10

The Indian Contract Act, 1872: Bailment and Pledge

10.1 WHAT IS A BAILMENT?

The term ‘bailment’ is derived from the French word ‘bailer’ which means to deliver a thing under a contract. The delivery of goods by one person to another person for a specific purpose with a condition to return the goods when the purpose is over or otherwise disposed off according to the direction of the person.

The person who delivers the goods is known as the ‘Bailor’ and the person who receives the goods is known as the ‘Bailee’ and the transaction is known as the ‘Bailment’.

Example

Arun gives a cloth to his tailor for stitching. It is a bailment of the cloth. As soon as the cloth is stitched, it will be returned to Arun.

10.2 ESSENTIALS OF A VALID BAILMENT

The essential features of a valid bailment are as under:

10.2.1 Delivery of Possession

Under the bailment, the possession of goods is delivered by the bailor to the bailee. If the possession is not delivered, it is not a bailment. If the ownership is transferred to other person, it is not a bailment.

The delivery of goods may take place either by a way of an actual delivery or by a constructive delivery. An actual delivery means the bailor hands over the physical possession of goods to the bailee. A constructive delivery means some act on the part of the bailor, which has the effect of putting the goods in the possession of the bailee. The bailment is not possible with an immovable property.

Example

The deposit of money in a bank is not a bailment, since the money returned by the bank would not be the identical currency notes. Moreover, money is not goods.

10.2.2 Contract Between the Parties

There must be a contract between the parties. The contract must be provided for the transfer of the possession of goods from one person to another. The contract may be expressed or implied. Sometimes, the bailment may arise even without the contract, i.e., a finder of goods is treated as a bailee.

10.2.3 Delivery for Some Purpose

The delivery of goods must be for some purpose. The purpose could be the safe custody of the goods or the transportation of goods. The purpose may be expressly specified in the contract or may be implied from the circumstances.

10.2.4 Return or Disposal of Goods

The goods must be delivered to the bailee for some purpose and subject to the condition that when the purpose is achieved, the goods shall be returned to the bailor or disposed off according to his direction. The return of goods may be in the original or altered form.

10.3 TYPES OF BAILMENT

A bailment can be classified either on the basis of reward or on the basis of benefits. The bailment on the basis of reward can be classified as (i) a gratuitous bailment or (ii) a non-gratuitous bailment.

10.3.1 Gratuitous Bailment

It is the bailment of goods without any charges or reward. The bailee is not required to pay any charges for the bailment.

10.3.2 Non-gratuitous Bailment

It is the bailment for some charges or reward. The bailee is required to pay some charges to the bailor.

The bailment on the basis of benefit may be classified in the following three manners:

10.3.3 Bailment for the Exclusive Benefit of a Bailor

It is the bailment in which the goods are delivered by the bailor to the bailee only for the exclusive benefit of the bailor himself.

10.3.4 Bailment for the Exclusive Benefit of a Bailee

It is the bailment in which the goods are delivered by the bailor to the bailee only for the exclusive benefit of the bailee.

10.3.5 Bailment for Mutual Benefit of Both Bailor and Bailee

It is the bailment in which the goods are delivered by the bailor to the bailee for the benefit of both the parties.

10.4 DUTIES OF A BAILEE

Duties of the bailee in the bailment are grouped as under.

10.4.1 Duty of Care—Sections 151 and 152

The bailee should take reasonable care of the goods which are in his possession. The degree of care required by the bailee is similar to that of a man of ordinary prudence would take of his own goods under the similar circumstances. If he has taken such care, he is not liable, even if the goods are lost or damaged. He is also not liable for the destruction or the loss of goods due to an act of God.

Example

If X bails his ornaments to ‘Y’ and ‘Y’ keeps these ornaments in his own locker at his house along with his own ornaments and if all the ornaments are lost/stolen in a riot, ‘Y’ will not be responsible for the loss to ‘X’.

