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6 EXPLAIN THE STANDARD OF CARE REQUIRED OF

A BAILEE IN RESPECT OF GOODS BAILED TO HIM.


INTROUCTION: - The standard of care is required is that of a
reasonable man. The amount of care to be taken should be
such as a man of ordinary prudence would under similar
circumstances take of his own goods of the same bulk quantity
and value as the goods bailed.
DEFINITION OF STANDARD OF CARE:- While going through the
contents of the provisions laid down in Section 151 of the
Contract Act it is noticed that in all cases of bailment the
bailee is bound to take as much as 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 and
quality and value and value as the goods bailed.
On perusal of the definition it is revealed uniform
duty of maintaining the standard of care in respect of the goods
bailed to him. However the following steps may also be taken
to maintain the standard of care:1.
The Bialee should act as a prudent man: When the
goods are bailed to him then he should take such standard way
of care as a man of ordinary prudence would like to take of his
own goods. If the bailee has not acted like an ordinary prudent
man he cannot be excused. A case of Union Bank of India v/s
Udho Ram & sons-1963: It was held railway did not take proper
care and failed to keep an eye on wagons which resulted theft.
2.
In Calcutta Credit Corportation Ltd. v/s Prince Peter of
Greece-1964: A car was received for repairs by a garage which
was damaged by fire. The car was parked in a garage which
was a partitioned by wooden walls, it also stored the paint and
thinners. When the fire open the car where it was kept could
not opened for fifteen minutes when the fire was notice. It was
held that the bailee had not taken a standard of care and he is
liable.
3.
Barbant & Comp. v/s King, 1895: The House of Lords
held that the only cases where the bailee would be immune are
laid down expressly in section 152 of the contract act, If he has

taken the amount of standard of care of it as described in


section 151 of act that the degree of care needed must be
maintained. 4. Laxmi Narayan v/s The Secretary for State for
India:1923: that when a carrier of goods transports jute in a
boat which has leaks on its side and the goods get damaged as
a results of un attended and unsafe place and lack of standard
of care.
CONCLUSION:- The facts and factors mentioned above it is
observed that the degree of care needed varies with the kind of
engagement and therefore when a person undertakes such a
job the law not only requires that he should possess the
requisite skill but also that he has the requisite plants and
appliances and well acquitted about maintaining the standard
of care. and also that his premises are also reasonable suitable
for doing that job.

7. What can be pledged and who can make a


valid pledge? Differentiate Pledge and Lien.
INTRODUCTION: - Section 172 says pledge is a bailment the
delivery of the goods from the pawnor to the pawnee which is
essential. There must be delivery of the goods i.e. the transfer
of possession from one person to another. The delivery
however, be either actual or constructive. Mere agreement to
transfer of possession in future is not enough to constitute a
Pledge.
Revenue Athority v/s Sunderasanam Pictures, 1968: It was held
that an agreement wherein the producer of a film agrees to
deliver final prints of the film under production when the same
are ready to a financier distributor in return for the finance
provided by the latter is not pledge because there is no deliver
of goods.
WHAT CAN BE PLEDGED:- Pledge is a kind of bailment where
the goods are delivered by one person to another as security
for payment or performance of a promise. If the goods are in
the possession of a third person there is deemed to be no
delivery of the goods unless and until the third person
acknowledges to the transferee that he holds the goods. The
following things can be pledged:i)

Only the moveable goods can be pledged.

ii)
The goods which are in possession of the True Owner
should have a clear title and valid documents.
WHO CAN MAKE A VALID PLEDGE:- Ordinarily he should be the
owner of the goods, or any person authorised by him in that
behalf who can pledge the goods. If a servant has the custody

of the goods or a tenant gets the possession of a furnished


house, the servant cannot pledge the goods nor can a tenant
pledge the furnishing materials in his possession.
A person obtaining the goods fraudulently does not have any
right to pledge them as described in a case of Purshotam Das
v/s Union of India-1967. In the following exceptional cases a
person who is neither the owner nor having any authority from
the owner for pledging the goods, but having possession with
the owners consent can make a pledge and confer rights on
the pledgee. These are as under:1. Pledge by Mercantile Agent: Section 178 of the Act a
mercantile Agent having the possession of the goods with the
consent of the owner but having no authority to pledge them
can make a pledge provided the pledgee or pawnee is acting in
good faith. He must pledge the goods while acting in the
ordinary course of his business of a mercantile agent.
2. PLEDGE BY PERSON IN POSSESSION UNDER A VOIDABLE
CONTRACT: The Act recognises another exception to the rule
that either the owner or his duly authorised agent can pledge
the goods. According to this a person who has obtained the
possession of the goods under a voidable contract.
Voidable contract is a valid contract until it has been
rescinded and becomes void after the same has been
rescinded. If the pawnor has obtained the possession of the
goods under a voidable contract but the contract has not yet
been rescinded, the pledgee is capable of having a good title to
such goods. Thus if a person has obtained the possession of
goods by fraud, misrepresentation, coercion or undue influence,
he could make a valid pledge of the goods if the same is done
before the contract has been rescinded. A case of Phillips v/s
Brooks Ltd., 1919: It was in this case that pledge was valid.
3. Pledge by a person with a limited interest: - This Provision
have been given in the section 179 of the act that a person
having limited interest in the goods may make a valid pledge.
For example : A pledges the goods to B for Rs.5000/- and B
makes a sub pledge of those goods for Rs.8000/- A gets a right
to take back those goods only by paying Rs.5000/-as held in

