Gopal Singh Hira Singh v Punjab National Bank

Facts

• The plaintiff pledged goods with the defendant bank as security for an advance.
• The goods were stored in a godown under the bank's control.
• The goods deteriorated while in the bank's custody.
• The plaintiff claimed compensation for the deterioration.
• The bank denied liability, contending that no negligence had been proved against it.

Issue

1. Where goods deteriorate in a bailee's custody, does the bailor have to prove negligence, or must the bailee prove that he took the care required by S.151?

Held

• The court held the bank liable. A bailee, being in possession, is in the best position to know what happened to the goods and how they were kept. He is bound to account for them. Once the bailor proves delivery and the fact of loss or deterioration, the onus shifts to the bailee to show that he exercised the care of a person of ordinary prudence in respect of his own goods of the same bulk, quality and value. Since the bank failed to discharge that onus, it could not claim the protection of S.152.

Ratio Decidendi

The evidential burden on the question of care rests on the bailee because the relevant facts lie within his exclusive knowledge. Section 152 exempts a bailee who has taken the S.151 care, but the bailee must establish that he did so; it is not for the bailor to prove the negative.