Rights and Duties of Bailor and Bailee
Rights and Duties of Bailor and Bailee
1. Introduction
The relationship between bailor and bailee arises out of a contract of bailment. Under Sections 148 to 171 of the Indian Contract Act, 1872, bailment is defined and regulated.
Bailment means the delivery of goods or personal property by one person (the bailor) to another (the bailee) for some purpose upon the condition that the goods will be returned or otherwise disposed of according to the bailor’s directions once the purpose is accomplished.
2. Rights and Duties of the Bailor
Duties of Bailor
Disclosure of Known Faults
The bailor must disclose any known defects or faults in the goods to the bailee.
Failure to disclose may lead to liability for damages.
Example: A bailor delivers goods with known defects but fails to inform the bailee, who gets injured due to the defect.
Reimbursement of Expenses
The bailor must reimburse the bailee for any necessary expenses incurred in taking care of the goods or returning them.
Indemnify for Loss Caused by Defects
The bailor must indemnify the bailee against loss arising from defects in the goods, if those defects were known to the bailor and not disclosed.
Rights of Bailor
Right to Claim Goods Back
The bailor has the right to demand the return of goods after the purpose of bailment is fulfilled.
Right to Claim Compensation for Loss or Damage
If the bailee misuses or damages the goods due to negligence or willful act, the bailor can claim compensation.
Right to Recover Necessary Expenses
The bailor can claim reimbursement for necessary expenses spent by the bailee in preserving the goods.
3. Rights and Duties of Bailee
Duties of Bailee
Taking Reasonable Care
The bailee must take reasonable care of the goods and must not use the goods for any unauthorized purpose.
Standard of care varies depending on whether the bailment is gratuitous or for reward.
Return or Disposal of Goods
The bailee must return the goods or dispose of them as per the instructions of the bailor once the purpose is accomplished.
No Unauthorized Use
The bailee cannot use the goods for his own benefit without consent of the bailor.
Compensation for Loss or Damage
If the bailee misuses the goods or is negligent, he is liable to compensate the bailor for loss or damage.
Rights of Bailee
Right to Retain Goods (Lien)
The bailee has a right to retain possession of the goods until his lawful charges (for custody, carriage, etc.) are paid.
Right to Claim Reimbursement
Bailee can claim reimbursement for necessary expenses incurred to preserve the goods.
Right to Compensation
If the bailment was for reward, bailee is entitled to receive compensation for his services.
4. Relevant Case Law
a. Kewal Chand v. Union of India (1969)
The court held that the bailee must take reasonable care of goods and is liable for loss due to negligence.
b. Gurupadappa v. S. Siddappaji (1953)
The court held that the bailee cannot use the goods for any purpose other than agreed without the consent of bailor.
c. Rama Krishna v. Girija (1966)
The court upheld the right of the bailee to retain goods (lien) till charges are paid.
5. Summary Table
| Party | Duties | Rights |
|---|---|---|
| Bailor | - Disclose defects - Reimburse expenses - Indemnify for loss from defects | - Claim return of goods - Claim damages - Recover expenses |
| Bailee | - Take reasonable care - Return goods as directed - No unauthorized use - Compensate for loss if negligent | - Right of lien - Reimbursement of expenses - Claim compensation if for reward |
6. Conclusion
The relationship of bailment balances rights and duties between bailor and bailee to protect property and ensure trust. The bailee must take proper care of the goods and return them, while the bailor must disclose faults and compensate necessary expenses. Courts uphold these principles to prevent misuse and protect property rights.
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