DUTY NOT TO MAKE UNAUTHORISED

USED OF GOODS BAILED

(CONTRACT=II)

SUBMITTED TO: MR. SOUROUDEEP RAKSHIT

ASST. PROF. OF CONTRACT

SUBMITTED BY: SUBHANKAR ADHIKARY

BALLB(5 YRS)

ROLL NO-33;SECTION-A
 ACKNOWLEDGMENT

I would like to express my special thanks of gratitude to my

teacher as well as our principal who gave me the golden
opportunity to do this wonderful project on the topic “DUTY
NOT TO MAKE UNAUTHORISED USED OG GOODS’,
which also helped me in doing a lot of research and I come to
know about so many new things.
I am really thankful to them.
Secondly, I would also like to thank my senior brother and
friends who helped me a lot in finishing this project within the
limited time.

SUBHANKAR ADHIKARY

signature signature

SUBHANKAR ADHIKARY Page 2

 DECLARATION

I, hereby declare that this academic project entitled... DUTY NOT TO

MAKE UNAUTHORISED USED OF GOODS BAILED... Submitted to
the Indian institute of Legal Studies for the award degree of B.A. LLB.
Is my original work. This dissertation has not been submitted for any
other degree of this institution or any other institution.

Student’s Name: SUBHANKAR ADHIKARY

Semester:3RD

Roll No: 33

Name of the College: Indian institute of Legal Studies.

Place: Dagapur, Siliguri

Date: ........

Signature of the Student...................

I, recommend that this project be placed before the examiners for

evaluation.

Academic Supervisor: Mr. SOURODEEP RAKSHIT

ASST Prof. OF CONTRACT

SUBHANKAR ADHIKARY Page 3

 CONTENTS

CHAPTER=1

1.1INTRODUCTION…………………………….…………………...…5
1.2WHAT IS BAILMENT (BAILOR &BAILEE)………………………5
1.3DUTIES OF BAILEE………………………………………….……..6
CHAPTER=2

2.1 DUTY NOT TO MAKE UNAUTHORISED USED OF GOODS…..8

2.1.1 TERMINATION OF BAILMENT……………………………..….8

2.1.2 DAMEGE FOR LOSS DUE TO UNAUTHORISED USED……...9

2.2 CASE STUDY……………………………………………………...9

CHAPTER=3

3.1 CONCLUSION…………………………………………………….11

REFERENCE &BIBLIOGRAPHY

TABLE OF CASES

 SHAW & CO V. SYMMOW & SONS 1971

 Fothergill v. Monarch Airlines Ltd [1980] 2 All ER 696

SUBHANKAR ADHIKARY Page 4

 CHAPTER=1

1.1 INTRODUCTION: There are many instances of bailment in our

daily lives – when we deliver our goods to another person for a purpose
for a period of particular time and then expects to receive the goods back
after that particular period gets over and the purpose is achieved.
Contracts of Bailment are a special class of contract. Bailment is a
process where the owner of certain goods places them in a temporary
possession of another person. In simple words, bailment means that a
person puts his goods into the custody of another person for a particular
time and for a specific purpose and when this purpose is achieved the
goods are returned to the person who bailed them.

These are dealt within Chap. IX from S.148 to 181 of the Indian
Contract Act, 1872 deals with the general concept of bailment. The
circumstance in which this happens are numerous. Delivering a cycle,
watch or any other article for repair, delivering gold to a goldsmith for
making ornaments, delivering garments to a drycleaner, delivering goods
for carriage, etc. are all familiar situations which create the relationship
of ‘Bailment’.

1.2 DEFINITION OF BAILMENT: Bailment is a kind of activity in

which the property of one person temporarily goes into the possession of
another. The ownership of the property remains unchange, while only the
possession goes to another.

Section 148 of Indian Contract Act 1872, defines bailment as follows -

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Section 148 - A bailment is the delivery of goods by one person to
another for some purpose, upon a contract that they shall, when the
purpose is accomplished, be returned or otherwise disposed of according
to the directions of the person delivering them. The person delivering the
goods is called the bailor and the person to whom they are delivered is
called the bailee.

Explanation - If a person is already in possession of the goods of another

contract to hold them as a baliee, he thereby becomes the bailee and the
bailor becomes the bailor of such goods although they may not have been
delivered by way of bailment.

BAILOR: The person delivering the goods is called ‘bailor’.

