This document discusses the legal concepts of bailment and pledge. It defines bailment as the delivery of goods by one person to another for a specific purpose, to be returned after. The person delivering the goods is the bailor and the person receiving is the bailee. Bailment can be gratuitous (without compensation) or non-gratuitous. Pledge is a type of bailment where goods are delivered as security for a debt. The person delivering the goods is the pawnor and receiving is the pawnee. The document outlines the duties and rights of bailors/pawnees and bailees/pawnees, and provides examples to distinguish between bailment and pledge

2. BAILMENT
INTRODUCTION –The word ‘Bailment’ is derived from
the French word ‘Ballier’ which means any kind of ‘handing
over’ .In legal sense ,it involves change of possession of goods
from one person to another for some specific reason .
DEFINATION –Section 148 defines ‘Bailment’ as “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 off according
to the directions of the person delivering them” .

3. BAILOR- The person delivering the goods is called
‘Bailor’ .
BAILEE- The person to whom they (goods) are
delivered is ‘Bailee’ .
EXAMPLE- A delivers a piece of cloth to B , a
tailor to be stitched into suit .There is a contract of
bailment between A & B .

4. Types of Bailment- Bailment may broadly classified
into two categories , namely :
1.Gratuitous Bailment – Gratuitous bailment is a type of
bailment in which the bailee receives no compensation .for example
, borrowing a friend’s car .A gratuitous bailee is liable for loss of the
property only if the loss is caused by the bailee’s gross negligence .
2.Non-Gratuitous Bailment- In this case consideration
passes between the bailor and the bailee .The bailment for the
mutual benefit of the bailor and the bailee is a non-gratuitous
bailment .

5. Duties of Bailor :
1.To disclose known defects .
2.To bear expenses.
3.To bear extra expenses .
4.To receive back the goods .
5.To indemnify the bailee .

6. Duties of Bailee :
1. To take care of goods bailed .
2. Not to make unauthorised use .
3. To return the goods bailed .
4. Not to mix the goods with his own .
5. To deliver accretion to goods .
6. Not to set up adverse title .

7. Rights of Bailor :
1.Claim damage against bailee’s negligence .
2.Right of termination .
3.Claim the damages against unauthorised use .
4.Compensation for unauthorised mix.
5.Entitled to get back the goods .
6.To enforce duties of bailee .
7.Right to claim accretion to goods .
8.Right to sue against wrongdoers .

8. Rights of Bailee :
1. Delivery of goods to one of several joint bailor
of goods .
2. Delivery of goods to bailor without title .
3. Right to apply to court to stop delivery .
4. Right of action against trespassers .

9. Termination of Bailment :
1. On the expiry of the period .
2. On the achievement of the object .
3. Inconsistent use of goods .
4. Destruction of the subject matter .
5. Gratuitous bailment .
6. Death of the bailor and the bailee .

10. PLEDGE
INTRODUCTION –Pledge or pawn is a special
kind of bailment where things are delivered as
security for the repayment of a debt .
DEFINATION - According to section 172 of the
contract act , “The bailment of goods as security
for payment of a debt or for performance of a
promise is called pledge .

11. PAWNOR – The bailor is called the pawnor .
PAWNEE – The bailee is called the pawnee .
EXAMPLE –A borrows Rs. 5000 from B and
keeps his scooter as security for repayment of the
debt .The kind of bailment of property is called a
pledge or pawn .Here A is the pawnor and B is the
pawnee .

12. Essential of a valid pledge :
1.The goods must be delivered by borrower to the lender
as a security for repayment of debt or for the
performance of a promise .
2.The possession of the goods passes from one person to
other person and not the ownership .
3.The goods ,pledge with the pawnee ,to be returned on
receipt of his full dues .
4.Pledge can be of only movable goods .Immovable
properties can not be pledge .

13. Duties of Pawnor :
1. It is the duty of the pawnor to repay the loan
taken from the pawnee withinthe time and in
the manner specified in the contract .
2. He has to compensate the pawnee for any
extraordinary expenses incurred by him .
3. Default or risk ,if any ,in the goods pledge
,should be known to pawnee .

14. Duties of Pawnee :
1.He has to take the reasonable care of the goods pledge
.
2.He is not permitted any unauthorised use of the goods
pledge .
3.He should not mix the goods pledge with his own
goods .
4.He has to return the pledge goods on the payment of
debt .
5.He should not do any act in violation of the terms of
he contract .

15. Rights of Pawnor :
1. Right to get back the goods .
2. Expenses of separation .
3. Right to redeem goods .
4. Right to get profit .
5. Redeemption of debt .

16. Rights of Pawnee :
1. Right to retain goods .
2. Recovery of expenses .
3. Right to sell the goods .
4. Right against true owner ,when the pawnor’s
title is defective .

17. Difference between Bailment & Pledge
BASIS FOR COMPARISON BAILMENT PLEDGE
Meaning When goods are temporarily
handed over from one person
to another person for a specific
purpose ,it is known as
bailment .
When the goods are delivered
to act as security against the
debt owned by one person ,it is
known as the pledge .
Defined in Section 148 of the Indian
Contract Act ,1872 .
Section 172 of the Indian
Contract Act ,1872 .
Parties The person who delivers the
goods is known as the Bailor
while the person to whom the
goods are delivered is known as
Bailee .
Th person who delivers the
goods is known as Pawnor
while the person to whom the
goods are delivered is known
as Pawnee .
Consideration May or may not be present . Always present .
Use of goods The party whom goods ae bring
delivered can use the goods
only ,for the specified purpose .
The party whom goods are
being delivered has no right to
use the goods .
Purpose Safe keeping or repairs , etc. As security against payment of
debt .

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