10.4.2 Compensation for an Unauthorized Use—Section 154

The bailee should not use the goods for an unauthorized purpose. He can use the goods as per the terms of the bailment.

If the bailee makes any unauthorized use of goods, he shall be liable for any loss or destruction of the goods even if he was not negligent. On any unauthorized use of goods, the bailor may terminate the contract of bailment. In other words, the contract of bailment becomes voidable.

10.4.3 Duty Not to Mix—Sections 155–157

The bailee should not mix the bailor’s goods with his own goods. If the bailee mixes his own goods with the bailor’s goods with the bailor’s consent, the bailor and the bailee shall have an interest in the proportion to their respective shares in the mixture thus produced. It must be remembered that if the mixture has taken place by an act of God, the bailee is not liable for such mixture.

When the bailee mixes the bailor’s goods with his own without a consent and the goods are separable, the bailee is required to pay the cost of separation but if it cannot be separated, the bailor entitled to be compensated.

Examples

1. A bails a barrel of Cape flour worth ₹ 45 to B. B, without A’s consent, mixes the flour with a country flour of his own worth only ₹ 25 a barrel. B must compensate A for the loss of his flour.
2. A bails 100 bales of cotton marked with a particular mark to B. B, without A’s consent, mixes the 100 bales with other bales of his own bearing a different mark. A is entitled to have his 100 bales returned and B is bound to bear all the expenses incurred in the separation of the bales and any other incidental damage.

10.4.4 Duty to Return Goods—Sections 160 and 161

On the achievement of the object or completion of the purpose or expiry of the contract period, the bailee should return the goods to the bailor. When the bailor gives direction to the bailee for the return of the delivery of goods, in such a case, the bailee should deliver the goods as per the direction. The bailee should return or deliver the goods without waiting for the demand from the bailor. In case, if the bailee fails to return the goods to the bailor, the goods will be at his risk even though the loss has been created due to an act of God.

10.4.5 Duty to Return Increase or Profit—Section 163

If the goods which are bailed due to any circumstances get an accretion, the goods should be returned back along with such addition. If some profit arises from the goods, the bailee is bound to return the profit of the bailor. This is, however, subject to any contract to the contrary.

Example

A leaves a cow in the custody of B to be taken care of. The cow has a calf and B is bound to deliver the calf as well as the cow to A.

10.4.6 Duty Not to Set Up Adverse Title

The bailee should not use the goods in such a way that it impairs the right of the bailor. The bailee, as such, can apply the goods only for the purpose of bailment and thus he cannot create the adverse title.

10.5 DUTIES OF A BAILOR

The following are the duties of a bailor.

10.5.1 Duty to Disclose Fault—Section 150

It is the duty of the bailor to disclose the known defects in the goods. The bailor should compensate the bailee for such a loss if the bailer fails to disclose such defects and as a result, if the bailee suffers from any loss. But these provisions are applicable only for the known defects.

However, it must be noted that a non-gratuitous bailer would be liable for known as well as unknown defects.

Example

A lends a horse, which he knows to be vicious, to B. He does not disclose the fact that the horse is vicious. The horse runs away. B is thrown and injured. A is responsible to B for the damage sustained.

10.5.2 Duty to Bear Extraordinary Expenses—Section 158

The bailor is liable to reimburse, to the bailee, all the necessary and extraordinary expenses incurred by the bailee in case of a gratuitous bailment. But in case of non-gratuitous bailment, the bailor is liable to reimburse the extra-ordinary expenses incurred by the bailee.

10.5.3 Duty to Indemnify Loss for Permanent Termination of Bailment—Section 159

In case of a gratuitous bailment, the bailer may prematurely terminate the bailment. If the loss caused to the bailee due to the premature termination is more than the benefit obtained by the bailee, it is the duty of the bailer to compensate the bailee for such an excess loss.

