RAYAT COLLEGE OF LAW

CONTRACT PROJECT
CONCEPT OF BAILMENT

SUBMITTED TO- SUBMITTED BY-

Mr. SONU BHAVYA SHARMA
ASSISTANT PROFESSOR, B.COM. LLB (Section- C) 2nd
RAYAT COLLEGE OF LAW, Semester
RAILMAJRA. Roll. No.- 17614
 ACKOWLEDGEMENT

I would like to express my special thanks of gratitude to my

teacher Mr. Sohnu as well as Rayat college of law, Railmajra
who gave me the golden opportunity to do this wonderful
project on the topic ‘Concept of Bailment’, which also helped
me in doing a lot of Research and i came to know about so
many new things I am really thankful to them.
Secondly i would also like to thank my parents and friends
who helped me a lot in finalizing this project within the
limited time frame.
 CERTIFICATE

THIS IS TO CERTIFY THAT BHAVYA SHARMA OF B.COM LLB

(SECTION –C) 2nd SEMESTER HAS SUCCESSFULLY COMPLETED
PROJECT ON THE TOPIC " CONCEPT OF BAILMENT " AS
PRESCRIBED BY Mr. SOHNU Sir.
 CONTENT

 Introduction
 Meaning – Bailment
 Definition- Bailment
 Nature of bailment
 Essential features of bailment
 Types of bailment
 Rights and duties of bailment
 Difference between bailment and pledge
 Difference between particular lien and general lien
 Conclusion
 Bibliography
 INTRODUCTION
The word bailment derives from a Latin verb, bajulare, meaning “to bear a
burden,” and then from French, bailler, which means “to deliver” (i.e., into the
hands or possession of someone). Finally, we turn to the legal relationships that
buyers and sellers have with warehousers and carriers—the parties responsible
for physically transferring goods from seller to buyer. This topic introduces a
new branch of law—that of bailments. The law of bailments is important to
virtually everyone in modern society: anyone who has ever delivered a car to a
parking lot attendant, checked a coat in a restaurant, deposited property in a
safe-deposit box, rented tools, or taken items clothes or appliance in to a shop
for repair. There are many instances of bailment in our daily lives – when we
give our clothes for laundry, when we use valet parking for our cars. We deliver
our goods to another person or leave them in the power of another person for a
purpose and expect to receive our goods back when the purpose has been
achieved.

For example, a man visits a repair shop for getting his television set fixed. The
television set is left at the shop where the repair man examines it and fixes the
problem. Once fixed, the television set has to be returned to its owner. There is
a contract of bailment between the man and the repair-man.

Chapter IX (Section 148 – 181) of the Indian Contract Act, 1872 deals with the
general rules relating to bailment.

MEANING- BAILMENT
Bailment is a process where the owner of certain goods places them in the
temporary possession of another person. In simple terms, bailment means that
a person delivers his goods to another person or put them in another’s
possession for a specific purpose and there is an express or implied
understanding between the two people that once the purpose has been
achieved, the goods will be returned to the owner – the person who bailed
them. In legal sense, it involves change of possession of goods from one person
to another for some specific purpose.

Example: A man drops off his clothes for dry cleaning. He is the bailor and the
purpose of bailment is to have the particular set of clothes cleaned. The dry
cleaner is the bailee – he is the temporary custodian of the clothes and is
responsible for keeping them safe and to return them to the bailor once they
have been cleaned.

Explanation to Section 148 states that if a person already in possession of the

goods of another person contracts to holds the goods as a bailee, he becomes
the bailee even though the goods may not have been delivered to him by way of
bailment in the first place. For example, a seller of goods becomes a bailee if the
goods continue to be in his possession after sale is complete. Here the original
possession of goods was with the seller as the owner of the said goods and after
the sale, his possession is converted into a contract of bailment.

Example: A has a motorcycle that he sells to B who leaves the motorcycle in the
possession of A while he is out of town. Here, A becomes the bailee even
though he was the owner originally.

DEFINITION- BAILMENT
Section 148 of Indian Contract Act 1872 defines ‘Bailment’ as 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 direction of the person delivering them. The person who owns
and delivers the goods is called the ‘bailor’. The person to whom the goods are
delivered is called the ‘bailee’.

