SUBMITTED BY :- ABHINAV RAJ 1

CONTRACT OF BAILMENT
Bailment is another form of sealed instrument. Since it's a contract, naturally all basic needs
of a contract are applicable. –According to my understanding Bailment suggests that AN act
of delivering product for a given purpose on trust. In Bailment, the products are to be come
when the aim is over, or in alternative words, {we can/ we will/ we are able to} say the
products are given for a selected time. In bailment, possession of products is transferred,
however property i.e., possession isn't transferred which implies the possession doesn't
amendment. A "bailment" is that the delivery of products by one person to a different for a
few purpose, upon a contract that they shall, once the aim is accomplished, be came or
otherwise disposed of per the directions of the person delivering them. The person
delivering the products is named the "bailor". The person to whom they're delivered is
named the "bailee". -- Explanation: If an individual already in possession of the products of
another, contracts to carry them as a agent, he thereby becomes the agent, and therefore
the owner becomes the deliverer, of such product, though they'll not are delivered by
method of legal transfer. [Section 148]. [Thus, initial possession of products could also be for
one more purpose, and after, it should be born-again into a contract of legal transfer, e.g.
merchandiser {of product/of products} can become agent if goods continue in his
possession when the sale is complete].

Bailment is another type of special contract. Since it is a contract, naturally all basic
requirements of contract are applicable. –According to my understanding Bailment means
act of delivering goods for a specified purpose on trust. In bailment the goods are to be
returned after the purpose is over or in other words we can say the goods are given for a
specific time. In bailment, possession of goods is transferred, but property i.e., ownership is
not transferred which means the possession does not change. A "bailment" is 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

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CUSB2013125003, SEC- A , SEMESTER 3rd
directions of the person delivering them. The person delivering the goods is called the
"bailor". The person to whom they are delivered is called the "bailee". Explanation: If a
person already in possession of the goods of another, contracts to hold them as a bailee, he
thereby becomes the bailee, and owner becomes the bailor, of such goods, although they
may not have been delivered by way of bailment. [Section 148]. 2[Thus, initial possession of
goods may be for other purpose, and subsequently, it may be converted into a contract of
bailment, e.g. seller of goods will become bailee if goods continue in his possession after
sale is complete].

Bailment can be only of 'goods'. As per section 2(7) of Sale of Goods Act, 'goods' means
every kind of movable property other than money and actionable claim. Further clarifying it
more, keeping money in bank account is not 'bailment'. Asking a person to look after your
house or farm during your absence is not 'bailment', as house or farm is not a movable
property and moreover there is a difference in bailment and things to be taken care of. One
very common example of bailment is that when we give something to get repaired or when
we give our vehicles for service, then it’s bailment, as we give the goods we posses for some
period of time with some prior conditions.

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Taken from the Indian Contract Act
ESSENTIALS OF BAILMENT

To constitute a bailment, the actual or constructive possession of specific movable property

must be vacated by its owner or possessor or in other words we can say that the goods is
given for particular period of time with some conditions, or his agent duly authorized for
that purpose, in favour of another person order that the latter may keep the same or
perform some act in connection therewith, for which such actual or constructive possession
of the goods is necessary, thereafter returning the identical subject matter in its original or
an altered form. Furthermore in simple words the basic elements of bailment are delivery of
possession of goods, delivery of possession upon a certain contract, and lastly returning or
disposing the goods according to the direction.

SPECIFIC MOVABLE PROPERTY

SECTION 149 of the Indian Contract Act, 1872 explains the mode of delivery to the agent
and states that the delivery of products could also be either constructive or actual. once the
deliverer hands over to the agent physical possession of sensibles /the products} that's
referred to as actual delivery of that good. Constructive delivery, on the opposite hand,
doesn't involve delivering the physical possession, however one thing is completed that has
the result of putt the products within the possession of the agent. Moreover, beneath this
we tend to get to grasp that legal transfer is done to any or all movable properties except
cash, cash will never be employed in legal transfer.

