BAILMENT

-Dr.Shikha Dimri
• The word bailment comes from the French word
‘bailer’ which means to deliver or handling over.

• In legal sense it involves change of possession of

goods from one person to another for some
specific purpose.
Section 148 Defines Bailment , Bailor and Bailee

• Sec-148 A “bailment” is the delivery of goods by one person to

another for some purpose, upon a contract that they shall, when
the purpose is accomplished, be returned or otherwise disposed of
according to the directions of the person delivering them. The
person delivering the goods is called the “bailor”. The person to
whom they are delivered is called the “bailee”.

• Explanation: If a person already in possession of the goods of

another contract to hold them as a bailee, he thereby becomes the
bailee, and the owner becomes the bailor, of such goods, although
they may not have been delivered by way of bailment.
 Essential Features of Bailment

Delivery of possession goods; Actual or

Constructive
Contract between the parties;
There should be a Purpose
Return of goods or their disposal as per
directions of the bailor
Difference between Bailment and Custody

Kaliaperumal Pillai v Visalaxmi

Visalaxmi ,where the lady was getting certain jewelry made by a goldsmith and
each evening the half made jewels were put into the box in the goldsmith’s room
and the lady kept the keys of the box in her possession. The jewels were lost one
night. But the lady’s action against goldsmith failed. It was held there was no
bailment.
The basic fact which distinguishes a mere custody from bailment is the
delivery and the control to be exercised over the goods
Ultzen v Nicolls,(1894)1 QB92,
- where a waiter at a restaurant took the coat of the customer and hung it at a
place of his desire a bailment was said to have occurred and the owner of the
restaurant was held liable for the loss of the coat.

Jagdish Chandra Trikha v Punjab National Bank

- Plaintiff claimed gold ornaments and jewellery deposited with the bank. It
was held that the position of bank was that of bailee
 Bailment compared with :
Sale – Possession + Ownership
 Exchange or Barter – Exchange of Possession +
Ownership
 Hire Purchase - Bailment + element of Sale
Can there be bailment without a contract?
• Allahabad HC expressed that obligation of bailee can
arise only out of a contract of bailment and not otherwise.
• Case – Ram Gulam v Govt of UP, the plaintiff ‘s ornament
having been sold were recovered by the police and while in
police custody were again stolen. The plaintiffs action
against state for the loss was dismissed.
• Decision given in this case has been described as
unjustifiable by Pollock and Mulla
• Non –contractual Bailments- English law recognizes
bailment without contract.
• In India bailment has been found in subsequent cases
apart from contract between the parties.
• Cases –
• Lasalgaon Merchants Cooperative Bank Ltd v Prabhudas
Hathibhai, it was held Govt. stood in the position of a
bailee and it was liable for having failed to take care of
goods.
State of Gujarat v. Memon Mahomed [bailment in case of
goods seized]

-Certain motor vehicles and other goods belonging to the

plaintiff’s were seized by the state in exercise of its power under
Sea Customs Act. The goods were in custody of the State
remained uncared for. It was contended that state were not
bailee, there was no obligation to take care. But this contention
was not sustainable.
•Bailment in case of Parking Lots
•General Exchange Ins Corp. v Service
Parking Grounds
•Beetson v Hollywood A.C.
•Keenan Hotel Co v Funk
 KINDS OF BAILMENT

According to sec 150 duty of bailor are of two kinds:

1. gratuitous bailor
• A person who lends his articles or goods without any
charge is called a gratuitous bailor. His duty is less then
that of the bailor for hire or consideration.

2. bailor for reward

• Where the bailment is not gratuitous it is for reward, it
is called bailor for reward. Duties for bailor for reward
is much greater then that of gratuitous bailor
 Duty of Bailor

Duty of Gratuitous bailor

• Duty to disclose defect
• Illustrations Section 150

Hyman & Wife v Nye & Sons, plaintiff hired a carriage &
horses from defendant for a particular journey.The carriage
being defective, it was upset and plaintiff was injured.
Defendant was held liable.
 Duties of Bailee

1. Duty of reasonable care (sec-151-152)

2. Duty not to make unauthorized use (sec-153-154)
3. Duty not to mix with own goods (sec-155-157)
4. Duty to Return(sec-160-161)
5. Duty to return accretion(sec-163)
6. Duty not to set up title in third person (sec-166-167)
1. Duty of reasonable care (sec-151-152)
Care to be taken by bailee.

