SplCon II 340

I Year B.A. LL. B. (Div.
-D) – Semester-II (2023)
2nd -Internal Assessment – SPECIAL CONTRACTS
CO-RELATION ANALYSIS AND ERRATA IDENTIFICATION

OF THE DUTIES OF BAILEE UNDER
INDIAN CONTRACT ACT, 1872

NAME: N Varshitha
DIVISION: D
PRN: 22010125340
COURSE: B.A. LL.B. (H)
BATCH: 2022-2027
WORD COUNT: 3539 (excluding citations, bibliography, and ancillaries)
[
Co-Relation Analysis and Errata Identification of the Duties of Bailee under iCA,1872
SUBMITTED BY: N VARSHITHA ]
Table of Contents
Introduction.................................................................................................................................................2
Section 151-152: Duty of Care.....................................................................................................................3
 Establishing thoughtful co-relationship...........................................................................................3
 Identifying the Incompatibility.........................................................................................................4
 Errata finding and re-drafting..........................................................................................................6
Section 153-154: Duty to act as per the conditions of bailment..................................................................7
 Establishing thoughtful Co-relationship...........................................................................................7
 Identifying the Incompatibility.........................................................................................................8
 Errata finding and re-drafting..........................................................................................................9
Section 159-160-161: Duty to Return Goods.............................................................................................10
 Establishing thoughtful co-relationship.........................................................................................10
 Identifying Incompatibility.............................................................................................................11
 Errata Finding and Re-drafting.......................................................................................................11
Conclusion.................................................................................................................................................12
References and Bibliography.....................................................................................................................13
1
[
INTRODUCTION
Bailment is the field of law which deals with the rights and duties of a person in possession of
goods of another. Bailment as a concept is older than contract itself. 1It is discussed under
Chapter IX of the Indian Contract Act, 1872. Bailment arises when one person (bailee) is
voluntarily in possession of goods belonging to another (bailor). 2
It is comprehensively codified in multiple sections. Section 148 which defines bailment as the
delivery of goods by one person to another for some purpose, upon a contract that when the
purpose is accomplished will be returned or otherwise be disposed of according to the directions
of the person delivery them. 3This delivering person is the bailor and the person who receives the
delivery is the bailee. Bailment is only of ‘goods’ which is every kind of movable property other
than money and actionable claims as given under S. 2(7) of the Sale of Goods Act,1930 and S.
3(36) and 3(26) of the General Clauses Act, 1897.
The purpose of bailment is to cast a duty on the person in the possession of goods of another
i.e., the bailee. If this duty was absent, then it would become an excuse for people to
misappropriate others’ goods.4 Among around nine duties of a bailee, this article shall discuss
the following duties:
 the bailee is under a duty to take reasonable care of the goods (S. 151-152),
 not to make the contract inconsistent with the conditions of bailment (s. 153),
 not to make unauthorized use of the goods (s. 154),
 to restore goods to the bailor, on demand of bailment is gratuitous (s. 159), and
 to restore on expiration of time or accomplishment of purpose in other cases (s.160-161).5
SECTION 151-152: DUTY OF CARE
1
AKHILESHWAR PATHAK, CONTRACT LAW IN INDIA: TEXT AND CASES (Oxford University Press 2011).
2
4 HALSBURY’S LAWS OF ENGLAND, BAILMENT AND PLEDGE, para 101 (5th ed. 1 February 2011).
3
The Indian Contract Act, 1872, § 148.
4
5
SIR F. POLLOCK, SIR D. F. MULLA, R YASHOD VARDHAN, POLLOCK & MULLA THE INDIAN CONTRACT ACT, 1872,
(Lexis Nexis 2019).
2
[
 Establishing thoughtful co-relationship
Contracts are consensual and the parties are free to set their own terms for the care and
protection of the goods. Taking care of the goods is the most important responsibility of the
bailee among the others. The bailed goods should have the same protection as the owner
themselves would have given.
As the goods are in the possession of bailee, the bailor has no way of knowing the amount of
care being taken of the goods. It is only the bailee who knows about the care being taken. 6It is
the bailee who has to establish that they took the requisite amount of care.7
Section 151 lays down a uniform standard of duty of care on the bailee8. The level of care and
precaution is the same in every type of bailment, gratuitous and non-gratuitous. The section
9
mentions reasonable care which the courts have abstracted as the care a man of ordinary
prudence would take care of as if his own goods of the same existence, as that of the goods
bailed.
After section 151 casts a duty and sets a liability on non-compliance, the section succeeding it
reduces the burden on a bailee by specifying when the bailee is exempt from liability. Bailee is
not an insurer of goods.
s. 152 mentions when the bailee is Not liable for loss, destruction or deterioration of the bailed
entity. It says that the liability is absent if the amount of care described in section 151 has been
6
7
Strachey CJ, Rampal Singh v Murray and Co. (1899) 22 All 164,167.
8
Secy of State v. Ramdhan Das Dwarka Das Firm, AIR 1934 Cal 151.
9
Blount v. War Office (1953) 1 All ER 1071.
3
[
given. Unless he has agreed to be so liable under a special contract. This indicates that s. 152
cannot be incomplete without referring to s. 151.
Further, s.152 ends with a standing reference to s. 151 establishes a direct co-relation. The two
sections give a cause-effect relationship.
 Identifying the Incompatibility