BAILEE: The person to whom goods are delivered is ‘bailee’

1.3 Duties of the bailee:

Duty to take reasonable care (section 153): In English law the duties of
a gratuitous and non-gratuitous bailee are different. However, in Indian
law, Section 151 treats all kinds of bailee’s the same with respect to the
duty. It says that in all cases of bailment, the bailee is bound to take as
much care of the goods bailed to him as a man of ordinary prudence
would, under similar circumstances take, of his own goods of the same
bulk, quality, and value as the goods bailed. The bailee must treat the
goods as his own in terms of care. However, this does not mean that if the
bailor is generally careless about his own goods, he can be careless about
the bailed goods as well. He must take care of the goods as any person of
ordinary prudence would of his things.

Duty not to make unauthorized use (section 154): Section 154 says
that if the bailee makes any use of the goods bailed which is not
according to the conditions of the bailment, he is liable to make

SUBHANKAR ADHIKARY Page 6

compensation to the bailor for any damage arising to the goods from or
during such use of them.

Duty not to mix (Section 155- 157): The bailee should maintain the
separate identity of the bailor’s goods. He should not mix his goods with
bailor’s good without bailor’s consent. If he does so, and if the goods are
separable, he is responsible for separating them and if they are not
separable, he will be liable to compensate the bailor for his loss

Duty to Return (Section 160): Section 160 – It is the duty of the bailee
to return or deliver according to the bailor’s directions, the goods bailed,
without demand, as soon as the time for which they were bailed has
expired or the purpose for which they were bailed has been accomplished.
If the bailee keeps the goods after the expiry of the time for which they
were bailed or after the purpose for which they were bailed has been
accomplished, it will be at bailee’s risk and he will be responsible for any
loss or damage to the goods arising howsoever.
In Shaw & Co vs. Symmons & Sons 1971, the plaintiff gave certain
books to the defendant to be bound. The defendant bound them but did
not return them within reasonable time. Subsequently, the books were
burnt in an accidental file. The defendants were held liable for the loss of
books

Duty to return increase (section 163): As per Section 163, in absence of

any contract to the contrary, the bailee is bound to deliver to the bailor, or
according to his directions, any increase of profit which may have
accrued from the goods bailed.

SUBHANKAR ADHIKARY Page 7

 CHAPTRER=2

2.1 DUTY TO NOT TO MAKE UNAUTHORISED USED OF

GOODS BAILED: In a contract of bailment, the bailor transfers the
goods to the bailee for some purpose, and the bailee is responsible for
using the goods bailed according to the purpose of bailment. Section
154 of Indian Contract Act imposes liability on bailee if goods are not
used authoritatively. Using goods beyond the conditions of a contract
would make the bailee liable to bailor if due to such unauthorized act the
bailor has suffered any loss or if goods are damaged. This implies that the
bailee is not entitled to use the goods for personal benefits (unless the
bailment for his use) by doing an unauthorized act. Even if the goods
bailed are for his personal use, he is not authorized to let the goods be
used by another person. Nevertheless, if the situation requires, the bailee
may use these goods for preservation. But in the other circumstances, he
is required to have express or implied consent of the bailor to use the
goods against the conditions of bailment contract.

In this case, there is two remedies for bailor:

1.Termination of contract: ACCOERING TO SECTION 153, if the

bailor finds that the bailee in making such use of the goods which is
inconsistent with the condition of bailment, he may terminate the
bailment’s and claim back the goods. Section 153 is as following:

“Termination of bailments by bailee’s act inconsistent with condition-A

contract of bailment’s is voidable at the option of the bailor, if the bailee
does any with regard to the goods bailed, inconsistent with the conditions
of the bailment’s”.

ILLUSTRATION

A lets to B, for hire, a horse for his own ridings drives the horse in his
cartilage. This is, at the option of A, a termination of the bailments.

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2.Damage for loss due to unauthorized used: If the bailee makes any
use of goods which is contrary to the condition of bailments, he is liable
to make compensation to the bailor for any damage to the goods due to
unauthorized use. Such a liability arises even if the unauthorized use was
being made with care.secrion-154, which makes a provision in this
regards, is as under:
“If the bailee makes any use of the goods bailed which is not according to the
conditions of the bailment, he is liable to make compensation to the bailor for any
damage arising to the goods from or during such use of them.’’

ILLUSTRATION

A lends a horse to B for his owns riding only B allows C as a member of

his family’s rides with care, but th horse accidently falls and is injured, B
is liable to make compensation to A for the injury done to the horse.

