BAILMENT

The concept of bailment which was meticulously cultivated by the jurists during Roman
times does not nowadays attract much attention. But the Indian Contract Act does justice to it
by devoting 34 sections (Secs. 148-181) to bailment and pledge.
Bailment implies a sort of relationship in which the personal (movable) property of one
person (generally the owner) temporarily goes into the possession of another. Bailment, thus
involves the transfer of possession of goods to a person, who holds the goods either for or at
the direction of their owner, to whom-they will be returned.1 The ownership of the goods is in
one person and the possession thereof in another.
Delivering a cycle, watch or any other article for repair, giving one’s suit for dry cleaning or
leaving a cycle or car, etc. at a stand, or goods for being transported from one place to
another, sending articles through post-office, etc. are all familiar situations which create the
relationship of bailment. Bailment is, thus, a subject of common public importance. 2
Definition of Bailment (Sec. 148)

The word “bailment” comes from the French verb “bailer”, to deliver. It is a technical term of
the Common Law, though etymologically it might mean any kind of handling over.3
In a contract of bailment, the person who delivers the goods is called the “bailor”, and the
person to whom the goods are delivered is called the “bailee”. Section 148 of the Indian
Contract Act, 1872, defines bailment as under:
148. ‘Bailment’, ‘bailor’ and ‘bailor’ defined. — 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 contracts 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.
Examples
(a) A delivers a piece of cloth to B, a tailor, to be stitched into a suit.
(b) A lends his book to B.
(c) A sells certain goods to B who leaves them in A’s possession.
ESSENTIALS OF BAILMENT:
1. Delivery of goods for some purpose.
2. Return of the goods after the purpose is achieved, or their disposal according to the
bailor’s directions.

1. Anson, Law of Contracts, 2002, 456, quoting Palmer on Bailment, II, (1991); Chitty on Contracts, 28 th Edn. 199 para 33-001 ff.
2. C.V. Davidge, Bailment, (1925) 41 L.Q.R. 433.
3. Pollock & Mulla, Indian Contracts and Specific Relief Acts, 2010, 1931 .
1) Delivery of the goods for some purpose:
“Delivery” means transfer of possession of the goods from one person to another. Delivery
need not always be actual. Delivery need not always be actual. Section 149 recognizes other
than actual delivery also. It provides:
“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 of any person authorized to hold them on
his behalf.”
Transferring of the key of the godown may be deemed to the delivery of the goods.
Explanation to Section 148 gives an illustration of constructive theory. According to this
provision: “If a person already in possession of the goods of another contracts 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.”
For example, A sells his watch to B. Instead of delivering the watch to B, A is asked to
continue keeping the watch with him for one month on B’s behalf. After this arrangement, A
is the bailee of the watch. The watch was already in the possession of A. Earlier he was
having it as himself the owner, but now he holds the same as a bailee for B. A finder of goods
is also deemed to be the bailee of those goods.1
In Jagdish Chandra Trikha v. Punjab National Bank,2 where a jewellery-box with
declared contents was handed over to a bank for safe custody, the relationship of bailment
was constituted, the relationship of bailment was constituted, the bank was held liable for loss
of contents.
2) Return of the goods after the purpose is achieved:
Delivery of goods should be made for some purpose and upon a contract that when the
purpose is accomplished the goods shall be returned to the bailor. When a person’s goods go
into the possession of another without any contract, there is no bailment within the meaning
of its definition in Section 148.
In Ram Gulam v. Government of U.P.,3 the plaintiff’s ornaments, having been stolen, were
recovered by the police and, while in police custody, were stolen again. The plaintiff’s action
against the State for the loss was dismissed. Because the ornaments were not made over to
the Government under any contract, the Government never occupied the position of bailee to
indemnify the plaintiff.
In Secretary of State for India in Council v. Sheo Singh,4 it has been held that when a number
of Government promissory notes are given to a treasury for being cancelled and their
consolidation into a single note of a higher denomination, there is no bailment, as the same
notes are not to be returned.
It may be noted that though bailment is usually based on a contract, there are some
exceptions e.g., the case of a finder of goods. There is no contract between the finder of a lost
article and its owner; nonetheless, the finder is treated in law as a bailee of the lost article.5

