ROLL NO.

(IN DIGITS): 1806

ROLL NO. (IN WORDS): ONE THOUSAND EIGHT HUNDRED AND
SIX
SEMESTER: II (TWO)
SUBJECT: LAW OF CONTRACTS - II
TOPIC NUMBER: 2
TOPIC NAME: BAILEE'S DUTY OF CARE IN IN INDIA:
EVOLUTION OF JURISPRUDENCE AND
RELATION WITH TORT
LAW

1
 BAILEE'S DUTY OF CARE IN IN INDIA: EVOLUTION OF JURISPRUDENCE
AND RELATION WITH TORT LAW

ACKNOWLEDGEMENT
On the completion of this project, the writer of this project, takes the opportunity of thanking
the people who contributed in the completion of it, without whose aid, contribution and help
this project wouldn’t have seen practicability.
First, I extend my heartfelt gratitude to, my mentor and Professor of Law of Contracts, Mr.
Arunabha Banerjee, Faculty of Law of Contracts, whose continuous guidance and support
provided me with the much-needed impetus and gave me a better insight into the topic. I am
grateful to the IT Staff for providing all necessary facilities for carrying out this work. I thank
all members of the Library Staff for providing me the assistance anytime needed.
I also thank my friends and batch mates for providing me the much-needed aid whenever
needed.

2
 TABLE OF CONTENTS

ACKNOWLEDGEMENT.........................................................................................................2

TABLE OF CONTENTS...........................................................................................................3

ABSTRACT...............................................................................................................................4

INTRODUCTION......................................................................................................................5

WHAT IS BAILEMENT?.........................................................................................................6

IMPORTANT CONSTITUENTS OF BAILMENT..................................................................7

WHO IS A BAILEE?.................................................................................................................8

DUTIES OF A BAILEE............................................................................................................9

THE ENGLISH LAW JURISPRUDENCE.............................................................................12

THE INDIAN JURISPRUDENCE..........................................................................................13

A. STANDARD DUTY OF CARE............................................................................................13

B. THE PRESENT JURISPRUDENCE.......................................................................................13

C. JURISPRUDENCE THROUGH IMPORTANT CASES..............................................................15

D. BURDEN OF PROOF........................................................................................................16

E. BAILEE’S ESCAPE FROM LIABILITY................................................................................16

JURISPRUDENCE OF BAILMENT’S RELATION TO TORT LAW..................................18

A. BAILMENT AS A CONTRACTUAL AGREEMENT: THE DILEMMA......................................18

B. GRATUITOUS BAILMENT: MISSING CONSIDERATION?..................................................18

C. TORTS AND CONTRACTS: RIGHT IN REM AND PERSONAM?..........................................19

D. PRIVITY OF CONTRACTS & BAILMENT..........................................................................19

BAILMENT AS A TORT........................................................................................................21

A. CONVERSION..................................................................................................................21

B. NEGLIGENCE..................................................................................................................22

CONCLUSION........................................................................................................................23

3
BIBLIOGRAPHY....................................................................................................................24

ABSTRACT
The concept of the duty of care of bailee emerged from the idea of liability base on gross
negligence. Although, the modern concept of duty is established as the concept of reasonable
care by bailee, which translates to, “will carry out the services with reasonable care and
skill”. Bailment has always been an integral part of commercial contracts both under English
law and Indian Contract Act. One of the foremost important concepts involved in the
Bailment is of the duties of the bailee. Section 151 of The Indian Contract Act, 1858, deals
with the objective of care to be taken by bailee. As per the section 151, In all the cases of
bailment the bailer 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, quality and value as the goods bailed. This project is aimed to study the evolution of
the duty of care under the Indian Jurisprudence while simultaneously studying how breach of
such duty can be held liable under Law of Torts, as well.

4
 INTRODUCTION
Bailment is a concept of common law. Under Common law, bailment is the process of
placing personal property or goods in the temporary custody or control of another. For a valid
bailment, it is necessary that bailee must have actual physical control of the property with the
intent to possess it. The bailee is generally not entitled to the use of the property during his
possession. A bailor can demand for return of the property at any time. The ‘duty of care’ of a
bailee is an important aspect of bailment and has seen its evolution through various cases,
beginning from the common law courts to the Indian courts. Many ambiguities have
prevailed regarding the issue on under what circumstances the degree of such duty of care
changes, if the bailee can escape liability if breached and on whom the burden of proof in
such cases fall upon. The author through the work has tried to trace the evolution of the
doctrine while addressing the ambiguity prevailing on the same by reiterating various
judgements and notes from eminent jurists.

Another aspect of the ‘Duty of care’ of a bailee is if it can be treated as a tort, if breached?
Though the ICA, 1872 doesn’t cover any tortious liability when duty of care is breached by
the Bailee, but the Common Law courts have been making progress in extending the liability
to Law of torts. Therefore, the author has addressed the same in the second part of this work
as, it is important to trace back the developments of such relation with torts and the aspects
open for extending such liability under torts.

5
 WHAT IS BAILEMENT?
Bailment1 has always been an integral part of commercial contracts both under English law
and Indian Contract Act. One of the foremost important concepts involved in the Bailment is
of the duties of the Bailee. § 151 2 of The Indian Contract Act, 1872 deals with the objective
of care to be taken by bailee.

Bailment means a kind of relationship in which the personal property of one person
momentarily goes into the possession of another. The ownership of the articles or goods is
with one person and the possession with another. 3 Section 148 to Section 171 lays down the
definitions, nature of the contract of bailment as well as the rights, duties and liabilities of
both the bailor and the bailee. Bailment, as per the Indian Contract Act, puts certain legal
obligations on bailee at the time of redelivery or disposing of goods as directed by the bailor.

1
JOSEPH CHITTY, CHITTY ON CONTRACTS, (31st Ed., 2012).
2
The Indian Contract Act, 1872, No. 9, (1872).
3
T. S. VENKATESH IYER, TREATISE ON LAW OF CONTRACTS, 330 (6th edn. 1995).