2.2 CASE LAWS: Fothergill v. Monarch Airlines Ltd [1980] 2 All ER

696: The plaintiff flew from Rome to Luton on an aircraft operated by the defendant
airline. The carriage was 'international carriage', within art 1 of the Warsaw
Convention, as amended at The Hague in 1955 and as set out in Sch 1 to the Carriage
by Air Act 1961. The plaintiff's ticket incorporated a baggage check which, as
required by art 4(1) of the convention, contained a provision stating: 'In case of
damage to baggage... complaint must be made in writing to carrier forthwith after
discovery of damage and, at the latest, within 7 days from receipt.' When the plaintiff
claimed his baggage he noticed that one side seam of his suitcase had been completely
torn away. He reported it to an official of the airline and a 'property irregularity report'
was completed which described the suitcase and, under the heading 'Nature of
Damage', stated: 'Side seam completely parted from case. Damage occurred on
inbound flight.' More than seven days later, the plaintiff discovered that some articles
were missing from the suitcase. He claimed L12 in respect of the damage to the
suitcase and L16.50 in respect of the lost articles. The airline admitted liability as to
the L12 but rejected the claim for contending that the loss of the articles constituted
'damage', within art 26(2) a of the convention, and the plaintiff had failed to give
notice in writing of that damage within seven days from the date of receipt of the
suitcase, as required by art 26(2) and (3). The airline supported their contention that
the word 'damage' in art 26(2) included loss of contents by reference to the published
minutes of the negotiations of [1981] AC 251, [1980] 2 All ER 696, [1980] 3 WLR
209, [1980] 2 Lloyd's R the Hague Protocol in 1955. The judge ([1977] 3 All ER 616)
upheld the plaintiff's claim on the ground that 'damage' in art 26(2) referred to
physical injury to baggage and did not include loss of articles from a suitcase, but
went on to decide that, had notice been required, the notice given by the plaintiff was

SUBHANKAR ADHIKARY Page 9

insufficient since it merely related to the damage to the suitcase and made no
reference to the missing articles. On appeal by the airline the Court of Appeal ([1979]
3 All ER 446) held that as a matter of ordinary English the term 'damage' in art 26
referred only to physical injury to baggage did not extend to partial loss of contents.
The airline appealed to the House of Lords.

Held: - Although on a literal interpretation in an English legal context 'loss' was

to be differentiated from 'damage', that was not an appropriate method of

interpretation of an international convention, such as the Warsaw Convention,

which was incorporated by statute into English law. Instead, a purposive

construction was to be adopted, and that was reinforced by the fact that the

English and French texts were inconclusive whether damage included loss, and

was supported by the consensus of international jurists. Having regard, therefore,

to the purpose of art 26 of the convention, which was to ensure that the airline

received prompt notice to enable it to take the necessary steps in regard to

damage to baggage or cargo including, if [1981] AC 251, [1980] 2 All ER 696,

[1980] 3 WLR 209, [1980] 2 Lloyd's R possible, recovery of objects lost, on its

true construction art 26 applied both to damage to baggage (and the contents)

and to loss of contents. The plaintiff was therefore required to lodge a complaint

for the lost articles within seven days of receiving his baggage, and as the only

complaint he had made did not refer to the loss of any articles but only the

damage to his suitcase his claimed failed. The airline's appeal would accordingly

be allowed. Observations on the use of travaux preparatories in the interpretation

of international conventions forming part of English law.

Decision of the Court of Appeal [1979] 3 All ER 445 reversed.

SUBHANKAR ADHIKARY Page 10

 CHAPTER=3

3.1 CONCLUSION: The bailee has to perform according to the

obligations laid down in the contract of bailment and as per the law of the
land. He is being inconsistent or negligent while performing his
obligation or duty would make him liable under various provisions of
law. In each contract of law, he has a certain uniform or fixed obligations
to comply with, and he cannot part with those basic obligations even if a
contract does not provide for any such obligations. These obligations are
the essence of bailment contract. The obligations might differ depending
on the facts but there are certain duties which are implied, and reasonable
care is to be taken by the bailee. The bailee’s responsibility towards the
goods bailed can be increased by way of providing provisions in that
regard but it cannot be lowered down, i.e., he cannot repudiate his
responsibility.

REFERENCE & BIBLIOGRAPHY:

 DR. S R MYNENI,CONTRACT-II,EDITION-2009

 https://blog.ipleaders.in/duties-bailee-contract-bailment/

 www.lawsofbusiness.com/2012/04/rights-and-duties-of-bailee.html

SUBHANKAR ADHIKARY Page 11