10.5.4 Duty to Indemnify the Bailee for Any Loss—Section 164

If the bailor does not have any title to deliver the goods on the bailment, he would be liable to indemnity to the bailee for any loss which the bailee has paid to the original owner.

10.5.5 Duty to Receive Back the Goods—Section 164

If the bailor wrongfully refuses to take the custody of the goods, he is liable to pay to the bailee, the necessary expenses of the custody.

10.5.6 Duty to Bear a Loss—Section 162

If the goods are destroyed or lost while in possession of the bailee without his fault, the bailor is required to bear the loss.

10.6 BAILEE’S RIGHTS

The duties of the bailor are the rights of the bailee. In addition to these rights, the bailee has the following rights:

10.6.1 Return/Delivery of Goods—Section 165

The bailee has a right to return the goods to anyone of the several joint bailors. It is not necessary that the goods should be delivered in the presence of all the bailors. However, if any agreement provides the contrary then the goods should be returned accordingly.

10.6.2 File Suit to Court

If the bailee gets the ownership claims of the goods from more than one person, he has a right to request the court to decide the real ownership of the goods. Until the final decision comes, the bailee can keep the goods with himself.

If the third person or the wrong doer prevents the bailee to use the goods under the bailment, he has the right to file a suit and can ask for compensation from the third party.

10.6.3 To Recover Charges

The bailee has the right to recover the charges as agreed. The bailee has the right to recover the expenses incurred by him.

10.6.4 Right of Lien

To recover his due, the bailee can exercise his right of lien. However, the bailee gets only a particular lien and not the general lien.

10.7 BAILOR’S RIGHTS

The duties of the bailee are the rights of the bailor. In addition, the bailor has the following rights:

10.7.1 Enforcement

The bailor has a right to force the bailee to perform his duties. The bailor can compel the bailee to take proper care of the goods. If the bailee neglects his duties, the bailor has the right to enforce by filing a suit to the court.

10.7.2 Termination of Bailment—Section 153

If the bailee uses the goods in an unauthorized manner, the bailor can terminate the bailment before the completion of the bailment. A contract of bailment is regarded as a voidable contract. In such an event, the bailee cannot suit the bailor for a breach of contract.

Example

‘A’ lets on hire his horse to ‘B’ for his own riding but ‘B’ uses the horse for driving his carriage. ‘A’ has a right to terminate the contract of bailment.

10.7.3 File Suit Against a Wrong Doer

To protect his goods, the bailor has a right to take a legal action against any person who has caused any loss or damage to the goods.

10.7.4 To Demand Goods at Any Time—Section 159

In gratuitous bailment, the bailor has a right to demand the return of goods even before time.

10.8 TERMINATION OF A BAILMENT

The bailment is terminated in the following circumstances:

10.8.1 Efflux of Time

If the bailment contract is made for a specific period, it terminates on the expiry of the specific period.

10.8.2 Fulfillment of Purpose

If the bailment contract is made for a specific purpose, it terminates as soon as the purpose is achieved.

10.8.3 Inconsistent Use of Goods

If the bailee makes unauthorized use of the goods, in such a case, the contract of bailment becomes voidable at the option of the bailor. If the bailor does so, the contract is terminated.

10.8.4 Destruction of the Subject–Matter

On the destruction of the goods which is the subject-matter, the bailment is terminated.

10.8.5 Death of Any Party

A gratuitous bailment is terminated on the death of the bailor or the bailee.

10.8.6 Termination by a Bailor

A gratuitous bailment may be terminated by the bailor at any time. The bailor may terminate the gratuitous bailment even if it was for a specific purpose or for a specified time.

10.9 LIEN

A lien means the right to retain the possession of goods till the bailee is paid for his charges for services or any other amount. The lien of goods can be either a general lien or a particular lien. The lien can be either the general lien or the particular lien.

