Chapter – 14

Bailment & Pledge

LIST OF SECTIONS TO BE DISCUSSED IN THIS CHAPTER
SECTION NO. SECTION NAME
148 CONTRACT OF BAILMENT
150 BAILORS DUTY TO DISCLOSE FAULT IN THE GOODS
151 BAILEES DUTY TO TAKE CARE OF GOODS
153 TERMINATION OF BAILMENT ON INCONSISTENT USE OF GOODS BY BAILEE
154 BAILEES DUTY NOT TO MAKE UNAUTHORIZED USE OF THE GOODS ENTRUSTED
TO HIM
155 BAILEES DUTY NOT TO MIX GOOD
156 BAILEES DUTY NOT TO MIX GOOD
157 BAILEES DUTY NOT TO MIX GOOD
158 BAILORS DUTY TO PAY NECESSARY EXPENSES
159 PREMATURE TERMINATION OF GOODS
160 BAILEES DUTY TO RETURN THE GOODS
161 BAILEES DUTY TO RETURN THE GOODS
162 TERMINATION OF BAILMENT ON THE DEATH OF BAILOR OR BAILEE
163 BAILEES DUTY TO RETURN ANY ACCRETION TO GOODS
164 BAILORS RESPONSIBILITY TO BAILEE
168 FINDER OF GOODS
169 FINDER OF GOODS
171 CONCEPT OF LIEN
172 CONCEPT OF PLEDGE
173 PAWNEES RIGHT OF RETAINER
174 PAWNEES RIGHT OF RETAINER FOR SUBSEQUENT ADVANCES
175 PAWNEES RIGHT TO EXTRAORDINARY EXPENSES
176 PAWNEES RIGHT TO SUE THE PAWNOR OR SELL THE GOODS, ON DEFAULT BY
THE PAWNOR
177 RIGHTS OF PAWNOR
178 PLEDGE BY A MERCANTILE AGENT
178A PLEDGE BY A PERSON UNDER A VOIDABLE CONTRACT
179 PLEDGE BY A PERSON WITH LIMITED INTERST

14.1 Concept of Bailment section 148

Definition of As per sec 148, Bailment is the delivery of goods by one person to another for some
bailment purpose upon a contract that they shall when the purpose is accomplished, be
returned or otherwise disposed of according to the direction of the person
delivering them.
Parties under There are namely two parties under Bailment, viz, the Bailor and the Bailee.
bailment  Bailor – The person delivering the goods to the other person for some purpose

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is called bailor.
 Bailee – The person to whom the goods are delivered for some purpose is called
the bailee.
Examples of  Delivery of cloth for stitching purpose
Bailment  Delivery of goods for the purpose of repair.
 Delivery of goods for the purpose of safe custody
PAST Q1. The delivery of goods by one person to another for some specific purpose and time is
ATTEMPT known as:
(a) Mortage
QUESTIONS
(b) Pledge
(c) Bailment
(d) Charge [CA IPCC MAY 2011]

14.2 Essential Features Of Bailment section 148

Delivery of goods.  Bailment implies delivery of goods.

 A mere agreement to deliver goods does not become bailment.
 Delivery can be actual ,symbolic,contructive.
 change in possession is not same as a mere shift in custody.
Delivery for some There must be some purpose for which goods are delivered.
purpose Where goods are delivered by mistake without any purpose there is no bailment.
Delivery with The delivery to bailee is with a contract that the goods shall be returned or disposed
contract off in the manner desired by the bailor.
Bailment of Goods shall have same meaning as in Sales of goods Act,1930.
movable goods
only
Goods to be For bailment to be valid goods should be returned in the the same form as given or
returned in specie may be altered as per bailers direction. It should be noted that exchange of goods
or altered form should not be allowed.
Bailee ultimate When a person keeps his goods in the premises of another person but him self
control continue to have the control over them there is not sufficient delivery for being
considered to be bailment [Kalia Porumal Pillai V Visalakshmi].