1. See Section 71.

2. A.I.R. 1998 Delhi 266.
3. A.I.R. 1950 All 206.
4. (1880) 2 All. 756
5. See Section 168.
KINDS OF BAILMENT:
Bailment may be divided into three main classes:
1) Those for the exclusive benefit of the bailor.
2) Those for the exclusive benefit of the bailee.
3) Those for the mutual benefit of the bailor and bailee.
Bailment may also be classified into:
 Gratuitous Bailment: Where no remuneration is payable either to the bailor or the
bailee e.g., where A lends a book to his friend B. A person who lends his articles or
goods without any charge, detriment or consideration is called a “gratuitous bailor”.
His duty is naturally much less than that of a bailor for hire or consideration.
 Non-Gratuitous Bailment: Where either of the two parties is entitled to
remuneration e.g., where certain goods are kept in a godown for hire. In Hyman v.
Nye & Sons,1 the plaintiff hired a carriage and horses from the defendant for a
particular journey. The carriage being defective, it was upset and the plaintiff was
injured thereby. The defendant was held liable for the injury to the plaintiff.
DUTIES OF A BAILOR
(RIGHTS OF BAILEE)
DUTIES OF A BAILOR:
1) Duty of Gratuitous Bailor to disclose faults in goods bailed: The bailor is bound to
disclose to the bailee faults in the goods bailed, of which the bailor is aware, and which
materially interfere with the use of them, or expose the bailee to extraordinary risks; and if he
does not make such disclosure, he is responsible for damage arising to the bailee directly
from such faults.
If the goods are bailed for hire, the bailor is responsible for such damage, whether he was or
was not aware of the existence of such faults in the goods bailed.2
A lends a horse, which he knows to be vicious, to B. He does not disclose the fact that the
horse is vicious. The horse runs away. B is thrown and injured. A is responsible to B for
damage sustained.3
2) Duty to bear expenses of bailment: A bailee is entitled to recover his agreed charges
from the bailor. But where there is no such agreement at all, Sec. 158 comes into play. Thus,
in case of a gratuitous bailment (when the bailee is to receive no remuneration), the bailor
shall pay to the bailee all the necessary expenses incurred by him for the purpose of
bailment.4
3) Duty to indemnify the bailee: Where the title of the bailor to the goods is defective and
the bailee suffers as a consequence, the bailor is bound to indemnify the bailee for any cost or

1.(1881) 6 Q.B.D. 685

2.See Section 150.

3.Illustration (a) to Section 150.

4.See Section 158.

loss which the bailee may incur. In other words, the bailor is responsible to the bailee for any
loss which the bailee may sustain by reason that the bailor has no right to bail the goods or to
receive back the goods or to give directions respecting them.1
RIGHTS OF BAILEE:
1)To see that the bailor discloses all known faults to him.2 The bailee can enforce by a suit
the duty of the bailor to disclose all known faults in the goods which materially interfere with
the use of them or expose the bailee to extraordinary risks.
2)Right to recover necessary expenses incurred on bailment. The bailee is entitled to
lawful charges or remuneration for providing his services in case of non-gratuitous bailment.
Similarly, the bailee can claim all the necessary expenses incurred by him for the purpose of
gratuitous bailment.3
In Surya Investment Co. v State Trading Corpn. Of India3, the State Trading Corporation had
hired the plaintiff’s storage tank for storing its oil. On account of a dispute, the STC
appointed a special officer who took charge of the tank and delivered its contents to others as
directed. The plaintiff thus lost possession of the oil and with it his lien, but his right to
charges for protection and storage of the oil survived. The court said that the bailor had
enjoyed the benefit of the bailee’s services.
3)Right to compensation: The bailee can also claim compensation for any loss which he
may sustain by reason that the bailor was not entitled to make the bailment or receive back
the goods. In other words, the bailee is also entitled to be indemnified for any loss or damage
which he may have to incur because of the defective title of the bailor.4
4)Delivery of goods to bailor without title: If the bailor has no title to the goods, and the
bailee, in good