6
 IMPORTANT CONSTITUENTS OF BAILMENT
The first important characteristic of bailment is “the delivery of possession” by one person to
another. Delivery of possession for this purpose should be differentiated from a mere
“custody”. But one who has custody without possession, like a servant, or a guest using his
host’s goods is not a bailee. The goods must be handed over to the bailee for whatever is the
purpose of bailment. Once this is done, a bailment arises, irrespective of the manner in which
this happens.4

The second and third important characteristic is that transfer of possession should be for some
“purpose”, must be “upon a contract” that when the purpose is accomplished the goods shall
be returned to the bailor.5 But, what happens when the goods are not returned to the bailor
after the accomplishment of purpose? So, if the purpose of the bailment is accomplished or
the time for which the goods were bailed has expired, the bailee should return the goods to
the bailor without demand.6 If he fails to return the goods, he will be liable for the loss or
damage to the goods from the date of default. 7 In keeping with the provisions of Sections 151
and 152, a bailee is excused from returning the subject matter of the bailment to the bailor
where it has been taken away from him by authority of law exercised through regular and
valid proceedings.8

Out of these, the ambit of our paper is restricted to rights and duties of bailee, thus the we
need to understand those rights in depth.

4
AVATAR SINGH, LAW OF CONTRACTS AND SPECIFIC RELIEF, 660 (10th edn. 2008).
5
Supra note 3.
6
§ 161, Indian Contract Act, 1872.
7
Supra note 4.
8
JOSEPH CHITTY, CHITTY ON CONTRACTS, VOL. 1,189 (H.G. Beale ed., 29th edn. 2004).

7
 WHO IS A BAILEE?
A bailee is an individual who temporarily gains possession, but not ownership, of a good or
other property. The bailee, who is also called a custodian, is entrusted with the possession of
the good or property by another individual known as the bailor. As mentioned above, the
bailee is given custody of a piece of property, but cannot legally lay a claim of ownership to
it. This means the bailor is still the rightful owner, even while the goods are in the bailee's
possession. However, the bailee is responsible for the property's safekeeping and the eventual
return of the goods. The bailee is typically not entitled to use the goods or property.

A bailee can serve as the overseer of an investment portfolio for a specified time period or
can be appointed to manage a rental property in the owner's absence. The bailee ensures the
assets are kept safe until the owner of those assets is able to resume management, and cannot
use them at any time for personal reasons. Reasonable care must be exercised by the bailee at
all times.

The short-term transaction between the bailee and bailor is governed by a contract, often as
simple as the reverse side of a dry-cleaning tag or receipt, or the chit from a coat check
attendant.

When the bailee takes possession of a piece of property, he or she assumes a legal and
fiduciary responsibility for its safekeeping. As mentioned above, the bailee is expected to
take reasonable care with the property, even if there is no fee involved. The bailee must,
therefore, return the goods to the bailor as they were entrusted. The bailor can sue for
damages if he can prove the bailee did not use reasonable care during the bailment.

8
 DUTIES OF A BAILEE
The concept of the duty of care of bailee emerged from the idea of liability base on gross
negligence.9 Although, the modern concept of duty is established as the concept of reasonable
care by bailee which translates to “will carry out the services with reasonable care
and  skill”. English law differentiates bailment in form of gratuitous bailment and bailment
for reward.10 The duty of bailee for reward6 under the English jurisprudence was established
in the case of  Brabant & Co v. King11   which said that duty of bailee is “to exercise the same
degree of care towards the preservation of goods entrusted to him from injury which might
reasonably be expected from a skilled storekeeper, acquainted with risk to be apprehended”.

The concept of reasonable care was established by the case of Blount v. War Office12.
Although, it was later established that the duty of bailee doesn’t includes duty of conversion.
The case of Houghland v. R.R. Low13 also laid down that standard of care is determined by
the circumstances of each particular case and situation. The duty of care on part of bailee
only arises when the bailer can show that certain conditions have been met. The bailer should
prove that the goods have been delivered to the bailee. Further, the initial burden of
establishing that the loss or injury occurred during the course of bailment also lies upon the
bailer.14

In G Merel & Co Ltd v. Chessher15 it was held by Salmon J. that the dating of loss need to
beestablished only upon the balance of probabilities. In the above case, the plaintiffs failed in
their actions as they failed to prove that the loss of goods occurred from the defendant before
the plaintiffs themselves were in possession of them.16

The final condition required by bailer to prove is that bailee had a duty to take care and they
failed is to establish that there was a valid contract between the parties. 17 The bailer in order
to establish a valid contract must show that the goods were accepted by the defendant bailee.
He must also prove that the goods weren’t involuntary cast or harboured by him. The

9
Finucane v. Small, (1795) 1 Esp; 170 ER.
10
NORMAN PLAMER, PALMER ON BAILMENT, (3rd Ed, 2009).
11
Brabant & Co v. King, (1895) AC 632 at 640.
12
Blount v. War Office, (1953) 1 All ER 1071.
13
Houghland v. R.R. Low, (1962) 1 QB 694 at 698.
14
O’ Reagen v Hui Bros Transport Pty Ltd, P. & N.G.L.R 261.
15
G Merel & Co Ltd v. Chessher, (1961) 1 Lloyd’s Rep. 534 at 537.
16
Ibid.
17
Fankhauser v Mark Dykes Pty Ltd, (1960) V.R. 376 at 377.

9
condition of valid contract in most of the cases tends to be the easiest to proof as there are
written contract of bailment in most of the cases.

The Indian Contract Act differs from the English Jurisprudence as the duty of care of bailee
under Contract Act is defined as uniform irrespective of circumstances. The duty of care for
hire or gain is the same i.e. the duty of care remains same for both gratuitous or bailment for
rewards.18 Although, it fails to provide any reasonable explanation about whether it’s open to
parties to make a contract to contrary as defined under the English law. Furthermore, under
Indian law there has been considerable number of cases where duty of care was escaped on
the grounds of non existence of bailer-bailee relationship between the parties.19

Section 151 lays down this duty in the following terms:

Care to be taken by the bailee (S.151). 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, quality and value as the goods bailed.

The following are the duties and liabilities of a Bailee:

(I) CARE

In all cases of bailment, bailee is bound to take care of bailed goods in the same manner in
which a man of ordinary prudence takes care of his own goods of the same quality and value.