GOODS DELIVERED

The goods are delivered for some purpose. When goods are delivered by mistake without
any purpose, there is no bailment. To constitute a bailment there must be delivery of
possession of goods for a specific known purpose.
CASE KALIA PERUMAL V/S VISALAKSHMI, 1938

A lady used a Goldsmith for the aim of melting recent jeweller and creating new out a
similar. Each evening she went to receive the half created jewels from the goldsmith and
them into a box that was left during an area within the goldsmith's house of that she
maintained the key. One night the box was stolen. It was held that the goldsmith wasn't in
possession of the jewels, as he had given it back to the woman the jewellery bailed to him.
Because the keys to the area were with the woman, there was no bailment with the
goldsmith. Moreover, no negligence on the a part of the goldsmith was proved. Therefore,
the goldsmith wasn't to blame for the jewellery.

DUTIES OF BAILEE

A bailee may be a person to whom the respective goods are delivered. His duties are as
follows:

1. Duty to take due care of the respective goods delivered to him: Section 151 lays down
this duty, thus, "In all cases of bailment the bailee is bound to take the maximum amount
care the respective goods bailed to him as a person of normal prudence would, under
similar circumstances, take of his own the respective goods of the same bulk, quality and
worth as the respective goods bailed."

2. Duty to not make unauthorized use of the respective goods entrusted to him: In Section
154, the bailee must use the respective goods strictly under the terms of the bailment. If he
makes unauthorized use of the respective goods, he's at risk of being liable to compensate
the make for any damage arising to the respective goods from or during such use of them.
This liability is absolute.

3. Duty to not combine mix bailed along with his own the respective goods: duty of bailee
that he shouldn't mix his own goods with those of the it's also the bailor, without bailor's
consent. If the respective goods area unit mixed with the consent of the bailor, there's no
breach of duty and therefore the bailor and the bailee shall have an interest, in proportion
to their respective shares, within the mixture thus produced. Section 155 deals with this
duty.

4. Duty to return the goods: Section 160 lays down this duty within the following terms: "It
is that the duty of the bailee to come, or deliver, according to the bailor's directions the
respective goods bailed, without demand, as soon because the time for which they were
bailed has expired, or the aim that they were bailed has been accomplished."

5. Duty to deliver any accretion to the goods: It is the duty of the bailee to deliver the
respective goods to the bailor and any natural increase or profit accruing from the goods
bailed, unless there is a contract to the contrary.

DUTIES OF BAILOR
1. Duty to disclose faults in the respective goods bailed: Section 150 down this duty. This
section makes a distinction between a gratuitous bailor and a bailor for reward and provides
as mentioned below:

a. A gratuitous bailor is bound to disclose to the bailee all those faults within the respective
goods bailed, of that he's aware and which materially interfere with the utilization of them,
or expose the bailee to extraordinary risks, and if he fails to try and do thus, he are going to
be vulnerable to pay such damages to the bailee as could have resulted directly from the
faults. A gratuitous bailor will not be responsible for damages arising to the bailee from
defects of which he was ignorant.

b. A bailor for reward is accountable for all defects within the the respective goods bailed
whether or not he's aware of the defects or not, if he doesn't disclose them to the bailee.

2. Duty to repay necessary expenses just in case of gratuitous bailment: wherever, by the
conditions of the bailment, the respective goods are to be kept or to be carried or to have
work done upon them by the bailee for the deliverer, and also the bailee is to receive no
remuneration, it's the duty of the bailor to repay all necessary expenses incurred by the
bailee for the aim of bailment.

3. Duty to repay any 'extraordinary expenses just in case of non-gratuitous bailment:

wherever under the terms of the bailment, the bailee is to receive remuneration for his
services, it's the duty of the bailor to bear extraordinary expenses, if any, incurred by the
bailee in relation to the thing bailed. In such a bailment the bailor isn't to bear the ordinary
or usual expenses.

4. Duty to indemnify bailee: A bailor is additionally bound to indemnify the bailee for any
loss suffered by the bailee, by reason of the fact that the deliverer wasn't entitled to bail the
respective goods because of the defective title.