PAST Q1. A, the bailor, pledges a cinema projector and other accessories with Cine Association
ATTEMPT Co–operative Bank Limited, the bailee, for a loan. A requests the bank to allow the
pledged goods to remain in his possession and promises to hold the same in trust for
QUESTIONS the bailee and also further promises to handover the possession of the same to the
bank whenever demanded. Examining the provisions of the Indian Contract Act, 1872
decide, whether a valid contract of pledge has been made between A, the bailor and
Bank, the bailee? [CA PCC JUNE 2009]
Q2. State the essential elements of a contract of bailment. Distinguish between the contract
of bailment and contract of pledge (8 Marks) [CA IPCC NOV. 2012]

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14.3 Additional examples

Deposit of money A deposit of money with a banker does not become bailment because banker is
with Banker bound to return not the same currency notes but only an equivalent value.
Deposit of It must be noted that deposit of valuables in a banker locker is not bailment because
valuables in bank bank does not have ultimate control over the goods.
locker
Delivery under sale Delivery of goods to a person under sale or gift or donation is also not bailment
or gift becomes ownership is transferred in such cases.
Parking of a vehicle In this case if keys are handed off to the parking persons then it does not amounts
in a parking lot to bailment .
Seizure of goods by It is bailment since it satisfies all essentials of bailment.
custom department
PAST Q1. Examine whether the following constitute a contract of 'Bailment' under the provisions
ATTEMPT of the Indian Contract Act, 1972:
(i) V parks his car at a parking lot, locks it, and keeps the keys with himself.
QUESTIONS
(ii) Seizure of goods by customs authorities [CA PE II MAY 2007]
Q2. Deposit of money in a Bank Amounts to Bailment. [CA PCC MAY 2007]
Q3. Depositing of ornaments in a bank locker is a bailment [CA Inter.(IPC) MAY
2015]

14.4 Types of bailment

Gratuitous Bailment The word gratuitous means free of charge. So a gratuitous bailment is one when the
provider of service does it gratuitously i.e. free of charge such bailment would be
either for the exclusive benefits of bailor or bailee.

Non-Gratuitous Non gratuitous bailment means where both the parties get some benefit i.e.
Bailment bailment for the benefit of both bailor & bailee.

14.5 Duties of Bailor section 150, 158, 159, 164

Duty to disclose The bailor must disclose to the bailee any faults or defects in the goods which can
faults. Sec 150 harm to him.
 A gratuitous bailor is bound to disclose to the bailee all those faults in the goods
bailed of which he is aware and if he fails to do so, he will be liable to pay such
damages to the bailee as may have resulted directly from faults.
 A Non gratitous bailor is responsible for all defects in the goods bailed whether
he is aware of the defects or not .

Duty to pay  In case of gratuitous bailment –In case of gratuitous bailment the bailor is liable
necessary expenses to reimburse to bailee :
Sec 158  all the necessary expenses incurred by bailee ; and

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 Any extraordinary expenses incurred by the bailee.
 In case of non-gratuitous bailment – In case of non gratuitous bailment, the
bailor is liable to reimburse to bailee any extraordinary expenses incurred by the
bailee
Duty to indemnify A bailor is also bound to indemnify the bailee for any loss suffered by the bailee by
bailee Sec 164 reason of fact that the bailor was not entitled to bail the goods because of his
defective title.
Duty to receive  It is the duty of the bailor to receive back the goods when the bailee returns
back the goods Sec. them after the time of bailment has expired or the purpose of bailment has been
164 accomplished.
 If the bailor refuses to take delivery of goods when it is offered at the proper
time the bailee can claim compensation for all necessary expenses incurred for
the safe custody.
Duty to compensate Sec 159 states that if the bailor terminates a gratuitous bailment prematurely
in case of causing loss to the bailee he will compensate the bailee for the loss caused, which is
premature in excess of the benefit received.
termination sec.159
PAST Q1. A hires a carriage of B an agrees to pay Rs. 500 as hire charges. The carriage is unsafe,
ATTEMPT though B is unaware of it. A is injured and claims compensation for injuries suffered by
him. B refuses to pay. Discuss the liability of B. [CA PE II MAY 2005]
QUESTIONS
Q2. M delivers to N, a carrier, some explosives in a case without disclosing this fact to N. N
does not take any extraordinary care required for such type of goods. The case explodes
and as a result, a porter is injured and some other goods are damageed. Discuss the
liability of M in the light of the provisions of the Indian Contract Act,1872.
[CA PE II NOV. 2009]
Q3. If the pawnor makes a default in the payment of debt, or performance of duty, as
agreed, the pawnee has a right to sell the thing pledged for which no reasonable notice
of the sale is required. [CA IPCC NOV. 2009]

