Contract Law Case: Shiva Prasad & others vs. Institute of Sanskrit Studies Dang & others, NKP,2046, P. 7
Case: Bailment/Deposit
Plaintiff: Institute of Sanskrit Studies Dang & others
Defendants: Shiva prasad and others
Decision No: 3688
This case is related to Bailment and Deposit
Facts of the case:
Defendants, including Shiv pd. Gautam, took approximately 500 bighas of land belonging to the educational institution on a five-year lease from 2030 to 2035 B.S. agreeing to pay Rs. 4,12,250/- as lease rent. During the lease arrangement, they received a 48-horsepower Belarus tractor, trailer, cultivator, disc/plough and toolbox for use with the leased land. They agreed to return the machinery in sound and working condition. On 2037/02/31 BS, they again gave a written undertaking to return the machinery in working condition by the end of Ashadh 2037. Defendants failed to return the machinery within the agreed period. Plaintiff therefore filed a case on 2039/02/30 BS, seeking either the return of the machinery in working condition or its value of Rs. 1,57,000/-, Defendants claimed that the tractor had been damaged by a flood in 2032 B.S. and remained in that condition. They argued that the loss resulted from a natural disaster and that they should therefore receive protection under Naso Dharaut (Bailment) No. 4.
Plaintiff’s Claim:
Plaintiff claimed that defendants had received the tractor and other machinery and they had agreed to return the machinery in sound and working condition but they failed to return it despite demands. They should either return the machinery in working condition or pay its value and claimed Rs. 1,57,000/- as the value of the machinery. Plaintiff also argued that defendants had not produced sufficient evidence proving that the machinery was damaged by the alleged flood. Therefore, they could not rely on the natural-disaster exception under Naso Dharaut (Bailment) No. 4.
Defendants’ Arguments:
Defendants argued that Toyanath Pandey personally lacks the locus standi to file the case because the tractor was originally handed over by the Rapti Zonal Education Committee, making them the proper party to bring the suit. Furthermore, they contend that the Naso Dharaut laws do not apply since the machinery was never given to them for sale or mortgage. Even if these provisions were considered, they argue they are exempt under Naso Dharaut No. 4 because the tractor was swept away and damaged by the 2032 B.S. flood due to a natural disaster. Consequently, they maintain that plaintiff should accept the machinery in its current, flood-damaged condition rather than demanding its full monetary value.
Legal issues:
- Whether the plaintiff had the locus standi to file the case?
- Whether the defendants were legally bound to return the tractor and other machinery in working condition according to their written undertaking?
- Whether the defendants could claim exemption under Naso Dharaut No. 4 by alleging that the machinery was damaged by a natural disaster (flood)?
- If the machinery could not be returned in working condition, what amount was legally payable by the defendants, and whether depreciation should be deducted from that amount?
Decisions of the Courts:
Dang District Court: It ordered defendants to pay Rs. 33,285/- held that the machinery was not returned, but the court relied on the evidence regarding its original/purchase value rather than plaintiff’s claimed amount of Rs. 1,57,000/-
Mid-Western Regional Court: It increased the damage amount to Rs. 1,17,900/- held that the defendants had agreed to return the machinery in working condition but failed to do so. The court assessed its value according to the prevailing value at the time of the suit.
Supreme Court (Joint Bench): Justice Gajendra Keshari Bastola: Upheld liability of Rs. 1,17,900/-, finding that defendants failed to prove the alleged flood damage.
Justice Mahesh Ram Bhakta Mathema: Favored setting aside the lower decisions and sending the case back for proper investigation of the alleged natural disaster and the plaintiff’s legal standing.
Supreme Court (Full Bench): Chief Justice Dhanendra Bahadur Singh, Justice Prachanda Raj Anil, and Justice Hiranyeshwar Man Pradhan. The Full Bench upheld defendants’ liability but deducted 10% depreciation from Rs. 1,17,900/- because the machinery had been used for agricultural purposes. And ordered the final amount of Rs. 1,06,110/- payable to plaintiff.
Established Principles:
- If the person who received goods on the condition of returning them in working condition cannot prove with factual evidence that the goods were lost or damaged due to a natural disaster, they cannot claim exemption from returning the goods.
- If the goods cannot be returned in working condition, their value must be paid according to the prevailing rate at the time the lawsuit was filed.
- It is not reasonable to deny depreciation for machinery merely because it was used in work; depreciation must be considered for machinery used over time.
