State of Gujarat v. Memon Mahomed

State of Gujarat v. Memon Mahomed

1967 SCR (3) 938

FACTS

Two trucks of the respondent were seized by the appellant state for alleged smuggling; they were kept outside in open where they were totally uncared for so much so that a greater part of their machinery was pilfered away leaving only the their skeletons. They were afterwards auctioned as unclaimed property under the orders of Magistrate. In the meantime, respondent, in appeal, obtained decree for return of the vehicles as against the order of confiscation of Customs Authority. However, when he was informed of such auction, he sued government for the return of the vehicles or in alternative value for them.

CONTENTIONS:

Respondent- On behalf of the respondent, the contention urged was that though the seizure might be lawful and under the authority of the Statute, the State Government was from the time that the said goods were seized until the decision of the appeal, in a position of a bailee and was, therefore, bound to take reasonable care of the said vehicles.

Appellant- There was no bailment nor can such bailment be inferred as s. 148 of the Contract Act requires that a bailment can arise only under a contract between the parties.

ISSUE:  Whether the State was liable to compensate the respondent?

HELD:

As the seizure of trucks was carried out with jurisdiction and as they were sold pursuant to a judicial order, no liability can be attached on the State Government for their disposal by public auction.

But between their seizure and the auction there was a statutory duty implicit to take reasonable care of the property seized. This is so because the order of confiscation was not final and was subject to an appeal and a revision, with the State being aware of the same. The state was also aware that if the said order was set aside, the property would have to be returned to the owner thereof in the same state in which it was seized except as to normal depreciation. In spite of this clear position, while the appeal was still pending State allowed its police authorities to have trucks disposed of as unclaimed property.

“There being thus a legal obligation to preserve the property intact and also the obligation to take reasonable care of it so as to enable the Government to return it in the same condition in which it was seized (let apart the natural depreciation), the position of the State Government until the order became final was that of a bailee.” The contention of the State that there can be no bailment without any contract is not well for “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 a bailment without an enforceable contract.” In fact, a finder of goods is also obliged by law to take reasonable care of the goods till the owner such that his rights and obligations are similar to that of bailee without any contract to that effect. Similarly, State was also obliged by the law in pari materia as bailee to take reasonable care of the trucks. Therefore, State would be liable to the value of the trucks.

Author: Vishrut Kansal (NUJS, Kolkata)