GOPALDAS JHAMATMAL ADVANI LAW COLLEGE

BANDRA WEST, MUMBAI 400 050.

ASSIGNMENT ON
Name of Topic : Rights And Liabilities Of
Finder Of Goods

BY

Name of Student :Surendrasingh B. Zala

SYLLB Division : B Roll No : 107

Name of Subject : Contract Law II

SEMESTER IV

Name of Professor : Prof. Neha Shroff

UNIVERSITY OF MUMBAI
ACADEMIC YEAR : 2021-2022
 INTRODUCTION

Section 71 of the Indian Contract Act, 1872 deals with the finder of goods. A finder of goods means a
person who finds goods that belongs to another and place them into his custody.

The finder of the goods holds the same position as that of bailee and he is required to take care of the
goods in the same manner or the same way he or she as is expected out of bailee under Section 151 of
the Indian Contract Act, 1872.

The act of keeping property in the custody and control of another person usually by agreement in which
the bailee is responsible for its safe keeping and then returning it is called bailment.

Examples : Bonds left with the bank, Vehicles parked in a garage, Animals in a dormitory, or a
storage warehouse facility (as long as the goods can be readily moved and are under the control of the
custodian).

He is also responsible for all the duties of bailee for example the duty to return the goods after the
real owner is found. If he or she refuses to return such goods then he/she would be made liable for the
same.

• For Instance: Shyam find a mobile phone that belongs to Sundar in the metro and Shyam
picked the phone. Here, Shyam is the finder of the goods.

Section 71 sets down the responsibility of a finder of goods. The duties and liability of a finder is
treated at par with that of the the bailee. The finder’s position, therefore, has been considered along
with bailment.

Finders are bailee

 It was clearly mentioned in State of Bombay Vs Memon Mahomed Haji Hasam that the position
of the finder of goods is similar to that of a bailee.

 There can, therefore, be bailment and the relationship of a bailee in respect of specific property
without there being an enforceable contract. Nor is consent indispensable for such a relationship to
arise. A finder of goods of another has been held to be a bailee in certain circumstances.
 Rights and Duties of the finder of goods

 Rights of finder of goods

o The rights of the finder of goods are mentioned under Section 168 and Section 169 of the Indian
Contract Act, 1872.

i. Right of Lien

 Section 168 of the Indian Contract Act deals with the right of lien which the finder of goods has.
It states that the finder of goods has no right to sue the owner for the problem and costs which are
borne by him for maintenance,storage or preservation of goods.

 He has only the right of particular lien regarding such goods.

 He has only the right to keep those goods against the will of the owner unless and until he receives
some costs incurred by him voluntarily for maintenance,storage or preservation of goods incurred.

 The finder of the goods has the power to retain the goods if the legal charges for the maintenance
are not given to the finder of the goods by the owner.

 In K. Sardambal v. Jagannathan and Brothers, the Court held that the finder of the goods only
has the right to retain the goods until payment and does not carry with it a right of sale to secure
the amount. He is also entitled to exercise the right of lien notwithstanding that he is in
possession of the goods as agent or bailee for the buyer.

Early English cases disallowed not only compensation, but also right to lien for expenses.

 They where:

1.A finder fed a dog for 20 days and claimed 20s. for the same. The court said he would be guilty
of trover if he refused to deliver unless paid for his keeping.

2.A quantity of timber, placed in a dock on the bank of a navigable river, being accidently
loosened, was carried by the tide to a considerable distance. The defendant, finding it in that
situation, voluntarily conveyed it to a place of safety.He was held not entitled to lien on the
timber for the trouble or expense, but was liable in trover for refusing to deliver.

ii. May sue for specific reward

 According to Section 168 of the Act, the acquirer of the goods cannot sue the owner of the goods
for the trouble and the problem and also expenses incurred by him in preserving and maintaining
those goods.

 It has been noted above that the finder also has the right to retain the goods until he or she is
compensated for trouble and the problem and also expense voluntarily incurred by him to preserve
and maintain the goods and find the owner.

 He or she only has the right to receive compensation only when the owner of the goods promised to
give a specific reward to the person who returns the goods which were lost by him.

