DR.

RAM
MANOHAR
LOHIYA
NATIONAL
LAW
UNIVERSITY
SUBMITTED TO
Dr. Visalakshi Vegesna
M.L. Ph.D.Associate
Professor (Law) TABLE OF CONTENTS
SUBMITTED BY
ABHISHT HELA
III SEM
ROLL NO.- 7

[LAW OF CONTRACTS - III]

TOPIC DELIVERY OF POSSESSION
Delivery OF Possession
 Types of Delivery

Delivery upon Contract

Non Contractual Bailment

Nature Of bailment

Conditional Delivery

Focussing On Constructive delivery

Conclusion

Bibliography

DELIVERY OF POSSESSION
The bailment contract has following features:
1. There must be actual or constructive delivery.
2. The goods not immovable property
3. by the owner called bailor
4. to another person called bailee
5. for a specific purpose
6. on condition that the goods shall be returned either in their original or in an
altered from or shall be disposed according to the direction of the bailor.
7. The delivery of possession from a bailor to a bailee
8. Possession without ownership.

The first important characteristic feature of bailment is delivery of possession by

one person to another.The person who delivers the good is called bailor and to
whome the goods are bailed is called the bailee. When the purpose is accomplished
the goods are then returned and disposed off according to the direction of of the
bailor. But delivery of possession is different from custody. One who has custody
without possession is like a servant or a guest using his hosts goods is not a bailee.

Section 149 of ICA defines it.According to which-THE DELIVERY TO THE

BAILEE MAY BE MADE BY DOING ANYTHING WHICH HAS THE EFFECT
OF PUTTING THE GOODS IN THE POSSESSION OF THE INTENDED
BAILEE OR OF ANY PERSON AUTHORISED TO HOLD THEM ON HIS
BEHALF.

But sometimes the bailment contract arises although the goods were made deliver
to another person by any other contract (not in the form of bailment contract). In
this way the owner becomes the bailor and the holder of goods becomes the bailor.

TYPES OF DELIVERY

Thre are two different ways how the delivery is made. The delivery is intended to
putting the possession of the intended bailee.These two ways are as follows-

1. ACTUAL DELIVERY
2. CONSTRUCTIVE DELIVERY
 o ACTUAL DELIVERY
When the bailor hands over to the bailee physical possession of the goods that is
called theactual delivery.It involves the physical moving of goods from one to
another enabling one to be in possession.

o CONSTRUCTIVE DELIVERY
It takes place when there is no change of physical possession.Goods remain there
where they are.But only possession holding person changes there is no moving of
goods.Only possessing right moves.Here something is done which has the effect of
putting them in the possession of the bailee. Wherea person pledged the projector
machinery of his cinema under an agreement which allowed him to retain the
machinery for the use of the cinema, the ANDHRA PRADESH HIGH COURT1 in
which it held that there was a construcyive delivery or delivery by attornment to
the bank.Since then there was a change in the legal character of the possession of
goods, though not in the actual and physical custody. Even though the bailor
continued to remain in possession,it wa the possession of the bailee.

But there are certain exceptions also.For example a bank locker does not
constitutes a bailment contract. Things kept there are in a way put in a hired
portion of the premises and not entrusted to the bank.The court will also try to find
out that there was no proof of the afct that at the time when bank locker was
robbed the cutomer had some items of jwellery in the locker.2

1
BANK OF INDIA v NARSIMBULU AIR 1966 AP 163
2 ATUL MEHTA v BANK OF MAHARASTRA AIR 2003
 DELIVERY UPON CONTRACT
Delivery of goods should be made for some purpose and upon a contract that when
the purpose is accomplished the goods shall be returned to the bailor.When a
persons goods in to the possession of another without any contract,there is no
bailment within the meaning of its definition in section 148. It was held in
Allahabad high court in Ram ghulam v state of UP3

The plaintiffs ornaments having been stolen were recovered by the police and
while in police custody, were stolen again from the police.The plaintiffs action
against the state for loss was dismissed.

Because the otnaments were not made over to the government under any contract,
the government never ocuupied the position of the bailee to indemnitify the
plaintiff.

NON CONTRACTUAL BAILMENTS

This decision has been criticized.English law recognizes bailment without
contract.In the words of CHesire and Fifoot: At the present day, in most instances
where goods are lent or hired or deposited for safe custody or as a security for a
debt the delivery will be the result of a contract.But this ingredient.though usual is
not essential.4

3 AIR 1950 AII 206

4 THE LAW OF CONTRACT,P. 73(SIXTH EDITION,1964)
The Bombay High Court in Lasalagon Merchants cooperative Bank Ltd v
Prabhudas HathilaL5 has taken the lead in imposing the obligation of a bailee
without a contract.

In this case ceratin packages of tobacco lying in the goodown of partnership firm
were pledged to the plaintiff bank.some of the partners wre failed to clear their

Income taxes therefore income tax officers ordered seizure of goods.The officials
act accordingly locked the godown and handed over the key to the police.Then
heagy rain came, roof of the godown leaked and the tobacco was damaged.