Halsbury defines Bailment as ‘delivery of personal chattels in trust on a

contract, express or implied, that the trust shall be duly executed and chattels
redelivered in either their original or altered form, as soon as the time of use, or
condition on which they had been bailed has elapsed or been performed
respectively’.

Justice Blackstone defines Bailment as ‘a delivery of goods in trust, upon

contract, either expressed or implied, that the trust shall be faithfully executed
on the part of the bailee’.

According to Anson, “Bailment involves the transfer of possession (or an

agreement to transfer possession) of goods to a person (the bailee) who holds
(or agrees to hold) the goods either for at the direction of bailor, to whom they
will be returned.”

According to Pallock and Mulla, “a bailment is a the delivery of a thing

entrusted for some special object or purpose, upon a contract, express or
impact, to conform to the object or purpose of the trust.”

Important points:-
 Who can bail – it is the owner of the goods, who may bail down.
Therefore, where the goods are bailed by a person, other than the owner,
it would not be a valid bailment. However, law creates equities in favour
of the bailee acting in good faith.
 Objective of contract of bailment – under the contract goods are bailed
with specific purpose which could be any specific service like care of
goods, washing, dry cleaning, dying, service of car etc. and when the
purpose is accomplished, the goods are to be returned or otherwise
disposed of according to the directions of the bailor.
 Parties in contract of bailment –There are two parties in the contract of
bail. The person delivering the goods is called the ‘bailor’. The person to
whom they are delivered is called, the ‘baliee’.
 Contract of bailment can be expressed or implied –the contract of
bailment can be expressed or implied. Expressed means through word
which can be oral or written. Implied contract involves not through words
but through conduct.
  Subject matter of the contract –the subject matter of the contract of
bailment is always goods and not the immovable property.

NATURE OF BAILMENT
Bailment is a type of special contract and thus, all basic requirements of
contract like consent of parties, competency, etc are applicable to any contract
of Bailment. A bailment is usually created by an agreement between the bailor
and bailee. Section 148 specifically talks of bailment via a contract. But a valid
bailment can also arise in absence of express contracts or from invalid or
voidable contracts.

In bailment, neither the property nor the ownership of the goods involved is
transferred at any point. Only the temporary possession of the bailed goods is
transferred and the ownership of such goods remains with the bailor. The bailor
can demand to have the property returned to him at any time.

ESSENTIAL FEATURES OF BAILMENT

Section 148 of the Indian Contract Act, 1872 makes it very clear that there are
three essential features of Bailment, namely:

1) Delivery of Possession

2) Delivery upon Contract

3) Delivery for a purpose and Return of Goods

1) Delivery of Possession: The delivery of possession of goods is essential for

bailment. There must be transfer of possession of the bailed goods from bailor
to bailee and the goods must be handed over to the bailee for whatever is the
purpose of bailment. Here, possession means control over goods and an
intention to exclude others from exercising similar control over the same goods.
Thus, the bailee must have actual physical control of the property with the
intent to possess it for a valid bailment.

As per Section 149, the delivery can also be made to the bailee by doing
anything which has the effect of putting the bailed goods in the possession of
the intended bailee or any person authorized by him for this purpose.

Thus, the delivery of possession can be actual or constructive. The delivery may
either put the bailee in the actual physical possession of the goods or put the
bailee in a position of power over such goods that may be possessed later. The
essential of a bailment is the delivery of goods for a temporary purpose.

Mere custody of goods is not the same as delivery of possession. A guest who
uses the goods of the host during a party is not a bailee. Similarly, it was held
in Reaves vs. Capper1 that a servant in custody of certain goods by the nature of
his job is not a bailee. Similarly, a servant holding his master’s umbrella is not a
bailee but is a custodian.

Similarly, hiring and storing goods in a bank locker by itself is not bailment
thought there is delivery of goods to the bank premises. The goods are in no
way entrusted to the bank. A bank cannot be presumed to know what goods are
stored in any given locker at all the times. If a bank is given actual and exclusive
possession of the property inside a locker by the person who hired the locker,
only then can bailment under Section 148 can be presumed.

In Atul Mehra vs. Bank of Maharashtra 2, it was held that mere hiring of a
bank’s locker and storing things in it would not constitute a bailment. But the
position changes completely if the locker in the safe deposit vault of the bank
can be operated even without the key of the customer.

