SECTION 151 & 152, INDIAN CONTRACT ACT, 1872

1st Year LLB. (3 year) 2023-26, Semester 2

SPECIAL CONTRACTS INTERNAL ASSESSMENT

Abstract write-up based on the correlational analysis of the Duties of Bailee

Section 151: Care to be taken by Bailee.

Section 152: Bailee when not liable for loss etc. of the thing bailed.

NAME: MAYURESH R BARHATE

PRN: 23010122006

Word Count: 1780 (excluding cover page & citations)

Special Contracts Internal Assessment 1

 SECTION 151 & 152, INDIAN CONTRACT ACT, 1872

Table of Contents
Abstract..........................................................................................................................................................................2
[1.Introduction]..........................................................................................................................................................2
[1.1 Evolution Of The Concept Of Standard Of Care For A Bailee In Common Law].......................................2
[1.2 The Standard Of Care In The Present Scenario]...........................................................................................3
[1.3 The Defences He Cannot Take]....................................................................................................................4
[2. Whether The Burden Is On The Bailee To Disprove Negligence On His Part.].................................................4
[3. Whether The Bailee Can Escape Liability By The Virtue Of A Contract To That Effect.]................................5
[4. Conclusion]..........................................................................................................................................................6

Cases
(1928) ILR 52 Bom 37: AIR 1928 Bom 5.....................................................................................................................7
(1962) 1 QB 694 CA: (1962) 2 All ER 159...................................................................................................................4
1558-1774 All ER Rep 1................................................................................................................................................4
AIR 1970 Mys 154.........................................................................................................................................................7
Cochin Port Trust v Associated Cotton Traders Ltd. AIR 1983 Ker 154: Ker LT 562.................................................5
Coldman v Hill [1918-19] All ER Rep 434...................................................................................................................5
Dwarka Nath V Rivers Steam Navigation Co LTd. AIR 1917 PC 173, 175: 46 IC 319 (PC)......................................6
Gour Chandra Mukherjee v Andrew Yales Co-Op Credit Society Ltd AIR 1977 Cal 336...........................................5
RS Deboo v M.V. Hindelkar AIR 1995 Bom 68...........................................................................................................7
Shanti Lal v Tara Chand, 1933 All 158: 142 IC 691.....................................................................................................5
Southcot v Bennet, (1601) 78 ER 401............................................................................................................................4
The Indian Contract Act, 1872 (9 of 1872), Section 152. Note: Bailee when not liable for loss, etc., of thing
bailed.The bailee, in the absence of any special contract, is not responsible for the loss, destruction or
deterioration of the thing bailed, if he has taken the amount of care of it described in section 151.........................4
Statutes
Indian Contract Act (9 of 1872), Section 151................................................................................................................8
The Indian Contract Act (9 of 1872), Section 152.........................................................................................................7
The Indian Contract Act, 1872 (9 of 1872.....................................................................................................................3
The Indian Contract Act, 1872 (9 of 1872), Section 152...............................................................................................7
Books
Hugh Evander Willis,.....................................................................................................................................................7
Nilima Bhandbhade, Pollock & Mulla...........................................................................................................................5
Norman Palmer, Palmer on Bailment.............................................................................................................................5
P C Markanda, Building & Engineering Contracts........................................................................................................8
T.K. Mukherjee, Law of Contract (1st edn, Premier Publication Co., 2003) vol 2; The Indian Contract Act 1872(9 of
1872)..........................................................................................................................................................................4
Misc.
Thirteenth Report of the Law Commission of India 1958, para 125.............................................................................7

Special Contracts Internal Assessment 2

 SECTION 151 & 152, INDIAN CONTRACT ACT, 1872

ABSTRACT

[INTRODUCTION]
1. The essay will primarily deal with the concept of duty of care of a bailee 1 in common law
in general and more specifically deal with the S.151-15222 .
2. The three major issues related to the doctrine of ‘Reasonable care’ with respect to the duty
of care of a bailee, which have been discussed in this essay, are:
a) The evolution of the concept of standard of care for bailee in common law.
b) Whether the burden is on the bailee to show reasonable care was taken by him.
c) Whether the bailee can escape liability by the virtue of a contract to that effect.