The court said heavy rains do not(necessarily) amount to an act of god. It was the
duty of government officers to take such care as every prudent manager would take
of his own goods. The government stood in the position of bailees.

This view was accepted by the Supreme Court in State of Gujarat v Memon
Mohammad6.

Certain motor vehicles and other goods belonging to the plaintiffs wre seized by
the State in the exercise of its power under a sea custom act.The goods while in
the custody of the State remained totally uncared for.

It was contended on behalf of the state that as the state were not bailees, there was
no obligation to take care. The trend set by these cases has been affirmed by the
Supreme Court,Though without reference to them.7 The facts involved the
repetition of Ran Ghulam story, atheft, recovery by polce,and final disappearance
from the police custody.The state was held liable in this.

5 AIR 1966 Bom 134

6 AIR 1967 SC 1885
7 Basavva K.D. Patil v State of Myssore,
 NATURE OF BAILMENT CONTRACT

There is no obligation of bailment contract to be always in express form. Some

times the bailment contract arises automatically no matter whether the goods have
been delivered for other purpose not in the form of bailment.If expressly done then
its ok if not done then also it becomes a contract in implied form leaving some
exceptions.

The contract where necessary may be express or implied. Where with the consent
of the station master goods wre stored on a railway companys platform,wagon
being not available,the company was held liable when they were damaged by fire
caused by a spark emitted by a passing engine.8

CONDITIONAL DELIVERY
Bailment of goods is always made for some purpose and is subject to the condition
that when the purpose is accomplished the goods will be returned to the bailor or
disposed of according to his mandate,If the person to whome thje goods are
delivered is not bound to restore them them to the person delivering them or to deal
with them according to his directions, their relationship will not be that of bailor
and bailee. It is this feature of bailment which distinguishes it from many other
transactions of the same kind.A deposit of money with a banker is not a bailment
as he is not bound to return the same notes and coins.

8 G.G. of India v Jubilere Mills Ltd. AIR 1953 Bom 46

In the words of Shetty J of the Supreme court one distinguishing feature berween
agency and bailment is that the bailee does not represent the bailor.He mere
exercises the with the leave of the bailor. Seciondly the bailee has no power to
make contract on his bailors behalf,nor he can make the bailor liable.

A bailment is also distinguishes from sale,exchange.In these transaction what is

transferred is not mere possession,but also ownership and, therefore the person
buying is under no obligation to return.

FOCUSSING ON CONSTRUCTIVE DELIVERY

Delivery that is inferred to have taken place from the conduct of the parties (such
as when one transfers a title to another) involved in a transaction, even if the
physical delivery did not take place

When a person is already holding the goods on behalf of another and is asked to
hold them on as a buyer or as a pledgee or otherwise, it is a case of constructive
delivery. The transfer of possession of property from one person to another. Under
the Sale of Goods Act 1979 , a seller delivers goods to a buyer if he delivers them
physically, if he makes symbolic delivery by delivering the document of title to
them (e.g. a bill of lading) or other means of control over them (e.g. the keys of a
warehouse in which they are stored), or if a third party who is holding them
acknowledges that he now holds them for the buyer. In constructive delivery, the
seller agrees that he holds the goods on behalf of the buyer or the buyer has
possession of the goods under a hire-purchase agreement and becomes owner on
making the final payment.

under the law of most states, delivery is not confined to physically handing
something over. Rather, delivery is a question of intent. Constructive delivery
occurs when a person shows a present intent to unconditionally divest himself of
his property, and to relinquish all control over it. When the owner signed the
document and gave it to the rental agency with the intent that the agency would
pass it along to Maria, the owner constructively delivered the leasehold interest to
Maria. After the lease was constructively delivered, the condition that the lease
would only become effective upon delivery was fulfilled.

CONCLUSION
Out of all the requirements of a bailment contract the delivery of possession is
most vital and complex feature of a bailment contract which make it different from
other forms of contract like hire purchase, agency etc. As it tells about the two
types express and constructive. Constructive being more complex as it invoves the
mutual understanding and acceptance of contract as a bailment contracts.But
sometimes it creates a problem in many of the situations as there are shades of grey
area so here comes the role of judiciary to play its role.
So, it is the best way to avoid any controversy or difficulty because if any
particular demarcation will be made on this doctrine that may lead to absurdity as
all types of situations may not be covered by an enacted law. It means that only
interpretation of courts will grant justice.

Bibliography

o Print Media

Cheshire ad Fiefoot Cases and Materials on Contract, Buter Worths London,

Moitras Commentries on Law of Contract, Eastern Book publications 2008.
Nilima Bhadbhade, Pollock & Mulla, Indian Contract & Specific Relief Acts
Avtar singh, tenth edition eastern book company
o Electronic Media

www.indiakanoon.org
www.legalresearchindia.com
www.inretentis.com