A-17 contract 2 - rights of bailee under Indian contract act, 1872 PDF

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Rights of a Bailee enumerated vastly under Indian contract act, 1872 . Description of rights, case laws, relevant sections...

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Assignment On: Rights of a bailee under Indian Contract Act, 1872

Submitted By:

Division: A Roll No.: 17 Subject: Contract-II Semester: IV Year: S.Y. L.L.B. 2020-2021 Submitted to:

KC Law College, Mumbai.

Introduction The word “bailment” has been derived from the French word “ballier” which means “to deliver”. In general, Bailment means the delivery of goods of a person to whom permission is given to have the goods of another person. The contracts of bailment come under a special class of contract and are dealt under Sections 148 to 181 of the Indian Contract Act, 1872. According to Section 148 of the Contract Act, “Bailment means 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 “bailer” and the person to whom they are delivered is called the “bailee”. After the accomplishment of the purpose, the Bailee needs to return these goods to the Bailor or dispose of them according to the directions of the Bailor. In the contract of bailment, the ownership of the goods remains with the Bailor and only the possession transfers to the bailee.

Relevant Legal Provisions 1. Right to recover charges: If the bailment is non-gratuitous, Bailee has right to recover agreed charges. If charges is not fix or agreed. Then Bailee can recover reasonable charges or charge which is charged by other bailee.

2. Right of Compensation [S.164]: The bailor is responsible to the bailee for any loss which the bailee may sustain by reason that the bailor was not entitled to make the bailment or to receive back the goods. or to give directions respecting them. Thus, bailee can recover the amount of loss which he has suffered due to defective title of Bailor. According to section 164, “The bailor is responsible to the bailee for any loss which the bailee may sustain by the reason that the bailor was not entitled to make the bailment, or to receive back the goods or to give directions respecting them”

3. Right to return the goods in cases of joint bailers [S.165]: If several joint owners of goods bail them the bailee may deliver them back to, or according to the directions of, one joint owner without the consent of all, in the absence of any agreement to the contrary. Thus when the goods have been delivered by several for of owners, Bailee can return goods any one of the owner if there is no contrary Agreement. If goods of several joint owners are being bailed, the bailee may deliver them back to one joint owner without the consent of all owners when there is no agreement to the contrary.

4. Delivery of goods to bailor without title (S. 166): If any person other than the bailor claims the goods bailed, the bailee has a right to apply to Court to prevent the delivery of goods to the bailor and to decide the title of such goods.

5. Right to apply to the court [S.167]: If a person, other than the bailor, claims goods bailed, he may apply to the Court to stop the delivery of the goods to the bailor, and to decide the title to the goods. Thus, where a person, other than the bailor claims goods bailed the bailee may apply the courta. to the stop delivery of goods to the bailer; and b. to decide the title of the goods.

6. Bailee’s right of lien: [S. 171] Lien means right to retain a property or goods until some charges due upon it or services rendered for its improvement, are paid. It is simply a right to retain the thing and does not give any right of property or ownership to bailee. If the bailee had rendered any service by exercise of labour or skill in respect of the goods, he gets the right to retain the goods until he gets the remuneration for the services rendered. Section 171 which deals with general lien of bailees provides: “Bankers, factors, wharfingers, attorneys of a High Court and policy brokers may, in the absence of a contract to the contrary retain, as security for a general balance of an account, any goods bailed to them : but no other persons have a right to retain, as a security for such balance, goods bailed to them, unless there is an express contract to that effect. ”

7. Right to sue wrongdoer (S180, 181): Section 180 confers right on the bailee to sue wrongdoers, section 180 provides: “If a third person wrongfully deprives the bailee of the use of or possession of the goods bailed, or does them any injury, the bailee is entitled to use such remedies as the owner might have used in the like case if no bailment had been made; and either the bailor or the bailee may bring a suit against a third person for such deprivation or injury.” S.181:- Whatever is obtained by way of relief or compensation in any such suit shall, as between the bailor and the bailee, be dealt with according to their respective interests. This right has been discussed in the Bailor rights. Case Laws

Hutton v. Car Maintenance Co.

In this case, the plaintiff company maintained the car of the defendant. Some maintenance expenses having become due, the plaintiff company took the car into its possession and claimed lien for the expenses. The court, however rejected its claims because what it did was simply to maintain the car and not to improve it.

Mercantile Bank of India Ltd. v. Rochaldas Gidumal & Co. In this case, a bank received some money of the customer with his instruction to transmit it telegraphically to his own firm at other place; it was held that the bank could not retain it as it was not given to it for the purpose of bailment.

State of Bihar v. Bank of Bihar In this case, a sugar company pledged the entire stock of sugar manufactured for advances made by bank to company. The stock was seized by the government. It was held that there was no wrongful deprivation in the case, firstly because the seizure was lawful and secondly because the Cane commissioner recovered money lawfully.

Ram Ghulam v. Government of U.P. In this case, some stolen ornaments belonging to the plaintiff were recovered by the police. But while ornaments were in custody of the police, they were again stolen and this time couldn’t be recovered. Plaintiff sued Government for loss of ornaments. But this action was dismissed by Allahabad High Court on the grounds that the possession of goods was not under a contract, and hence, the Government never occupied the position of a bailee. Although, section 148 requires that delivery of goods must be upon a contract, it may be submitted that it is not exhaustive and there may be bailment even without a contract. This was finally affirmed by the Supreme Court in a recent case of State of Gujarat v. Menon Mohammad.

Kaliaperumal v. Visalakshmi Achi In this case, a lady engaged a goldsmith for melting old jewellery to make some new ornaments. She delivered the old jewellery to him but every evening after the day’s work, she used to take half-made jewelleries with her and after putting those into a box with a lock left it in the room of goldsmith while retaining the keys with her. One morning she found jewellery to be stolen and sued goldsmith for it. It was held that goldsmith was not liable as every evening there was re-delivery of jewelleries to lady and when they were stolen, were not in possession of goldsmith and mere leaving the box in goldsmith’s room while herself retaining the key, did not constitute delivery.

Conclusion

Contracts of Bailment are a special class of contract. These are dealt within Chap. IX from S.148 to 181 of the Indian Contract Act, 1872. It can be concluded that bailment is a contract in which delivery of

possession of specific goods is given to another person for a specific purpose and it is different from the concept of sale. The concept of bailment is used in our day to day lives so it becomes necessary to know about the rights and duties arising out of the concept of bailment. The bailee and the bailor have to perform in accordance with the provisions of the Indian Contract Act, 1872 and the contract of bailment. References:

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Mondaq.com

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Legalservicesindia

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Avtar Singh, Law of Contract and Specific Relief (10 ed., 2008)

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