Bailment and pledge (148 – 181)

Bailment and pledge (148– 181)

 Sec 148 – 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 off according to the
directions of the person delivering them”.
 The person delivering the goods – Bailor.
 The person to whom they are delivered -
Bailee
Requisites of a Bailment
 Contract – Express or implied. (finder of
goods)
 Delivery of possession – delivery may be
actual or symbolic or constructive
 For some purpose
 Return of specific goods.
Bailment is concerned only with the
Goods.( Examples of Bailment )

 A hire purchase contracts – two aspects –

bailment + sale
 Seizure of goods by custom authorities.
 Acceptance of goods by transport company
or railway for carriage.
 Acceptance of articles by post office as Value
Payable Parcel (VPP)
Bailment may be classified

According to benefits derived by the parties -

 for the exclusive benefit of the bailor eg delivery of

some valuables to neighbor for safe custody
without charge.
 for exclusive benefit of the bailee- lending a
bicycle to friend for his use without charge.
 for mutual benefit – eg. Giving watch for repair.
Bailment may also be classified as
–
 Gratuitous bailment – No consideration
passes between bailor and bailee. eg. Where
A lends a book to his friend B

 Non – gratuitous bailment- or bailment

for reward where consideration passes
between bailor and bailee eg A hires a horse
from B
Duties & Rights of Bailor and Bailee
Duties of Bailor
 To disclose known faults- sec 150. In case of
goods are bailed on hire, the duty of the bailor is still
greater. He is responsible even for those faults which are
not known to him (sec 150)
 To bear extraordinary expenses Of bailment-
bailee is bound only for ordinary and reasonable exp. Eg.
A leaves his car with B, a friend for safe custody for two
months. B has to pay Rs 100 per month to the night
watchman. It is A’s duty to pay B. (sec 158)
 To indemnity bailee for loss in case of premature
termination of gratuitous bailment- (if loss exceeds the
benefit )sec 159
Duties & Rights of Bailor and
bailee (Duties of Bailor)
 To receive back the goods- After the expiry
of term of bailment.
 To indemnify the bailee- (sec 164) where the
title of the bailor is defective and bailee suffers
the consequences, bailor is responsible for the
loss and must make it good.
Duties of bailee
1. To take reasonable care of the goods
bailed (sec 151). The on us of proof is on
the bailee to show that there has been no
negligence (eg. Cattles for feeding, hospital
people for jewellery of a patient, restaurant
proprietor for a loss of coat etc)
2. Not to make any unauthorized use of
goods (sec 154)
3. Not to mix the goods bailed with his own goods- If
bailee mixes the bailor’s goods with his own goods
(a) with the bailor’s consent – both shall have a
proportionate interest in the mixture thus produced
(155)
(b) without the bailor’s consent – bailee is bound to
bear the expenses of separation or division as well as
damage arising from the mixture. (sec 156) (if the goods
can be separated / divided.
(c)   Without the bailor’s consent – where the goods
or mixture is beyond separation (sec 157) liable for loss )
4. Not to set up an adverse title - (sec 117 of
Evidence Act)
5. To return any accretion to the goods -
(sec. 163) In the absence of any contract to
the contrary bailer is bound to deliver to the
bailor any increase/profits which may have
accrued from the goods bailed.
6. To return the goods- (sec 160, 161)
Rights of bailor

1. Enforcement of rights- Bailor can enforce

by suit all the liabilities or duties of the
bailee, as his rights
2. Avoidance of Contract – The bailor can
terminate the bailment if the bailee does,
with regard to the goods bailed, any act
which is inconsistent with the terms of
bailment (sec 153)
3. Return of the goods lent gratuitously – When the
goods are lent gratuitously, the bailor can demand their
return whenever he pleases, even though he lent them
for a specified time or purpose. But if the bailee suffers
any loss exceeding the benefit actually derived, bailor
must indemnify the bailee (sec 159)
4. Compensation from a wrong-doer- If a third person
wrongfully deprives the bailee of the use or possession
of the goods bailed, or does them any injury, the bailor
or the bailee may bring a suit against the third person for
such deprivation or injury (sec 180)
Rights of bailee
1. Delivery of goods to one of several joint bailors of
goods – sec 165
2. Delivery of goods to bailor without title – 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 owners in respect of such
delivery (sec. 166)
3. Right to apply to court to stop delivery – If a person,
other then of the bailor, claims goods bailed, the
bailee may apply to the court to stop the delivery of
the goods to the bailor and to decide the title of
goods (sec. 167)
4. Right of action against trespassers – sec 180
5. Bailee’s lien – where the charges of the bailee in
respect the goods bailed are not paid he may retain
the goods. This is known as “particular lien”.
Laws relating to lien
 “Lien means the right of a person to
retain possession of some goods,
belonging to another, until some
debt or claim of the person in
possession is satisfied”.
Two types of Lien

1. Particular Lien – is available to the bailee against

only those goods in respect of which he has
rendered some services involving the exercise of
labour or skill . ( sec 170)
2. General Lien – is a right to retain all the goods or
any property of another until all the claims of the
holder are satisfied. This is a right to retain the
property of another for a general balance of
account (sec 171) – This lien is available to
Bankers, Factors, Wharfingers, Attorneys of High
Court.
Finder of goods – Rights
 Right of lien
 Right to sue for reward
 Right of resale –
a. If the owner can not with reasonable
diligence to be found, or
b. If found he refuses to pay lawful charges
c. If the goods are in danger of perishing
d. If the lawful charge of the finder in respect of
the goods found, amounts to 2/3 their value
(sec 169)
Termination of Bailment
1. On the expiry of period
2. On the achievement of the object
3. Inconsistent use of goods – sec 154
4. Destruction of the subject matter
5. Gratuitous bailment can be terminated any
time, subject to conditions laid down
(sec159)
6. Death of the bailor or bailee( sec 162)
Pledge
 The bailment of goods as a security
for payment of a debt or
performance of a promise is called
pledge

 The bailor is known as pawner

 The bailee is known as pawnee

Rights and Duties
of Pawner and
Pawnee.