14.6 Duties of bailee section 151,154, 157,160,161,163

Duty to take care of  Every bailee has duty to take a reasonable care of the goods ,as much care of the
goods. Sec 151 goods bailed to him, as a man of ordinary prudence under similar
circumstances, take of his own goods
 If in spite of bailee’s care goods are lost or damaged, bailee shall not be liable;
but the parties may increase the level of care expected from bailee through a
special term in the contract (Sec 151).
Duty not to make  Bailee is under duty to handle the bailed goods strictly according to the terms of
unauthorized use the contract. Any deviation in this respect will be an unauthorized use of the
of goods entrusted goods.
to him – Sec. 154.  In case of an unauthorized use of the goods, the bailee shall be liable for any
damage whatsoever arising to the goods from or during such use of them.
 In addition to this, the bailor would have a right to terminate bailment in case of
unauthorized use.
Duty not to mix the It is the duty of the bailee not to mix his own goods with the goods bailed. If the
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goods Sec. 155, 156, bailee mixed his own goods with the goods of the bailor, the consequences shall be
157 as follows:
 In case the goods are mixed with the permission of the bailor – In such a case
the goods of bailor & bailee need not be separated. The bailor & bailee shall be
entitled to receive their proportionate shares from the mixture.
 In case the goods are mixed without the permission of the bailor -:
 In case it is possible to separate the goods – If it is possible to separate
bailor’s goods & bailee goods, it shall be the duty of the bailee to make
such separation. Accordingly the bailee shall be liable to pay damages for
any loss caused to the bailor.
 In case it is not possible to separate the goods – If it is not possible to
separate bailor’s goods then bailee shall be liable to compensate the bailor
for the loss caused to him. The damages shall be measured as per the
market value of the same quality of goods bailed by bailor.
Duty to return the  The bailee has a basic duty to return or deliver according to the bailor’s
goods – Sec 160 & direction i.e. the purpose for which they were bailed has been accomplished.
161.  If bailee fails to return the goods at proper time his liability for loss or damage
to goods increases, he is responsible to the bailor for any loss or destruction
from that time [Sec 161].
Duty to return any It is the duty of the bailee to deliver to the bailor any natural increase or profit
accretion to goods accruing from the goods bailed unless there is a contract to contrary.
Sec. 163
PAST Q1. Sunil delivered his car to Mahesh for repairs. Mahesh completed the work, but
ATTEMPT did not return the car to Sunil within reasonable time, though Sunil repeatedly
QUESTIONS reminded Mahesh for the return of car. In the meantime a big fire occurred in
the neighbourhood and the car was destroyed. Decide whether Mahesh can be
held liable under the provisions of the Indian Contract Act, 1872. [CA PE II
NOV. 2003]
Q2. M lends a sum of Rs. 5,000 to B, on the security of two shares of a Limited
Company on 1st April 2007. On 15th June. 2007, the company issued two bonus
shares. B returns the loan amount of Rs. 5,000 with interest but M returns only
two shares which were pledged and refuses to give the two bonus shares.
Advise B in the light of the provisions of the Indian Contract Act, 1872. [CA PE
II NOV. 2008]
Q3. Bailee has no right to mix the goods bailed with his own goods without the
consent of the bailor. [CA Inter.(IPC) NOV. 2014]

