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 consumer’s 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 HathiBhai-1966:- 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 Bank’s 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.