Page 103 - DCOM103_COMMERCIAL_LAW

Commercial Law

Notes
Examples: (i) A delivers a rough diamond to B, a jeweller, to be cut and polished,
which is accordingly done. B is entitled to retain the stone till he is paid for the services he
has rendered.
(ii) A gives cloth to B, a tailor, to make into a coat. B promises A to deliver the coat as soon
as it is finished and to give a three months’ credit for the price. B is not entitled to retain

the coat until he is paid.
The provisions of S.171 empower certain categories of bailees to exercise a general lien.
These include: bankers, factors, wharfinger, and attorneys of High Court and policy

brokers. These bailees can retain all goods of the bailer so long as anything is due to them,
unless there is a contract to the contrary.
3. Right against wrongful deprivation of or injury to goods (Ss.180-181): If a third person
wrongfully deprives the bailee of the use or possession of the goods bailed, or causes them
any injury, the bailee is entitled to use such remedies as the owner might have used in the
like case if no bailment had been made and either the bailer or the bailee may bring a suit
against the third person for such deprivation or injury. Now, whatever is obtained by way
of relief or compensation in such a suit shall, as between the bailer and the bailee, be dealt
with according to their respective interest (S.181).

10.2.4 Rights of a Bailer

There is number of rights of a Bailer. These are:
1. The bailer can enforce, by suit, all duties or liabilities of the bailee.
2. In case of gratuitous bailment (i.e., bailment without reward), the bailer can demand their

return whenever he pleases, even though he lent it for a specified time or purpose. But if,
on the faith of such bailment, the borrower has acted in such a manner that the return of the

thing before the specified time would cause him (i.e., the bailee) loss exceeding the benefi t
derived by him from the bailment, the bailer must indemnify the borrower for the loss if he
compels an immediate return (S.159).

Task A consigned goods by Railways. The consignment, at the time of delivery, was
found damaged. After obtaining a certificate of damages from the Railway Offi cer, A

claimed from the Railways compensation of ` 2,300. The general Manager of the Railways
sent him a cheque for ` 1,300 in full and final settlement. The cheque was encashed, but

after a lapse of sometime. A claimed that the payment had satisfied only a part of his claim
and demanded payment of the balance. Discuss the claim of A for payment of the balance
amount. [Hint: A shall have no claim against Railways.]

10.3 Termination of Bailment

A contract of bailment terminates or comes to an end under the following circumstances:

1. On the expiry of the stipulated period: Where bailment is for a specific period, it comes to
an end on the expiry of the specifi ed period.

Example: A room cooler is hired by X from Y for a period of 6 months. On the
expiry of 6 months X must return the cooler.

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