14.7 Rights of Bailor section 151,153, 156,159,160,163,180,181

Right to enforce The duties of the bailee are the rights of the bailor. The bailor can enforce by suit all
bailee’s duties the duties of the bailee as his rights.
Right to terminate Bailor in entitled to terminate bailment even before expiry of the specified time or
bailment completion of the purpose if bailee does any act with regard to the goods which is
inconsistent with the terms of bailment (Sec 153).
Right of premature  In case of gratuitous bailment of goods, bailor is entitled to demand their return
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termination even before the expiry of the specified time or completion of purpose. But if this
premature return causes loss to bailee, the bailor has to compensate bailee for
this loss.
 The measurement of damages for bailee would be the excess of loss caused by
the premature return of goods over the benefits already derived from such
goods.
Right to sue If a third party has caused some damage to the bailed goods while they are in the
wrongdoer bailee’s possession, bailor may file a suit against the third party i.e. the wrong-doer
for compensation and will have a right to share the proceeds available according to
their interests

14.8 Right of Bailee section 150, 158, 164, 165, 167, 180, 181

Right to enforce The duties of the bailor are the rights of bailee. As such, the bailee can by a suit
Bailor’s duties enforce the duties of the bailor.
Right to deliver If there are several joint-bailors of goods bailed then, the bailee has a right to
goods to one of deliver the goods back to one of several joint-owner without the consent of. all in
several joint-bailors the absence of any agreement to the contrary (Sec 165).
Right to deliver  The bailee is entitled to return the goods to bailor in good faith even if during
goods back to the possession of goods by him, a third person comes forward claiming his title
bailor over the bailed goods. (Sec 166).
 The alternates upon to such a third person is that he may apply to the court to
stop delivery of the goods to the bailor & to decide the title of the goods (Sec
167).
Right of lien  Lien means a right to retain the goods belonging to another person until the
expenses incurred in respect of such goods are paid for.
 The bailee has the right to recover the extraordinary expenses (whether the
bailment is gratuitous or non gratuitous) & ordinary necessary expenses (in
case the bailment is gratuitous) incurred by him.
 If the bailor refuses to reimburse to bailee such expenses, the bailee has a right
to exercise lien over the goods bailed.
Right to sue wrong- If a third party has caused some damage to the bailed goods while they are in
doers bailee’s possession bailee may file a suit against the third party i.e. the wrong-doer
for compensation and both will have a right to share the proceeds available
according to their interests (Sec 180 & 181).

14.9 Termination of Bailment: Section 153, 159, 162

Expiry of specified When the bailment was for a specific period, it terminates on the expiry of the time
period– period.
Accomplishment of If the bailment was for a specific purpose it terminates on the completion of the
the purpose of purpose.
bailment –
Inconsistent use of If bailee does any act with regard to goods which is inconsistent with the terms of
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goods bailment, then bailor may terminate bailment immediately.
Death of bailor or A gratuitous bailment is terminated by the death of either of the parties .The goods
bailee would be returnable immediately.
Premature (Sec 159). A gratuitous bailment can be terminated by the bailor even before expiry
termination by a of time or completion of purpose. But the bailor will have liability for compensation
bailor to bailee

14.10 Concept of Pledge section 172

Definition of The bailment of goods as security for payment of a debt or performance of a

Pledge promise is called pledge.
Parties  Pawnor: The person delivering the goods to another for the purpose of security is
called the pawnor.
 Pawnee: The person with whom the goods are deposited for the purpose of
security is called the pawnee.
PAST Q1. The Delivery of goods by one person to another as security for the payment of a debt is
ATTEMPT called
(a) Bailment (b) Pledge
QUESTIONS
(c) Mortgage (d) Hypothecation. [CA PCC MAY 2007]

14.11 Rights and duties of bailor and bailee

Duties of pawnor The pawnor, i.e. the borrower, has following duties:
 The pawnor, as a borrower, has a duty to fulfill his obligations to the
pawnee in time and according to the terms of the contract.
 He has all the duties of a bailor towards the bailee.
 He has a duty to re-imburse to the pawnee extraordinary expenses
incurred by pawnee for the preservation of the goods pledged (Sec 175).
 He has a liability to pay any deficiency to the pawnee in case of sale of
goods by the latter.
Duties of pawnee Pledge being a special kind of bailment, the duties of a pawnee are just like
a bailee. Thus a pawnee’s duties may be enumerated as following:
 To take reasonable care of the goods pledged.
 Not to make any unauthorized use of the goods pledged.
 Not to mix the goods pledged with his own goods.
 To return the goods pledged on receipt of his full dues.
 To deliver any accretion to the goods ledged.
Rights Of Pawnor The pawnor has following rights against the pawnee:
section 177  As a bailor of goods, pawnor has all the rights of the bailor.
 Pawnor has a supreme right of redemption of the pledged goods. This
right to recover the goods by clearing his dues is available to the

