CRE Proposition No.

6 dated March 11, 2019

Raheja Synthetic Textiles Ltd (“Raheja”) was in the business of supplying nylon socks to
several retail outlets located in the Sardarpura area of Jodhpur. The stock arrived from
Ludhiana every first Friday of the month. Since Raheja wanted to collect the goods in a
closer location than his own godown at Mandore, it contracted with Lodha & Sons (“Lodha)
to hire their Jalori Gate godown for collection of the consignment of socks to be collected on
the next day by Raheja. This area contained a number of godowns in the vicinity and was a
popular choice amongst traders to hire services of storage mostly for containers of fuel. Last
month, while the socks were in storage, a godown placed about 500 metres away containing
kerosene containers caught fire at night. The wind was particularly strong that night and
though the area is fairly congested, the flames were carried over to long distances engulfing a
number of godowns rapidly. The watchman of the godown tried to remove the socks, but the
combustible nylon material meant that it caught fire quicker than other materials. The
watchman decided against using the fire extnguisher and called the fire brigade. But by the
time the fire brigade arrived the godown had already been burnt down along with the
consignment of socks. An action was filed against Lodha by Raheja in the Jodhpur District
Court to claim the value of lost goods insisting that Lodha was vicariously under a duty of
care as a bailee which was not carried out properly. Lodha filed a counter claim stating that
the combustible nature of the nylon socks which explosed Lodha to extraordinary risk of fire
was not revealed in the contract of bailment making Raheja liable for damages. Argue.