt of 188 bales and certified short-landing of 6 bales. Even the 188 bales were delivered to the first plaintiff charred by fire and damaged by sea water. The defendant alleged that fire broke out in the godown in which the goods were stored. The first plaintiff suffered a loss of Rs. 1,10,527.30 as a result of the damage. The insurer, second plaintiff purchased the goods from the first plaintiff and was subrogated to the rights of the first plaintiff According to them, loss occurred on the fault of the defendant to store the goods in a place impervious to fire and in not taking reasonable care of the same. The defendant also aggravated the damage by not taking effective and speedy steps to put out the fire and by using salt water to quench the fire and even thereafter leaving the goods uncared for in the open. Third plaintiff was impleaded on account of the amalgamation of the second plaintiff.

3. The defendant filed written statement contending that goods were stored in a proper place with due care and caution. The defendant had taken reasonable care of the goods. The fire and the damage were caused not on account of any lack of care or diligence or by any negligence on the part of the defendant or its servants but on account of spontaneous combustion All possible steps to put out the fire were taken. It was not true that salt water was used to quench the fire. Partly burnt bales had to be removed outside so as to prevent spread of the fire further. They were later removed and stacked at the northern end of the wharf under the cover of tarpolines. All necessary precautions were taken to see that there was no danger or loss.

There were adequate and effective fire fighting equipment to deal with the situation in the quickest possible manner. There was damage caused by water. The auction sale arranged by the plaintiffs fetched only a low amount because it was not properly conducted. Sufficient steps to mitigate loss were not taken by plaintiffs. The claim was barred by limitation.

4. On behalf of the plaintiffs a replication was filed traversing the averments in the written statement.

5. The trial court held that the fire was not proved to have been the result of spontaneous combustion, but must have taken place as a result of electric short circuit on account of the lack of diligence on the part of the defendant. The trial court further held that adequate, effective and immediate steps were not taken to deal with the fire and salt water also was used in quenching the fire. The trial court also held that the defendant failed to place before court all the necessary materials available with the defendant; and the defendant failed to take the care required of a bailee and therefore was liable for the damage and loss. The trial court also found that the plaintiff had taken all steps to mitigate the damages. The suit was held to be not barred by limitation and accordingly the decree followed.

6. The learned counsel for the appellant made three important submissions in the course of his arguments. He contended that the finding of the trial court that the defendant is liable for the loss is untenable in law and on facts. According to him, the finding on the question of limitation also is bad. Learned counsel contended that the amount awarded is not correct, since the plaintiffs had not taken all steps to mitigate the damages.

7. The defendant is a