The word Bailment has got its origin from a French word baillier which means -
to deliver. According to section 14, a delivery of goods,with a condition to
return,when the purpose is over or otherwise disposed off according to the
direction of the person delivering them,by one person to another is called a
The person who delivers the goods is called the bailor.The person who receives
the goods from the bailor is called the bailee.
- Mr. Shaurya hires a bike for travelling to Delhi.
- Mr. Bhavesh delivers his mobile for repairing.
- Mr. Aviral gives his suit to a shop for drycleaning.
Elements of a bailment
- There must exist an expressed or implied agreement between the bailee and
- It is necessary that the goods should be delivered to the bailee in case of
bailment. Furthermore, the possession of the goods must be voluntarily transferred
and shall be in accordance with the contract. Delivery may be of two types -
Actual delivery and constructive delivery.
- A car delivered for repair to a workshop dealer is an actual delivery.
- The key of a car delivered to a workshop dealer for repair of the car is
a constructive delivery.
- In a bailment the ownership remains with the bailor and is not transferred to
the bailee or anyone as because if the ownership is transferred then it is not a
bailment contract. It becomes a contract of sale.
- Bailment is only for movable goods and not for immovable goods.
- There should be a purpose for the delivery of goods like safe custody,use and
transportation of the goods, repair etc.
- If the bailed goods are changed like a raw material is converted into a
product still the contract remains the same as a bailment.
- The goods shall be returned to the bailor or disposed off according to
The amount deposited by a person in various bank accounts like saving,
current account etc. isn't treated as bailment because the bank is not bound to
return the same deposited coins or currency notes.This has been stated in the
various decisions given by the judges in different cases from time to time.
But it will be treated as bailment if a person keeps of his valuable items in
the locker of the bank for safe custody.
Kinds Of Bailment
On the basis of reward
The bailment of products without any charges or reward is
Gratuitous bailment.In this type,There is no requirement to pay any charges by
the bailee for the bailment.
Non gratuitous bailment:
The bailment for some reward or charges is Non
gratuitous bailment.It is required to pay some charges to the bailor by the
On the basis of benefit
- Bailment Contract made for the exclusive benefits of the bailor
- Bailment made for the exclusive benefits of the bailee
- Bailment made for mutual benefits of both bailor and bailee
Duties of Bailor
- Duty to disclose all known defects-( sec 150):
It is the duty of the bailor to disclose any known defects occurred in the goods.In case if there is
failure of disclosing the defects and there occurs some loss from the end of
bailee,the compensation will be beared by the bailor.
- Duty to bear necessary and extraordinary expenses (Sec 158):
In case of
gratuitous baiment,the bailee must be repaid with all the expenses which he has
incurred already for bailment,by the bailor.
- Duty to indemnify loss for premature termination of
The bailor would be liable to indemnify the bailee for any loss incurred which
the bailee has paid to the original owner,if the title to deliever the goods
does not falls within the bailor's reach.
- Duty to indemnify the bailee against the defective title of the bailor (Sec164):
if any loss is occurred to the bailee by reason that the bailor was not
entitled to make the bailment, or to receive back the goods.In that case,bailor
will be responsible for the losses.
- Duty to bear a loss (Sec162):
If the bailee has taken all the necessary and
reasonable care to protect the bailed goods from occurance of any possible
damage or loss and still any loss or damage is occurred then it is the duty of
bailor to bear the damages or loss of the things bailed.
Rights of Bailor
- Right to claim damages in cases of negligence from the bailee [section
It is the right of the bailor to be compensated for the damages of the
goods which are bailed if the bailee has failed to take all the necessary due
care to abstain that damage or losss according to the direction.
- Right of termination of the contract in case of unauthorized use of
goods [sec 153]:
If there is an unauthorized use of goods by the bailee,the bailment
contract can be terminated before its completion.
- Right of compensation in case of the unauthorized use of goods [ICA
If the use of goods is not done by the bailee as per the terms and
conditions of the bailment contract, the bailor has a right to claim
compensation from bailee for any damages arising to the said goods.
- Right to claim compensation in case of the unauthorized mixture of
the goods which cannot be separated" [section 157]:
If the bailee without the consent of
the bailor mixes goods of the bailor with his own goods and they cannot be
separated, the bailor has right to claim compensation from bailee for loss of
- Right to claim separation of the goods in case of unauthorized
mixture of goods[section 156]:
If bailee, without consent of the bailor mixes with his
own goods the goods of the bailor and goods can be separated, the bailor has
right to claim his own goods after separation.
- Right to demand return of goods [section160]:
The bailor has a right to
demand return of goods after the completion of purpose or after expiry of the
period of bailment.
- Right to claim compensation in case of unauthorized retention of
goods (section 161):
If the bailee does not either return or deliver the
goods according to bailor's directions, even after accomplishment of the purpose
or after expiry of period of bailment, the bailor has a right to claim
compensation for any loss, destruction and deterioration of goods from that
- Duty to deliver any accretion to goods:
It is the duty of the bailee to
deliver the respective goods to the bailor and any natural increase or profit
accruing from goods bailed, unless there exists a contract to the contrary.
Duties of Bailee
- Duty to take due care of the respective goods delivered to him:
151] In all cases of bailment,It is necessary for the bailee to take the
maximum amount of care to the goods delivered to him.
- Duty to not make unauthorized use of the respective goods entrusted
In ICA Sec 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
- Duty to not combine mix bailed along with his own the respective :[ICA
sec 155 to 157] 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.
- Duty to return the goods: [ICA Sec 160] lays down this duty within the
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.
- Duty to deliver any accretion to goods:
It is the duty of the bailee to deliver
the respective goods to the bailor and any natural increase or profit accruing
from goods bailed, unless there exists a contract to the contrary
Rights of a bailee
- Right to claim the damages [ICA sec 150]
- Right to claim reimbursement of expenses if any [ICA sec 158]
- Right to get indemnified if termination of gratuitous bailment takes
place [ICA sec 159]
- Right to give bailed goods to any of the bailors in case of joint bailment [ICA
- Right to recover damages for the losses in case bailor refuses to take the
goods back [ICA sec 164]
- Right to deliver the goods to the bailor in case of the title of bailor is
defective [ICA sec 166]
- Right to recover damages for the loss in case title of bailor is
defective[ICA sec 164]
Termination of bailment
Some Relevant Cases
- After the fulfillment of the purpose
- When use of goods become inconsistent
- When the subject matter of bailment gets destroyed
- Death of any party occurs
- When bailor terminates the bailment contract
- Kavita Trehan V. Balsara Hygiene Product Ltd. ( AIR 1992 Delhi 103):
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.
- Annamalai Timber Trust Ltd. V. Thrippunithura Dewas (1954):
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):
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.