RIGHTS OF BAILEE

Rights of Bailee

Right to Right of lien

Right to return Right of Right to Right against
recover [S.170, 171]
the goods in Compensation apply to wrong does
charges
cases of joint [S.164] the court [S.180-181]
bailers [S.165] [S.167]

1. Right to recover charges:-If the bailment is non-gratuitous, Bailee has right to

recover agreed charges. If charges is not fix or agreed. Then Bailee can recover reasonable
charges or charge which is charged by other bailee.
For Example:

(1) A gives suit length to B, a tailor for stitching Shirt Pant Tailor tells A that charges of
Stitching will be Rs. 500. In then case Tailor B has right to recover from A Rs. 500 as
stitching charges.
Similarly, Mohan gives his mobile for Repairing to Mechanic B. B does not tells the
repairing charges, In this case Mechanic B can recover reasonable charges or charges which
he takes from other consonner.
2. Right to return the goods in cases of joint bailers [S.165]:- If several joint owners
of goods bail them the bailee may deliver them back to, or according to the directions of, one
joint owner without the consent of all, in the absence of any agreement to the contrary.
Thus when the goods have been delivered by several for of owners, Bailee can return
goods any one of the owner if there is no contrary Agreement.

1
3. Right of Compensation [S.164]:-The bailor is responsible to the bailee for any loss
which the bailee may sustain by reason that the bailor was not entitled to make the bailment
or to receive back the goods. or to give directions respecting them.
Thus, bailee can recover the amount of loss which he has suffered due to defective
title of Bailor.
4. Right to apply to the court [S.167]:- If a person, other than the bailor, claims goods
bailed, he may apply to the Court to stop the delivery of the goods to the bailor, and to decide
the title to the goods.
Thus, where a person, other than the bailor claims goods bailed the bailee may apply the
court-
(i) to the stop delivery of goods to the bailer; and

(ii) to decide the title of the goods

5. Right against wrong does [S.180-181] :- 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. S.181:- Whatever is obtained by way of relief or
compensation in any such suit shall, as between the bailor and the bailee, be dealt with
according to their respective interests.
This right has been discussed in the Bailor rights.

6. Right of lien [S.170, 117] :-

Bailee can retain the possession goods belong to bailor until the charges due to the
bailor are paid.

2
 DUTIES OF BAILEE [S.151 to
157, 160, 161, 163, 165]

Duties of Bailee

Duties of Bailee may be understood easily with the help of following chart:

Duties of Bailee

Duty
Dutynottoto deny theDuty
title of
notthetoBailor [S.117
Duty not Duty to Duty to
take care(2)] of the
explanation makeEvidence Act, S. to mix the
166, return the return with
of goods's unauthorized bailor's goods increase in 167 of contract
bailed use of goods goods in bailed the goods
[S.160, bailed Act
[S.151- bailed [S.153, his own
152] 154] goods S.161] (S.163)
1. Duty to take care of goods bailed [S.151 and 152]:-Regarding this duty of bailee
[S.155,
S.151 provides that In all cases of156,
bailment
157] the bailee is bound to take as such 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 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.[S.152]
Thus, Bailee is to-

(i) Bound to take reasonable care of the goods bailed to him.

(ii) Degree of care required by bailee is similar to the man of ordinary prudence.

1
(iii) Standard of care to be taken by bailee similar in all cases of bailment whether bailment
is gratuitous or non gratuitous.
(iv) The measure of the care will depend upon quantity quality and value of the goods
bailed.
As S.152 states that the bailee shall not liable for the loss, destruction or deterortion of
the goods bailed if he had taken the required degree of care.
In Martin v. Londan County Council (1947)

The plaintiff admitted in the paid hospital. At the time of the admission she gave some
jewellery to the hospital officials for safe custody. Jewellery was kept by Hospital official in
the Drugs room, from where it was stolen It was held that hospital officials were liable for
loss of jewellery.
However, bailee will be not liable for damages if the goods are destroyed due to
following: -(i) war (ii) heavy floods (iii) communal riots
(2) Duty not to make unauthorised use of goods bailed[S.153, S.154]:- This duty of
bailee is mentioned in S.153 and 154 of contract Act. S.153 provides a contract of bailment is
avoidable at the option of the bailor, if the bailee does any act with regard to the goods
bailed, inconsistent with the conditions of the bailment thus, where the bailee breaches the
conditions of bailment, bailor has right to terminate the bailment. If unauthorised use of
goods by bailee any loss or damage caused the goods, bailee will be liable to compensate the
bailor even of loss or damage caused due to the act of Good.
S.154 provides if the bailee makes any use of the goods bailed which is not according to the
conditions of the bailment, he is liable to make compensation to the bailor for any damage
arising to the goods from or during such use of them.
Examples:

