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The Tax Publishers Indian Contract Act, 1872--Bailment Some Principles of Bailment Revisited using a Supreme Court Decision Srivatsan Rangnathan Bailment is special type of contract provided in section 148 of the Indian Contract Act, 1972. The Supreme Court in its recent judgment in Taj Mahal Hotel v. United India Insurance Co. Ltd. (Civil Appeal No. 8611 of 2019) has revised certain provisions of Bailment. The same are discussed by learned author in this Article. 1. Introduction Bailment is a special type of contract enshrined in section 148 of the Indian Contract Act, 1872 (ICA). Contract law recognizes bailment with a consideration and one without a consideration, i.e., on gratuitous basis. Hence, bailment without consideration forms an exception to the principle that contracts without consideration is void. 2. Bailment provisions/principles revisited - Section 148 of the ICA defines bailment as under : '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'. 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 the owner becomes the bailor of such goods, although they may not have been delivered by way of bailment.' A finder of lost goods assumes the role of a bailee as per section 71 of the ICA. 'A person who finds goods belonging to another, and takes them into his custody, is subject to the same responsibility as a bailee.' As to how bailment happens is mentioned in section 149 which recognizes both express and constructive delivery -- '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 of any person authorized to hold them on his behalf.' SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Indian Contract Act, 1872--Bailment

Some Principles of Bailment Revisited using a Supreme Court Decision

Srivatsan Rangnathan

Bailment is special type of contract provided in section 148 of the Indian Contract Act, 1972. The Supreme Court in its recent judgment in Taj Mahal Hotel v. United India Insurance Co. Ltd. (Civil Appeal No. 8611 of 2019) has revised certain provisions of Bailment. The same are discussed by learned author in this Article.

1. Introduction

Bailment is a special type of contract enshrined in section 148 of the Indian Contract Act, 1872 (ICA). Contract law recognizes bailment with a consideration and one without a consideration, i.e., on gratuitous basis. Hence, bailment without consideration forms an exception to the principle that contracts without consideration is void.

2. Bailment provisions/principles revisited -

Section 148 of the ICA defines bailment as under :

'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'.

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 the owner becomes the bailor of such goods, although they may not have been delivered by way of bailment.'

A finder of lost goods assumes the role of a bailee as per section 71 of the ICA.

'A person who finds goods belonging to another, and takes them into his custody, is subject to the same responsibility as a bailee.'

As to how bailment happens is mentioned in section 149 which recognizes both express and constructive delivery --

'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 of any person authorized to hold them on his behalf.'