1. In S. 151 the duty of care is very general. It says that the duty of care is the same for both
gratuitous and non-gratuitous. S. 151 freezes the liability ‘in all cases of bailment’ but
s.152 expands the liability with the clause ‘in absence of any special contract’ making it
open to scope of increasing the standard of care.
S 152 indicates that a bailee may make a special contract increasing his liability. However, there
has been a difference in judicial interpretation of the same; to mean that the care enjoined on a
bailee under 151 is subject to contract to the contrary or at least that this section does not prevent
reduction of liability under 151.10 Making 152 contradictory to 151.
In English law, there is a distinction made between the duty of care owed to gratuitous bailment
and a bailment for reward.11The duty of care owed is higher in cases of bailment for reward. It on
the consideration paid. The rationale behind this concept was discussed in Fut Chong v. Maung
Po Cho12 that there was no reason for a person to not be at liberty to agree to keep property
belonging to another on the terms that such property is to be entirely at the risk of owner.
The Law Commission of India in its 13th Report (1958) recommended amending s. 151 by
adding the words ‘in absence of any special contract’ in it 13. It is suggested that ICA could also
make this distinction as this liability on bailee for all cases could be unfair and overwhelming.
With incompatibility seen in freezing and then expanding liability, bailee is liable in 151 for
absence of the standard of that an ordinary prudence while 152 would make it to extraordinary
10
Kariadan Kumber v. British India Steam Navigation Co. Ltd. (1913) 38 Mad 941.
11
SIR F. POLLOCK, SIR D. F. MULLA, R YASHOD VARDHAN, POLLOCK & MULLA THE INDIAN CONTRACT ACT, 1872,
(Lexis Nexis 2019).
12
Fut Chong v. Maung Po Cho (1929) Rang 339, AIR 1929 rang 145,120 IC 899.
13
The 13th Report of the Law Commission of India 1958, para 123.
4
[
prudence. It be suggested that the clause ‘in absence of any special contract’ should be added in
151 rather than 152 as recommended by the Law Commission.
* Thought for further scope
‘in absence any special contract’ does not mean that a contract by a bailee purporting to exempt
himself wholly from liability for negligence is not valid 14. In M Siddalingappa v. T Natraj 15where
drycleaner could not repudiate any liability for damage to clothes on the basis of a condition
printed on the back of a receipt because he could not contract himself out of the minimum duty of
care prescribed under 151.
This can be mentioned in an explanation to the section that no special contract can exempt the
bailee from the duty owed in 151 upon examination and deliberation by competent legal
authority.
2. There is a difference in these section w.r.t the words used Goods Bailed v. Thing Bailed
clash is seen.
While the definition of bailment in s.148 specifies that it is ‘goods’ that are bailed, the usage of
‘thing’ in 152 shows inconsistency in legislation drafting. ‘Goods’ are defined in parallel
legislations as movable property. The legal definition of ‘Thing’ is other common law country
legislations means ‘any tangible object.16’ Or means ‘any tangible item, including without
limitation, models, prototypes and samples of any device, product or apparatus.’17
This creates inconsistency and confusion making the bailee’s liability inclusive of entities that
were excluded from the definition of bailment itself.
14
Sheik Md v. British Indian Steam Navigation Co. Ltd. 1909 ILR 32 Mad 95.
15
M. Siddalingappa v. T. Nataraj, 1969 SCC OnLine Kar 94.
16
Honeywell Safety Products USA, Inc., v ERB Industries, Inc. (2020) USPTO TTABVUE 92070774-CAN.
available at https://ttabvue.uspto.gov/ttabvue/ttabvue-92070774-CAN-9.pdf.
17
The Wonderful Company LLC v. Kevin Barnett, (2020) USPTO TTABVUE 88287058-EXT. available at
Microsoft Word - 3140609_1 (uspto.gov).
5
[
 Errata finding and re-drafting

