Goods kept in cold store are not bailment, insurer must honour claims

The National Commission disagreed, observing that goods were stored against payment of rent, which could not be termed a bailment

Sai Balaji Cold Storage India provided services to 136 farmers to store their agricultural produce in its facilities. These farmers had borrowed money from banks by hypothecating the stored goods, with the cold storage company standing guarantor for the loans. The arrangement was governed by a tripartite agreement, which contained a specific clause requiring the bank to ensure that an insurance policy was taken to cover the goods stored and the cold storage building, plant and machinery. 

This arrangement had been in existence since 2005. On June 2, 2013, a fire broke out. At the time of the incident, three