Example: A hired a locker in a bank and kept some of his valuables in it. He was
given one key to open the locker. But the bank manager of the particular branch
had fraudulently filed the levers of the locks of the lockers. Thus, the lockers
could be opened even without the key of the customers. A’s valuables went
1
[1838 5 Bing NC 136]
2
[AIR 2003 P&H 11]
missing. A’s control over the valuables in that locker had gone because the
locker could be operated even without A’s key. The bank was liable for the loss
of A’s belongings from the locker as it became a bailee. This example is similar
to the case of National Bank of Lahore vs. Sohan Lal1

Thus, it is clear that the nature of possession is very important to determine

whether a delivery is for bailment or not. If the owner continues to have control
over the goods, there can be no bailment.

To create a bailment, the bailee must intend to possess and in some

way physically possess or control the bailed goods or property. In a situation
where a person keeps the goods in possession of another person but in fact,
continues to have control over such goods, there is no delivery for the purpose
of bailment.

The delivery of possession does not mean that the bailee now represents the
bailor with respected to the bailed goods. The bailee only has certain power
over the property of the bailor with his permission. The bailee has no power to
make contracts on behalf of the bailor or make the bailor liable for his own acts
with the goods bailed.

Example: If a person delivers his damaged car to a garage for repair under his
insurance policy, the insurance company becomes a bailee and the garage a
sub-bailee. If the car is stolen from the garage or destroyed by fire in the garage,
both – the insurance company and the garage will be liable to the owner of the
car, the bailor.

Delivery of possession, as required for bailment, can be made in two ways –

Actual or Constructive.

1. a) Actual Delivery: Here, the bailor hands over the physical possession of
the goods to the bailee.

Example: A’s watch is broken. When he leaves his watch at the showroom for
repair, he has given actual delivery of possession of goods to the showroom.
1
[AIR 1962 Punj. 534]
 1. b) Constructive Delivery: Constructive delivery is an action that the law
treats as the equivalent of actual delivery. It can be difficult to deliver
intangible

In constructive delivery, the physical possession of the goods may not be

handed over. The possession of the goods may remain with the bailor with the
consent or authorization of the bailee. In constructive delivery, an action on
part of the bailor merely puts the bailee in position of power with respect to the
bailed goods. The bailor gives the bailee the means of access to taking custody
of it, without its actual delivery.

Example: A has rare coins in a locked safe-deposit box. Delivery of a safe deposit
box is not possible. When he hands over the keys to the box to B, it is taken as
constructive delivery for purpose of bailment.

Section 149 specifically deals with constructive delivery of goods. It states that
anything done 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 is to
be treated as constructive delivery of the goods.

Constructive delivery is legal fiction – thus, a legal delivery is presumed even

where the delivery of the actual goods has not taken place. Even the delivery of
a railway receipt is taken as the equivalent of delivery of the goods.

In Bank of Chittor vs. Narsimbulu1 , a person pledged cinema projector with the
bank but the bank allowed him to keep the projector so as to keep the cinema
hall functional. It was held that there was constructive delivery because action
on part of the bailor had changed the legal character of the possession of the
projector. Even though the actual and physical possession was with the person,
the legal possession was with the bank, the bailee.

2) Delivery upon Contract: It is necessary that the goods are delivered to the
bailee and returned to the bailor when the purpose is accomplished upon a
contract. This means there should a contract between the two parties for such

1
[AIR 1966 AP 163],
transaction of delivery and subsequent return. If there is no contract, there is no
bailment. The contract giving rise to bailment can be express or implied.

Property deposited in a court under orders is not property delivered under a

contract. Such delivery or transfer does not constitute bailment.

Exception to the delivery upon contract: A finder of goods is treated as a bailee

even if there is no contract of Bailment or delivery of goods under a contract.
A finder of the goods is a person who finds the goods belonging to some other
person and keeps them under his protection till the actual owner of the goods is
found. An involuntary contract of bailment arises and the finder automatically
becomes bailee even in absence of bailment by the bailor – the owner of the
lost goods. Since the person is in the position of the bailee, he has all the rights
and duties of a bailee.

Under English Law: There can be bailment without a contract. If a person

deposits or delivers the goods under stressful circumstance like fire flood, riots
or if the person who is depositing the goods is incapable of appreciating the
value of the action, it is still regarded as bailment despite the absence of a
contract. Delivery of goods to another under a mistake of identity of the person
is also treated as bailment without a contract as long as the bailor took
reasonable care to ascertain the identity.

