Breach of Contract Against Employer : A Case Study & BAILMENT OF A CONTRACT

1. CASE STUDY 1
Breach of Contract Against
Employer : A Case Study

2. Case study
■ Mrs Bryne was sacked as a human resources director of
a drug company in January 2001, two months before
giving birth. She had complained that male directors
were paid more than female directors in the company.
This was based on the fact that on promotion from
human resources manager to director she had expected
a pay rise in line with the other four directors. In fact, she
was awarded a pay increase that brought her salary to
£52,500.

3. Case study
■ All of the other directors, who were men, were earning more than
£60,000 each. One such director, the finance director, had been
given a 36.8% pay rise when he became a director, which meant
that his pay was £65,000. Mrs. Bryne sent a memo to her boss
highlighting the differences and was told that she ‘wanted too
much too soon’ and that she should have ‘ignored what other
people were earning.’

4. The Claim
■ Mrs. Bryne brought her claim for breach of contract and
for sexual discrimination because her boss made a
comment that all women who were of child-bearing age
should be treated. She was sacked after sending the
memo and only given three months’ notice rather than
the six months to which she was entitled under her
contract. This resulted in her not being able to claim for
unfair dismissal.

5. At theTribunal
■ Another employee confirmed the boss’s comment about female
sterilization, adding that she was told that if she wanted to progress in
her career with the company it was best never to get pregnant. When
Mrs. Bryne was recruited, the recruitment consultant was asked to find
out whether she intended to start a family or not.
■ She told the tribunal that she was shocked to be asked this question,
which is not something that should be asked during the recruitment
process or at all by an employer.
■ The recruitment consultant told her that if she brought up the subject of
having children, she should reassure her future employers that she was
not planning on ‘running off and having millions of babies.’

6. At theTribunal
■ The tribunal found that the way in which she had been dismissed
after sending her boss the email about her salary did constitute
unfair dismissal. This was because she would have been entitled
to claim damages if she had been given the notice period that was
contracted.
■ The boss in question stated that he liked to crack jokes and to
make the working environment less serious. He did however state
that he realised that the quip he had made in this instance had
been severely off-key. He told the tribunal that he regretted
making the remark, and said that it was ‘so grotesque that it could
not actually be his opinion.

7. TheTribunal's Findings
■ Mrs. Bryne’s sexual discrimination claim was dismissed at the
employment tribunal. The tribunal chairman said that the comment
made by the boss was just part of the humour that was used in the
pharmaceutical industry, and that it did not constitute the boss’s
view or that of the company. Mrs. Bryne was awarded damages
for successfully proving breach of contract.
■ Although Mrs. Bryne’s sexual discrimination claim failed, she did
receive an award of damages for the breach of contract by her
employer.

8. CASE STUDY 2
BAILMENT OF A
CONTRACT

9. The Case
■ Mr. Mainak Bose. for the private respondent. The appeal
is directed against a Judgment and order dated 23rd
February, 2016 by which the writ petition was disposed
of.
■ The following amongst other directions were issued.
■ In accordance with the statutory obligation of the
Customs to dispose of the goods, the Customs
authorities are agreeable to expend the requisite amount
of about of Rs. 77,000/- for such purpose. The special
officer will cause the crates to be brought down and
opened, all the goods to be arranged for inspection

10. • An inventory thereof prepared and the goods valued upon
incurring the requisite expenses therefor on behalf of the
Customs authorities, subject to the Customs' first and
paramount charge over the sale price in respect of such
expenses incurred on account of the sale.
• The balance consideration will be dealt with in accordance
with section 150 of the Customs Act, 1962.'' The goods have
pursuant to the aforesaid order been sold to buyers. Mr. Basu,
learned advocate, represents one of them.
The Case

11. The Appeal has been preferred by the Writ
Petitioners
■ Mr. Khaitan, learned Senior Advocate, appearing for the writ
petitioner submitted that the disbursement of the sale proceeds
has to take place in accordance with section 150 of the
Customs Act, as directed by the learned Trial Court. But the
difficulty arose from the fact that the Customs Authority has not
taken the appellants in confidence in determining the duty
payable with respect to the goods sold.
■ Mr. Das, learned Senior Advocate, appearing for the Customs
Authority, submitted that the duty has to be adjudicated in
accordance with law.