case of Belgawn Poiner Urban Co-op Credit Bank v/s


Satyaparmoda-1962.
Difference between Pledge & Lien
Pledge
Lien
Pledge is a kind of bailment and security.
In right of lien it is not so as in Pledge.
In a pledge pawne acquires a special interest in the property
pledged.
Right to lien gives only a right to detain the subject matter of
the lien until payment. Lien is not transferable to a third
person.
Pledge is deliver of goods to the creditor as security for the
debt.
Lien is a right of a creditor to retain the goods until his debt is
paid or satisfied
CONCLUSION:- In Pledge which a kind of bailment and also to
be considered as security for the debt of the creditor. It is also
essential in the Pledge that there must be delivery of the
moveable goods from pawnor to pawnee and transfer of
possession from one fellow to another. A person who is having
the possession of goods and consent of the true owner and
acting in good faith can make a valid pledge.

8. What is bailment? Explain its essential


ingredients of Bailment? What are the duties &
rights of Finder of the goods as a Bailee?
INTRODUCTION:-Means delivery of goods i.e. moveable
property by one person who is generally the owner thereof, to
another person for some purpose. The goods are to be returned
to the owner after accomplished the purpose to take further
action as per directions of the owner of the goods. A.T.Trust
Ltd., v/s Trippunhura Devaswomi-1954. In a contract of
bailment the person who delivers the goods called the Bailor
and to whom the goods are delivered is called as Bailee.
DEFINITION:- Section 148 of the Indian Contract Act, A bailment
is the delivery of goods by one person to another for upon a
contract that they shall when purpose is accomplished be
returned or otherwise disposed of according to the directions of
the person delivering them. The person delivering the goods is
known as BAILOR and the person to whom goods are delivered
is known as the BAILEE.
ESSENTIAL INGREDIENTS OF BAILMENT:- The following are the
essentials of the bailment under the Contract Act:-

(a) DELEVERY OF GOODS FOR SOME PURPOSE:- Delivery means


transfer of the goods from the possession of one person to
another person. Delivery need not always be actual, sometimes
it may be constructive or symbolic as per instructions laid down
in section 149 of the Act, and this section recognises it other
than actual delivery. However section 149 also provides below
in this regard:The delivery to the bailee may be made by doing anything
which has the effect of putting the goods in the possession of
the intended bailee or any other person authorized to hold
them on his behalf.
i) Jagdish chand Trikha v/s Punjab National Bank, 1998 : It was
held by the court that the position of the bank was that of a
Bailee and it failed in its duty to take care of the goods and
return them to the Bailor. The Bank was held liable to pay the
cost of Rs. 3,72,400/- along-with simple interest @12% from the
date of institution of the suit.
ii) Ultzen v/s Ni coles, 1894:- It was held that the defendant
was the bailee of the coat as his servant had assumed the
possession of the same and he was therefore liable for its loss
which was occurred due to his negligence.
(b) IF THE OWNER MAINTAINS CONTROL OVER THE GOODS
THERE IS NO BAILMENT: When the person keeps his goods in
the premises of others but himself continues to have the
control over them, this is not sufficient delivery for being
considered to be bailment. Kaliaporumal Pillai v/s Visalakshmi,
1938 : It was held that there was no bailment as she had not
handed over the possession of the jewels to the goldsmith, and
therefore the goldsmith could not be made liable for the loss.
Punjab National Bank v/s Sohan Lal, 1962, It was held that the
locker could be operated even without the key with the
consumer. The consumers control over the valuable things in
the locker had gone and the same with the bank, therefore the
bank was liable being bailee and thus Bank is liable for the loss
of the belonging of the consumer in the locker.
(c) THERE CAN BE BAILMENT WITHOUT CONTRACT:- In some
cases there can be a bailment when the person obtains the

