Contract of Bailment

Introduction

Bailment is an important special contract under the Indian Contract Act, 1872. It deals with temporary transfer of possession of goods for a specific purpose. It is commonly used in daily transactions like repair, storage and transport of goods.

Meaning / Definition

Section 148 defines bailment as the delivery of goods by one person to another for some purpose, upon a contract that the goods shall, when the purpose is accomplished, be returned or disposed of according to the directions of the person delivering them.

• The person delivering the goods is called the bailor
• The person receiving the goods is called the bailee

Key points:

• Bailment involves delivery of possession (control over goods), not ownership
• Only movable goods can be bailed
• Money (legal tender) is not considered goods for bailment

Modes or Types

Express Bailment

• Created by clear agreement between parties
• Terms are stated in words (oral or written)

Implied Bailment

• Arises from conduct or circumstances
• No direct agreement, but intention is inferred

Important Case Law

• Atul Mehra v. Bank of Maharashtra (2003)
  Mere use of a bank locker does not create bailment unless the bank has control over the goods.

• National Bank of Lahore v. Sohan Lal (1962)
  Bailment exists where the bank has control over the locker contents.

Distinction / Comparison

Practical Example

A gives his car to a garage for repair.

• A is the bailor
• Garage is the bailee

The garage must take reasonable care of the car and return it after repair.

Summary

• Bailment means transfer of possession for a specific purpose
• Defined under Section 148 of the Indian Contract Act, 1872
• Involves bailor and bailee
• Only movable goods can be bailed
• Requires delivery of control, not just physical custody
• Ends when purpose is completed and goods are returned