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State Of Bombay (Now Gujarat) vs Memon Mahomed Haji Hasam on 5 May, 1967
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under s. 523 of the Code of Criminal Procedure, and that the sale proceeds had been paid to a creditor of the 'respondent under an attachment order. The respondent thereupon filed a suit for the recovery of the value of the vehicles. It appeared in the evidence that the vehicles were kept for several in an. open place outside the police station at Veraval so that most of their parts were pilfered away and only the skeletons of the vehicles were left. Finally on the report of the officer incharge of the aforesaid police station they were sold it an auction as unclaimed property after obtaining the order of a Magistrate. The trial court on the above evidevice decreed the respondent's suit and the High Court upheld the decree though partly reducing the amount. The State appealed to this Court It wits contended on behalf of the appellant that the sale was under a judicial order and therefore there was no liability to pay; at the most one or the other officers of the Government could be held guilty of negligence. It was further contended on behalf of the State that it could not be treated as a bailee because a bailment could arise only under a contract. HELD : (i) The State Government no doubt seized the said vehicles pursuant to the power tinder the Customs Act. But the power to seize and confiscate was dependent upon a customs offence having been committed or a suspicion that such offence had been committed. The order of the Customs Officer was not final as it was subject to appeal and if the authority found that there was no good ground for the exercise of that power the property Could no longer be retained and had under the Act to be returned to the owner. Thus there was a clear obligation to return the vehicle to the owner if the appeal went his favour. [944E] There was also an implied legal obligation to preserve tile property intact and to take reasonable care of it so is to enable it to be returned 93 9 in the same condition in which it was seized. The position of the State Government until the order became final was therefore that of a bailee. There can be bailment and the 'relationship of a bailor and bailee in respect of specific property without there being an enforceable

contract. Nor is consent indispensable for such a relationship to arise. Even a finder of goods of another becomes a bailee in certain circumstances. 1.944A-D; F-H] The High Court was right in confirming the decree passed by the trial court on the basis that there was an obligation on the State Government either to return the said vehicles or in the alternative to pay their value. [945 E] State of Rajasthan v. Mst. Vidhyawati, [1962] Supp. 2 S.C.R. 989 and Kasturilal Jain v. State of U.P. [1965] 1 S.C.R. 375, held inapplicable. JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 215 of 1961. Appeal by special leave from the judgment and decree dated January 22, 1958 of the Bombay High Court at Rajkot in Civil First Appeal No. 93 of 1956. R. H. Dhebar, for the appellant. H. K. Puri and Bishamber Lal, for the respondents Nos. 4- 7. The Judgment of the Court was delivered by Shelat, J. In 1947 and prior thereto the respondent carried on business as an exporter of fish in the State of Junagadh in the name and style of Ayub lqbal and Company. In 1947 the Customs authorities of the, State of Junagadh seized two motor trucks, a station wagon and other goods belonging to the respondent on the grounds, (a) that the respondent had not paid import duties on the said trucks, (b) that they were used for smuggling goods in the State and (c) that some of the goods were smuggled goods. The action was taken under the Junagadh State Sea Customs Act, II of S.Y. 1998 then in vogue in the State. The respondent filed an appeal against tbis order to the Home Member of the State as provided in the said Act. Pending the appeal, the State of Junagadh merged in the United States of Saurashtra which ultimately was converted into the State of Saurashtra. The State of Saurashtra thereafter merged with the former State of Bombay and on bifurcation of the Bombay State became part of the State of Gujarat. In the meantime the appeal was transferred to the Revenue Tribunal which was constituted by the State of Saurashtra and which was the competent forum to hear such appeals. On February 6, 1952, the Revenue Tribunal set aside the said order of confiscation of the Customs authority and directed the return

pendency of the appeal and secondly because the application under s. 523 expressly mentioned -the person from whom the said vehicles were seized, that the vehicles were and could not be said to be unclaimed property. In the circumstances, the State Government was during the pendency of the appeal under a statutory duty to take reasonable care of the said vehicles which on the said appeal being decided against it were liable to be returned to their owner. The contention that the order of disposal was a judicial order or that the respondent could have filed a revision application against that order and have it set aside would be beside the point. There being a statutory obligation under the Act to return the property once the order of seizure and confiscation was held to be wrong, the respondent could rely on that obligation and claim the return of the said vehicles. 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. That no such reasonable care was taken and the vehicles remained totally uncared for is not in dispute. Mr. Dhebar's reply was that 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. That contention is not sustainable. Bailment is dealt with by the Contract Act only 944

There can, therefore, be bailment and the relationship of a bailee in respect of specific property without there being an enforceable contract. Nor is consent indispensable for such a relationship to arise. A finder of goods of another has been held to be a bailee in certain circumstances. On the facts of the present case, the State Government no doubt seized the said vehicles pursuant to the power under the Customs Act. But the power to seize and confiscate was dependent upon a customs offence having been committed or a suspicion that such offence had been committed. The order of the Customs Officer was not final as it was subject to an appeal and if the appellate authority found that there was no good ground for the exercise of that power, 'the property could no longer be retained and had under the Act to be returned to the owner. That being the position and the property being liable to be returned there was not only a statutory obligation to return but until the order of confiscation became final an implied obligation to preserve the property intact and for that purpose to take such care of it as a reasonable person in like circumstances is expected to take. Just as a finder of property has to return it when its owner is found and demands it, so the State Government was bound to return the said vehicles once it was found that the seizure and confiscation were not sustainable. 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, the position of the State Government until the order became final would be that of a bailee. If that is the correct position once the Revenue Tribunal set aside the order of the Customs Officer and the Government became liable to return the goods the owner

property seized or its value, if, in the meantime the State Government had precluded itself from returning the property either by its own act or that of its agents or servants. This was precisely the cause of action on which the respondent's suit was grounded. The fact that an order for its disposal was passed by a Magistrate would not in an-,, way interfere with or wipe away the right of the owner to demand the return of the property or the obligation of the Government to return it. The order of disposal in any event was obtained on a false representation that the property was an unclaimed pro- perty. Even if the Government cannot be said to be in the position of a bailee, it was in any case bound to return the said property by reason of its statutory obligation or to pay its value if it had disabled itself from returning it either by its own act or by any act of its agents and servants. In these circumstances, it is difficult to apperciate how the contention that the State Government is not liable for any tortious act of its servants can possibly arise. The decisions in State of Rajasthan v. Mst. Vidh- yawati(l) and Kasturilal Jain v. The State of U.P.(2) to which -,Mr. Dhebar drew our attention have no relevance in view of the pleadings of the parties and the cause of action on which the respondent's suit was based.