possession without a contract of the bailment as it was done in


the case of :Ram Gulam v/s Govt. Of Uttar Pradesh- 1950, The
court expressed that the property of plaintiff was stolen and the
same was recovered by the Police, Police kept the same in the
Malkhana. Property was again stolen from the Maalkhana and
could not be traced out. Here the point of bailment raised since
no contract of bailment was made for which conviction is
announced but the law itself recognises the finder of the goods
as bailee under section 71 of contract Act, hence it was held
that bailment can be even there when there is no contract of
bailment. L.M. Co-operative Bank v/s Prabhudass HathiBhai1966:- It was held that the government stood in the position of
a Bailee to take due care of the goods. Govt., duty to prove that
they had taken proper care as was possible for them and the
damage was due to reasons beyond their control.
RETURN OF GOODS AFTER THE PURPOSE IS ACHIEVED: OR
THEIR DISPOSAL ACCORDING TO THE BAILOR DIRECTIONS:The delivery of the goods in a bailment is only for some
purpose i.e. for safe custody, for carriage, for repair etc., when
the purpose is accomplished the goods are to be returned or
otherwise disposed of according to the directions of the person
delivering them. According to Section 148, the goods shall be
when purpose is achieved returned to the bailor or disposed of
as per his directions i.e. when the cloth is given for being
stitched in to suit or gold for being converted into ornaments or
wheat for being converted into flour there is a bailment in each
case. When the money is deposited into a Bank, when the
agent receives some payment on behalf of Principal, he is not
the bailee thereof because he is only bound to pay an
equivalent of it to the principal rather than the same currency
as done in the case of: - Secretary of State for India Council v/s
Sheo Singh-1880: Some notes were given to Treasury for being
cancelled, there is no bailment as the same notes are not to be
returned. Constructive bailment does not confer any right to a
stranger. Bailment regarding hiring of a locker will not create
relationship of Land lord and the tannent, as the Bank can
always open the locker with a Master Key. The hirer of the
locker is not in a position to open the locker without the

assistance of the Bank. The Hirer has to operate the locker only
within the Banks time but the bank has no such limitation
CONCLUSION:- Keeping in view the above stated facts and the
gist of the decisions of the Courts it is noticed that the goods
are to be returned to their original owner after the purpose is
accomplished or they are to be disposed of as per the
directions of the Bailor in same condition as these were bailed.

POSITION OF FINDER OF GOODS


A person who finds goods belonging to another and takes them
into his custody is subject to the same responsibility as a bailee
as provided in sec.71. Since the position of the finder of goods
is that of a bailee. He is supposed to take the same amount of
care with regard to the goods as is expected of a bailee under
section 151. He is also subject to all duties of a bailee including
a duty to return the goods after the true owner is found.
Section 168 and 169 confer certain rights on the finder of
goods which are as under:
1. May sue for specific reward offered: The finder of goods
has no right to sue the owner for compensation or trouble and
expenses voluntarily incurred by him to preserve the goods, but
he may retain the goods until he receives such compensation
and a specific reward offered by the owner for return of the
goods. Refer sec. 168 of the Act.
2. If true owner is diligence not found or he refuses to pay the
lawful charges of the finder of the goods, the finder may sell it
on the following conditions:i)
When the thing is in danger of perishing or losing
part of its value.
ii)
When the lawful charges of the finder, in respect of
the found goods amount to two-third of its value.
iii)
Right of Lien: He can retain the Lien on the found
goods until his expenses on find goods are paid.

iv)
Right to sell the goods found:- Finder of the goods
has the right to sell the goods found by him under certain
circumstances provided in section 169 of the act with a
reasonable notice mentioning the intention to sale the goods
found.

9. Define Pledge and distinguish between Pledge


and Bailment.
INTRODUCTION:-- Section 172 of the Act: Since pledge is a
bailment the delivery of the goods from the pawnor to the
pawnee which is essential. There must be delivery of the goods

i.e. the transfer of possession from one person to another. The


delivery however, be either actual or constructive. Mere
agreement to transfer of possession in future is not enough to
constitute a Pledge.
Revenue Athority v/s Sunderasanam Pictures-1968: It was held
that an agreement wherein the producer of a film agrees to
deliver final prints of the film under production when the same
are ready to a financier distributor in return for the finance
provided by the latter is not pledge because there is no deliver
of goods.
DEFINITION OF PLEDGE:- Section 172 of the Contract Act,
Pledge is the bailment of goods as security for the payment of
a debt or for the performance of a promise. The delivery may
be actual or constructive. The possession in a pledge must be
judicial possession. Mere physical possession in not sufficient.
DEFINITION OF BAILMENT:- The delivery of the goods by the
bailor to the bailee is the essence of the bailment. Unless there
is actual delivery there is no contract of bailment.
Section 148 of the contract act defines bailment as under:- A
bailment is a 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.
DIFFERENCE BETWEEN PLEDGE & BAILMENT
PLEDGE
Pledge is a species of bailment.
Pledge is bailment of goods as security for the payment of debt
or for the performance of a promise.
Moveable property is subject-matter of pledge under the
contract Act.