12. ■ Mr. Khaitan, pointed out that the Customs authority has issued a
circular being Circular No.71/2001-Cus., dated 28.11.2001 F.No.
446/17/2001-Cus. IV for determination of duty in such cases.
■ Mr. Khaitan, submitted that the Customs authority is liable to
determine the duty after hearing the writ petitioners.
■ Mr. Das, learned Senior Advocate, did not dispute that the
adjudication or determination of duty has to take place upon notice
both to the importer and the ware- house owners.
■ We are inclined to think that the warehouse owner being a bailee is
in the position of a deemed owner of the goods, regard being had
to Section 151 of the Contract Act, which provides as follows:

13. ■ Section 151 Care to be taken by bailee- In all cases of bailment the
bailee is bound to take as much care of the goods bailed to him as
a man of ordinary prudence would, under similar circumstances,
take of his own goods of the same bulk, quantity and value as the
goods bailed
■ The warehouse owner also has a lien in respect of the goods until
he receives due remuneration for the service rendered by him
under Section 170 & 171 of the Contract Act. Now that the goods
have been sold, the lien has shifted to the sale proceeds subject
however to the provisions of Section 150 of the Customs Act.
■ This appeal is disposed of by directing that the adjudication of duty
payable should be made as early as possible upon notice both to
the importer and the appellants before us in accordance with law
preferably within two months from the date of service of a copy of
this order.

14. ■ Mr. Basu, learned advocate, appearing for one of the buyers
submitted that in spite of payment of full consideration and in spite
of delivery orders having been issued both by the auctioneer and
the Customs authority the appellants have withheld delivery of the
goods. Mr. Khaitan learned Senior Advocate, upon instruction
submitted that goods shall be delivered as and when the buyers
choose to apply for delivery.
■ The appeal and the connected application are, thus, disposed of.
■ Needless to mention that before taking up the appeal for hearing
we have condoned the delay.

15. CASE STUDY 3
N.R. Srinivasa Iyer vs New India
Assurance Co., Ltd

16. ■ Mr. Iyer’s car was insured by the New IndiaInsurance. The car met an accident
and was taken to P. S. N. Motors Ltd., Trichur for repairing. The insurance
company was intimated of the accident and that the car was given to the P. S.
N. Motors for repair with a request to discharge its obligation under the policy of
insurance. The P. S. N. Motors submitted an estimate to the insurance
company.
■ After a several correspondence, the two settled onan estimate. Mr. Iyer was
thus, informed: We have pleasure to inform you that the revised estimate of
M/s. P. S. N. Motors Ltd., Trichur has been approved by our head office, and
they have been advised to proceed with the repairs and send us their final bill
together with the discharge voucher duly filled in and signed by you for making
the payment.
■ Before the car could be delivered to Mr. Iyer, a fire occurred in the workshop of
the PSN Motors and the car was destroyed. The garage was not insured. Is the
insurance company bailee of Mr. Iyer’s car, on whose behalf the car has been
sent to the garage?

17. ■ Supreme CourtIn a contract of insurance, there are mutual rights
and obligations both of the Insurer and the Insured. Once the motor
car is damaged it is the duty of thecar owner to take it to nearest
repair shop. This is done on behalf of the insurance company which
pays for such removal as well as the repairs.
■ the Insurer took charge of the damaged car from the scene of
accident and got it moved to the nearest repairer. The car virtually
came into the custody ofthe Insurer and the repairer took the
custody for and on behalf of the Insurer.
■ When the Insurer has the option to replace the Motor Car, it can
take over the damaged car andt he Insured is bound to submit to
the same. If theInsurer on the other hand, exercised the option of
repairing the car, it is entitled not merely to choose the repairer but
also to determine the charges for repairs to be negotiated and
settled between the Insurer and the repairer and the Insured has
hardly anything to do with it.

18. ■ Sub-Bailee The Insurer became the bailee and the repairermay
have been initially pointed out by the bailor but with whom the
Insurer entered into negotiation, arrived at a contract and
agreed to get the car repaired in discharge of an obligation
under the contract of insurance. Therefore, for this additional
reason the custody of the repairer is that of a sub-bailee.
■ Morris Case"Once a man has taken charge of goods as a baileefor
reward, it is his duty to take reasonable care; tokeep them safe; and
he cannot escape that duty bydelegating it to his servant. If the
goods are lost ordamaged, whilst they are in his possession, he
isliable unless he can show - and the burden is onhim to show - that
the loss or damage occurredwithout any neglect or default or
misconduct ofhimself or of any of the servants to whom hedelegated
his duty."

19. ■ When the car was in the custody of the sub-bailee,it was destroyed
by fire that occurred in therepairers workshop. The sub-bailee was
bound totake the same care as a man of ordinary prudencewould
take in regard to his own goods of the samequality and value as was
expected of the bailee.Now no evidence has been led by the
defendants toexplain what amount of care the bailee or the sub-
bailee took in respect of the car. When the custodyis of the bailee or
the sub-bailee, the burden is onthem to show how they handled the
car.

20. THANKYOU