(II) UNAUTHORIZED USE OF BAILED GOODS

If bailee makes any use of goods bailed and such use in not according to conditions of
bailment, he is liable to make compensation to bailor for any damage, which is caused to the
goods during such use.

(III) MIXING OF BAILED GOODS WITH BAILEE’S GOODS

If bailee mixes bailed goods with his own goods without consent of bailor, his liability arises
in the following two cases;

When goods can be separated?

18
Secy of State v. Ramdhan Das Dwarka Das Firm, AIR 1934 Cal 151.
19
Messrs Damodar Valley Corporation v. State of Bihar, 1960 Indlaw SC 270.

10
Out of mixed goods, if bailed goods can be separated or divided, bailee will be under
obligation to bear all expense of separation or division, and any damage, which is caused
from such mixture.

When goods cannot be separated?

Out of mixed goods, if bailed goods cannot be separated or divided, bailee will be under
obligation to compensate the bailor for such loss of bailed goods.

(iv) Return of Bailed goods

It is duty of bailee to return bailed goods to bailor without any demand an according to
directions of bailor on expiration of time or accomplishment of purpose.

(V) NON-RETURN OF BAILED GOODS

If bailee fails to return bailed goods at proper time, it is his liability to compensate bailor for
any destruction or loss from this time.

(VI) INCREASE OR PROFIT FROM BAILED GOODS

In absence of any contrary contract or according to directions of bailor, bailee is also under
obligation to deliver to bailor any increase or profit, which may have accrued from bailed
goods.

11
 THE ENGLISH LAW JURISPRUDENCE
Under the above Jurisdictions, if all the facts stated are proved, then the defendant bailee can
only escape liability if he can show that he took all the reasonable care to avoid damage and
loss.20 The concept of reasonable care was established in the case of Brook’s Wharf and Bull
Wharf Ltd v. Goodman Bros. The standard of care principle was further elaborated in Joseph
Travers & Sons Ltd v Cooper21.

Joseph Travers & Sons Ltd v Cooper:

It is one of the leading judgements which set guidelines for establishing the concept of
standard of care. In this case, the defendant bailee who was in the possession of salmon fish
lost the goods on account of him being absent for a long time and finding good at the final
stage of submersion on the banks of Thames river. The defendant, although being clearly
negligent claimed that they should not be held liable as the firstly, plaintiff failed to establish
any casual connection between default of plaintiff and sinking of barge.

Secondly, they said that the barge was sunk when it became mud-sucked while resting on the
river bed which couldn’t be rectified even by human efforts. 22 Although, it is clear that
defendants filed to take reasonable care when the goods were bailed to them but it is also
established that defendants cannot be held liable for something which is not foreseeable.
Furthermore, it is also clear from the facts that even proper care from the bailee would not
have prevented the damage which was clearly held by the judge correctly.

20
NORMAN PLAMER, PLAMER ON BAILMENT, (3rd Ed. Sweet & Maxwell, London 2009).
21
Joseph Travers & Sons Ltd v Cooper, (1915) 1 KB 73.
22
Ibid.

12
 THE INDIAN JURISPRUDENCE
Under the section 151 of Indian contract Act, the standard of care required by the bailee
would be of an average prudent man but the amount of care required can differ from case to
case.

A. STANDARD DUTY OF CARE

The section lays down a uniform standard of care for “all cases of Bailment”. 23 Originally in
English law “liability in Bailment was absolute”. Bailment is a concept older than contract
itself. It means “delivery of goods by bailor to bailee for a definite purpose in condition of
their return or disposal, when purpose is accomplished ”.24

It is not always necessary that bailment be enforced through the way of a contract only. It is a
sue generis relationship.25 When the intention of the parties was to deal the bailment as a
contract only then the contract act comes into play. Bailment may also be voluntary or
involuntary. Possession is a central point to bailment; when the bailee receives the possession
of the goods, it subjects him to certain obligations such as taking care of the goods 26, not to
make wrongful use of the goods27, to return bailed goods28, etc.

Out of these duties, taking care of goods is arguably the most important responsibility of the
bailee. Section 151 and Section 152 of the I.C Act;1872 deal with the above-mentioned duty
of the bailee. But the standard of duty of care mentioned in these sections has always been a
matter of debate in the courts. “Man of ordinary prudence”29 is a very subjective concept.

This project delves into the nuances of ‘reasonable care’, how courts have interpreted it over
years in different landmark cases, the burden of proof and if a bailee can exempt himself
from any liability by means of a special contract. It was no excuse for the bailee to say that
the damage or failure to return was due to no fault of his own; he was liable in any case.30

B. THE PRESENT JURISPRUDENCE

23
Willson v Brett, (1843) 11 M&W, 113.
24
ANIRUDH WADHWA, MULLA: THE INDIAN CONTRACT ACT (13th edn, Butterworths, 2011) 1921.
25
Per Shelat J. in State of Bombay v. Memon Mahomed Haji Hasam, 1967 AIR 1885.
26
§ 151, The Indian Contract Act, 1872.
27
§ 154, The Indian Contract Act, 1872.
28
§ 159 and § 160, The Indian Contract Act, 1872.
29
Supra note 26.
30
See C.V DAVIDGE, BAIMENT, (1925) 41 LQR 433, 436.

