Direct liability of a sub-bailee, special carriage law prevails, and foreign currency damages convert at judgment-date exchange rate.

A bailor may sue a sub-bailee directly for loss of goods, and absence of privity with the handling agent does not defeat the claim; the carrier was not a necessary party. The ordinary care rules under Sections 151 and 152 of the Contract Act could not displace the special liability regime governing carriage by air, so the handling agent could not avoid responsibility by relying on bailment principles. Foreign currency damages were to be converted into Indian rupees at the exchange rate prevailing on the date of judgment, and the decree applying that rate was upheld.

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Issues: (i) Whether the suit was bad for non-joinder of the carrier and for want of privity of contract between the plaintiff and the handling agent. (ii) Whether the handling agent could avoid liability by invoking the ordinary law of bailment under the Contract Act. (iii) Whether foreign currency damages had to be converted at the exchange rate prevailing on the date of loss rather than the date of judgment.

Issue (i): Whether the suit was bad for non-joinder of the carrier and for want of privity of contract between the plaintiff and the handling agent.

Analysis: The goods were entrusted to the carrier and thereafter handled by the appellant as the carrier's agent or sub-bailee. In such a commercial arrangement, the original bailor can sue the sub-bailee directly for loss of the goods. The inter se indemnity arrangement between the carrier and the handling agent does not extinguish the latter's liability to the owner of the goods. The carrier was therefore not a necessary party and absence of direct contract did not defeat the suit.

Conclusion: The objection based on non-joinder and absence of privity failed and the appellant remained liable.

Issue (ii): Whether the handling agent could avoid liability by invoking the ordinary law of bailment under the Contract Act.

Analysis: The plea based on reasonable care under Sections 151 and 152 of the Contract Act did not apply where the transaction was carriage by air. The carrier's liability, and consequently the liability of the sub-bailee handling the goods on its behalf, was governed by the special regime under the Carriage by Air Act. The ordinary bailment rules could not be used to dilute the strict liability attached to carriage of goods, and a carrier could not evade that liability by interposing a sub-bailment.

Conclusion: The appellant could not escape liability by relying on Sections 151 and 152 of the Contract Act.

Issue (iii): Whether foreign currency damages had to be converted at the exchange rate prevailing on the date of loss rather than the date of judgment.

Analysis: The governing rule for recovery of an amount quantified in foreign currency is that conversion into Indian rupees is made on the date of the judgment. That approach was treated as the correct measure for determining the decree amount, and the trial court's adoption of the judgment-date exchange rate was upheld.

Conclusion: The challenge to the exchange rate applied in the decree was rejected.

Final Conclusion: The decree for recovery was affirmed in full, and the appeal was dismissed with no interference in the quantified relief.

Ratio Decidendi: A bailor may sue a sub-bailee directly for loss of goods, an inter se indemnity between carrier and handling agent does not affect the owner's claim, special carriage legislation prevails over ordinary bailment rules, and foreign currency claims are to be converted at the exchange rate on the date of judgment.

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