Bailment and Pledge

19/07/2021 0 By indiafreenotes


Section 148 of the Indian Contract Act deals with the concept of Bailment, Bailor and Bailee.

A bailment is a contract in which one person transfers goods to another person with a contract that he will return the goods after completion of the purpose for which contract takes place.

The person who delivers goods to another person is known as Balior and the person to whom bailor delivered goods, is known as Bailee.

The contract of bailment is different from the contract of sale of a property. In the contract of sale of a property, after the completion of sale the ownership of the property gets transferred to the buyer. But, in bailment, only the possession of the property is transferred to the bailee and not the ownership and the possession of the property is transferred only for the period up to the completion of the purpose. In order for bailment, the bailee must have the intention to possess the property, i.e. actual possession of the property. The bailor intends to transfer the property to the bailee for the specific period of time and after the fulfilment of the purpose, the property should be returned to the actual owner.

Kinds of Bailment

Gratuitous Bailment

Under this Bailment, anyone, either the bailor or the bailee gets the sole benefit.

For sole benefit of Bailor

In this concept, the bailor transfer the goods to the bailee for some specific purpose which result in the benefit of bailor only i.e. bailee has no expectation in return.

For sole benefit of Bailee

In this concept, the bailor transfers the goods to the bailee for some specific purpose which result in the benefit of bailee only i.e. bailor does not get anything in return. The bailor only gets his goods back after completion of the purpose.

Non Gratuitous Bailment

Under this concept, both the bailor and the bailee get some rewards in return i.e. mutual benefit of both.

When bailor transfers his goods to the bailee for some specific purpose. After the completion of that specific purpose, the bailee returns the goods back to the bailor and in return gets the payment for his services.


The pledge comes under a special kind of bailment. The pledge is the performance of promise or the bailment of goods as a security for repaying the debt. The bailor is the pawnor, and the bailee is the pawnee.

Essential Characteristics of Pledge

There are certain characteristics that are necessary to pledge goods. The following are the characteristics:

Delivery of Possession

The pawnee must have the possession of the pledged goods. Sometimes for a special purpose, the goods can remain under the custody of the pledger. Whereas it will not affect the pledge.

Pledge of Goods upon Contract

The pledge acts as a conveyance pursuant to the contract. The delivery of the goods must take place by the pawnor to the pawnee through a contract. But it is not necessary for the loan and the delivery of the goods to occur at the same time.

Rights of Pawnee

The pawnee has certain rights regarding the pledging of the goods. The following are the rights of the pawnee:

Right of Retainer

It is the right of the pawnee to retain the pledged goods. This is not only regarding the payment of debt or performance of the promise. But it is for the interest of the debt and all the expenses regarding the possession or the pledged goods.

Right as to Extraordinary Expenses

The pawnee can receive from the pawnor for the extraordinary expenses for preserving the pledged goods.

Right where Pawnor makes Default

There are two distinct rights for the pawnee if the pawnor is at default. The pawnee can raise a suit against the pawnor and retain the pledged goods as collateral security. The pawnee can also sell the pledged goods by providing reasonable notice of the sale to the pawnor. If the amount due is still less after the sale, then the pawnor is still liable to pay the balance. If the amount of the sale is greater than the due amount, then the pawnee can return the surplus money to the pawnor.

Right of Pawnor to Redeem

The pawnor can redeem the pledged goods before the sale of those goods. But the pawnor has to pay for the expenses arising from the default. The pawnor has time to redeem his goods up to the time it is sold after issuing the notice.