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Rights of a Bailee: Judicial Interpretation


Authored by - Divyanshi Pathak

Keywords - Rights of Bailee, Bailee Duty, Contract Duties, Contract, Indian Contract Act 1872


Abstract:


Bailment is a contract in which there are two parties, a bailor and a bailee and there is a bailment or transfer of goods that take place. The contract is governed by the Indian Contract Act,1872. To avoid certain discrepancies and unjust situations there are certain rights and duties provided to the bailor and the bailee. The article talks about the Sections and Laws governing the ‘rights of a bailee’.


Introduction:


Human is a social being and needs to come in contact with another for completing their basic needs. We tend to make a lot of contracts on a daily basis and one such contract is the contract of bailment. All the contracts formed in the Indian subcontinent are governed by the Indian Contract Act, 1872. Bailment is also a type of contract which is defined under Section 148 of the Indian Contract Act.


Rights of a Bailee


Under Section 148[1] of the Indian Contract Act, 1872, bailment is defined as, ‘Bailment’, ‘bailor’ and ‘bailee’ defined. —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 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’. So, Section 148 explains bailment to be a contract of delivery of goods from one person to another wherein the person delivering the goods is the bailor and to whom the goods are delivered is a bailee.


The important essential to consider in this form of contract is the ownership of the goods always remains with the bailor while the bailee only gets the possession of the goods. Both the bailor and bailee has certain rights and duties with regard to the contract of bailment. The Indian Contract Act explains the rights of bailee as well. Generally, the rights of bailee are equivalent to the duties of bailor.


The first right a bailee has been provided by the Indian Contract Act under Section 150. According to this Section, a bailee has a right to know all the material facts about the goods bailed. The ‘material facts’ which might open the bailee to extraordinary risks are to be disclosed. It is the duty on the part of the bailor and a right of the bailee to know all the material facts about the goods being bailed. The Section also says that if the bailor does not disclose these facts, he is responsible for the damages incurring from these defects. ‘Material facts’ depend on the facts and circumstances of the case.


According to the Section 155 of ICA, the bailee has a right to claim proportionate share in the mixed goods. If in any case, the bailor mixes the bailed goods with other goods or directs the bailee to do so, both the bailor and bailee will have their respective shares in the mixture, thus produced.


The third right provided by ICA under Section 170 is the right of lien. Right of lien is basically a common principle which explains that when a bailor delivers goods to the bailee, then the bailee can keep the goods under his possession until he is rendered remuneration for the services provided. So a bailee has a right to lien of the goods bailed until he is remunerated or compensated for the services provided.


Under Section 164 of ICA, the bailee has the right to recover compensation from the bailor of any loss sustained by the bailee. Also, stating Section 150, the bailee has a right to claim damages in case of a fault in the goods. According to this Section, the bailor is bound to disclose any material facts to the bailee and if there are any and might arise any extraordinary risks. So all the compensation arising from these risks shall also be recovered from the bailor.


The bailee has a right to claim expenses of bailment under the Section 158[2] “Where, by the conditions of the bailment, the goods are to be kept or to be carried, or to have work done upon them by the bailee for the bailor, and the bailee is to receive no remuneration, the bailor shall repay to the bailee the necessary expenses incurred by him for the purpose of the bailment. —Where, by the conditions of the bailment, the goods are to be kept or to be carried, or to have work done upon them by the bailee for the bailor, and the bailee is to receive no remuneration, the bailor shall repay to the bailee the necessary expenses incurred by him for the purpose of the bailment.” So according to this Section, the bailee has a right to get compensated for the all the expenses incurred in the process of bailment. Under the contract of bailment, the bailee has to take care of the goods bailed as if it were his own goods.


According to the Section 159 of the Indian Contract Act, the bailee has right to get indemnified. Under this principle, one party promises the other party by means of a contract to indemnify or save the other party from loss. The bailee has a right to get indemnified for any losses incurred.


Conclusion:


The Indian Contract Act, 1872 offers a balance between the rights of the bailor and the bailee. It helps maintain an equilibrium during the entire tenure of the contract and also has penalties, in case any party defaults on its own part. The bailee has complete possession of the goods for the time period the goods are being bailed, while the bailor has complete ownership and title of the goods. As there are two parties involved it is important to have certain rights and duties so that there is no injustice on the part of any of the parties involved in the contract.


[1]Indian contract Act, 1872 [2]Indian contract Act, 1872

References:


1. https://www.srdlawnotes.com/2017/04/contract-of-indemnity-and-rights-of.html

2.https://www.srdlawnotes.com/2017/06/bailment-rights-of-3.bailee.html#:~:text=B%20is%20responsible%20to%20A,proportionate%20share%20in%20mixed%20goods%20%3A&text=According%20to%20Section%20155%20of,the%20consent%20of%20the%20bailor.

4.http://www.legalserviceindia.com/legal/article-1891-right-to-lien-and-bailment-judicial-interpretation.html

5.https://indiankanoon.org/doc/1240329/#:~:text=148.,of%20the%20person%20delivering%20them.