13
According to Sec.15131, in all cases of bailment, the bailee is bound to take as much care of
he goods bailed to him as a man of ordinary prudence would, under similar circumstances,
take of his own goods of the same bulk, quality and value as the goods bailed.
S. 15232 adds that if the care given under the above section is taken, then the bailee will not be
liable unless, there is a contract to the contrary.
As an example, when a port trust stores imported cotton bales as a bailee, then he is bound to
take as much care as an ordinary prudent man in similar circumstances, and if fire breaks out
at the port, in turn destroying the goods, the port trust will be liable on failure to show
reasonable care.33
The duty of care also depends on type and quality of goods. If the bailee is not negligent such
as in the Shantilial34 case, where the bailor’s goods were lost due to floods, then the former is
not held to be liable. The Allahabad High Court, in the same case has said, ‘no cast-iron
standard can be laid down for the measure of the care due from him and the nature and
amount of care must vary with the posture of each case.’35

Even when the bailee’s goods are stolen, the onus is on him to show that he made all
reasonable efforts to retrieve them; otherwise, he will be liable for negligence. 36 The bailee’s
duty does not end with the expiry of the contract of bailment. After the expiry of the contract,
it is the bailee’s duty to ask the bailor to collect the goods and if need be serve a notice of sale
to the bailor. He will be liable for the safety of the goods as long as they are in his
possession.37

The bailee cannot take recourse to the defence that others too would have acted in the same
way. The director of a cooperative society who was entrusted with cash stored in the usual
conventional manner, but the court in this case found that the conventional manner was not
reasonable and held the bailee liable for negligence.38 If the bailee’s goods are stolen along
with the bailor’s he cannot just take the defence of acting to his best possible ability or take
the defence of generally being a negligent man, unless the bailor knew of that fact, but even

31
Supra note 26.
32
§ 152, The Indian Contract Act, 1872.
33
Cochin Port Trust v Associated Cotton Traders Ltd, AIR 1983 Ker 154: Ker LT 562.
34
Shanti Lal v Tara Chand, 1933 All 158: 142 IC 691.
35
Ibid.
36
Coldman v. Hill, [1918-19] All ER Rep 434 as cited in NILIMA BHANDBHADE, POLLOCK & MULLA: INDIAN
CONTRACT.
37
NILIMA BHANDBHADE, POLLOCK & MULLA: INDIAN CONTRACT & SPECIFIC RELIEF ACTS (12th edn,
Butterworths, 2001), 1959.
38
Gour Chandra Mukherjee v Andrew Yales Co-Op Credit Society Ltd, AIR 1977 Cal 336.

14
then, reasonability of the degree of care in the given case would be explored. 39 Thus we see
that in all cases, test of an ordinary prudent man will be applicable.

C. JURISPRUDENCE THROUGH IMPORTANT CASES

The measure of care from a bailee would depend upon the facts of each case. Sometimes the
duty of care depends on the type and quality of the goods. 40 It is also required to take note of
the opportunities and means that are properly and reasonably available to the bailee for
safeguarding the interests of the bailor.41 In Gour Chandra Mukherjee v. Andrew Yules Co-op
Credit Society Ltd.42, the court held that the fact that many others would have resorted to the
same measure of care cannot bring the ‘care’ taken by bailee within the standard
requirements of this section. The bailee’s duty of care isn’t limited only till the period of
bailment. If after the expiry of bailment, the bailee doesn’t want to keep the goods anymore,
he has to ask the bailee to take them away within a specified time and if the bailor doesn’t
comply then he can dispose of with the goods after serving a proper notice of the sale of the
goods to the bailor. A bailee can’t escape his duty by delegating his duty.43 It is also the duty
of the bailee to try and minimise the loss. 44 A bailee is also liable for the negligence of his
servants acting in their course of employment about the use or custody of the goods bailed to
him45 although a contract of exemption of liability for any loss or damage caused due to the
negligence of the servants is binding on the parties and is not hit by Section 23 of the ICA.46

In Trustees of Port Bombay v. Premier Automobiles Ltd. 47, the machinery of plaintiff was
damaged because of negligence by the port trust authorities. The trust contended that it was
not responsible for the acts of its employees as they were appointed under the act and its
liability was absolved because of Section 87 of the Bombay Port Trust Act. The court held
that the authorities were not liable. In Blount v. The War Office48 the court found it hard to
believe that any reasonable man, who had valuables stored in precarious circumstances would
leave them to the tender mercies of 70 or 80 displaced persons, all rowdies, without taking
39
NORMAN PALMER, PALMER ON BAILMENT (3rd, Sweet & Maxwell Ltd, 2009) 763.
40
Lakshmi Narain Baijinath v. Secy of State in India, AIR 1924 Cal 92.
41
Union of India v. Lakshminarain Harnarain, (1963) 13 Raj 140, AIR 1963 Raj 162.
42
Gour Chandra Mukherjee v. Andrew Yules Co-op Credit Society Ltd, AIR 1957 Mys 55.
43
Morris v. C.W. Martin & Sons Ltd., (1965) 2 All ER 725 (CA); Vijaya Bank v. Corpn, AIR 1991 Ker 209.
44
Kuchwar Lime and Stone Co. v. Dehri Rohtas Light Rly & Co. Ltd., AIR 1969 SC 193 as cited in NILIMA
BHADBHADE, POLLOCK AND MULLA: THE INDIAN CONTRACT AND SPECIAL RELIEF ACTS, (14th edn, Butterworths,
2012) 1905.
45
Hastmal v. Raffi Uddin, AIR 1953 Bho 5; Secy of State v. Ramdhan Das Dwarka Das Firm, AIR 1934 Cal
151.
46
Central Bank of India v. Grains and Gunny Agencies, AIR 1989 MP 28.
47
Trustees of Port Bombay v. Premier Automobiles Ltd, 1981 1 SCC 228.
48
Blount v. The War Office, 1953 1 All ER 1071.

15
any precaution. In State of Bombay vs Memon Mahomed Haji Hasam 49, the court held that
when state seized the property of some person upon the orders of Custom officer and that
order is subject to appeal and later the grounds of seizures are found to be invalid, the state
has an implied obligation to take reasonable care of the seized goods so as to enable it to be
returned in the same condition in which it was seized. The court had also held in the same
case that there can be bailment and the 'relationship of a bailor and bailee in respect of
specific property without there being an enforceable contract. In Shanti Lal v. Tara Chand
Madan Gopal50 the court held that where there are unprecedented floods in the town, as a
result of which part of the goods bailed deteriorated, other things being equal, the bailee is
not responsible for such loss, but the bailor has to suffer it. When the goods have been stolen
from the bailee’s custody, he should take reasonable steps to recover them and if he fails to
do so, the burden of proof is on him to show that reasonable efforts would not have been
successful.51 When bailee’s own goods have been stolen along with bailor’s it is not enough
to contend that he was taking as much care of the bailor’s good as he was taking of his own.