[1.1 EVOLUTION OF THE CONCEPT OF STANDARD OF CARE FOR A BAILEE

IN COMMON LAW]
3. In the beginning in English law, liability in bailment for a bailee was absolute. Hence,
when goods were robbed from a bailee who was in charge of its safe custody, he was
automatically held liable absolutely3. However, with Coggs v Bernard 4, we see that the
modern English Law has made a distinction in measuring the duty of care between bailees
of two types, namely, gratuitous bailee and bailee for consideration. The duty of a bailee
for consideration is to exercise the same degree of care towards the safeguarding of the
goods kept with him which might be expected from a reasonable prudent man responsible
for the safety of such goods. Lord Holt, in the same case said that, in case of duty of care
for a gratuitous bailee, the latter has no liability except for a case of gross negligence, the
reason being that the bailee himself is not deriving any benefit out of the goods. 5 However,
in more recent times, common law has adopted a more consistent yardstick of reasonable
standard of care of bailees for both types of bailment.
4. The Court of Appeal in Houghland v R.R. Low (Luxury Coaches Ltd)6 said that the
standard of care of a bailee was that of reasonable care and was same, irrespective of the
1
In the context of the essay, the bailee will be considered to be of general (i.e. not including special cases of a
bailee, for example, being a carrier or a sub-bailee or a pledgee) in nature, as defined in The Indian Contract Act,
1872 Section 148.
2
The Indian Contract Act, 1872 (9 of 1872
3
Southcot v Bennet, (1601) 78 ER 401.
4
1558-1774 All ER Rep 1
5
Ibid.
6
(1962) 1 QB 694 CA: (1962) 2 All ER 159

Special Contracts Internal Assessment 3

 SECTION 151 & 152, INDIAN CONTRACT ACT, 1872

bailment being gratuitous or for reward. Under the Indian Contract Act, the duty of care for
a bailee applies across the board uniformly in all cases of bailment and it is provided for in
the S.151-152.7

[1.2 THE STANDARD OF CARE IN THE PRESENT SCENARIO]

5. According to S.1518 , in all cases of bailment, the bailee is bound to take as much 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, quality and value as the goods bailed. S. 152 9 adds
that if the care given under the above section is taken, then the bailee will not be liable
unless, there is a contract to the contrary. As an example, when a port trust stores imported
cotton bales as a bailee, then he is bound to take as much care as an ordinary prudent man
in similar circumstances, and if fire breaks out at the port, in turn destroying the goods, the
port trust will be liable on failure to show reasonable care.10
6. The duty of care also depends on type and quality of goods. If the bailee is not negligent
such as in the Shantilial11 case, where the bailor’s goods were lost due to floods, then the
former is not held to be liable. The Allahabad High Court, in the same case has said, ‘no
cast-iron standard can be laid down for the measure of the care due from him and the
nature and amount of care must vary with the posture of each case.’ 12 Even when the
bailee’s goods are stolen, the onus is on him to show that he made all reasonable efforts to
retrieve them; otherwise, he will be liable for negligence. 13 The bailee’s duty does not end
with the expiry of the contract of bailment. After the expiry of the contract, it is the bailee’s
duty to ask the bailor to collect the goods and if need be serve a notice of sale to the bailor.
He will be liable for the safety of the goods as long as they are in his possession14.

7
T.K. Mukherjee, Law of Contract (1st edn, Premier Publication Co., 2003) vol 2; The Indian Contract Act 1872(9
of 1872).
8
See n 2.
9
The Indian Contract Act, 1872 (9 of 1872), Section 152. Note: Bailee when not liable for loss, etc., of thing
bailed.The bailee, in the absence of any special contract, is not responsible for the loss, destruction or deterioration
of the thing bailed, if he has taken the amount of care of it described in section 151.
10
Cochin Port Trust v Associated Cotton Traders Ltd. AIR 1983 Ker 154: Ker LT 562
11
Shanti Lal v Tara Chand, 1933 All 158: 142 IC 691
12
Ibid
13
Coldman v Hill [1918-19] All ER Rep 434 as cited in Nilima Bhandbhade, Pollock & Mulla: Indian Contract &
Specific Relief Acts (12th edn, Butterworths, 2001) 1982
14
Nilima Bhandbhade, Pollock & Mulla: Indian Contract & Specific Relief Acts (12th edn, Butterworths, 2001)
1959

Special Contracts Internal Assessment 4

 SECTION 151 & 152, INDIAN CONTRACT ACT, 1872

[1.3 THE DEFENCES HE CANNOT TAKE]

7. The bailee cannot take recourse to the defence that others too would have acted in the same
way. The director of a cooperative society who was entrusted with cash stored in the usual
conventional manner, but the court in this case found that the conventional manner was not
reasonable and held the bailee liable for negligence.15
8. If the bailee’s goods are stolen along with the bailor’s he cannot just take the defence of
acting to his best possible ability or take the defence of generally being a negligent man,
unless the bailor knew of that fact, but even then, reasonability of the degree of care in the
given case would be explored.16 Thus we see that in all cases, test of an ordinary
prudent man will be applicable.

[2.1 WHETHER THE BURDEN IS ON THE BAILEE TO DISPROVE

NEGLIGENCE ON HIS PART.]
9. When the goods are delivered back to a bailor in a damaged state or not returned at all, the
law presumes negligence to be the cause and casts the burden on the bailee to prove that he
was exercising due care during the course of bailment or show that loss was caused,
irrespective of his negligence.17

10. The Privy Council has said that Section 106 of the Indian Evidence Act says that when
there is a fact which a person specially knows of, then the burden of proving that fact is on
that person. In the case of a bailee, the goods get lost or damaged from his possession;
therefore, it is prudent enough to ask the bailee to show how the goods were dealt with,
when they were in his possession. All the bailor has to do is to show the absence of due
care on the part of the bailee, from the evidence advanced by the latter.18