Present Position in India: The Law Commission of India in its 13th report
suggested that bailment without contract should also be included in the Indian
Contract Act, 1872 but no concrete steps have been taken as yet. Presently, the
Indian Courts have taken the position that bailment can exist without a
contract. In some of these cases, even the government has been held liable as a
bailor despite the absence of a contract.

The case of Lasalgoan Merchants Bank vs. Prabhudas Hathibhai 1is one the first
where the Courts started imposing the obligations of a bailee even without a

1
AIR 1966 Bom 134, (1965)
contract. In State of Gujarat vs. Memom Mahomed1, the Supreme Court of India
accepted this view and stated that “…Bailment is dealt with by the Contract Act
only in cases where it arises from a contract, but it is not correct to say that
there cannot be bailment without an enforceable contract.”

3) Delivery for a purpose and Return of Goods: There has to be a purpose

for the bailment of goods and it is mandatory that once such purpose is
accomplishes, the goods have to be returned to the bailor or be disposed off per
his instructions. Bailment cannot arise if the goods are not to be specially
accounted for after completion of such task or purpose. This is a feature of
bailment that distinguishes it from other relations like agency, etc.

The third essential of bailment is twofold –

1. a) The delivery of goods must be for some specific task or performance.

Delivery of goods in bailment is not permanent. There has to be a purpose
for the bailment of goods and it is mandatory that once such purpose is
accomplishes, the goods have to be returned to the bailor or be disposed
off per his instructions. A tailor is given a cloth for stitching a shirt, a
watch repair shop is given a watch to mend it.

1. b) That the goods must be returned to the bailor or be taken care of as

per the instructions of the bailor. If a person is not bound to return the
goods to another, then the relationship between them is not of bailment.
If there is an agreement to return the equivalent and not the same goods,
it is not bailment. An agent who collects money on behalf of his principal
is not a bailee because he is not liable to return the same money and
coins.

Example: A tailor who receives a cloth for stitching is the bailee in this case. The
tailor is supposed to return the finished garment to the customer, the bailor,
once the garment has been stitched.

1
AIR 1885 1967 SCR (3) 938 ACT:
 1. c) Return of goods in specie is also essential. The same goods that were
bailed must be returned to the bailor in the same condition after the
accomplishment of purpose as they were handed over to the bailee in the
beginning. Any accruals to the goods must also be handed over. If an
animal gives birth during the period of bailment, the bailee must return
the animal with the offspring at the conclusion of the bailment.

The bailor can give other directions as to the disposal or return of the bailed
goods. In case of such agreement or instructions, the bailee must immediately
dispose the goods after completion of purpose as per the directions.

If the goods are not returned or dealt as per the directions of the bailor there is
no bailment. For example, depositing money into bank by a customer does not
give rise to a contract of bailment because the bank is not bound to return the
same notes and coins to the customer. This same point was also made in the
case of Ichcha Dhanji vs.Natha 1

In Secy of State vs. Sheo Singh Rai 2, a man delivered nine government
promissory notes to the Treasury Officer at Meerut for cancellation and
consolidation into a single note of Rupees 48,000 only. The notes were
misappropriated by the servants of the Treasury Officer. The man sued the State
to hold it responsible as a bailee. But the action failed as there can be no
bailment without delivery of goods and a promise to the return the same. The
government was in no way bound to return the same notes or dispose the
surrendered notes in accordance with the instructions of the man.

TYPES OF BAILMENT
CLASSIFICATION ON THE BASIS OF REWARD: Depending upon whether bailment
is with or without it of two kinds:

I. Gratuitous Bailment

1
[1888 13 Bom 338]
2
[1880 ILR 2 All 756],
 II. Non gratuitous Bailment
i. Gratuitous Bailment: A bailment with no considerations is called
a gratuitous bailment. In this kind of bailment neither the bailor,
nor the bailee is entitled to any remuneration or reward. Such a
bailment may be for the exclusive benefit of either party.
ii. Non gratuitous Bailment: Contrary to gratuitous bailment, a non-
gratuitous bailment or bailment for reward is one that involve
some consideration passing between the bailor and the bailee.
Obviously in this case the delivery of goods takes place for the
mutual benefit of both the parties. It is further of two points:
1. Non gratuitous bailment where payment is made bailor
2. Non gratuitous bailment where payment is made bailee
For example, “A” hires “B’s” car. Here B is the bailor and receives
the hire charges and A is the bailee and enjoys the use of the car.
Similarly, when you give your PC or laptop for repair to some
techie, both you and the computer techie are going to be benefited
by this contract – while you get your computer repaired, he gets
his fees or charges.

