Essentials of Bailment

BAILMENT

1. Delievery of goods for some purposes.

There should be the transfer of possession of goods from one person to another. Delievery need not to be actual, it may be sometime constructive or symbolic delivery as provided under section 149 of Indian Contract Act, 1872. It is to be noticed that according to section 71vof Indian Contract Act, the finder of the goods is also deemed to be the bailee of those goods.

In Jagdish Singh Tarikha v. Punjab National Bank, when the gold ornaments and jewellery was delivered to the bank, it was locked, sealed and properly wrapped and the receipt describing the contents of the box was given to bank. When the box reached delhi, it was found that it was not in the condition in which it was delivered. The court ordered for the compensation by the bank to the plaintiff. 

If a person, without a formal agreement, assumes the custody or someone's goods, it is sufficient to constitute bailment as in the case of Ultzen v. Nicols, where the waiter who took the plaintiff coat without being asked for. Later the coat got missed and the defendant was held to be bailee.

If the owner maintains the control over the goods, there is no bailment. 

In Kaliaporumal Pillai v. Visakalakshmi, a lady who had given her jewels to goldsmith for some work, every evening visit there, locked the box and keep the keys with herself while leaving the box at the place of goldsmith only. It was held that it dies not constitutes bailment. 

Similarly in the case of bank locker. If the customer has the complete control over the locker, bailment could not be constitute. If the locker can be operate by the bank without the key with the customer, as in the case of National Bank of Lahore v. Sohal lal, the bank is termed as the bailee. 

Can there be bailment without the contract.

In Ram Gulam v. Govt. Of  U.P., the court held that obligation of bailee can only br arise by the contract of bailment. 

However the above decision was negated in some subsequent cases. In L.M. Co-operative Bank v. Prabhudas Hathibhai, some tobacco packages were lying in the A's godown and the keys were handed over to police. There was heavy rain and roofs were leaking due to which goods got damaged. Naik J. Observed that the government was acting as the bailee and thus it is liable for not taking due care as a prudent manager. 

In State of Gujarat v. Memon Mohammad, the supreme court expressed the view that bailment is possible even without the contract. Thus the court ordered the authorities to give back the confiscated vehicles or in absent of that, the compensation. 

2. Return of the goods after the purpose is achieved. 

The delievery of goods, in bailment, is for some purpose after accomplishment of which goods either needs to be returned or disposed off according to the directions of the bailor. This feature distinguished it from the transaction of sale or gift. However it is to be noticed that depositing money in a bank or receiving payment by agent on behalf of principal, is not bailment.

When the goods are delivered without the intention of taking them back and the exact cost of goods were charged, this is the contract of sale and not bailment. As in the case of Kalyani Breweries Ltd. v. State of West Bengal, the court held that talking the exact amount of bottles from the customer who keeps the bottle and returning the amount to those, who returns it, amounts to sale transaction and not bailment. 

Whether hiring of locker in a bank is bailment.?

In Atul Mehra v. Bank of Maharashtra, the High Court ruled that mere hiring of a locker in bank is not bailment.