- The plaintiff had some jewels which she wanted to be remade by a goldsmith who worked in the defendant’s house as there was better accommodation for this purpose.
- Every day in the morning, the plaintiff used to be present at the defendant’s house during the time the goldsmith worked there.
- Every evening when the goldsmith’s work was over, he handed over the half-made jewels to the plaintiff. The plaintiff put those half-made jewels in a box given by the defendant in a room of the defendant’s house. Some of the plaintiff’s witnesses also said that the key to the room remained with the plaintiff.
- One morning when the plaintiff went into the room for taking the jewels for continuing the goldwork she found them missing from the box.
- One of the witnesses admits that the defendant had made a complaint of the theft in his house and the plaintiff was aware of such complaint.
- The plaintiff sued the defendant for the stolen jewellery which was kept in one room of his house.
- When the matter reached the lower court, the defendant was made liable for the loss of the plaintiff. After that, the defendant appealed in the Madras High court.
- Whether the goldsmith can be considered as bailee and thus made liable for the loss of the plaintiff?
- Was there any delivery of goods from Plaintiff to the defendant?
- Whether the defence under section 152 will apply in this case?
The case was filed in the lower court, where the question before the judge was whether, considering the given facts, the defendant could be considered to be a ‘bailee’ under sections 148 and 149 of the Indian Contract Act,1872. The lower court passed a decree in favour of the plaintiff. A revision petition was filed by the defendant, challenging the aforesaid judgement before the high court of madras. The ground for such a revisional petition was that the judgement was not in accordance with the evidence presented before the lower court. The defendant argued that ‘delivery’ of goods under section 148 never took place.
The judge said that the defendant cannot be held as the bailee for the said goods. Because according to the evidence, the gold given to the defendant for remaking was not considered to be “delivered”, which is an essential element of bailment. Thus, the defendant could not be held liable.
ESSENTIAL ELEMENT TO A CONTRACT OF BAILMENT
There are three essential elements for making a contract of bailment which are:-
DELIVERY OF POSSESSION
The delivery of goods is required, from bailment to bailee for forming a contract of bailment. Here the word possession means the control over the good by a person and no other person to have control over the good. The possession is only giving control over the good to the bailee. Section 149 of the Indian contract act, 1872talks about the delivery of possession of goods. This delivery of possession is either done by directly giving the physical possession to the bailee or by creating conditions in which the bailee has power over the position of such good which can be physically possessed by him in future.
DELIVERY UPON CONTRACT
The second essential element is that the transfer of goods and their return must be done under a contract between the bailor and bailee. The contract can be either expressed or implied. There is an exception that in case the goods are lost and found by any other person then there arises a contract of bailment even if there is no contract or delivery of goods done between the parties under a contract. The finder of good will be considered as bailee as he finds the lost goods of someone else and keeps them under his possession until the original owner of the good takes it back. This is an involuntary form of bailment. All the rights and duties of a bailee will be given to the finder of the good.
RETURN OF GOODS
The third element is the return of the goods from the bailor to the bailee when the purpose is completed. If there is no returning of the good then it will not amount to a contract of bailment. Also, the return of the equivalent good in place of the original goods will not amount to a contract of bailment. For example, a car mechanic receives a car for repairing so he is considered as bailee. After the car has been repaired, the mechanic is supposed to return the car to the bailor. Moreover, it is necessary for the bailee to follow the instruction given by the bailor for the purpose of the return of the good if any. If there are instructions that have been given to the bailee by the bailor for returning the good, then it also has to be followed for completion of the contract of bailment.
In this case, Madras high court held that defendant will not be held liable. When the lady took the half-made jewels from the goldsmith in the evening, it came under her possession and the contract of bailment between lady and goldsmith got over that moment. She put that half-made jewel in the box and locked the box in a room of the defendant. She held the keys to the room. It made clear that delivery is an essential element of the bailment and merely leaving the box in the room of the defendant while she retained key did not constitute delivery within the meaning of section 149 of Indian Contract Act, 1872. Therefore, liabilities do not arise. In this case, while following the essentials of contract of bailment, the first essential ‘delivery upon contract’ is there and as soon as the daily work is over the contract is completed between the lady and the goldsmith.
But by second essential, the delivery of possession does not seem to be fulfilled here. After every evening the lady put the half-made jewel in a box and locked the room in which she put the box. Thus, the possession of the goods passed over to her every evening. This makes it not admissible as a contract of bailment as the word ‘delivery’ according to section 149 of the Indian Contract Act is not fulfilled here. And the last essential ‘return of good’ is not possible as the jewels are already stolen. But in case all the other conditions are fulfilled then the bailee will be held responsible for the missing good to the bailor.
FURTHER DEVELOPMENT IN LAW
Considering this case, the question arises -whether the hiring of the locker at banks constitutes a contract of bailment? This is considered in the landmark judgement of Atul Mehra and Anr. v Bank of Maharashtra,2008. In this case, the High Court of Punjab and Haryana laid down that hiring lockers at banks does not constitute a contract of bailment as it does not constitute delivery of possession which is a necessary element for a contract of bailment. The learned judge also laid down that in order to constitute a contract of bailment there the Bailee must be aware of the content of the locker according to which it can gauge the nature and extent of the security of the goods.
Author(s) Name: Abhay Shankar Yadav (National University of Study and Research in Law, Ranchi)
Indian contract act 1872, s 152.
Indian contract act 1872, s 148.
Indian contract act 1872, s 149.
Indian contract act 1872, s 149.
Monika, “What Is Contract of Bailment under the Indian Contract Law, 1872” (iPleadersMarch 20, 2019) <https://blog.ipleaders.in/what-is-the-contract-of-bailment> accessed January 17, 2022
Indian contract act 1872, s 149.
Atul Mehra and Anr. v. Bank of Maharashtra, AIR 2003 P H 11, II
Jahnvi Shah, “Atul mehra v. bank of maharastra – case study on bailment under the indian contract act “(ipleaders ,2018), <https://blog.ipleaders.in/bailment-under-the-indian-contract-act/> (last visited Aug 1, 2021).