(a) A lends a horse to B for his own riding only. B allows C, a member of his family, to
ride the horse. C rides with care, but the horse accidentally falls

2
 and is injured. B is liable to make compensation to A for the injury done to the horse.
(b) A hires a hores in Calcutta from B expressly to march to Varanasi. A rides with clue
care, but marches to Cuttack instead. The horse accidentally falls and is injured. A is
liable to make compensation to B for the injury to the horse.
3. Duty not to mix the bailers goods in his own goods [S.155, 156, 157

]:- It is the duty of bailee not mix the bailor's goods in his own goods. If he mixes the bailers
goods in own goods the effect of such mixture will be as follows:-
(A) Effect of mixture, with bailor's consent, of his goods with bailee's-If the bailee,
with the consent of the bailor, mixes the goods of the bailor with his own goods, the
bailor and the bailee shall have an interest, in proportion to their respective shares, in
the mixture thus produced. [S.155]
(B) Effect of mixture, without bailor's consent, when the goods can be separated-If
the bailee, without the consent of the bailor, mixes the goods of the bailor with his
own goods, and the goods can be separated or divided, the property in the goods
remains in the parties respectively; but the bailee is bound to bear the expenses of
separation or division, and any damage arising from the mixture.[156]
Example: A bails 100 bales of cotton marked with a particular mark to B. B, without
A's consent, mixes the 100 bales with other bales of his own, bearing a different mark: A is
entitled to have his 100 bales returned, and B is bound to bear all the expense incurred in the
separation of the bales, and any other incidental damage.
(C) Effect of mixture, without bailor's consent, when the goods cannot be separated-
If the bailee, without the consent of the bailor, mixes the goods of the bailor with his own
goods, in such a manner that it is impossible to separate

3
 the goods bailed from the other goods, and deliver them back, the bailor is entitled to be
compensated by the bailee for the loss of the goods.[S.157]
Example: A bails a barrel of Cape flour worth Rs. 45 to B. B, without A's consent,
mixes the flour with country flour of his own, worth only Rs. 25 a barrel. B must compensate
A for the loss of his flour.
4. Duty to Return the goods bailed [S.160, 161]:-It is the duty of the bailee to return, or
deliver according to the bailor's directions, the goods bailed, without demand, as soon as the
time for which they were bailed has expired, or the purpose for which they were bailed has
been accomplished.[S.160]
If, by the default of the bailee, the goods are not returned, delivered or tendered at the
proper time, he is responsible to the bailor for any loss, destruction or deterioration of the
goods from that time.[S.161]
It is point to the noted here that if bailee does not return the goods within time to
bailee. Bailor will be liable even if he is not negligent or loss was caused due to act of Gold.
However, where the possession of goods from bailee has been taken away by some authority
of law, bailee will be not liable to return the goods to bailor. In Case of Jugilal Kamlapati oil
Mills v. Union of India (1976) is best example for it:
In this case some edible oil was sent by a resident of Kanpur to Calcutta through
railway. When oil is wagon reached destination oil was seized by the food inspector under the
Calcutta Municipal Act. Oil was found to be adulterated therefore it was destroyed by the
order of the High Court.
It was held that Railway was not liable to return oil because oil was destroyed by the
order of the competent authority.
5. Duty to return withs increase in the goods bailed [S.163]:- Regarding this duty of bailee
S.163 provides that in the absence of any contract to the contrary, the bailee is bound to
deliver to the bailor, or according to his directions, any increase or profit which may have
accrued from the goods bailed.

4
For
Exam
ple:

A leaves a cow in the custody of B to be taken care of the cow has a calf.

B is bound to deliver the calf as well as the cow to

A.

6. Duty not to deny the title of the bailor [S.166, 167 of contract Act and

S.117 and exp.(2) of S.117 of Evidence Act]:-According to 117 of Evidence Act

that the bailee cannot deny the title of the Bailers or he cannot say that at the time
the bailment bailor has no title to bail the goods.
If the bailor has no title to the goods, and the bailee, in good faith, delivers
them back to, or according to the directions of the bailor, the bailee is not
responsible to the owner in respect of such delivery. [S.166]
If a person, other than the bailor, claims goods bailed, he may apply to
the Court to stop the delivery of the goods to the bailor, and to decide the title to
the goods.
According to Explanation (2) of 117 of evidence Act that if a bailee
delivers the goods bailed to a person other than the bailer he may prove that
such person had a right to the goods as against the bailar.