10.9.1 General Lien

A certain bailee entitled to retain any goods for any amount due. It is known as a general lien. The bankers, factors, wharfingers, attorneys of a High Court and policy-brokers may, in the absence of a contract to the contrary, retain as a security for a general balance of account any goods bailed to them.

Example

The chartered accountants have a general lien against the books of their clients, which come into their possession against the professional fees, not paid to them by those clients.

10.9.2 Particular Lien

Where the bailee has, in accordance with the purpose of the bailment, rendered any service involving the exercise of labour or skill in respect of the goods bailed, he has, in the absence of a contract to the contrary, a right to retain such goods until he receives the due remuneration for the services he has rendered in respect of them.

Examples

1. 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.
2. A gives a 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.

Finder of goods, Pawnee’s lien, Agent’s lien and Unpaid-seller’s lien have particular lien.

10.10 DIFFERENCE BETWEEN A GENERAL LIEN AND A PARTICULAR LIEN

The difference between a general lien and a particular lien can be summarized as follows:

1. A particular lien is exercisable only on such goods in respect of which charges are due. A general lien is a right to detain/retain any goods of the bailor for the general balance of an account outstanding.
2. A particular lien is automatic. A general lien is not automatic but is recognized through an agreement. It is exercised by the bailee only by name.
3. Particular lien comes into play only when there is some labour or skill is involved. A general lien can be exercised against the goods even without involvement of labour or skill.

10.11 FINDER OF GOODS

The person who finds the goods belonging to some other person and takes them in his possession is known as the finder of goods. The finder of goods is in the position of the bailee and therefore, all the duties of the bailee are equally applicable to the finder of goods. Following are the duties of the finder of goods:

1. The finder of goods must take the reasonable care of goods.
2. The finder of goods must return the goods to the owner when found.
3. The finder of goods must not use the goods for his own purpose.
4. The finder of goods must not mix the goods with his goods.
5. The finder of goods must return any increase in goods along with the goods.
6. The finder of goods must make a reasonable effort to find the owner.

10.12 PLEDGE

A pledge is a special kind of bailment. Here, the goods are delivered as a security for the payment of debt or for the performance of a promise. The person who delivers the goods is known as the Pledger or Pawner and the person who receives the goods is known as the Pledgee or Pawnee. In the pledge, there is no change in the ownership of the property.

10.13 RIGHTS OF A PAWNEE

Following are the rights of a pawnee with reference to the goods pledged:

10.13.1 Right of a Retainer—Sections 173 and 174

The pawnee can retain the goods pledged with him until he is paid:

1. Money in advance by him
2. Necessary expenses
3. Interest paid on debt

But the pawnee has no right to retain the goods even for subsequent advance.

Example

Malav pledges stock of goods for certain loan from a bank, the bank has a right to retain the stock not only for adjustment of the loan but also for payment of interest.

10.13.2 Extraordinary Expenses—Section 175

The pawnee has a right to retain the extra ordinary expenses related to the goods from the pawner for the preservation of the goods pledged with him.

10.13.3 When a Pawnor Defaults—Section 176

If the pawner makes a default, the pawnee has a right to sell the goods after giving notice of his intention to sell goods. Even if the title of the pawnor is defective, the pawnee gets valid title. If sale proceeds of goods by the pawnee are less than the amount of debt, the pawnee can recover such deficit from the pawnor.

On default by the pawnor, the pawnee has the right to file a recovery suit for the recovery of money due, interest due on the money lent, the necessary expenses and the extraordinary expenses.

10.13.4 To Sell Goods

The pawnee can sell the goods if the pawnor makes a default after giving a reasonable notice. The contract may exclude this right. If the sale is made by the pawnee without notice is void.

10.14 RIGHTS OF A PAWNOR

Following are the rights of the pawnor under the contract of pledge:

10.14.1 Redeem Goods Pledged

The pawner has a right to redeem his goods on the payment of debt or other charges. The right to redeem means get back his goods.