D. BURDEN OF PROOF
When there is any loss or damage to the goods during the period of bailment, it is itself prima
facie evidence of negligence on behalf of the bailee and burden of proof, therefore, to
disprove it lies on him. If he can prove that he exercised due care and in spite of that the loss
had occurred, then he would absolved of his liabilities. Where the machinery imported from
Liverpool had admittedly been pilfered while still in the custody of the port commissioners, it
was held that since it was not shown that care was taken by them, they were obliged to make
good the loss.52 In Sri Narasimhaswami Namagiri Amman and Sri Ranganathaswami
Temples53 the temple jewels went missing at a time when the defendant was properly in
custody of them as a bailee. He was held liable for the loss because it was reasonably clear
that either he was negligent in not taking the requisite amount of care, caution or diligence or
he must have misappropriated the jewels for himself.

E. BAILEE’S ESCAPE FROM LIABILITY

Sec. 152 of I.C. Act, 1987 has created much debate whether a bailee can contract himself out
of the duty prescribed by Sec. 151. The ICA doesn’t explicitly prohibit contracting out of
49
State of Bombay vs Memon Mahomed Haji Hasam, 1967 SCR (3) 938, 1967 AIR 1885.
50
Shanti Lal v. Tara Chand Madan Gopal, AIR 1933 All 158 as cited in P C MARKANDA, THE LAW OF
CONTRACT Vol.2 (1st edition, Wadhwa and Company).
51
Coldman v. Hill, 1919 1 KB 443.
52
I.T.C. Ltd. V. Board of Trustees for the Port of Calcutta, AIR 1990 Cal 129.
53
Sri Narasimhaswami Namagiri Amman and Sri Ranganathaswami Temples, AIR 1962 Mad 244.

16
obligations mentioned in Sec.15149. There has been contrasting judgments given regarding
exemption of the liability of the bailee with the help of a “special contract”. In Bombay Steam
Navigation Co v. Vasudev Baburao54 the court held that it was open to bailee to contract
himself out of the obligations imposed by Section 151 and it would be curbing liberty of him
if he is denied to do so. Court followed the same line of reasoning in State of Bank v. M/s.
Quality Bread Factory, Batala55 also. But this interpretation of Sec. 152 defeats the purpose
of establishing minimum standard of care for the bailee. Avatar Singh in his book56 has stated
that the words in Sec. 152 “in the absence of any special contract” would permit the standard
of duty of care to be revised upwards and not to be diluted and also that no one can get a
license to be negligent. Even the authors of Pollock and Mulla57 have stated that it is not valid
to exempt the bailee totally of his liability from negligence. The court in United Indian
Assurance Co Ltd v. Pooppally Coir Mills58 held that bailee cannot claim a total exemption
from the minimum standard of care by taking recourse to the provision contained in Section
121 of the Major Port Trusts Act, 1963 (protection from liability for acts done in good faith).

In Central Bank of India v. Grains and Gunny Agencies59 too, the court held that even when
bailee has contracted himself out of liability due to his own negligence, the bailee has still to
show that he took much care of the pledged goods as an ordinary prudent man. In my opinion
too, it will appear to be a superficial reading of the law if it is claimed that a bailee can get rid
of his duties by way of contract. On the conjoint reading of both Sec 151 and 152, it seems
clear that unless the standard of care of the bailee has been enhanced by a special contract, he
will be liable only when he fails to observe the minimum required standard of duty of care.

54
Bombay Steam Navigation Co v. Vasudev Baburao, AIR 1983 P&H 224.
55
State of Bank v. M/s. Quality Bread Factory, Batala, AIR 1983 P H 244.
56
AVATAR SINGH, CONTRACT AND SPECIAL RELIEF, (10TH EDN, EBC) 1973.
57
NILIMA BHADBHADE, POLLOCK AND MULLA: THE INDIAN CONTRACT AND SPECIAL RELIEF ACTS, (14th edn,
Butterworths, 2012) 1905.
58
United Indian Assurance Co Ltd v. Pooppally Coir Mills, 1994 2 Ker LT 473.
59
Central Bank of India v. Grains and Gunny Agencies, AIR 1989 MP 28.

17
 JURISPRUDENCE OF BAILMENT’S RELATION TO TORT LAW

A. BAILMENT AS A CONTRACTUAL AGREEMENT: THE DILEMMA

The common law Courts have taken the way of regarding such cases as tortious when faced
with a dilemma between if the agreement is contractual or tortious, while hearing such
cases.60
Difficulty is presented by a number of decisions which establish that those who lack the
capacity to make contracts are nevertheless capable of becoming bailees; thus, an infant
today61 can be, convicted by a bailee and an infant's liability in tort in respect of a transaction
avoided by the Infants' Relief Act, 1871 could be measured with respect to the extent to
which the tort complained of was committed outside the purview of what, in spite of the Act,
the court regarded as a bailment. 62

F. GRATUITOUS BAILMENT: MISSING CONSIDERATION?

The ambiguity takes stances when dealing with instances where bailment is not backed up by
a relevant consideration. Interestingly, here the gratuitous bailment of goods at the request of
and for the benefit of the bailor. In a ostensibly gratuitous transaction, where the bailment is
to the advantage of the borrower, there is no difficulty in discovering consideration, on the
reasoning of Bainbridge v. Firmstone;63 the bailor, by parting with the goods at the bailee's
request, may reasonably be held to have suffered a detriment sufficient to amount to
consideration.

The gratuitous bailment for custody. There is authority for holding that even here, the bailor
furnishes consideration by his parting with possession; 64 but how can this reasonably be
regarded as a detriment when the parting with possession takes place at his own request and
to his own exclusive advantage? The modern doctrine of consideration compels the
conclusion, contrary to that of Coggs v. Bernard,65 that the necessity for sufficient

60
Turner v. Stallibrass, [I8981 1 Q.B. 56, C.A.; Cheshworth v. Farrar, [I966] 2 All E.R.107.
61
R. v. McDonald, (1885) 15 Q.B.D. 323, C.C.R.
62
Ballett v. Mingay, [I943] K.B. 281, C.A..
63
Bainbridge v. Firmstone, (1838) 8 A. & E. 743; 112 E.R. 1019.
64
Coggs v. Bernard, (1703) 2 Ld. Raj-m. 909; 92 E.R. 107; Whitehead v. Greetham, (1825) 2 Bing. 464.
65
Coggs v. Bernard, (1703) 2 Ld. Raym. 909; 92 E.R. 107.