1. There is voidness in terms of the duration of liability in S.151
It is seen that the time period of the duty of care owed is not mentioned. This could lead to
various interpretation of the duration of liability. In leading cases, it is seen that it doesn’t end
with time period of the contract, it exists till the goods bailed reach the bailor. The bailee
cannot repudiate his responsibility for the safety of the goods bailed so long as they are in his
custody. 18This was seen in Petroleo Brasilerio case19. A bailee was liable to take reasonable care
of the cargo until arrangement were made to discharge it.
2. Extent of liability and specific extent of liability for ‘loss’ in S.152
Bailee is not exempt from the liability only due to mere ‘loss’ of the goods. The bailee must
show that there was an attempt to restore them. The bailee is exempt only after proving this. This
was seen in Coldman v. Hill 20that bailee must show reasonable efforts to restore the goods. Only
jurisprudence has said that there must be an attempt to restore them. This can also be included in
the section.
3. Loss due to authority of law
A bailee is excused from returning the subject matter of the bailment to the bailor or his agent
when the subject matter was taken away from him by authority of law exercised through regular
and valid proceedings21. Adulterated oil seized by health authorities and destroyed the goods by
orders of court, and the railways as the bailee was not held. The author opines that in s. 152 the
immunity due to intervention by lawful authority can be included.22
18
Prakash Road Lines Pvt Ltd. v HMT Bearing Ltd AIR 1999 AP 106.
19
In Petroleo Brasilerio S A v. ENE Kos 1 Limited (2012) UKSC 17.
20
Coldman v. Hill, [1919] 1 K.B. 443.
21
SIR F. POLLOCK, SIR D. F. MULLA, R YASHOD VARDHAN, POLLOCK & MULLA THE INDIAN CONTRACT ACT,
1872, 1445.(Lexis Nexis 2019).
22
Jugilal Lamlapat Oil Mills v..UOI AIR 1976 SC 227.
6
[
Summarizing the incompatibility and errata, the following re-drafts are proposed:
Section 151. Care to be taken by bailee- In all cases of bailment except in case of a special
contract the bailee is bound to take as much care of the goods bailed to them as a man of
ordinary prudence would, until the goods reach the bailor, under similar circumstances, take of
their own goods of the same bulk, quality and value as the goods bailed.
Section 152.- Bailee when not liable for loss, etc., of thing bailed- The bailee, in absence of
any special contract, is not responsible for the loss, destruction or deterioration of the goods
bailed, if they have taken the amount of care of it described in section 151, intervention due to
lawful authority and has made reasonable attempts to restore them.
SECTION 153-154: DUTY TO ACT AS PER THE CONDITIONS OF BAILMENT
 Establishing thoughtful Co-relationship
Section 153 vests power in the bailor to terminate the contract if the bailee does any act with
regard to the goods bailed which are inconsistent with the conditions of the bailment. The
opening clause of s. 154 also deals with the same situation where in a bailee makes use of the
good bailed, not in accordance to the conditions of bailment.
7
[
To condense, these two establish the duty of bailee to use the goods only under the capacity
endowed to him by the bailor of the goods. A wrongful use or disposal, acts as the determining
factor of the bailment. It gives the bailor the rights and remedies of a person entitled to
possession23 It is breach of a confidential relation.
Although seemingly same on the surface, s.154 makes a distinction by giving an extension to
the duty of the bailee. The bailee is liable to compensate the bailor for any damages arising to the
goods from or during the use of goods inconsistent with the terms of bailment. This takes us back
24
to the essential of a contract of bailment, the specific purpose. The intensity of wrong by the
unauthorized use is very high and thus compensation to bailor is decided by a third party and
liability is discharged through it.
There is a cause and consequence relationship between the two sections. The duty to make
only authorized use is laid in s.153 and the consequence of it would be compensating for
damages in goods as seen in s. 154. Bailor may terminate the contract at once and insist on the
25
goods being returned to him. This makes a latent reference to s. 153 and is also makes a
connection to s. 160.
 Identifying the Incompatibility