Martin v london Country Council, plaintiff was brought to a paid

hospital as patient. On her entry the hospital officials took charge of two
pieces of jewellery and a gold cigarette case. They were subsequently
stolen by a thief who broke into the room in which they were kept. It
was held that the defendants as bailee for reward were liable for the
loss as they failed to exercise a care which nature and quality of the
articles required.
Union of India v United India Fire etc., Insurance Co. Ltd
Union of India v Amar Singh
Juggilal Kamlapat Oil Mills v Union of India
• Bailee when not liable for loss, etc., of thing bailed.

• The bailee, in the absence of any special contract, is not

responsible for the loss, destruction or deterioration of
the thing bailed, if he has taken the amount of care of it
described in section 151.
Loss due to act of Bailee’s Servant - liability will be there if
act has been done during the course of employment

Case- Sanderson v. Collins, the defendant sent his carriage to the plaintiff
for repairs who lent his own carriage to the defendant while the repairs
were going on. The defendants coachmen without his knowledge took
away the carriage for his own purpose and damaged it. The defendant was
not held liable as the coachmen at the relevant time was not acting within
the course of employment.
There are exceptional circumstances where
bailee cannot exercise reasonable care-loss due
to floods, damage due to action of mob;roits
Burden of proof-is on the bailee that he was
exercising reasonable care
 Rights and Liabilities of Finder of
Goods[S.168-169]

Right of finder of goods;

• To retain the goods until he receives compensation

• To sue for-specific reward offered by the owner.
 FINDERS RIGHT OF SALE

Finder of goods may sell the goods found if :

(1) the thing is commonly subject of sale.

(2) the owner cannot be found with reasonable diligence,
or is found ,he refuses to pay the lawful charges of the
finder.
(3) either the goods are in danger of perishing or losing
their value; or the lawful charges of the finder amount to
two third of their value.
•His Liabilities (Sec-71) A finder of goods is
subject to the same responsibility as that of the
Bailee
 Rights of Bailee

1. Right to recover expense or remuneration (sec158)

2. Right to be indemnified (sec164)
3. Bailment by several joint owners (Sec165)
4. Right of lien on goods (sec170-171)
5. Right to sue wrong doers (sec180)
Lien is the right of the bailee under which the bailee can
retain the goods of the bailor and refuse to deliver them to
the bailor until his due remuneration for services in respect
of the goods bailed or the amount due is paid. Act recognises
two kinds of lien:

 General lien
 Particular lien
Particular lien- implies the right to retain only that particular property
in respect of which the charge for rendering any service involving the
exercise of labour or skill is due. The right can be exercised so long as
the remuneration in respect of the specific goods has not been paid.

General lien-is the right to retain the goods of another as a security for a
general balance of account. The right of general lien is only conferred
on certain special kinds of bailees only and not on every one.
Bailee's particular lien.
Section170.
Where the bailee has, in accordance with the purpose of the
bailment, rendered any service involving the exercise of
labour or skill in respect of the goods bailed, he has, in the
absence of a contract to the contrary, a right to retain such
goods until he receives due remuneration for the services he
has rendered in respect of them.
• General lien of bankers, factors, wharfingers, attorneys and policy-
brokers.
• 171. Bankers, factors, wharfingers, attorneys of a High Court and
policy-brokers may, in the absence of a contract to the contrary,
retain, as a security for a general balance of account any goods
bailed to them; but no other persons have a right to retain, as a
security for such balance, goods bailed to them, unless there is an
express contract to the effect.
 GENERAL LIEN PARTICULAR LIEN
1. It is a privilege of only five 1. It is available to all
classes of persons mentioned bailees
in section171 2. It is available only as
2. It is available against all regards the goods on
goods which the bailee has
3. It can be exercised for a done any work
general balance of accounts 3. It is available only for
remuneration due in
respect of these goods
Suit by bailor or bailee against wrong-doer.

180. If a third person wrongfully deprives the bailee of the use or

possession of the goods bailed, or does them any injury, the bailee is
entitled to use such remedies as the owner might have used in the
like case if no bailment had been made; and either the bailor or the
bailee may bring a suit against a third person for such deprivation
or injury.