The pawner gets all the protection that is available to the ordinary debtor under any law which is for the time being enforced in India. The pawner has a right to recover the extraordinary expenses related to the goods from the pawnee.

10.14.2 Surplus on Sale

The pawnor has the right to take back any increase alone with the goods. But the pawnor can get it back only on the payment of debt or other charges.

10.15 PLEDGE BY A NON-OWNER

An owner of goods can create a pledge. However, this is subject to certain exceptions as under:

10.15.1 Mercantile Agent

A mercantile agent means an agent who has the authority to sell the goods in the ordinary course of business. At the time of creation of pledge, the pawnee has no notice of the fact that the mercantile agent had no authority to pledge the goods.

10.15.2 Possession Under a Voidable Contract

The person possessing the goods under a voidable contract can make a valid pledge on the satisfaction of following conditions:

1. The voidable contract has not been declared as void.
2. The pawnee must act in good faith. He should not have any notice of pawnor’s defective title.

10.15.3 Person with Limited Interest

When a person pledges the goods in which he has only limited interest, the pledge is valid only to the extent of such limited interest.

10.15.4 Seller in Possession After Sale

When the seller continues to be in possession of goods ever after sale, he can make a valid pledge of goods. The pledge is valid only if the pawnee acts in good faith and had no notice of previous sale.

10.16 DISTINGUISH BETWEEN A BAILMENT AND A PLEDGE

The main distinctions between a bailment and a pledge are as under:

1. The pledge is a variety of bailment. Under a pledge, the goods are bailed as a security for a loan or a performance of a promise. In a regular bailment, the goods are bailed for other purpose than the two referred above. The bailee takes them for repairs and safe custody.
2. The pledge enjoys the right to sell only on default by the pledgor to repay the debt or perform his promise after giving due notice. In a bailment, the bailee, generally, cannot sell the goods. He can either retain or sue for the non-payment of dues.
3. The pledgee has a right to use the goods. A bailee can if the terms so provide use the goods.

LIST OF LANDMARK JUDGEMENTS

1. State of Gujrat vs Haji Hassan (1967)

   If the goods are seized by the tax authority, it is not a bailment as there is no contract. However, the tax authority is in the position of the bailee after the goods are seized by them.

2. Standard Chartered Bank vs Custodian (2000)

   If the shares are transferred to the bank as a security and if the bank gets dividend or bonus shares, these can be retained by the bank (as bailee) but must be returned to the bailor after the purpose of bailment is over.

3. Purshottamdas vs UOI (1967)

   If a person takes a delivery of goods against a forged railway receipt, railways (bailee) can file a suit against him.

4. R. D. Saxena vs Balram Prasad (2000)

   An advocate has no lien over litigation files for his unpaid fees. The files must be returned to the client even if the fees not paid. The client’s file is not the goods bailed.

5. Revenue Authority vs Sundersanam Pictures (1968)

   The bailment requires a physical or a constructive delivery. Hence, mere agreement to deliver the goods in future when ready for security is not a pledge.

6. Houghland vs R. R. Luxury Coaches (1962)

   If the bailee is negligent in taking the care of the goods bailed then he is liable to pay damages for the loss or destruction of the goods.

7. Shaw and Co. vs Symmons and Sons (1917)

   The bailee should return the goods without waiting for the demand from the bailor. If he fails to do so, he will keep the goods at his own risk and will be liable for the loss of destruction.

8. Chand Mal vs Ganda Singh (1855)

   The bailee can retain only such goods in respect of which he has exercised his labour and skill.

9. PNB vs Satya Pal (1956)

   The acceptance of goods and securities for a special purpose excludes a general lien.

10. GubaxRai vs PNB (1984)

    The bank cannot exercise lien on the goods belonging to the firm against the partners’ individual accounts.

11. SBI vs J. A. Hussain (1993)

    A lending branch of a bank can exercise lien for the loans given by it but not for the loans given by another branch of the same bank.