18
consideration, fundamental to the common law notion of contract, excludes some forms of
bailment from the law of contract.66

G. TORTS AND CONTRACTS: RIGHT IN REM AND PERSONAM?

Law of tort primarily involve the protection of rights in rem, which become crystallised into
rights in personam when infringed, whereas the law of contract deals with rights which are
created in personam: if the core of the law of bailment is the complex of rights and duties
which regulate the relationship of the bailor and the bailee inter se, then would it not be more
convenient to place the law of bailment in the classification which deals with rights created in
personam? Bailment may be admitted to be contractual, as Blackstone and Sir William Jones
have described it, without postulating that it requires consideration, just as their description of
the relationship as requiring a delivery of goods on trust does not imply that the intervention
of equity is necessary to give effect to the rights and duties created thereby.

A gratuitous bailee, as well as a contractual bailee, may be liable in detinue or trover; the
bailor may also claim in negligence whether or not there is a contract. The existence of that
duty of care which is essential for the tort of negligence is a necessary inference from the fact
that a defendant was the plaintiff's bailee in respect of the goods whose loss or damage gives
rise to the action.

H. PRIVITY OF CONTRACTS & BAILMENT

The odd case of Cheshire v. Baileg;67 has, not been so readily noticed that it sets out to
explore a relatively unknown dimension of the law of bailment. The plaintiff had sent a mink
stole to a furrier for cleaning. The furrier, subcontracting as principal, handed over the stole
to the defendants for the actual process. A servant of the defendants, employed to clean the
fur, was found to have stolen it. The plaintiff claimed in conversion, alleging that the
defendants were vicariously liable for their servant's misconduct.

Diplock and Salmon L.JJ. held that the relationship between the plaintiff and the defendants
was that of bailor and bailee, despite the absence of any privity of contract between them.
They thus held that sub-bailment with the bailor's consent creates a relationship of what may
aptly be termed privity of bailment not only between the original bailor and bailee on the one
66
AVATAR SINGH, CONTRACT AND SPECIAL RELIEF, (10th edn, EBC) 1973.
67
Cheshire v. Baileg, [I905] 1 K.B. 237.

19
hand and between the bailee and the sub-bailee on the other, but also between the original
bailor and the sub-bailee. The learned Lords Justices relied on the nineteenth century Court of
Appeal decision in Meux v. Great Eastern Railway Co. Ltd.68 and the postwar decision of the
House of Lords in Kahler v. Midland Bank Ltd.69

The defendants in Meux v. Great Eastern Railway Co. Ltd. had accepted the plaintiff's goods,
carried by the plaintiff's servant in a portmanteau, as the personal luggage of the servant, who
had travelled as a passenger on the defendants' line. A servant of the defendants in the course
of his employment carelessly damaged the portmanteau by allowing it to fall in the path of a
train. The defendants were throughout unaware that the luggage was the property of the
plaintiff rather than of her servant, with whom alone they had contracted. The absence of a
contractual nexus between the plaintiff and the defendant was held to be no bar to the
plaintiff's recovery of damages in tort on account of what was held to be the defendants'
misfeasance.

Morris v. C. W. Martin Sons Ltd. is an outstanding example of the judicial recognition that
the law of bailment is not confined within the boundaries of the law of contract. Although the
form taken by this recognition in that case at first sight seems to promise to bear some fruit in
enabling some of the inconveniences of the law of contract to be avoided, the difficulty of
reconciling its particular exploration of the law of bailment with principle and authority may
prove fatal to its future development. In any event, the inconveniences of the doctrines of
privity of contract and privity of consideration may, it is to be hoped, be mitigated as a result
of the newly grasped freedom of the House of Lords to refuse to follow precedent in the
interests of justice.70

68
Meux v. Great Eastern Railway Co. Ltd, [1895] 2 Q.B. 387.
69
Kahler v. Midland Bank Ltd, [I950] A.C. 24.
70
Morris v. C. W. Martin Sons Ltd, [1966] 3 All E.R. 77.

20
 BAILMENT AS A TORT

A. CONVERSION
On various occasions, the courts in England have considered bailment to be conversion.
Upon the termination of the bailment the bailed property must be returned to the bailor, or
applied in accordance with his instructions either in its original form, or where it is agreed
that it should be altered, in its altered form. Otherwise, the bailee is liable in the tort of
conversion, irrespective of any want of care, for, e.g. misdelivery, material unauthorised use
of the goods, wrongful refusal to deliver up the goods or any other dealing in the goods
inconsistent with the rights of the bailor including any other wrongful parting with possession
of the goods as in the case of an unauthorised sub-bailment.71

Plaintiff delivered his automobile to a garage for the purpose of having it repaired and
painted. The auto repairer, as one of the conditions of his lease of the garage, had a verbal
agreement with his lessor that he would at all reasonable times do automobile repair work for
the lessor. Upon receiving a request by the lessor to do such work, the auto repairer removed
plaintiff's car from the garage to make room for the lessor's car, and with the aid and co-
operation of the lessor, placed plaintiff's car on lessor's premises. Plaintiff was later informed
of this transfer. He saw his car in the new place and made no objection. A few days later a
fire occurred in the lessor's premises and plaintiff's car was burnt. Plaintiff sued both the auto
repairer and the lessor as co-defendants on several counts for conversion and negligence.
Held, for the plaintiff against both defendant.72

In a bailment for hire of labour and services the authority of the bailee over the bailed
property is defined by the terms of the contract of bailment. If loss results from a use of the
property unauthorized by the bailor, and amounting to “a material breach of the contract” or
to “an assertion of dominion over the property inconsistent with the bailor's right of
ownership,” the bailee is liable for conversion whether the loss occurred through negligence
or accident.73

71
Garnham, Harris & Elton v. Ellis, [1967] 1 W.L.R. 940.
72
Doucette v. Proud, 4 D. L. R. 111 (P. E. I. Sup. Ct. 1940).
73
Maynard v. James, 109 Conn. 365, 146 Atl. 614 (1929); Fryer v. Cooper, 53 S. D. 286, 220 N. W. 486 (1928);
Staley v. Colony Union Gin Co., 163 S.W. 381, 382; Loeschman v. Machin, 2 Stark 311, 171 Eng. Rep. 656
(K. B. 1818).