[3.1 WHETHER THE BAILEE CAN ESCAPE LIABILITY BY THE VIRTUE OF A

CONTRACT TO THAT EFFECT.]
11. The words, “in the absence of any contract” in S.152 19 may indicate that the law-maker’s
objective was to enable the bailee to limit the extent of his liability. In the Bombay Steam

15
Gour Chandra Mukherjee v Andrew Yales Co-Op Credit Society Ltd AIR 1977 Cal 336.
16
Norman Palmer, Palmer on Bailment (3rd, Sweet & Maxwell Ltd, 2009) 763.
17
Ibid.
18
Dwarka Nath V Rivers Steam Navigation Co LTd. AIR 1917 PC 173, 175: 46 IC 319 (PC).
19
The Indian Contract Act, 1872 (9 of 1872), Section 152.

Special Contracts Internal Assessment 5

 SECTION 151 & 152, INDIAN CONTRACT ACT, 1872

Navigation Co v Vasudev Baburao20 case, the court held that the section does not
explicitly prohibit a person to reduce his scope of liability and even if it were so, it would
be curbing the liberty of people to enter into a contract of bailment of their choice. THE
LAW COMMISSION OF INDIA, TOO, IN ITS THIRTEENTH REPORT, had taken
cognizance of this view and recommended to amend S.151 to enable reduction of liability
of the bailee.21
12. The opinion of Hugh Evander Willis that all types of bailees should be allowed to exempt
themselves from liability for negligence, unless prohibited by special statutory enactments
was also based on the principle of freedom of choice of contract.22
13. However, the above interpretation of S.152 can also be seen as defeating the obligation of
an absolute minimum standard of care of the bailee as given in S.151.When both the
sections are read together, a plausible interpretation can be that S.151 requires the bailee to
have a minimum standard of care and if that standard of care has not been enhanced with
the help of a contract as given in S.152, then the bailee will only be liable when he fails to
meet the obligations under S.151. This interpretation also hints at the unjust and
unreasonable notion of allowing a bailee to escape liability in cases of his negligence. In M
Siddalingappa v T. Nataraj23, a dry cleaner could not escape liability for damage to clothes
based on the terms on the back of the receipt, because the court said that he could not
contract himself out of the minimum duty of care given in S.151. In addition, if the
exemption clauses are opposed to public policy, then, they are not valid.24
14. Therefore, we see that there are contrasting judgments on this aspect. Although, the words
in S.15225 make it clear that a bailee can enhance his liability, it is for the courts to decide
after taking into considerations the facts of a case, whether the bailee can be exempted
from his liability because of a contract to that effect. Nevertheless, when the bailee has
enhanced his liability by a special contract, then the standard of care will measured
according to S.152 and the bailee cannot take the defence of adhering to a minimum
standard of care as per S.151.26

20
(1928) ILR 52 Bom 37: AIR 1928 Bom 5
21
Thirteenth Report of the Law Commission of India 1958, para 125 recomended amending S.151 by adding the
words ‘in the absence of any special contract’ in it as cited in Nilima Bhandbhade, Pollock & Mulla: Indian
Contract & Specific Relief Acts (12th edn, Butterworths, 2001)
22
Hugh Evander Willis, 'The Right of Bailees to Contract against Liability for Negligence' [1907] Harvard Law
Review, Vol. 20, No. 4 297, 317
23
AIR 1970 Mys 154
24
RS Deboo v M.V. Hindelkar AIR 1995 Bom 68.
25
The Indian Contract Act (9 of 1872), Section 152
26
P C Markanda, Building & Engineering Contracts (3rd, Lexis- Nexis Buttersowrth Wadhwa, Nagpur 2010).

Special Contracts Internal Assessment 6

 SECTION 151 & 152, INDIAN CONTRACT ACT, 1872

[4.1 CONCLUSION]
15. Through this essay, we have seen how the ‘reasonable care’ doctrine with respect to duty of
care of a bailee has evolved with time in common law. The degree of liability has
transformed from absolute to reasonable. In India, though, it was always uniform. The
standard of care expected of a bailee as given in S.151 is that of an average prudent man
taking care of his goods of the same type in the similar circumstances. Though the words in
this section might be apparently subjective, there are numerous case laws to establish the
standard of care of a bailee. In addition, the circumstances prevailing in a given case will
also play a major role in determining the bailee’s liability. S.152 27 says that if the bailee
takes due care that is prescribed in S.151 28, then he will be absolved of his liability unless
there is a contract to the contrary. The burden, though, is on the bailee to show that he
acted as a reasonable prudent man or loss had happened to the goods, irrespective of his
negligence. The jury is still out on the bailee’s chances of escaping liability with the help of
a special contract which is governed by S.152 29 There are contrasting judgments in this
regard and while the bailee can undoubtedly enhance his liability, it is the discretion of the
courts to enable the bailee to limit his liability.

27
See n 25
28
Indian Contract Act (9 of 1872), Section 151.
29
See n 25

Special Contracts Internal Assessment 7