12. Morvi Mercantile Bank vs UOI (1965)

    The delivery of the documents of titles which enables the pawnee to obtain the possession is the constructive delivery of goods and therefore, a valid pledge.

13. Blundell Leigh vs Atten-Borough (1921)

    The delivery of goods should be made in the pursuance of contract of pledge. The delivery of goods may be made before or after the advance of money.

14. M. R. Dhawan vs Madan Mohan (1969)

    If there is an increase in the pledged goods, the pawnor has the right to take back the increase along with the goods.

15. Prabhat Bank vs Babu Ram (1966)

    In case of a default made by the pawnor, the pawnee may sell the goods pledged with him after giving a reasonable notice.

TEST YOUR KNOWLEDGE

1. Define a bailment.

   (Ref. Para-10.1)

2. What is a bailment? What are the essentials of a valid bailment?

   (Ref. Para-10.1,10.2)

3. In a bailment there is a transfer of possessory right forever. Comment.

   (Ref. Para-10.2)

4. A bailment can be made of both movable and immovable goods. Comment.

   (Ref. Para-10.2)

5. A bailment is the delivery of goods by one person to another for some purpose. Comment.

   (Ref. Para-10.2)

6. A bailment of goods without any charges to be paid to the bailee is invalid. Comment.

   (Ref. Para-10.3)

7. How can a bailment contract be classified?

   (Ref. Para-10.3)

8. What are the legal provisions when the bailee mixes the goods bailed to him with his own goods?

   (Ref. Para-10.4)

9. What are the provisions under the Contract Act, 1872, when the bailee mixes the goods bailed to him with his own goods?

   (Ref. Para-10.4)

10. What is the liability of a bailor in case of defect in goods?

    (Ref. Para-10.5)

11. Write a short note on the bailor’s liability in case of defect in goods.

    (Ref. Para-10.5)

12. Explain the rights and duties of the bailee.

    (Ref. Para-10.4,10.6)

13. Discuss the right and duties of the bailor.

    (Ref. Para-10.5,10.7)

14. What are the rights of a bailor.

    (Ref. Para-10.7)

15. When will a bailment be terminated?

    (Ref. Para-10.8)

16. What is a lien? Explain a general lien.

    (Ref. Para-10.9)

17. Write a short note on a particular lien.

    (Ref. Para-10.9)

18. Distinguish between a general lien and a particular lien.

    (Ref. Para-10.10)

19. The position of a finder of goods is exactly that of a bailee. Comment.

    (Ref. Para-10.11)

20. What are the duties of the finder of goods?

    (Ref. Para-10.11)

21. What are the rights of the pawnee under pledge?

    (Ref. Para-10.13)

22. What are the rights of the pawnor under pledge?

    (Ref. Para-10.14)

23. When the non-owner can create a pledge?

    (Ref. Para-10.15)

24. Distinguish between a bailment and a pledge.

    (Ref. Para-10.16)