21
Courts in many instances have also found conversion even though the acts of the defendant
may have been innocent.74 Furthermore, while it has been held that mere removal of a chattel
from one place to another in the absence of any intent or claim of ownership, or the exercise
of “dominion” thereover, does not amount to a conversion, 75 there are statements that liability
would be imposed if the property were destroyed while in the custody of the taker.76

I. NEGLIGENCE
If the bailee is negligent in his duty of care, and the goods are damaged, or not in the same
state, he may be held liable for negligence. Moreover, in a case governed by Section 151 and
152 of the Indian Contract Act, the non-return of articles entrusted by the plaintiffs to the
defendant by itself is prima facie proof of negligence of the bailee. It is not for the bailer to
lead positive evidence proving the negligence of the bailee in respect of unreturned articles
entrusted by the bailer to the bailee.

Further, in Union of India v. Amar Singh,77 it was held that the Railway was guilty of
negligence and did not act as a prudent man and hence liable for the loss and deterioration of
the articles. Misdelivery is also a loss under certain circumstances and therefore, the
defendants are held liable for the price of the goods which the plaintiff had lost.78

Thus, Courts in India may also adopt a similar approach, is a case has been filled in Torts and
not under the Indian Contracts Act.

74
Consolidated Co. v. Curtis, [1892] 1 Q. B. 495.
75
Metcalf v. McLaughlin, 122 Mass. 84 (1877); Clark v. Grand Rapids Trust Co., 241 Mich. 379 (1928).
76
Fouldes v. Willoughby, 8 M. & W. 540.
77
Union of India v. Amar Singh, 1960 AIR 233.
78
Mohammad Ekram v. Union of India, AIR 1959 Pat. 337.

22
 CONCLUSION
The discharge of duty of care by bailee is directly affected by multiple numbers of factors.
Value of goods, hazards, availability of resources with bailee, perish ability of goods, the
condition of goods bailed and professional expertise with bailee should be taken into account
while determining his duty of care. In words of Lord Hammerton, the bailee is of course not
an insurer and “is not obliged to take every conceivable or possible precaution to prevent loss
of goods bailed to him”. However, this cannot be used as a defence if he says that he used all
his best resources still the damage couldn’t be perceived or avoided.

Thus, a bailee receiving goods as a warehouseman must show degree of care as required by
him i.e. of a skilled shopkeeper who has all the resources to make sure that the goods bailed
are safe with him under his capacity of bailee.

Also, certain loopholes in law and wrong interpretation by jurists have resulted in wrongdoers
escaping liability. The legislature needs to define certain standards to measure the duty of
care so that it doesn’t create a situation of injustice towards any of the parties whether it be
gratuitous bailment or bailment for reward. Further, we need to eliminate the discrepancies
under both § 151 and 152 as it has created a stir on position of law. Both § 151 & 152 should

be read together and position of 152 should be determined as it leaves much scope for a very
wide interpretation regarding liability arising out of special contracts. Also, scope of
increasing and decreasing liability under § 152 should be ascertained to establish a firm
position of law in order to prevent further controversies.

It can be finally be concluded that bailee’s duty of care and after liability is a situation-based
concept and is a question of what, in the final analysis, the bailee has promised to do.

Further, the courts, at various instances have extended the liability of breach of such duty of
care by the bailee to the Law of torts. Though the ICA, 1872 doesn’t not specifically extend
such liability, but with the rampant modernisation and increase requirement to bring
accountability, it is important that a specific legislation should be brough to unify the
liabilities arising out of such breach both in Law of Contracts & Law of Torts.

23
 BIBLIOGRAPHY

Cases

Bainbridge v. Firmstone, (1838) 8 A. & E. 743; 112 E.R. 1019.............................................18

Ballett v. Mingay, [I943] K.B. 281, C.A..................................................................................18
Blount v. The War Office, 1953 1 All ER 1071......................................................................15
Blount v. War Office, (1953) 1 All ER 1071.............................................................................9
Bombay Steam Navigation Co v. Vasudev Baburao, AIR 1983 P&H 224.............................17
Brabant & Co v. King, (1895) AC 632 at 640...........................................................................9
Central Bank of India v. Grains and Gunny Agencies, AIR 1989 MP 28.........................15, 17
Cheshire v. Baileg, [I905] 1 K.B. 237......................................................................................19
Cheshworth v. Farrar, [I966] 2 All E.R.107............................................................................18
Clark v. Grand Rapids Trust Co., 241 Mich. 379 (1928).........................................................22
Cochin Port Trust v Associated Cotton Traders Ltd, AIR 1983 Ker 154: Ker LT 562..........14
Coggs v. Bernard, (1703) 2 Ld. Raj-m. 909; 92 E.R. 107.......................................................18
Coggs v. Bernard, (1703) 2 Ld. Raym. 909; 92 E.R. 107........................................................18
Coldman v. Hill, [1918-19] All ER Rep 434...........................................................................14
Coldman v. Hill, 1919 1 KB 443.............................................................................................16
Consolidated Co. v. Curtis, [1892] 1 Q. B. 495.......................................................................22
Doucette v. Proud, 4 D. L. R. 111 (P. E. I. Sup. Ct. 1940)......................................................21
Fankhauser v Mark Dykes Pty Ltd, (1960) V.R. 376 at 377.....................................................9
Finucane v. Small, (1795) 1 Esp; 170 ER..................................................................................9
Fouldes v. Willoughby, 8 M. & W. 540...................................................................................22
Fryer v. Cooper, 53 S. D. 286, 220 N. W. 486 (1928);............................................................21
G Merel & Co Ltd v. Chessher, (1961) 1 Lloyd’s Rep. 534 at 537...........................................9
Garnham, Harris & Elton v. Ellis, [1967] 1 W.L.R. 940.........................................................21
Gour Chandra Mukherjee v Andrew Yales Co-Op Credit Society Ltd, AIR 1977 Cal 336....14
Gour Chandra Mukherjee v. Andrew Yules Co-op Credit Society Ltd, AIR 1957 Mys 55....15
Hastmal v. Raffi Uddin, AIR 1953 Bho...................................................................................15
Houghland v. R.R. Low, (1962) 1 QB 694 at 698.....................................................................9
I.T.C. Ltd. V. Board of Trustees for the Port of Calcutta, AIR 1990 Cal 129.........................16
Joseph Travers & Sons Ltd v Cooper, (1915) 1 KB 73...........................................................12
Kahler v. Midland Bank Ltd, [I950] A.C. 24...........................................................................20