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borrower even after he default in the payment at the prescribed time.
This right comes to an end only by the sale of goods by the pawnee
made in a lawful manner.
 Pawnor has a right to receive notice from the pawnee for intended sale
of the goods.
 Pawnor has a right to demand any surplus that may be left with the
pawnee after sale of goods.

14.12 Rights of Pawnee section 173, 176

Right of retainer The pawnee has the right to retain the goods pledged until his dues are paid.
Sec 173 He has the right to retain the goods pledged, not only for payment of the
debt but for the interest due on the debt and all necessary expenses incurred
by him in respect of the possession or for the preservation of the goods
pledged.
Right of retainer When the pawnee lend money to the same debtor after the date of the
for subsequent pledge without any further security, it shall be presumed that the right of
advances Sec 174 retainer over the pledged goods extends even to subsequent advances. This
presumption can be rebutted only by a contract to the contrary.
Right to The pawnee also has the right to recover from the pawnor extraordinary
extraordinary expenses incurred by him for the preservation of the goods pledged. But he
expenses Sec 175 cannot retain the goods, if such expenses are not paid. He has only a right to
sue the pawnor for recovery of such extraordinary expenses.
Right to sue the Where a pawnor makes default in the payment of the debt the pawnee may
pawnor or sell the himself sell the thing pledged, after giving to the pawnor a reasonable notice
goods on default of his intention to sell.
of the pawnor Sec
176

14.13 Who Can Pledge? section 178, 178A, 179

General Rule Ordinarily, it is the owner of the goods, or any person authorized by him in
that behalf, who can pledge the goods. Following are exceptions.
mercantile agent A mercantile agent having possession of the goods with the consent of the
(Sec 178). owner but having no authority to pledge them can make a pledge provided
the pawnee is acting in good faith.
person in A person who has obtained the possession of the goods under a voidable
possession under a contract, can make a pledge provided the pawnee is acting in good faith.
voidable contract
(Sec 178-A
Pledge by a person  where a person pledges goods in which he has only a limited interest,
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with a limited the pledge is valid to the extent of that interest.
interest (Sec 179).  In such a case, the pawnee’s right is limited to the pawnor’s interests in
the goods
Pledge by seller in  if the seller after selling the goods, continues to have posseeion on the
possession after goods pledges the same then such pledge shall be valid if pawnee is
sale acting in good faith.
Pledge by buyer in  if the buyer before sale has possession over the goods and pledges the
possession before same then such pledge shall be valid if pawnee is acting in good faith.
sale
PAST ATTEMPT Q1. Ravi sent a consignment of goods worth Rs. 60,000 by railway and got railway
QUESTIONS receipt. He obtained an advance of Rs. 30,000 from the bank and endorsed and
delivered the railway receipt in favour of the bank by way of security. The railway
failed to deliver the goods at the destination. The bank filed a suit against the
railway for Rs. 60,000. Decide in the light of provisions of the Indian Contract Act,
1872, whether the bank would succeed in the said suit? [CA PE II MAY 2008]
Q2. A pledge of documents of title to goods by a mercantile agent is a valid pledge.
[CA PCC MAY 2008]
Q3. X sent a consignment of mobile phones worth Rs. 60,000 to Y and obtained a railway
receipt therefore. Later, he borrowed a loan of Rs. 40,000 from Star Bank and
endorsed the railway receipt in favour of the Bank as security. In transit the
consignment of mobile phones was lost. The Bank files a suit against the railway for
a claim of Rs.60,000, the value of the consignment. The railway contended that the
Bank is entitled to recover the amount of loan i.e. Rs. 40,000 only. Examining the
provisions of the Indian Contract Act, 1872, decide, whether the contention of the
railway is valid. [CA IPCC NOV. 2010]
Q4. X sent a consignment of goods worth Rs. 2,90,000 by railway and got railway receipt
for the same. He obtained an advance of Rs. 2,60,000 from the bank and endorsed
and delivered the railway receipt in favour of the bank by way of security for the
advance. The railway failed to delivered the goods at the destination. The bank filed
a suit against the railway for Rs. 2,90,000. Decide in the light of provisions of the
Indian Contract Act, 1872, whether the bank would succeed in the said suit?
[CA Inter.(IPC) NOV. 2014]