MULTIPLE-CHOICE QUESTIONS

1. The transfer of the ownership of goods by one person to another for some specific purpose is known as a
   1. bailment.
   2. pledge.
   3. hypothecation.
   4. none of these.
2. The delivery of goods by one person to another for some specific purpose is known as a
   1. bailment.
   2. pledge.
   3. hypothecation.
   4. mortgage.
3. The bailment of goods can be made by its owner of
   1. movable goods only.
   2. immovable goods only.
   3. both of these.
   4. none of these.
4. A lent his car to his friend B for two days without any charges. It is a
   1. non-gratuitous bailment.
   2. gratuitous bailment.
   3. hypothecation.
   4. beneficial bailment.
5. In which of the following ways, the bailment is not terminated?
   1. Expiry of a specified period.
   2. Fulfillment of an object.
   3. Bailor’s insolvency.
   4. Death of a bailor or a bailee.
6. Which of the following persons does not have a right of general lien?
   1. Bankers.
   2. Wharfingers.
   3. Finder of goods.
   4. Factors and policy brokers.
7. Which of the following statements is true?
   1. The lien can be exercised for the realization of time-barred debt.
   2. The lien also gives a right to sell the goods for the recovery of lawful charges.
   3. The bank cannot exercise lien on the goods belonging to the firm, against the partner’s individual account.
   4. The bank cannot exercise lien for loans given by another branch of the same bank.
8. The delivery of goods by one person to another as a security for the repayment of a debt is known as a
   1. bailment.
   2. hypothecation.
   3. pledge.
   4. mortgage.
9. In case of a default made by the pawnor in repaying the loan, the pawnee may sell the goods after giving a notice of such sale.
   1. True, as it is pawnee’s right.
   2. False, as pawnee can only exercise lien.
10. ‘X’ delivers his car to ‘Y’ for repair. It is the case of a ____
    1. sale.
    2. bailment.
    3. pledge.
    4. mortgage.
11. ‘X’ delivers his car to ‘Y’ for repair. Here X is a
    1. bailor.
    2. bailee.
    3. pledgee.
    4. pawnor.
12. ‘X’ delivers his car to ‘Y’ for repair. Here Y is a
    1. bailor.
    2. bailee.
    3. pledgee.
    4. pawnor.
13. Out of following which is/are not an example of a bailment?
    1. Immovable goods
    2. Money
    3. Movable goods
    4. Both (i) and (ii)
14. ‘A’ lets on hire his horse to ‘B’ for his own riding. ‘B’ uses the horse for driving his carriage. Here, which of the following is most appropriate?
    1. A should terminate the bailment.
    2. A may terminate the bailment.
    3. A will not allow any other goods for use to B.
    4. Both (i) and (iii).
15. Under the pledge the person who pledges is known as a………
    1. bailor.
    2. bailee.
    3. pledgee.
    4. pledgor.
16. Under the pledge the person who pledges is known as a pledgor and the bailee is known as a ………..
    1. bailor.
    2. bailee.
    3. pledgee.
    4. pledgor.
17. In a bailment the bailee _________ for the non-payment of dues.
    1. cannot sell the goods
    2. retains the goods
    3. sue for non-payment
    4. all of the above
18. Is the deposit of money in a bank is a bailment?
    1. Yes
    2. No
    3. May be
19. Whether depositing of ornaments in a bank locker is a bailment?
    1. Yes
    2. No
    3. Yes—as it is in possession of bank
    4. No—as it is in possession of owner
20. Any increase of profit from the goods bailed belongs to
    1. bailor.
    2. bailee.
    3. both.
21. The bailor is responsible for the loss caused to the bailee on account of defects in the goods bailed but unknown to him in the case of a
    1. gratuitous bailment.
    2. non-gratuitous bailment.
    3. bailment for mutual benefit.
22. Out of following, which statement is/are correct?
    1. Bailment may arise without a contract also.
    2. Bailment must be for mutual benefits of both the parties.
    3. Both (i) and (ii).
    4. None of the above.
23. Out of following which statement is/are correct?
    1. Bailee has the right of specific lien.
    2. Pledge is a type of bailment.
    3. Both (i) and (ii).
    4. None of the above.
24. Out of following, which is/are duty of a bailee?
    1. To take care.
    2. To take a reasonable care.
    3. To sell the goods.
    4. To retain the goods.
25. Out of following, which is/are rights of a bailee?
    1. To indemnity.
    2. To claim necessary expenses.
    3. To delivery of goods to any one of the joint bailor of the goods.
    4. All of the above.

ANSWER KEYS

1. iv
2. i
3. i
4. ii
5. iii
6. iii
7. ii
8. iii
9. i
10. ii
11. i
12. ii
13. iv
14. i
15. iv
16. iii
17. iv
18. iv
19. iv
20. i
21. ii
22. i
23. iii
24. ii
25. iv