Upon hyper critical analysis, the terminology used in the title of s. 153 and the provision is
noted. While the word ‘termination’ is specific and creates some sort of a compulsion to end the
contract, the further reading of the provision brings a sort of idea that it is at the wish of the
bailor to do so. The bailor may or may not terminate the contract, depending on the
circumstances and purpose/desire of the bailor. Usage of the word ‘avoidable’ could confer the
meaning that it can be modified by interventions during the course of action.
There is no incompatibility between 153-154 per se. The degree of combined reading is provided
in the previous section. The author suggests that both the sections can be clubbed and re-drafted
by the competent authority
23
1872, (Lexis Nexis 2019).
24
25
AVTAR SINGH, LAW OF CONTRACT AND SPECIFIC RELIEF (Eastern Book Company 2017).
8
[
 Errata finding and re-drafting

1. Only acts, omitted omissions
S. 153 only addresses the ‘acts’ which as inconsistent, it does not address the negative
connotation of ‘omission’. There is a distinction between an act and an omission. 26 Omission is
refraining or failure to perform an agreed to, where there is a legal duty to act in that way. 27This
is the bailee’s negligence and nobody under law and be excused for negligence. 28 Courts have
held that the bailee will also be negligent if he omits to take steps to see if the receptacle was not
opened29.
2. Bailor’s remedy 30
In s. 154 nothing is said here about the extent of bailor’s remedies if the goods are not
forthcoming; he can have an action for damages against the bailee, and he has also further
equitable rights. If the bailee sells the goods bailed, the bailor can in equity follow the proceeds
wherever they can be distinguished, either being actually kept separate, or being mixed up with
other moneys31
Section 153. Termination of bailment by bailee’s act inconsistent with conditions- A contract
of bailment is avoidable at the option of the bailor, if the bailee does any act or omission with
regard to the goods bailed, inconsistent with the conditions of the bailment.
Section 154. Liability of bailee making unauthorized use of goods bailed- If the bailee makes
any use of the goods bailed which is not according to the conditions of the bailment, they are
liable to make compensation to the bailor for any damages arising to the goods or the loss of
goods from or during such use of them.
26
HALL, JOHN C. , Acts and Omissions, THE PHILOSOPHICAL QUARTERLY (1950-) 39, no. 157 (1989): 399–408.
https://doi.org/10.2307/2219826.
27
Brown v. Standard Casket Mfg. Co., 234 Ala. 512, 175 So. 358 (Ala. 1937).
28
1872, 1434, (Lexis Nexis 2019).
29
Blount v. War Office (1953) 1 All ER 1071.
30
SIR D. F. MULLA, RAHUL SAHAY, MULLA THE INDIAN CONTRACT ACT (Lexis Nexis 2015).
31
Jessel, M.R., Re. Hallett’s Estate, (1879) 13 Ch Div 696,710.
9
[
SECTION 159-160-161: DUTY TO RETURN GOODS
 Establishing thoughtful co-relationship
The trinity of s. 159, 160 and 161 deal with the return of the possession of goods bailed, back to
the owner.
s. 159 is a bailor specific right rather than a bailee’s duty. Returning gratuitously bailed goods
whenever demanded for by the bailor is the duty created. Bailee has the right to be indemnified
for the losses caused by the unforeseen return that outweigh the benefits derived from the bailed
goods.
S. 160 casts a uniform duty in all cases of bailment, on the bailee to promptly return the goods
to the bailor (or dispose of according to the instructions), regardless the bailor demanding it or
not; upon the expiration of the period of time of the contract or the accomplishment of the
specific purpose of bailment.
s. 161 has a cause of effect relationship with s. 160 when it casts responsibility on bailee in case
of any loss, destruction or deterioration of goods in case of violation of the duty in s. 160. It
creates an additional duty to tender of delivery at the proper time.
10
[
 Identifying Incompatibility
In this set of sections, s. 159 stands out from the rest by giving the bailee both, a duty to return
goods at the beck and call of the bailor who gratuitously bailed goods, and a right to be
indemnified. S. 160 and 161 specifically talk about the bailee’s duty and liability.
Section 160 specifies that the bailor must return the goods on two conditions (I) on
accomplishment of the purpose (II) on expiration of the time period of contract. Now
inharmonious conditions are created when s. 161 includes ‘by the default of the bailee’. This
creates a third condition for returning i.e., bailee’s fault which hinder the return of the goods.
 Errata Finding and Re-drafting