 Here the acquirer of the goods can only sue the owner for non payment of the compensation or
reward and has the power to keep with himself the goods with them until he receives it.
Right of claiming the reward ,if announced by the owner

If the goods have already been found by a person voluntarily, and then the owner of the goods
promises to pay or compensate the finder for his past voluntary services, the contract is binding and the
owner is obliged to pay the promised amount.

iii. When finder of thing commonly on sale may sell it

Section 169 of the Indian Contract Act, 1872 says that where a thing which is commonly
the subject of sale is lost and also the owner of the goods cannot be found or when he refuses to pay
the compensation or the lawful charge of such goods to the finder then the finder has the legal power
to sell it where:

a. The thing is of perishable nature or will lose the most of is value part , or

b. Where the lawful charge or the legal charge of the finder in respect of the thing that has been founded
by him is equal to the two thirds of its value.

Although, the Indian Contract Act mentions the same duty of the finder as the bailee of missing
goods, yet in the case of Kanhya Lal Sain Vs Registrar Examination, R.H.C, it was held that the
aforementioned provision does not specifically lay down the finder’s rights and thus a bailee may be
interpreted as a finder of lost goods; however, the two are not the same.
 Duties of finder of goods

o The duties of finder of goods are similar to that of the bailee. The following are the duties of finder of
goods:

i. Duty take reasonable care

 According to Section 151 of the Act, the finder of the goods has the respomsibility to take care of
the goods in the same manner as he would take care of the goods that belonged to himself.

 Therfore the acquirer of the goods is required to take all thereasonable care that is required of the
goods of the owner as he would have taken care of the goods under the same circumstances.

 Section 152 of the Act stipulates that in the absence of a special contract to the contrary then in
such a case, the acquirer or te guarantor of the goods or the bailee cannot be made liable for any
of the loss, destruction or any deterioration of the goods provided that he has taken all the
reasonable care of the goods.

 The burden of proof that the reasonable and proper care of the property was taken by the bailee
has to be proved by the finder of goods only. If he establishes such ground then he would not be
held liable.

ii. Duty not to make unauthorised use

Section 154 of the Act states that the bailee should not use the goods in any unauthorised manner.

If the finder of goods makes any use of the goods that are found by him, which is not according to
the conditions of the bailment, he is liable to make full the compensation to the owner of goods
for any damage arising to the goods from or during such umauthorized use of them.

If he or she makes any unauthorised use of goods then he or she will be liable for the same and
has to provide compensation to the owner or the bailor for such unauthorised use.

Section 153 : Termination of bailment by finder of good’s act inconsistent with conditions

 A contract of bailment is voidable at the option of the actual owner, if the finder of goods make
any unauthorized use of the goods found inconsistent with the condition of the bailment.
iii. Duty not to mix

 The finder of the goods has the duty that he or she shall not mix his goods with that of the owner
of the goods.In accordance with Section 155 of the Act, if the goods of the owner are mixed with
that of the finder of the goods or the acquirer with the consent of the owner then in such a case
both the bailor and the bailee will have the proportional share as per there goods.

 Section 156 of the Act states that if the property which is mixed by the finder of the goods is of
such a nature that they can be separated from the owner’s goods, then the cost of that separation
of such goods will be incurred by the finder only as he is the only one who has mixed it.

 Section 157 of the Act says that if the property which is mixed by the acquirer with those of
owner goods cannot be separated then it is the duty of the acquirer to compensate for the loss
incurred to the owner of the goods.

iv. Duty to return the goods

 The finder of the goods has the duty to return the property possessed by him to it its rightful
owner as per Section 160 of the Act.

 But he can exercise his right of lien if the compensation or any of the lawful charges are not paid
to the acquirer by the owner of those goods.

v. Duty to return the increase

 Section 163 of the Act says that if any benefit that is earned by the finder of the goods on the property
that belonged to the real owner, then it is the duty and is the responsibility of the acquirer to return
such profit to the owner of the goods.
 Liabilities of finder of goods

• Although there is no contractual relationship between the finder and the real owner, yet there is a
legal duty on the part of the finder of goods as a bailee, as set out in Section 71[1] of the Indian
Contract Act. pursuant to section 151[2] of the Indian Contract Act, that the bailee of the goods
or the finder of the goods, in a broader interpretation, owes a general duty of care as per the
expectations of a prudent man.