24
Kuchwar Lime and Stone Co. v. Dehri Rohtas Light Rly & Co. Ltd., AIR 1969 SC 193......15
Lakshmi Narain Baijinath v. Secy of State in India, AIR 1924 Cal 92...................................15
Loeschman v. Machin, 2 Stark 311, 171 Eng. Rep. 656 (K. B. 1818).....................................21
Maynard v. James, 109 Conn. 365, 146 Atl. 614 (1929);........................................................21
Messrs Damodar Valley Corporation v. State of Bihar, 1960 Indlaw SC 270........................10
Metcalf v. McLaughlin, 122 Mass. 84 (1877...........................................................................22
Meux v. Great Eastern Railway Co. Ltd, [1895] 2 Q.B. 387...................................................20
Mohammad Ekram v. Union of India, AIR 1959 Pat. 337......................................................22
Morris v. C. W. Martin Sons Ltd, [1966] 3 All E.R. 77..........................................................20
Morris v. C.W. Martin & Sons Ltd., (1965) 2 All ER 725 (CA).............................................15
O’ Reagen v Hui Bros Transport Pty Ltd, P. & N.G.L.R 261...................................................9
R. v. McDonald, (1885) 15 Q.B.D. 323, C.C.R.......................................................................18
Secy of State v. Ramdhan Das Dwarka Das Firm, AIR 1934 Cal...........................................15
Secy of State v. Ramdhan Das Dwarka Das Firm, AIR 1934 Cal 151....................................10
Shanti Lal v Tara Chand, 1933 All 158: 142 IC 691...............................................................14
Shanti Lal v. Tara Chand Madan Gopal, AIR 1933 All 158....................................................16
Sri Narasimhaswami Namagiri Amman and Sri Ranganathaswami Temples, AIR 1962 Mad
244........................................................................................................................................16
Staley v. Colony Union Gin Co., 163 S.W. 381, 382..............................................................21
State of Bank v. M/s. Quality Bread Factory, Batala, AIR 1983 P H 244...............................17
State of Bombay vs Memon Mahomed Haji Hasam, 1967 SCR (3) 938, 1967 AIR 1885......15
Trustees of Port Bombay v. Premier Automobiles Ltd, 1981 1 SCC 228...............................15
Turner v. Stallibrass, [I8981 1 Q.B. 56, C.A.;.........................................................................18
Union of India v. Amar Singh, 1960 AIR 233.........................................................................22
Union of India v. Lakshminarain Harnarain, (1963) 13 Raj 140, AIR 1963 Raj 162..............15
United Indian Assurance Co Ltd v. Pooppally Coir Mills, 1994 2 Ker LT 473......................17
Vijaya Bank v. Corpn, AIR 1991 Ker 209...............................................................................15
Whitehead v. Greetham, (1825) 2 Bing. 464...........................................................................18
Willson v Brett, (1843) 11 M&W, 113....................................................................................13

Statutes

§ 151, The Indian Contract Act, 1872......................................................................................13

§ 152, The Indian Contract Act, 1872......................................................................................14
§ 154, The Indian Contract Act, 1872......................................................................................13

25
§ 159 and § 160, The Indian Contract Act, 1872.....................................................................13
§ 161, Indian Contract Act, 1872...............................................................................................7
State of Bombay v. Memon Mahomed Haji Hasam, 1967 AIR 1885.....................................13
The Indian Contract Act, 1872, No. 9, (1872)...........................................................................6

Treatises

ANIRUDH WADHWA, MULLA: THE INDIAN CONTRACT ACT (13th edn, Butterworths, 2011)
1921......................................................................................................................................13
AVATAR SINGH, CONTRACT AND SPECIAL RELIEF, (10th edn, EBC)........................................18
AVATAR SINGH, CONTRACT AND SPECIAL RELIEF, (10TH EDN, EBC) 1973.............................17
AVATAR SINGH, LAW OF CONTRACTS AND SPECIFIC RELIEF, 660 (10th edn. 2008)...7
C.V DAVIDGE, BAIMENT, (1925) 41 LQR 433, 436................................................................13
JOSEPH CHITTY, CHITTY ON CONTRACTS, (31st Ed., 2012)..........................................................6
JOSEPH CHITTY, CHITTY ON CONTRACTS, VOL. 1,189 (H.G. Beale ed., 29th edn. 2004).........7
NILIMA......................................................................................................................................15
NILIMA BHADBHADE, POLLOCK AND MULLA: THE INDIAN CONTRACT AND SPECIAL RELIEF
ACTS, (14th edn, Butterworths, 2012)..................................................................................17
NILIMA BHANDBHADE, POLLOCK & MULLA: INDIAN CONTRACT & SPECIFIC RELIEF ACTS
(12th edn, Butterworths, 2001)............................................................................................14
NILIMA BHANDBHADE, POLLOCK & MULLA: INDIAN CONTRACT...........................................14
NORMAN PALMER, PALMER ON BAILMENT (3rd, Sweet & Maxwell Ltd, 2009) 763................14
NORMAN PLAMER, PALMER ON BAILMENT, (3rd Ed, 2009)......................................................9
NORMAN PLAMER, PLAMER ON BAILMENT, (3rd Ed. Sweet & Maxwell, London 2009).......12
P C MARKANDA, THE LAW OF CONTRACT Vol.2 (1st edition, Wadhwa and Company)..........16
T. S. VENKATESH IYER, TREATISE ON LAW OF CONTRACTS, 330 (6th edn. 1995)........6

26