SHANTEZ Vs. APPLAUSE BHANSALI FILMS PRIVATE LIMITED COMPANY

JUDGEMENT

(1.) The present appeal is directed against the order passed by the learned Single Judge in Notice of Motion No. 2561 of 2007 dated 13th October, 2008 vide which the application filed by the plaintiffs/appellants under Order XII, Rule 6 of the Code of Civil Procedure, 1908 (hereinafter referred to as the said "Code") has been dismissed. Necessary facts are that the appellants filed the suit for damages for loss and destruction of certain antique pieces of furniture which were hired by the defendants for the sets of a film under production. This resulted from the fire broke out in the Studio on 18th February, 2004 when shooting of the film was going on. It was averred in the plaint by the plaintiffs/appellants that the goods being in the nature of antique furniture had no market value and the value of which would appreciate by passage of time and though the furnitures were on hire basis the respondents were liable to make good the losses.-The respondents had even filed the claim with the Insurance Company admitting the value of furnitures and in fact that was the admission of liability which was the basis of the plaintiffs' claim in the suit. This suit was contested by the defendants by denying their liabilities to make good the claim raised by the plaintiffs and further contending that simpliciter lodging of claim with the Insurance Company is neither an admission on merit nor ascertaining of liability in relation to the claim made by the plaintiffs in the suit.

(2.) Learned Counsel appearing for the appellants, while relying on the provisions of Order XII, Rule 6 of the Code contended that it is not only the admission in the pleadings of the parties but even on the basis of documents or any other material wherein the defendants have admitted their liabilities the appellants would be entitled to a decree on admission. The appellants relied upon the claim raised by the respondents before the Insurance Company and contended that the survey reports are a clear admission of liability as well as quantum which the appellants have claimed in the suit. Thus, according to the appellants, the learned Single Judge has erred in law in not relying upon these documents and not passing a decree on admission. Reference was also made to a letter dated 21st July, 2005 written by the respondents to the Senior Inspector of Police, Dadar Police Station, Dadar, Mumbai, wherein these documents were submitted to him, which show an admission of liability and the total estimated loss to the extent of Rs. 5,90,03,040/-.

(3.) The learned Counsel for the appellants also relied upon a judgment of the Supreme Court in the case of State of Maharashtra, Bombay & ors. Vs. Britannia Biscuits Co. Ltd. & ors,1995 2 Supp SCC 72 to raise an issue that the transaction in question was for sale and not simpliciter for bailment and there was absolute liability on the part of the respondents to make good the losses. In that case, the Company was manufacturing biscuits and selling the same in tins and charging only for biscuits and for the tins the Company took a deposit with the stipulation that in case the tin was returned within three months in good condition, the deposit would be refunded. The tins so supplied to purchasers were shown as the assessee's stock in its account books but were debited in the customer's account. No sales tax was charged on such deposit. The High Court held that the arrangement in respect of the tins between the assessee and the purchasers was one of bailment and not a transaction of sale as, according to the High Court, there was an obligation on the assessee to accept the tins returned and a corresponding obligation on the customer to return the tins. Therefore, the High Court concluded that the amount in question could not be treated as price of the tins sold and that the same was not exigible to sales tax. Allowing the Revenue's Appeals, the Supreme Court held that the High Court was right in holding that the question whether there has been a sale of tins at the end of the accounting year - or along with the biscuits themselves - has to be determined on the precise terms of the transaction between the respondent and its customers and that on this aspect the manner in which the respondent maintained its accounts or made entries therein is not very much relevant. Once it is held that there was no obligation to return the tins, the theory of bailment falls to the ground. It would then not be a case of bailment within the meaning of section 148 of the Contract Act. The transaction in question was neither a bailment nor a pledge. It was a composite transaction. It was to start with an entrustment which could result in a sale of tins in case of non-return of the tins. While entrusting the tins, the respondent took care to stipulate and receive the value of the tins and a little more - to be precise 20 per cent. If the tin was returned, well and good - the transaction remained one of entrustment. But if not returned within 3 months, it became a sale as per the terms of the transaction. The fact that the respondent was receiving back the tins even after the expiry of three months and returning the deposits, was more by way of grace - probably a business decision - rather than a matter of right or an obligation.