1. Bailment and Pledge
According to Sec 148 of the Contract
Act, 1872, ‘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, the person to whom they are delivered is
called the bailee and the transaction is called
the bailment.

2. Essentials of Bailment
 It is a delivery of movable goods by one
person to another (not being his servant).
According to Section 149 the delivery of goods
may be actual or constructive.
 The goods are delivered for some purpose.
When they are delivered without any purpose
there is no bailment as defined under Sec 148
 The goods are delivered subject to the
condition that when the purpose is
accomplished the goods are to be returned
in specie or disposed of according to the
directions of the bailor, either in original form
or in altered form.

3. Duties of the Bailee
(i) Duty to take reasonable care of goods
delivered to him [Sec 151]
(ii) Duty not to make unauthorized use of
goods entrusted to him [ sec 154]
(iii) Duty not to mix goods bailed with his own
goods [ Sec 155]
(iv) Duty to return the goods [ Sec 165]
(v) Duty to deliver any accretion to the goods
[Sec 163]

4. Duties of the Bailor
(i) Duty to disclose fault in the goods bailed
[Sec 150]
(ii) Duty to repay necessary expenses in case
of gratuitous Bailment [Sec 158] eg
bailment of horse and expenses incurred
towards feeding and medical care of the
horse to keep it alive.
(iii) Duty to repay any extraordinary expenses
in case of non-gratuitous expenses
(iv) Duty to indemnify bailee [Sec 164]

5. Rights of Bailee
(i) Enforcement of Bailor’s Duties
(ii) Right to deliver goods to one of several
joint owners
(iii) Right to deliver goods, in good faith, to
bailor without title, without incurring any
liability to the true owner
(iv) Right of Lien

6. Rights of the Bailor
(i) Enforcement of Bailee’s Duties
(ii) Right to terminate bailment if the bailee
uses the goods wrongfully [ Sec 153]
(iii) Right to demand return of the goods at
any time in case of gratuitous bailment
[Sec 159]

7. Pledge or Pawn
According to Sec 172, Contract Act, 1872, ‘
The bailment of goods for repayment of a
debt or performance of a promise is called
‘pledge’. The bailor in this case is called the
pawnor, the bailee is called the pawnee.

8. Pledge Bailment
 Pledge is the bailment for  Bailment is for a purpose
a specific purpose ie to other than two under
provide security for a pledge ie for repairs, safe
debt or for fulfillment of custody etc.
object.  No right to sale. The
 The pledgee has right to bailee may either retain
sale on default after the goods or the bailor
giving notice thereof to for non-payment of his
the Pledger. dues
Distinction between Bailment & Pledge

9. Essential Features of a valid
pledge
 Delivery of possession
 Delivery should be upon a contract
 Delivery should be for the purpose of
security
 Delivery should be upon condition to
return

10. Duties of a Pawnor
 Duty to repay the loan
 Duty to pay expenses in case of
default

11. Duties of a pawnee
 Duty not use of pledged goods
 Duty to return the goods

12. Right of Pawnor
 Right to redeem the goods pledged
 Right to receive the increase

13. Right of Pawnee
 Right to retain the pledged goods
 Right to extra ordinary expenses
 Right in case of default of the pawnor
 Right to sell the goods