5
 PLEDGE : MEANING ESSENTIALS

PLEDGE : MEANING and ESSENTIALS

Meaning [S.172]:- All pledges are bailment but all bailments are not pledge. Therefore,
only those bailments are pledge where one party has delivered the possession of goods to
another party as a security for a loan or for fulfilment of a promise. As S.172 provides the
bailment of goods as security for payment of a debt or performance of a promise is called
"pledge". The bailor is in this case called the "pawnor". The bailee is called the "pawnee".
Thus, valid pledge come into existence only when:

(i) One person (Pawnor) has delivered the possession of the goods to other person
(Pawnee);
(ii) Such possession of the goods has been delivered upon a contract.

(iii) Possession of the goods has been delivered as a security for

(a) a payment of a debt; or

(b) fulfilment of the promise.

(iv) Delivery has been made on the condition that the security shall be returned when:

(a) loan is repaid or

(b) on the fulfilment of the promise.

Parties of the Pledge:

(i) Pawnor or pledger (Bailor)- The person who delivers the possession of the goods.

(ii) Pawnee or Pledged (Bailee)- The person to when the possession of the goods are
delivered as security.

6
 The relation between pawnor and pawnee is called pledge.

Example-Gauri borrowed Rs. 10,000 from Rajni and delivered her golden Chain as
security for repayment. In this case
Pawnor or pledger=Gauri
Pawnee or Pledgee=Rajni
Relation between Gauri and Rajni is of Pledge.

Essentials of Valid Pledge

1. Pawnor has delivered the possession of the goods to pawnee:-For valid pledge it
is necessary that pawnor has delivered the possession of the goods to the pawnee. It is point
to be noted that only possession of goods bassess from pawnor to pawnee and not ownership.
Where pawnor has not delivered the possession of the goods there can not be valid pledge.
The case of Revenue Authority v.Sudarshan Pictures (1968) is best example on this point.
In this case a producer of film took loan from a financer distributor and promised to
deliver the final prints of the film when it is ready. It was held that there was no valid pledge
because there was not delivery of possession for the pawnor to pawnee.
Pledge is kind of Bailment therefore like a bailment delivery of possession may be of
two kinds :-
(i) Actual delivery;

(ii) (ii) Constructive delivery.

Delivery of document of little and delivery of key of store is example of constructive

delivery.
In Morvi Mercantitle Bank Ltd. v. Union of India (1965) the Supreme Court held that
the Railway receipts for goods was the same thing as delivery of goods and delivery of
railway receipts amounts to delivery of goods.
Similarly the case of Bank of Chittor v. Narsimbulu (1968) is a best example of
constructive delivery.

7
 In this case the loan was taken by owner of cinema from the Bank. Cinema projector and
accessories were pledged with the Bank as security. The Bank allowed the pledge goods to remain with
the cinema owner. Owner of the cinema sold the Cinema Projector. It was held that projector was under
constructive delivery of the bank.
2- Possession has been delivered upon a contract:- It is also essential elements of valid pledge
that Pawnor has delivered the possession of goods in pursuance of contract of pledge. Delivery of
possession may be-
(i) Simultaneous with advance; or

(ii) after getting advance; or

(iii) Before or in contemplation of Advance.

In Blundell leigh v.Attenborough. (1921) A gave B a diamond ring for the purpose of valuation and
to let her know and to what credit can she secure on their value. On the same by B pledged the ring with
C for 1000 pound on the next day B gave A 500 pounds. It was held that pledge was valid.
3. Possession of the goods has been delivered as Security- for valid pledge it is necessary that
Pawnee has delivered some goods the Pawnee for:
(i) Repayment of a debt; or

(ii) Fulfilment of the promise

4. The pawnor has delivered the goods to pawnee on condition to return- For valid pledge it is
necessary that pawn or has delivered the possession of the goods to pawnee on the condition that when
loan is repaid or promised is fulfilled delivered goods as a security be return to Pawnor.
5. All essential of valid bailment must be present: - Pledge is kind of bailment therefore All
essentials of bailment must be present in the valid pledge. Pledge can me made for only movable
goods.