14.14 Concept Of Lien section 171

Meaning of Lien Lien is a right of a person to retain the possession of goods of another person
so long as some claim upon that person is not satisfied by him.
Types of lien
Particular Lien Particular lien means the right granted by law to a person to detain only a
particular property or goods of the owner against a particular claim upon
the owner.
(B) General Lien General lien means the right granted by law to a person to detain any goods
whatsoever of a person against any general claim upon the owner.
Persons entitled to The right of general lien has been conferred on the following kinds of
general lien bailees:

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1. Bankers, 2. Factors,
3. Wharfingers, 4. Attorneys of a High Court, and
5. Policy-brokers.

The right is available to the above categories of bailees only and none else, “unless there is an
express contract to that effect.” It means that the parties may, by an express contract between
themselves, confer the right of general lien on a bailee, who has otherwise got only a right of
particular lien .
Bankers . Every banker will have a general lien which attaches to all goods, securities
and papers entrusted to it as a bailee by its customer
Factors The word ‘factor’ is used for such mercantile agents who are entrusted with
principal’s goods for selling them. Sec 171 grants a general lien to a factor on
all goods received by him in his capacity as factor for his remuneration.
Wharfingers  A ‘wharf’ is a place close to a seaport where goods are temporarily
placed during the loading or unloading operations to or form the ship.
A ‘wharfinger’ is the owner of a wharf.
 Sec 171 grants to a wharfinger a general lien over goods bailed to him in
that capacity for the wharfage. i.e. his remuneration for allowing the use
of his wharf.
Attorneys of High An attorney or a solicitor of a High Court is granted a general lien over the
Court client’s documents and papers received by him in professional capacity from
the client until his professional fee and other legal costs incurred by him for
the client are paid.
Policy – brokers  An insurance agent employed to affect a policy of marine insurance is
called a policy – broker.
 He may detain any property or documents received from his clients for
any balance on any insurance account due to him from his client.

14.15 Finder of Goods section 71, 168, 169

Meaning of finder Finder of goods means a person who finds the goods lost by some another
of goods person.
Duties of finder:- The finder’s duties as a bailee are given below
To take reasonable The finder will take a reasonable care of the goods he has chosen to take in
care of the goods his possession. This would be the care that he would take of his own goods
of a similar type.
To search the true The finder must take initiative to search the true owner and make reasonable
owner efforts for the same.
Not to make The finder is expected to keep the goods in his safe custody only without
personal use of misappropriating them or converting them to his own use. If personal use is
goods unavoidable, he will be liable to make a reasonable payment to owner for

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this.
To return the goods On finding the true owner, finder must return the goods to him. This duty
to true owner has another aspect and that is that he must not hand over the goods to any
person other than the true owner.
Rights of Finder:- The rights of the finder of goods are given below
To keep possession The finder has a right to keep possession of the goods against everybody
of goods except the true owner.
To recover expenses The finder is entitled to get reimbursement from the owner for the expenses
from true owner incurred for preserving the goods and searching him.
To recover reward The finder can demand from the owner the reward promised for the return
from owner of the goods provided he was aware .
To exercise lien The finder may have claim upon the true owner for his expenses on search
over goods for for owner and maintenance of goods and also for the reward promised by
expenses and the owner. For both these claims, finder has a lien over the goods in his
reward possession.
To exercise right of finder a right to sell the goods in his possession but the right is available only
sale when
 The true owner cannot ,with reasonable diligence be found: or
 If the true owner has been found he refuses to pay the lawful charges
incurred by the finder of the goods; or
 The goods are in the danger of perishing or losing a greater part of their
value ; or
 The lawful charges of the finder in respect of the goods found amounts
to 2/3rd of their value.
PAST ATTEMPT Q1. What is the status of a "finder of goods" under the Indian Contract Act, 1872? What
QUESTIONS are his rights? [CA PE II MAY 2003]