BAILMENT
Bailment is a genus.
Bailment is a delivery of goods by one person to another for
some purpose upon a contract.
In the contract of bailment after the accomplishing of the
purpose the goods are to be returned or otherwise disposed of
according to the directions of the Bailor.
CONCLUSION:- In Pledge which a kind of bailment and also to
be considered as security for the debt of the creditor. It is also
essential in the Pledge that there must be delivery of the
moveable goods. Whereas in the contract of bailment there is a
delivery of goods by one person to another for some purpose
and when the purpose is accomplished the goods are to be
returned or to disposed of as per the directions of the Bailor.
10. Explain the Rights and the Duties of BAILEE.
INTRODUCTION: - Bailee is one of the most important character
of the Bailment Contract. Bailee is of that to whom the goods
are delivered by the Bailor with some directions and to
complete some certain purpose. Bailee receives only the
moveable things and he has to returned the goods which he
receives after accomplishing the purpose or he has to disposed
of that things with the directions of the owner of that goods.
RIGHTS OF BAILEE:- Under the provisions of Indian Contract Act
1872, the following are the rights to the bailee in Bailment
contract:1. RIGHT TO RECOVER NECESSARY EXPENSES INCURRED ON
BAILMENT:- According to section 158 of the Act when a contract
of bailment is made some remuneration is to be paid to the
bailee for the services he renders in respect of them. So he has
the right to recover the same. In case of gratuitous of bailment

the bailee has no right even not entitled to receive any


remuneration for the services he renders.
Section 158 says that, Where by the conditions of the
bailment the goods are to be kept or to be carried or the work
to be done upon them, the bailee for the bailor and the bailee is
to receive no remuneration the bailor shall pay the necessary
expenses incurred by the bailee for the purpose of bailment.
Illustration: - A leaves his horse with the neighbour for safe
custody for a week. B is entitled to recover the expenses
incurred by him in feeding the horse.
2. RIGHT TO RECOVER THE COMPENSATION:- According to
section 164 of the act, 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 in respect of them.
From the definition it is noticed that when the Bailor
sometime not entitled to make the bailment or to receive back
the goods which may results a loss to the bailee, then the
bailee is entitled to recover the loss from the Bailor.
3. RIGHT OF LIEN ON THE GOODS BAILED:- According to
section 170-171 of the Act the bailee can retain the lien on the
goods of the Bailor and can refuse to deliver them back to
Bailor until his due remuneration for services he renders or any
amount due is paid by the Bailor.
4. Compensation for the loss caused by non-disclosure of
faults in goods Bailed:- The goods so bailed contain a fault
which is known to the bailor but he does not convey it to the
bailee and as a result thereof bailee sustains some injury. The
bailee can ask for the compensation.
5. Loss caused by the defects of thing bailed:- When the
things bailed for hire or on rent the bailee can ask for
compensations for the loss or injury caused by both latent or
patent defects of the thing bailed irrespective of awareness of
bailor about those defects as provided in sec.150 of the Act.
6. Right to sue: The bailee has the right to sue the wrongdoer who wrongfully deprives the bailee of the use or

possession of the goods bailed or does them any injury on the


basis of instructions in Sec.180 of the Act.
DUTIES OF THE BAILEE:- A bailee has to observe the following
duties:1. Duty to take reasonable care of the goods bailed: under
section 151-152 of the act bailee is bound to take reasonable
care of goods bailed to him as man of ordinary prudent under
similar circumstances as he is taking care of his own goods.
2. Duties not make unauthorised use of the goods bailed:
Section 153-154 of the act bailee is not authorised to make
unauthorised use of the goods bailed to him.
3. Duty not to mix bailors goods with his own goods: Act says
through its section155 and 157 that bailee may not mix the
bailed goods with his own goods which will create a problem at
the time of return of the goods to bailor.
4. Duty to return the goods on fulfilment of the purpose:
Section 159-161and 165-167 provides that when the purpose is
accomplished the bailee has to return the goods to bailor or to
disposed of as per his directions.
5. Duty to deliver to the bailor increase or profit on the goods
bailed:- Under secion 163 of the Act it is the duty of the bailee
to pay to bailor the profits earned through the goods bailed or
any increase thereby.
CONCLUSION:- If the bailee performed his duties with entire of
his dedications, honesty and in good-faith and also to enjoy his
rights on the basis of the provisions laid down in the Contact
Act then there will be no creation of any problem and the
agreement will also be fulfilled.