Contract of Bailment & Contract of Lien
1. Statutory Meaning of Bailment (Section 148)
“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.”
- Bailor: The person delivering the goods.
- Bailee: The person to whom goods are delivered.
Cardinal Elements of a Valid Bailment:
- Delivery of Possession: Physical or constructive transfer of goods from bailor to bailee. Custody without possession (e.g., a servant holding master’s watch) is NOT bailment.
- Moveable Goods Only: Bailment applies exclusively to moveable chattels (not immovable property or money).
- Specific Purpose: Goods delivered for a definite purpose (e.g., repair, safe custody, carriage).
- Return of Specific Goods: The identical goods must be returned or disposed of; returning equivalent value in money or other goods is a sale or loan, not bailment.
2. Rights and Duties of Bailee
Core Statutory Duties of the Bailee
1. Duty of Reasonable Care (Sec 151)
Care which a person of ordinary prudence would take of his own goods of like bulk and value. Not liable for loss without negligence (Sec 152).
2. Not to Make Unauthorized Use (Sec 154)
If bailee uses goods in a manner unauthorized by terms of bailment, he is strictly liable for any damage, even arising from accidental acts.
3. Not to Mix Goods (Sec 155-157)
Bailee must not mix bailed goods with his own without bailor's consent. If mixed inseparably, bailee must compensate bailor for total loss.
4. Return Accretion & Goods (Sec 160-163)
Duty to return goods on expiration of purpose without demand, along with any natural increase or profit accrued (e.g., cow giving birth to a calf).
3. Contract of Lien: Retaining Possession
A Lien is the right of one person to retain possession of goods or property belonging to another until certain lawful charges, remuneration, or debts due to him are fully satisfied.
Particular Lien vs. General Lien Architecture
Particular Lien — Section 170
- Right to retain only those specific goods on which the bailee has bestowed labor, skill, or service.
- Available to tailors, watchmakers, automobile repairers, transporters.
- Example: Tailor can retain the coat stitched by him until stitching charges are paid, but cannot retain another garment for that coat's fee.
General Lien — Section 171
- Right to retain any goods in possession as security for a general balance of account.
- Statutorily restricted exclusively to:
- Bankers
- Factors (mercantile agents)
- Wharfingers
- Attorneys of High Courts
- Policy Brokers