Bailment is a kind of activity in which the property of one person temporarily goes into the possession of another. The ownership of the property remains with the giver, while only the possession goes to another. Several situations in day to day life such as giving a vehicle for repair, or parking a scooter in a parking lot, giving a cloth to a tailor for stitching, are examples of bailment. Section 148 of Indian Contract Act 1872, defines bailment as follows:-
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. The person delivering the goods is called the bailor and the person to whom they are delivered is called the bailee.
Explanation - If a person is already in possession of the goods of another contracts to hold them as a baliee, he thereby becomes the bailee and the bailor becomes the bailor of such goods although they may not have been delivered by way of bailment.
Following are the duties of Bailor:-
(1) To disclose defects in the goods' bailed:-If the bailment is gratuitous, the bailor's duty is to disclose such defects as are known to him. If the bailment is for hire, the bailor is liable for all defects, irrespective of his knowledge of defact. (Section 150. Indian Contract Act).
Where the bailment is for hire the bailor is equally liable for latent as well as patent defects in the goods bailed.
(2) To bear extraordinary expenses:- (Section 158 Indian Contract Act).
Where, by the conditions of the bailment, the goods are to be kept or to be carried, 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.
In F.F.C. Co. Ltd. v. Board of Trustees of the Port of Bombay. AIR 2006 Born 162. it was held that under Section 158 of the Indian Contract Act. the bailor is bound to repay to the bailee the 'necessary expenses incurred by him for the purpose of bailment. Therefore. in respect of port charges of uncleared goods where the consignee fails to turn up and no delivery order has been issued by the steamer agent, port trust would be entitled to recover demurrage charges and other charges from steamer agent.
If a horse is lent for journey, the expenses for feeding the horse are normal expenses and fall on the bailee. But if the horse is stolen and expenses are incurred for its recovery or if the horse becomes sick and expenses are incurred on its treatment these are extraordinary expenses. These fall on the bailor.
(3) To compensate or indemnify the bailee for any loss which the bailee may suffer by reason that the bailor was not entitled to make the bailment or to receive back the goods or to give directions respecting them (Section 164, Indian Contract Act).
Bailee's Lien-A bailee has a right of lien in respect of charges due to him either for work or for labour done in respect of goods bailed (Sec. 170, Indian Contract Act). This right consists of a right to detain goods belonging to the bailor until the sum claimed or other demand of the bailee is satisfied.
Courtesy:- Legal Point Foundation