BAILOR
A bailor is an individual who temporarily give up the possession but not ownership of a good or other property under a bailment. The bailor gives the possession of the good or property to another individual, known as the bailee.
BAILEE
A bailee is an individual who gains possession, but not ownership, of a good or other property. The bailee is also known as a custodian, is given with the possession of the good or property by another individual known as the bailor.
This relationship, in legal terms as a bailment, is based on a contractual agreement between the bailor and the bailee. The bailment specifies the terms and purpose of the change in custody and is outlined in writing such as a receipt or chit.
RIGHTS AND DUTIES OF BAILOR
RIGHTS OF BAILOR
- RIGHT TO ENFORCE BAILEE’S PERFORMANCE
The bailor delivers goods to the bailee for some specific purpose, and in case of non-gratuitous bailment, the bailor has an elemental right to achieve that purpose or obtain the benefit through the latter.
- RIGHT TO CLAIM DAMAGES
In the case of bailment, the bailor has the right to claim for damages against the loss, if any, caused to the goods bailed due to the bailee’s negligence or misconduct.
- RIGHT TO CLAIM COMPENSATION AGAINST UNAUTHORIZED USE OF GOODS
If any third person does some injury to the goods bailed or deprives the rights of bailee of the use of the goods, the bailor may file a suit against the wrong-doer, and recover compensation from him.
- RIGHT TO DEMAND RETURN OF GOODS ALONG WITH ACCRETION TO, IF ANY
The bailor enjoys the right to have the goods bailed delivered back to him in a safe condition and after the time of bailment has expired or the purpose behind the bailment has been achieved. And, in the absence of any contrary term in the contract, the bailor is also entitled to any accretion to the goods bailed if it occurred while the goods were in the study of bailee.
DUTIES OF BAILOR
- DUTY TO DISCLOSE FAULTS
In the case of gratuitous bailment, the bailor is expected to disclose all the defects to the bailee known to him and which would get in the way with the use of goods bailed. A non-gratuitous bailment carries a greater responsibility on the part of the bailor. He will be liable even if he was not in the know of the defects.
- DUTY TO REPAY BAILEE’S EXPENSES
A bailor is bound to repay to the bailee expenses incurred by him for work done on the goods received under conditions of bailment, and in which he is not receiving any remuneration or deriving any benefit.
- DUTY TO INDEMNIFY THE BAILEE
The bailor is bound to make good the loss suffered by the bailee that is in excess of the benefit derived, where he had delivered the goods without a reason and compelled the bailee to return them before the expiry of the period of bailment.
- DUTY TO COMPENSATE BAILEE FOR BREACH OF WARRANTY
In every contract of bailment warrants the bailee about the bailor’s title being defect-free. And, if bailee subsequently suffers any loss by the reason of the bailor’s title being defective, it is the duty of the bailor to compensate the bailee for breach of warranty.
- DUTY TO CLAIM BACK THE GOODS
The bailor is bound to accept the goods returned by the bailee in accordance with the terms of bailment. If he refuses or fails to accept back the goods, if offered at a proper time and at a proper place, without any reasonable ground, he will be responsible for any damage to the goods and not the bailee.
RIGHTS AND DUTIES OF BAILEE
RIGHTS OF BAILEE
- RIGHT TO COMPENSATION
The bailor is responsible to the bailee for any loss which the bailee may sustain and the bailor was not entitled to make the bailment, or to give directions respecting them. If the bailor has no right to bail the goods or to give directions respecting them and consequently the bailee is exposed to some loss, the bailor is responsible for the same.
- RIGHT TO EXPENSES OR REMUNERATION
The conditions of the bailment, the goods are to be kept, or to have work done upon them by the bailee for the bailor, thus the bailee is to receive no remuneration, the bailor will have to repay to the bailee the necessary expenses incurred by him for the purpose of the bailment.
- RIGHT OF LIEN
If the bailee lawful charges are not paid he may retain the goods. So the right to retain any property until the charges due in respect of the property are paid is called the right of lien. The Supreme Court cited the following passage from HALSBURY’S LAWS OF ENGLAND as to the nature of this right.
DUTIES OF BAILEE
- DUTY OF REASONABLE CARE
In the cases of bailment the bailee is bound to take as much care of the goods bailed to him as an ordinary and prudent man of sound mind.
Union of India v. Udho ram & sons.
Facts– Certain goods were consigned by M/s Radha Ram Sohan Lal from Calcutta to Delhi by rail. Some of the articles out of this consignment, having been stolen during transit, the same were not delivered to the plaintiffs. The plaintiffs brought an action to recover compensation for the same. The trail court found that the wagon in which the goods were loaded was properly rivetted and sealed when the train left Howrah at 1:30 am, but seals and rivets of one of the doors of the wagon were found open when it reached Chandanpur station after 2 hours. The theft took place at an in-between point when the train stopped there for the home signal at 2:05 am for about 15 minutes. It was found that railway protection police were also there in the guard’s van.
Issues before the court –
Whether the railway authorities were liable for the loss of the goods in transit?
Whether the railway authorities were in the position of the bailee and liable to indemnify for the loss caused?
Judgement – It was held that the railway did not take due care. Firstly, they did not prove from record that the railway protection police which escorted the train was sufficient in strength, and secondly, that unlike a prudent man, the railway protection police did not keep an eye on wagons, particularly when the train stopped, to prevent the theft of the goods. Hence, the defendants were held liable.
- DUTY OF UNAUTHORIZED USE OF GOODS
The bailee should use the goods bailed to him strictly in accordance with the conditions of the contract of bailment. If he illegally uses the goods bailed to him, the contract of bailment becomes voidable at the option of the bailor.
The bailor may terminate the bailment;
According to section 153 If the bailee make unauthorize use of goods or uses the goods which is inconsistent with the conditions of bailment, then the bailor has the option to terminate the bailment and claim back the goods.
Illustration– A lets to B, for hire, a car for his own use. B lends the car to C for commercial purpose. A can terminate the bailment.
The bailor may recover compensation for the loss caused due to unauthorized use of goods;
According to section 154, If the bailee makes such use of goods which is contrary to the conditions of bailment, and there happens any damage to the goods due to such unauthorize use, the bailee is liable to compensate bailor for such loss.
Illustration- A hires a car from B for travelling to Delhi but instead went to Mumbai. The car met with an accident. A is liable to compensate B for loss.
- DUTY OF NOT TO MIX THE GOODS BAILED WITH HIS OWN GOODS
The bailee must keep the goods bailed separate from his own goods. He should not mix his goods with another without any prior permission of the bailor.
If the bailee without bailor’s consent mixes bailor’s goods with his own goods, there arises two possibilities.
Section 156– When the goods can be separated;
When the mix goods ca be separated, both remain the owners in accordance with there respective shares. The bailee has to bear the expenses of separation of goods and also for any damage arising from the mixture.
Section 157– When the goods cannot be separated;
If the nature of the goods is such that the bailor’s goods cannot be separated from those of bailee’s, then it is deemed to be the loss of goods and bailor can recover compensation for the same.
- DUTY TO RETURN THE BAILOR THE INCREASE OR PROFIT ON THE GOODS BAILED. (SECTION 163)
According to this section “In the absence of any contract to the contrary, the bailee is bound to deliver to the bailor, or according to his directions, any increase or profit which may have accrued from the goods bailed.”
For example- A leaves a cat in the custody of B to be taken care of. The cat gives birth to 5 kittens. B is bound to deliver the kittens as well as the cat to A.
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