5. Duty to receive back {the respective good/the products}: it's the duty of the bailor to
receive back the goods once the bailee returns them after the time of bailment has invalid
or the purpose of bailment has been accomplished. If the bailor refuses to take the delivery
the respective goods once it's offered at the proper time, the bailee can claim
compensation for all necessary expenses of, and incidental to, the safe custody.

RIGHTS OF BAILEE

1. enforcement of bailor's duties: The duties of the bailor are the right of the bailee. As such,
the bailee can, by suit, enforce the duties of the bailor enumerated.

2. Right to deliver to one to 1 of many joint bailors: wherever the respective goods have
been bailed by many joint owners, the bailee has a right to deliver them to, or according to
the direction of, one joint owner without the consent of all, within the absence of any
agreement to the contrary.

3. Right to deliver the respective goods, in honesty, to bailor without title: The bailee has a
right to deliver the respective goods, in honesty, to the bailor without title, without
incurring any liability towards the true owner.

4. Right to lien: the right to retain possession of the property or the respective goods
belonging to another until some debt or claim is paid, is called the right to possession and is
lost as soon as possession of the respective goods is lost. 
RIGHTS OF BAILOR

1. enforcement of bailee's duties: the duties of the bailee are the rights of the bailor. The
bailor can enforce by suit all the duties of the bailee as his rights. To get back to it, the bailor
has the following rights against the bailee:

a. right to claim damages for loss caused to the goods bailed by bailee's negligence.

b. right to claim compensation for any damage arising from or unauthorized use of

the goods bailed.

c. right to claim compensation for any loss caused by the unauthorized

mixing {of the respective goods/of products} bailed with his own goods.

d. right to demand the return the respective goods as soon because the time for which they
were bailed has expired, or the purpose for which they were bailed has been accomplished.

2. right to terminate bailment if the bailee uses the goods wrongfully: the bailor has the
right to terminate the bailment, if the bailee will, regarding the respective goods bailed, any
act that is inconsistent with the terms of the bailment, though the term of bailment has not
expired or the purpose of bailment has not been accomplished.

3. right to demand the return the respective goods at any time in case of gratuitous
bailment: when the respective goods are lent while not reward, the bailor will demand their
return whenever he pleases although he lent them for a specified purpose or time and the
agent isn't guilty of wrongful use. however if the premature return {of the respective
goods/of products} causes the bailee loss in more than benefit derived by him from the
utilization of such goods, the bailor should indemnify the bailee for the amount during
which the loss occasioned exceeds the profit derived.

SOME RELEVANT CASES :-

Annamalai Timber Trust Ltd. V. Thrippunithura Dewas (1954) :- The court held that where
there is no obligation to return identical subject matter is an altered manner there is no
bailment.
Haatmal Bhutaria V. Dominion of India (AIR 1961 Kolkata 54) : In this case it was decided
that sec. 148 makes it clear that a seller can become a bailee if he contracts to hold the
goods as bailee in the absence of such contract he cannot be awarded as bailee.

Kavita Trehan V. Balsara Hygiene Product Ltd. ( AIR 1992 Delhi 103) : In this case it was
decided that one of the very requirement of bailment is the delivery of goods to the bailee,
where there is no change of possession there is no bailment.

Jagdish Chandra Trikha V. Punjab National Bank (AIR 1998 Delhi 266) : This case is related to
parcel which was carrying some gold jewellery. The jewellery was well scaled and packed.
When the parcel reached the destination some part of the jewellery was missing. In this the
court held that the position of bank is of bailee.

CONCLUSION

In this assignment I have discussed about different topics which comes under Bailment. As
per my understanding of the subject matter and this topic I have tried my best to explain
every topic I have aforementioned, furthermore I tried to give some relevant examples of
my own related to the topics. In this assignment basically all the focus have been given to
Bailment according to sec. 148 of the Indian Contract Act. I have discussed about its
essentials, and again giving some relevant cases for the same. I have stated two terms
‘Bailor’ and ‘Bailee’ and then talked about their rights and duties. I have made this
assignment with my level of understanding about the subject matter and have taken help of
my textbook and different websites to gain more thrust on the topic.