Essentials of bailment PDF

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Essentials of bailment: 1. Delivery of possession Delivery means transfer of possession of the goods from one person to another. Delivery need not always be actual. It may sometimes be a constructive or symbolic delivery.1 Section 149 of the Indian contract act recognises other than actual delivery also. Section 149 of the Indian contract act is defined as: “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 any person authorized to hold them on his behalf.” a. Actual delivery: As we all know a delivery is termed to be actual when delivery takes place when the goods are physically handed over by the seller or his/her authorized agent to the buyer or his/her agent authorized to take possession of the goods. For example, A, the seller of a car hands it over to B, the buyer; it is a case of actual delivery of the goods. b. Constructive delivery: In constructive delivery, the physical possession of the goods may not be handed over. The possession of the goods may remain with the bailor with the consent or authorization of the bailee. For example, in the case of Bank of Chittor vs. Narsimbulu2 c. Symbolic delivery: This method of distribution involves delivering something in token of a transfer of something else. The distribution can be symbolic where the items are weighty or bulky and incapable of real distribution. For example, transferring the key of the godown. If a person assumes the custody of another person’s goods, even without any formal agreement, this is sufficient to constitute bailment. This is evident from the case Ultzen v. Nichols 3, here the plaintiff went to defendant’s restaurant for the purpose of dining there. When the plaintiff entered the restaurant, a waiter took the plaintiff’s coat from him without being requested to do so, and hung it on a hook behind the plaintiff. When the plaintiff wanted to leave, he found the coat had been lost. It was held that the defendant was the bailee of the coat as his servant had assumed that the possession of the same and he was, therefore, liable for its loss which was due to his negligence. 2. Return or dispose of goods according to the direction The delivery of goods in a bailment is only for some purpose. When the purpose is achieved, the goods are to be returned or otherwise disposed according to the directions of the person delivery them.

1 Komma Naveen Kumar, Bailment (Oct 03, 2020, 5:30), https://www.slideshare.net/komma_129/bailment. 2 AIR 1966 AP 163 3 (1894) 1 Q.B 92.

As mentioned in section 148 of the Indian Contract Act, “the goods shall, when the purpose is achieved otherwise disposed of according to the directions of the person delivery them.” This particular element distinguishes bailment from other kinds of transactions like sales of goods, or gift, where the property in goods is transferred and they are not to be returned in any case. In very bailment, the same thing is to be retuned either in the same form or in altered form. For example, When the cloth is given for being stitched into suit, or gold for being converted into ornaments, or wheat for being converted into flour, then there is bailment.

Duties of the bailee referred in this case: 1. Duty to take reasonable care of the goods bailed (Sections 151) “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.” The standard of care required is that of a reasonable man. The amount of care to be taken should be as a man of ordinary prudence would, under similar circumstances, taken of his own goods of the same bulk, quantity and value as the goods bailed. This section lays down an uniform duty of care for very kind of bailment, whether the same is for gratuitous or nongratuitous bailment. According to Section 151, if the bailee has not acted as ordinary prudent man, he cannot be excused by pleading that he had taken similar care of his own goods also, and his goods, have also been lost or damaged along with those of bailor, or that the bailor had the knowledge that his goods were kept in a negligent manner. 2. Bailee not liable when he takes due care (Section 152) 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 of the Indian Contract Act. Section 151 describes the amount of care which a bailee is supposed to take. If he has taken due care, he will not be liable for any loss which may be caused to the goods bailed to him. If due care has not be taken and there is damage to the goods as a consequence of his negligence, he will be answerable for the same. When he is negligent, he cannot avoid the liability by pleading that his own goods have also been damaged along with the goods bailed, or the bailor was aware that the goods bailed were being kept in a negligent manner.4 Bailee is required to take care of the goods bailed to him as a man of ordinary prudence. If the bailee has taken due care and the damages to the goods is because of the circumstances beyond his control, he will not be liable for the loss. Therefore, the bailee is not liable for loss due to destruction of goods in accidental fire.5 4 Calcutta Credit Corp. Ltd. v. Prince Peter of Greece, AIR 1964 Cal. 374, at 379. 5 Pyramid Finance Ltd. v. Ramkrishna Iyer, 2007 Cri LJ 1767 (Bom) (Goa Bench).

Other duties of bailee that can be included: 1. Duty to return the goods on fulfilment of the purpose (Sections 160 and 161) According to Section 160 of the Indian contract act: “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 expired, or the purpose for which they were bailed has been accomplished.” Since the bailment of the goods is either for a certain purpose or a certain period, the bailee is bound to return the goods to the bailor as soon as the time for which the bailed goods has expired, or on the fulfilment of the purpose. According to Section 161: “If, by the default of the bailee, the goods are not returned, or delivered or tendered at the proper time, he is responsible to the bailor for loss, destruction or deterioration of the goods from that time.” If a bailee is not in a position to deliver back the goods, for instance, when they are not lost due to the fault of his servants, the responsibility for such loss is that of the bailee. A bailee is liable for the loss due to non-return or non-delivery of goods if that is due to his fault. A bailee is excused from returning the subject matter of the bailment to the bailor or his agent where the subject matter was taken away from him by authority of law exercised through regular and valid proceedings.

Rights of the bailee that can be included: 1. Right of suit against wrong doer (Section 180) “If a third person wrongfully deprives the bailee of their use or possession of the goods bailed, or does them an 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.” When the goods have been bailed, if a third person for wrong to the goods. This suit can be filed not only by the bailee but also by the bailor. If a person fraudulently or forcibly takes away the goods from the bailee, the bailee has a right to recover the same.

Rights of the bailor that can be included: 1.

Claim back the goods (Section 159)

“The lender of a thing for use may at any time require its return, if the loan was gratuitous, even though he lent it for a specified time or purpose. But if, on the faith of such loan made for a specified time or purpose, the borrower has acted in such a manner that the return of the thing lent before the time agreed upon would cause him loss exceeding the benefit actually derived by him from the loan, the lender must, if he compels the return, indemnify the borrower for the amount in which the loss so occasioned exceeds the benefit so derived”

When the goods are lent from consideration, the bailor has a right to demand for the return of the goods if he lent even if he lent them for a specific period or a specific purpose.

References: I. II. III. IV.

V.

Bare acts https://www.slideshare.net/satyavrat1994/bailment-and-pledge-29308619 https://www.lawnn.com/contract-of bailment/#:~:text=1)%20Enforcement%20of %20Rights%3A%20The,regard%20to%20the%20goods%20bailed. http://notesforfree.com/2017/12/16/bailment-law-contracts-ii-notes/ https://www.toppr.com/guides/business-laws/the-sale-of-goods-act-1930/definitionsof-important-terms/#:~:text=There%20are%20various%20forms%20of,or%20custody %20of%20the%20goods....