14.16 Some Important Distinctions

I. Distinction Between Bailment And Pledge
S. Basis Bailment Pledge
No
1. Definition Bailment is the delivery of goods by The bailment of goods as security for
one person to another for some payment of a debt or performance of a
purpose upon a contract that they shall promise is called pledge.
when the purpose is accomplished , be
returned or otherwise disposed of
according to the direction of the person
delivering them.
2. Meaning In simple words, bailment is delivery of In simple words pledge is a delivery of
goods from one person to another for goods from one person to another for the
some purpose upon a condition that purpose of security for the repayment of
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the recipient shall ultimately ,restore a debt.
them to the person delivering them or
he shall dispose them according to the
direction of the person delivering them.
3. Scope Bailment is a wider term and But, pledge is a specific category of
includes a large variety of bailment.
transaction.
4. Purpose Bailment, as a wider concept, may But, pledge is for one specific
be for a large variety of purposes. purpose only, to make the goods
security for a loan.
5. Right of The purpose of bailment may be to Such a personal use of goods is
personal use enable the bailee to make use of the denied to a pawnee.
bailed goods.
6. Right of sale In general, bailees do not have the But, a pawnee would always have a
right to sell bailor’s goods to serve right to sell the pledged goods to
their own interests. recover his money in case of default
by the pawnor.
II. Distinction between general lien and particular lien
S. Basis General Lien Particular Lien
No
1. Meaning General lien means the right granted Particular lien means the right
by law to a person to detain any granted by law to a person to detain
goods whatsoever of a person against only a particular property or goods
any general claim upon the owner. of the owner against a particular
claim upon the owner.
2. Scope It is wider in scope as it entitles the It is narrower in scope as compare
person to detain any property. to particular lien because it entitles
the person to detain only a
particular property or goods of the
owner against a particular claim
upon the owner.
3. Persons The right of general lien has been The particular lien has been
entitled to conferred on the following kinds of conferred on the following: bailee,
bailees:- Bankers, Factors, finder of goods, pawnee, agent’s
Wharfingers, Attorneys of a lien, unpaid seller’s lien, partner’s
HighCourt, and Policy-brokers. lien.
III. Distinction Between Gratuitous and Non Gratuitous Bailment
S. Basis Gratuitous Bailment Non Gratuitous Bailment
No
1. Meaning The word gratuitous means free of Non gratuitous bailment means where
charge. So a gratuitous bailment is one both the parties get some benefit i.e.
when the provider of service does it bailment for the benefit of both bailor &

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Chapter 14 Bailment & Pledge
gratuitously i.e. free of charge such bailee.
bailment would be either for the
exclusive benefits of bailor or bailee.
2. Consideration In case of gratuitous bailment either However, in case of non gratuitous
party (i.e. either bailor or bailee) bailment both party will get
would not get consideration. consideration.
3. Liability of A gratuitous bailor will be liable to pay A non gratuitous bailor is responsible
bailor such damages to the bailee as may for all defects in the goods bailed
have resulted directly from faults. A whether he is aware of the defects or
gratuitous bailor will not be liable for not .If he does not disclose them to the
damages arising to the bailee from bailee unlike a gratuitous bailor
defects of which he was ignorant. ignorance of the defects is no defence
for him.
4. Duty to pay In case of gratuitous bailment the In case of non gratuitous bailment the
necessary bailor is liable to reimburse to bailee all bailor is not liable to reimburse to
expenses the necessary expenses incurred by bailee any necessary expenses incurred
bailee. by bailee.
5. Termination of A gratuitous bailment is terminated on A non gratuitous bailment is not
bailment the death of bailor or bailee. terminated on the death of bailor or
bailee.

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