1. Usage of terms lent, loan, borrow, etc.,
In s.159 the terminology used is in conflict with that of bailment. Loan, lent, lender, borrower,
etc., are terms used with respect to dealing with money. Section 148 clearly excludes money
from being a part of bailment. Thus, the usage of these terms needs to be changed with their
respective bailment alternatives i.e., bailed, bailment, bailor, and bailee.
2. Continuation of liability
S.161 creates an additional liability by using the ‘tendered at the proper time’. Tender is
another term for an ‘offer of performance’ of an act which the party is offering, and is bound to
perform to the party to whom the offer is made.32 S. 161 increases the scope of liability by
including the offering of performance apart from returning and delivering. The scope of ‘proper
time’ is not known, unlike that specified in s.160 because offering of performance could before
or after the expiry of contract. The phrase used is very vague when read with context using the
words surrounding it.
32
11
[
Section 159. Restoration of goods bailed gratuitously- The bailor of a good for use may at any
time require its return, if the bailment was gratuitous, even though they bailed it for a specified
time or purpose. But if, on the faith of such bailment made for a specified time or purpose, the
bailee has acted in such a manner that the return of the good bailed before the time agreed upon
would cause them loss exceeding the benefit actually derived by them from the bailment, the
bailor must, if they compel the return, indemnify the bailee for the amount in which the loss so
occasioned exceeds the benefit so derived.
Section 160. Return of goods bailed, on expiration of time or accomplishment of purpose.-

It is the duty of the bailee to return, or deliver according to the bailor’s directions, the goods
bailed, without demand, as soon as the time for which they were bailed has expired. Or the
purpose for which they were bailed has been accomplished.
Section 161. Bailee’s responsibility when goods are not duly returned- If the bailee fails to
return or deliver the goods according to the conditions specified in section 160, he is responsible
to the bailor for any loss, destruction or deterioration of the goods from that time.
CONCLUSION
To conclude, the concepts given in the Indian Contract Act are a relic. From 1872, there has
barely been any significant amendment to this skillfully drafted untouched legislation. The
Indian judiciary’s conjoint interpretation of statues enables the enjoyment of holistic drafting of
the Act.
Bailment continues to be a pervasive transaction in modern life. it appears but a short step to the
conclusion that the case law continues to be governed by "the anachronism, confusion, and basic
unfairness of traditional doctrine.”33
33
RICHARD. H. HELMHOLZ, Bailment Theories and the Liability of Bailees: The Elusive Uniform Standard of
Reasonable Care, 41 UNIVERSITY OF KANSAS LAW REVIEW 97 (1992). Available at
https://chicagounbound.uchicago.edu/cgi/viewcontent.cgi?article=8476&context=journal_articles.
12
[
The author firstly attempts to honor this by writing down the co-relationship between the
sections which deal with the duties of bailment. An attempt to find significant loopholes was
later made through extensive research to identify the incompatibility. A novice attempt was made
to recommend suggestions to re-draft the same to fill the gaps created by the loopholes that were
identified. An effort to include gender-neutrality in laws is made by changing ‘he/him/his’ to
‘they/them/their.’ The exercise helped the author to under the principles of legislative drafting
and interpretation and the importance of judiciary and the role of social context in their activism
and interreference.
REFERENCES AND BIBLIOGRAPHY