CLASSIFICATION ON THE BASIS OF BENEFIT: Depending upon whether bailment

is for the benefit of bailor or bailee or both it is of three types:

I. Bailment for the benefit of bailor;

II. Bailment for the benefit of bailee;
III. Bailment for the benefit of bailor and bailee;
1. Bailment for the benefit of bailor: In this case the bailor delivers the
goods for the exclusive benefits and the bailee does not derive any
benefit out of it.
For example, “A” leaves his pets with “B”, his neighbour to be
looked after during A’s physical absence. In this case, A alone is
being benefited by the bailment. Or, if you park your car in your
neighbour’s premises to be taken care in your absence, you as a
bailor derive the exclusive benefit from the bailment.
 2. Bailment for the benefit of bailee: This is the case where a bailor
delivers the goods to the bailee for the exclusive benefits of the
bailee and does not gain anything from the contract himself.
For example, you lend your book to a friend of yours for a week
without any charge or favour. In this case the recipient of the book
as a bailee, is the sole beneficiary of this transaction of bailment.
3. Bailment for the benefit of both bailor and bailee: n this case goods
are delivered for consideration, both the bailor and bailee get
benefit and hence it is called the bailment for the benefit of the
bailor and bailee.

CLASSIFICATION ON THE BASIS OF CONSENT OF BAILEE: Depending upon

whether bailment is with the consent of bailee or not it is of two types:

I. Voluntary bailment;
II. Involuntary bailment.
i. Voluntary bailment: when bailment is with the consent of bailee it
is known as voluntary bailment
ii. Involuntary bailment: when bailment is not with the consent of
bailee it is known as involuntary bailment. In such bailment there is
no contract of bailment between the parties. It is only by the law,
that relation resembling those created by the contract of bailment
are established between the parties.
In case of Howard vs Harris1, the court defined involuntary bailee as
where a person who gets possession of goods through no act of his
own and without his consent.

1
(1884) C &K 253
 RIGHTS AND DUTIES OF BAILOR AND BAILEE
Duties of a Bailor:
As Spiderman said, “With great power comes great responsibility;” the same
goes for the bailor as well. He/she has a sense of responsibility and a duty to
discharge certain things whilst the act of Bailment. Some of the duties which are
discharged by the Bailor are:

1. Disclosure of faults:[Section – 150]

The Bailor is bound by the law to disclose the defects of the goods bailed, to the
bailee. If, in case, any future damage arises, because of the non – disclosure, it
becomes the liability of the Bailor to bear the expenses. Even if the good in
transit is for hire, it is the Bailor who is responsible for the damages. His
awareness or non – awareness of the fault in the good is no excuse.

Illustration 1: A lent his car to B. A knew that the brakes of the car are a bit
loose. A did not disclose this fact to B. B rode the car and met with an accident.
A is liable for the damages of B.

Illustration 2: A gives his carriage to B for hire. A is unaware of the fact that the
carriage is unsafe. B rides the carriage. B meets with an accident. A is liable for
the injury.

2. Bearing the Extra-Ordinary Expenses:

The usual and the ordinary expenses of the good are to be borne by the Bailee.
But, if the need arises, to meet with some expenses which are ‘Extra-ordinary’
then, it is the duty of the Bailor to pay for it.

Illustration: A lends his car to B. B pays for petrol and type punctures et al. but if
there is a major problem like Brake failure arise, then A will bear the repair
charges.
 3. Indemnification:

The Bailee will not suffer, under any circumstances, because of the dispute of
title of the Bailor’s good. If the bailee suffers, then it is the duty of the Bailor to
indemnify or compensate the Bailee.

Illustration: A found an antique piece of jewellery and bailed it to B for safe-

keeping. C, the real owner, found out that B has the jewellery and filed a suit
against B for recovery and compensation. Here, it is the duty of A, the Bailor to
indemnify B, the Bailee.

