The Concept of Bailment

“Bailment is a contract in which one person transfers the goods to another person without transferring the ownership”.Sec148 of Indian contract act –“ A bailment is a contract in which there is delivery of goods from one person to another for some purpose upon a contract that they shall return it or otherwise dispose it according to the direction by the person delivering it after the purpose is accomplished “.

Parties to Contract

• The person who delivers the goods is called as Bailor.
• The person to whom the goods are delivered is called as Bailor.

Essential features of Bailment

• Delivery of possession of goods.
• Delivery should be upon contract.
• Delivery should be upon some purpose.
• Delivery of possession of goods:

Transfer of goods from one person to another which means there shall be a transfer of Physical possession, custody and responsibility to take care of goods. Goods must be handed over from one hand to another, then only it is understood as actual transfer of custody.

How the delivery of goods should be done to the Bailer?

Sec 149:The delivery to the Bailor may be made by doing anything which has the effect of putting the goods in the possession of the Bailor or any other person on behalf of Bailor.

As per sec 149, there are two kinds of delivering of goods:

• Actual delivery
• Constructive delivery
• Actual delivery

When the Bailor hands over the goods physically to another person (bailor) then it is called as an actual delivery.

• Constructive delivery

Constructive delivery refers to an act amounting to a transfer of title by operation of law when an actual transfer is impossible. Constructive delivery is a general term comprehending all those acts which, although not truly conferring a real possession on the purchaser, have been held by the construction of law equivalent to acts of real delivery. 

Ram Ghulam v/s Govt of UP (1950)

Some gold ornaments belonging to the plaintiff was stolen, he filed a police complaint, police caught the thief and recovered all the gold ornaments from the thief. when it was in the custody of police again it was stolen. Plaintiff filed a case against the state. Court held that the state is not liable as bailor the reason was even though there was a delivery of goods but there is no contract between state and plaintiff. It is constructive delivery there is no contractual agreement with the state. It was applied till 1966 but after that Bombay High court decided a case there were changes done to the existing law.

• Delivery should be upon contract.

The delivery of the goods shall be based and done upon a contract.

• Delivery should be upon some purpose.

The purpose may vary from safe-keeping or safe custody to repairing or changing the form of the goods.

Examples:

(1) A leaves his suitcase with a Railway Cloak Room for safe custody.

(2) A gives his watch for repair to a watch-maker.

(3) A gives a piece of cloth to a tailor for stitching it into a shirt.