BOOKS
 AVTAR SINGH, LAW OF CONTRACT AND SPECIFIC RELIEF (Eastern Book Company 2017).
 4 HALSBURY’S LAWS OF ENGLAND, BAILMENT AND PLEDGE, para 101 (5th ed. 1 February
2011).
 AKHILESHWAR PATHAK, CONTRACT LAW IN INDIA: TEXTS AND CASES(Oxford University
Press 2011).
 SIR D. F. MULLA, RAHUL SAHAY, MULLA THE INDIAN CONTRACT ACT (Lexis Nexis
2015).
 SIR F. POLLOCK, SIR D.F. MULLA, R YASHOD VARDHAN, POLLOCK & MULLA THE
INDIAN CONTRACT ACT, 1872 (Lexis Nexis 2019).
CASES
 Rampal Singh v. Murray and Co. (1899) 22 All 164,167.

 Secy of State v. Ramdhan Das Dwarka Das Firm, AIR 1934 Cal 151.
 Blount v. War Office (1953) 1 All ER 1071.
 Kariadan Kumber v. British India Steam Navigation Co. Ltd. (1913) 38 Mad 941.
 Fut Chong v. Maung Po Cho (1929) Rang 339, AIR 1929 Rang 145,120 IC 899.
 Sheik Md v. British Indian Steam Navigation Co. Ltd. 1909 ILR 32 Mad 95.
 M. Siddalingappa v. T. Nataraj, 1969 SCC OnLine Kar 94.
13
[
 Jugilal Lamlapat Oil Mills v..UOI AIR 1976 SC 227.

 Prakash Road Lines Pvt Ltd. v HMT Bearing Ltd AIR 1999 AP 106.
 Petroleo Brasilerio S A v. ENE Kos 1 Limited (2012) UKSC 17.
 Coldman v Hill., [1919] 1 K.B. 443.
 Brown v. Standard Casket Mfg. Co., 234 Ala. 512, 175 So. 358 (Ala. 1937).
 Re. Hallett’s Estate, (1879) 13 Ch Div 696,710.
 The Wonderful Company LLC v. Kevin Barnett, (2020) USPTO TTABVUE 88287058-
EXT.
 Honeywell Safety Products USA, Inc., v ERB Industries, Inc. (2020) USPTO TTABVUE
92070774-CAN.
STATUTES
 The Indian Contract Act, 1872, § 38.

 The Sale of Goods Act, 1930, § 2 No. 7.
 The General Clauses Act, 1897, §3 No. 26.
 The General Clauses Act, 1897, §3 No. 36.
ARTICLES
14
[
 Richard. H. Helmholz, Bailment Theories and the Liability of Bailees: The Elusive
Uniform Standard of Reasonable Care, 41 UNIVERSITY OF KANSAS LAW REVIEW 97
(1992).
 Hall, John C. Acts and Omissions, THE PHILOSOPHICAL QUARTERLY (1950-) 39, no. 157
(1989): 399–408.
OTHER SOURCES
 The 13th Report of the Law Commission of India, 1958.
15

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I Year B.A. LL. B. (Div.

-D) – Semester-II (2023)

2nd -Internal Assessment – SPECIAL CONTRACTS

CO-RELATION ANALYSIS AND ERRATA IDENTIFICATION

INDIAN CONTRACT ACT, 1872

SECTION 151-152: DUTY OF CARE

 Establishing thoughtful co-relationship

 Identifying the Incompatibility

* Thought for further scope

 Errata finding and re-drafting

2. Extent of liability and specific extent of liability for ‘loss’ in S.152

3. Loss due to authority of law

SECTION 153-154: DUTY TO ACT AS PER THE CONDITIONS OF BAILMENT

 Establishing thoughtful Co-relationship

 Identifying the Incompatibility

 Errata finding and re-drafting

SECTION 159-160-161: DUTY TO RETURN GOODS

 Establishing thoughtful co-relationship

 Errata Finding and Re-drafting

Section 160. Return of goods bailed, on expiration of time or accomplishment of purpose.-

REFERENCES AND BIBLIOGRAPHY

 Rampal Singh v. Murray and Co. (1899) 22 All 164,167.

 Jugilal Lamlapat Oil Mills v..UOI AIR 1976 SC 227.

 The Indian Contract Act, 1872, § 38.

 The 13th Report of the Law Commission of India, 1958.

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