4. To Claim the Bailed Goods Back:

The Bailor has the duty to take back his goods after the expiry of the time or the
fulfilment of the purpose for which the good was bailed. In case the Bailor fails
to claim back the good, it is his responsibility to compensate the Bailee for the
expenses incurred because of the Bailor’s delay.

Illustration: A gave his car to B for servicing. B told A to collect the car after a
week. A did not come for a month. B has the right to claim for the compensation
of the car’s safekeeping from A.

Duties of a Bailee:
The Bailee, same as the Bailor, has some duties as well. Some of the duties are:

1. Reasonable Care:[section 150-153]

The Bailee is supposed to take care of the goods as they were to be his own. He
must take reasonable care of the goods as an ordinary and prudent man of
sound mind.

Illustration: A delivers his car to B for servicing after bumping it in a tree. B

cannot bump the car in a tree because A did the same. He ought to take care of
the car.
 2. Unauthorized Use of Goods [section – 154]

If there be any unauthorized usage of the bailed good and there be any damage
arising out of the unauthorized usage then the Bailee is liable to compensate
the Bailor for the same.

Illustration: A lends his car to B for driving. B gives it to his son C for joy riding. C
crashes the car. B is liable to compensate A for the damage as A had bailed the
car to B, and not C.

3. Duty of not Mixing the Goods [section 155-157]

The Bailee has the responsibility keep his own goods and the Bailor’s good
separate. He should not mix the two without any prior permission of the Bailor.
But if any act of ignorance regarding the separation be done and the result of
which be the in-separation of the Bailor’s good, then the Bailee must
compensate the Bailor for the loss incurred.

Illustration: A gives B a sack of Basmati rice. B mixes it with general rice. B is

liable to compensate A for his loss as the cost of Basmati rice is more than the
cost of normal rice.

4. Return the Goods [section 160-161, 165-167]

The Bailee must return or deliver the good upon the fulfilment of the purpose. If
the Bailee retains the goods even after the lapse of the slated time period then
the Bailee is liable for any damages done.

Illustration: A gives his documents to B for safe-keeping for a month. A does not
take it back even after 3 months and neither does B return it to A. The
documents are burnt in a fire. B is responsible for the loss as it was his duty too.

5. Dispute as to ‘Who is the owner?’[Sections 166 – 167]

If the Bailee has received the good from the Bailor then he must return the good
to the Bailor only. It does not matter if there a third person who claims the good
to be his. The Bailee has accepted the good to be Bailor’s during bailment. The
Bailee has no right to not re-deliver the good to the Bailor on grounds that the
Bailor is not the real owner.

llustration: A gives his car to B. C comes to B and claims the car to be his. But B
is responsible towards A, and A only as for this particular bailment A is the
Bailor and not C.

Therefore, these are the various duties of Bailor and Bailee as per the Indian
Contracts Act of 1872.

Rights of bailor:-
1. Right to enforce

If the bailee neglects in any one of his duties, the bailor has a right to enforce
them by filing a suit against the bailee.

2. Right to avoid the contract

If the bailee does any act, which is inconsistent with the terms of the bailment
as regards the goods bailed, the bailor can terminate the bailment.

Example: A lets a car to B for his private use only. But B used it as taxi. A can
terminate the bailment.

3. Right to return the goods lent gratuitously

When the goods are lent gratuitously, the bailor can demand back the goods at
any time even before the expiry of the time fixed or the achievement of the
object.

Example: A, while going out of station delivered his ornaments to B for safe
custody for one month. But A returned to station after one week. He may
demand the return of his ornaments even though the time of one month has
not expired.
However, due to the premature return of the goods, if the bailee suffers any
loss, which is more than the benefit actually obtained by him from the use of
the goods bailed, the bailor has to compensate the bailee.

4. Right to get compensation

If any third person does some injury to the goods bailed or deprives the bailee
of the use of the goods, then the bailor may file a suit against the wrong-doer,
and recover compensation from him.

Example: A bailed 50 bags of rice to B, a godown keeper, for safe custody. C a

fraudulent man, prepared a fake delivery order for 10 bags of rice and claimed
the delivery from B, the godown keeper. B believing in good faith, that 10 bags
have been sold by A to C, delivered the same to C. Here A may file a suit against
C to recover the rice bags from him.

