Sudarshan bails a certain quantity of "First Grade" petrol, to be stored safely till the end of March 2011. Raghman, without the consent of Sudarshan mixes the first grade petrol with his own "Second Grade" petrol on 1 st April, 2011, when Sudarshan asked Raghman for his first grade petrol Raghman tells him to take the bailed quantity of petrol out of the mixed petrol. Sudarshan refused to take the mixed petrol and instead claims the prices of the "First Grade" petrol, which is higher than "Second Grade". Raghman refuses to compensate Sudarshan for the above on the ground of impossibility of performance. QUESTION: Whether Raghman is liable to compensate Sudarshan for the loss.

In common law, the bailee has the obligation to return the goods to the bailor once there contract or agreement is over. The goods must be returned in the same condition as they were before. If the bailee fails to return the goods or returns them in a different condition, e.g. broken, damaged, or changed, he/she is liable to the bailor.

Sudarshan is the bailor since he entrusted petrol (gasoline?) and Raghman is the bailee since he received the goods. Raghman has the obligation to return he goods in the same condition as he received them. Arguing that he is not liable simply because he cannot return the goods is no excuse.