• Responsibility or the obligation of the finder of the lost goods has been laid down in section 71 of
the Indian Contract Act, 1872 which states that “a person who finds goods belonging to another and
takes them into his custody, is subject to the same responsibility as that of the bailee.”

• A finder of the goods is subject to the same responsibilities and liabilities as those that of the bailee’s
of goods. He has to take the same degree of care and caution in respect of the goods that are found
by him as the bailee has in respect of the goods bailed to him.

• The person who finds goods belonging to another is entitled to retain or keep back those goods
against the owner until he gets compensation from him.

• He also has the right of lien against the goods for the expenses which he has incurred in preserving
and maintaining the goods in the safe custody, but this does not give him the right to sue the finder
for the trouble and expenses that are incurred by him.

• He can sue the owner for the reward where a specific reward has been offered by the real owner.
The finder of the goods is entitled to its possession as against everyone except that of the real owner.

Few liabilities of the finder of the commodities, which are as follows.

1. Trying to figure out who the actual owner of the lost goods is.

2. To take good and accurate care of the products. Such a finder is entitled, with the exception of the
true owner, to the possession of such products in the world.

3. Such a finder is also entitled to a bond, to hold the goods even against the true owner, until such
time as the owner pays them the lawful money which the real owner is obliged to pay. In the case
of detention, treatment and preservation, but he is not entitled to sue for such compensation.

 For Instance :

 X picked up a diamond on the floor of Y’s shop and handed it to Y to keep it to the owner, appeared.
In Spite of wide advertisements in the newspapers, no one appeared to claim it.

 After sometime X tendered to Y the expenses of advertisement and indemnity bond and requested
him to return the diamond; but Y refused to do so. Y was held liable for damages; and X was held
entitled to get the possession and to retain the good as against everyone except the true owner.
 If a finder dishonestly appropriates to his own use when he knows the owner or has the means of
discovering the true owner, he is guilty of criminal misappropriation of property.But when he takes
the property for the purpose of protecting it, or restoring it to the owner, he is not guilty of any offence.

 In addition, a person who, upon receiving the lost goods, takes charge of the good is called the finder
of the lost goods, and his position is that of the bailee of goods (Sec. 171 of the Contract Act, 1872).

 The finder is under an obligation, to take care of the goods as a man of ordinary prudence would take
as his own property, under similar circumstances, of his own goods. Secondly, he is bound to return
the goods to the true owner. These are the quasi contractual obligations of the person who is finder
of the goods.
 CONCLUSION

o Finder of goods is a part of quasi contract or certain relationship that resembls or is similar to those
created by a contract.

o Here it would not be be worth that finder of goods has the same criteria of responsibilities and duties
towards the innocent parties as given to the bailee. This is something which is mentioned in the Indian
Contract Act, 1872 under section 71.

o Literally, their position is a mere custodian of the assets that are found by him. Neither can he
dishonestly appropriate his own use, nor can he transfer it to anyone for his personal gain. You are
required by law to properly take care of the property until the true owner is found.

o The one who finds goods belonging to a different person is entitled to retain the products against the
owner until he gets compensation from the real owner.

o He has the right of lien against the goods for lawful expenses he has incurred in preserving the goods
within safe custody, but this doesn’t give him the right to sue the finder for the difficulty and expenses
that are incurred by him.

o He can sue the owner for the reward where a particular reward has been offered by the real owner of
that goods. The finder of the products is entitled to its possession as against everyone except the real
owner.

o The finder is also under an obligation, to take care of the products as a person of ordinary prudence
would take, under similar circumstances, of his own goods. Secondly, he is bound to return the products
to the actuality owner. These are the quasi-contractual obligations of a finder of products.

o Therefore, in this respect, the procedural legislation leaves a margin for more study and calls for
positive reinforcement for the same.
 BIBLIOGRAPHY

1. https://lawcorner.in/who-is-finder-of-goods-state-the-
rights-and-obligations-of-finder-of-goods/

2. https://blog.ipleaders.in/rights-duties-finder-lost-goods-
india/

3. https://lawcorner.in/who-is-finder-of-goods-what-are-
good-rights-and-obligations-what-is-the-nature-of-lien-he-
has-over-the-goods/

4. https://www.lawcolumn.in/rights-and-liabilities-of-
finder-of-lost-goods/

5. https://www.owlgen.in/explain-the-rights-and-duties-of-
the-finder-of-goods/