Rights of bailee:-
As a matter of fact, all the duties of the bailor are the rights of the bailee. In
addition to that, the bailee has the following other rights also.

1. Right to deliver the goods to any one of the joint bailors

If several joint owners bailed the goods, the bailee has a right to deliver them to
any one of the joint owners unless there was a contract to the contrary.

Example: A, B and C are the joint owners of a harvesting combine. They

delivered it on hire to D for one month. After the expiry of one month, D may
return the “combine” to any one of the joint owners namely, A, B or C.

2. Right to deliver the 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 directions of the bailor, the bailee is not responsible to
the owner in respect of such delivery.
3. Right to apply to courts to decide the title of the goods

If the goods bailed are claimed by the person other than the bailor, the bailee
may apply to the court to stop its delivery and to decide the title to the goods.

Example: A, a dealer in T.V. delivered a T.V. to B for using in summer vacation.

Subsequently, C claimed that the T.V. belonged to him as it was delivered only
for repairs, to A and thus, B should deliver it to him. In this case, B may apply to
the Court to decide the question of ownership of the T.V. so that he may deliver
it to the right owner.

4. Right to lien

The bailee has a right to exercise lien i.e., to refuse to return the goods to the
bailor until his lawful charges are paid to him.

DIFFERENCE BETWEEN PLEDGE AND BAILMENT

Section 148 & 172 of the act

Section - 148 talks about the Bailment and the section states that “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.”

This section states that bailment is a type of contract in which one person
delivers some good/s to other for some purpose and when that purpose is
fulfilled then the person shall return the goods to the owner. It basically means
is that bailee won’t become the owner of the goods entrusted upon him and
once its objective has been fulfilled then it shall be the duty of the bailee to
return the goods in the exact condition he has taken the goods.

Furthermore, he shall be liable if any damage happens to the good as he has the
responsibility to take care of the goods in a reasonable manner. Like A gives his
ring to B for safekeeping and he carelessly left it in the open.

Next day, he saw all his things along with the ring given to him by A have been
stolen. In this case, B can’t take the defence of the fact that since all his
belongings have stolen along with A’s ring that means he has taken the same
care that if his own belongings. The degree is that he should undertake
reasonable care and the fact that he left the ring carelessly in the open shall the
ground under which he can be prosecuted.

Section 172 talks about the concept of pledge, which states that “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’.”

Section 172 of the Act states that when a bailment is done for the purpose of
creating security for payment of any debt or for the performance of any
contract then that kind of bailment shall be called as Pledge. Pawn or pledge is a
bailment of personal property as a security for some debt or engagement.

As held in the case of Lallan Prasad1“A pawnor is one is one who being liable to
an engagement gives to the person to whom he is liable a thing to be held as
security for payment of his debt or the fulfilment of his liability and the person
to whom its delivered shall be called pawnee”.

1
Lallan Prasad v Rahmat Ali AIR 1967 SC 1322
Comparison chart between the pledge and bailment
BASIS BAILMENT
It’s a contract where goods
are entrusted upon by the
bailor to the bailee for the
fulfilment of certain
objective after which the
good/s is returned to the
1. Meaning owner.
In this case, there are two
parties; Bailor-who gives
the goods for a certain
purpose & Bailee- who is
2. Parties the receiver of the good.
It’s defined under section
3. Sections 148 of the Act.
In the contract of bailment,
consideration may be
involved or may be missing.
It depends upon the
4. Considerations contractual terms.
In this case, the good/s is
5. Right to sell the
entrusted to the bailee for a
good
specific use, so in this case,
PLEDGE
It’s a peculiar kind of
bailment in which the
pawnor delivers his goods to
pawnee as security for a
debt owed to that person or
performance of a contract
owned to that person.
In this case, there are two
parties; Pawnor- who gives
his good as security for debt
& pawnee-who receives the
good.
It’s defined under section
172 of the Act.
But, in this case, since the
whole concept of the pledge
is that it’s a security for a
debt so the involvement of
consideration is important
or else there will be no
contract of pledge.
In this case, since the good
entrusted upon works as a
security/assurance for the
 the bailee has no right to
sell the good but has the
duty to return it after the
fulfilment of the purpose.
The main purpose of
undertaking a bailment
contract is for the main
safekeeping of goods or for
6. Purpose the repair.
In this case, the bailee can
use the goods to the extent
allowed by the bailor for
7. Use of goods the specified purpose only.
Bailee can use the lien over
the good/s but only for
8. Lien labour and service
I. Right to compensation
[section 164]:- If the bailor
has no right to deliver the
goods or if he didn’t give
any direction on how to use
9. Rights of the
or maintain the goods and
pawnee & bailee
in response, the bailed
debt so in case the debt is
not paid then pawnee can
sell the good as he has been
given this right so that he
can satisfy his debt
The main purpose of
undertaking this contract is
for ensuring security against
the payment of the debt.
In this case, the pawnee can
never use the good/s for any
purpose. He doesn’t have
the right to do it, only has
the right to keep the good/s
until the repayment of debt
is made.
Pledgee also exercises the
lien over the goods but for
the non-payment of the
interest.
I. Right to retainer
[section 173-174]:- This right
entails that the pawnee can
retain the goods till the time
payment of the debt has
been made. It’s imperative
to note that he can retain
goods lost some value, then
bailor shall be responsible
for it.
II. Right to expenses
[section 158]: – When the
bailee has to keep the
goods of the bailor and in
return, no compensation is
given, then the bailee can
ask for any necessary
expenses which he has
incurred for the
performance of the
bailment.
III. Right to lien [section
170-171]:- if the bailor’s
lawful expenses remain
unpaid then he may retain
the goods till the time
charges are paid in respect
to that property.
IV. Right to sue [section
180-181]: – Under this right,
bailee can sue any person
who has wrongfully
deprived him of using the
goods. As per this right,
both the bailor & bailee
right against the wrongdoer
is one & same.
the goods only for that debt
for which it was given, not
for any other debt.
II. Right to extraordinary
expenses [section 175]: –
under this right, pawnee can
claim any extraordinary
expenses which he has
incurred in maintaining and
preserving the goods bailed
by the pawnor
III. Right to sell [section
176]: – If pawnor fails in
repayment of the debt, then
pawnee can exercise two
rights under this section;
either retain the goods &
sue the pawnor for the
repayment of the debt or
sell the pledged goods and
satisfy the debt.
 I. Mercantile
agent [section 178]

II. Pawnee can further

pledge the goods to
There is as such no bar or subsequent Pawnee
special provisions provided provided he shall have the
10. Who can specifically mentioning who right to do so as per his
undertake can or cannot enter into interest on the property
pledge/bailment bailment. [section 179].

In the case of bailment, the

bailee can either retain the In this case, if pawnor fails
goods till the payment is to pay the debt, the pawnee
11. Payment made or can sue the bailor can sell the good entrusted
default for his outstanding dues. upon as security to the debt.

DIFFERENCE BETWEEN GENERAL LIEN AND

PARTICULAR LIEN

BASIS FOR
GENERAL LIEN PARTICULAR LIEN
COMPARISON

Meaning General lien alludes to the Particular lien implies a right

right to keep possession of of the bailee to retain specific
goods belonging to other goods bailed for non-payment
against general balance of of amount.
account.
 BASIS FOR
GENERAL LIEN PARTICULAR LIEN
COMPARISON

Availability Any goods, in respect of Only against the goods, in

which the amount is due to which skill and labor is
another person. exercised.

Automatic No Yes

Right to sale No right to sale the goods. In general, there is no right to

goods sell goods, however, the right
can be conferred to bailee in
special circumstances.

Exercised by Bankers, Wharfngers, Bailee, pledgee, finder of

factors, policy brokers, goods, agent, partner, unpaid
attorneys etc. seller etc.

CONCLUSION
A bailment arises when one person (a bailee) rightfully holds property belonging
to another (a bailor). Bailments only apply to personal property; a bailment
requires that the bailor deliver physical control of the goods to the bailee, who
has an intention to possess the goods and a duty to return them. Section 148
defines ‘Bailment’.

We’ve discussed all the important facts, details and differences between
general lien and particular lien. The key point which differentiates these two
are, a general lien can be exercised against any goods on which claims are not
satisfied. Unlike particular lien which is exercised only on those items on which
bailee has provided services.
 BIBLIOGRAPHY

 Dr. Jyoti Rattan – Law of contract – 2

 www.lawtimesjournal.com
 www.legalbites.in