Involuntary Bailment and the Case for a Differential Standard of Care: Rethinking the 13th Law Commission’s Recommendation

Aadya Narain |

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Introduction

The law of bailment governs duties and liabilities that arise when possession of goods changes hands without a transfer of ownership. Under s.148 of the Indian Contract Act, 1872 (“ICA”), bailment is defined as the delivery of goods by one person to another for some purpose, upon a contract that the goods shall, when the purpose is accomplished, be returned or otherwise disposed of in accordance with the directions of the person delivering them. A strict reading of this definition limits bailment to circumstances involving an express or implied contract.

Indian courts, however, have long recognised situations where possession changes lawfully but involuntarily, and in the absence of any agreement. These situations, commonly referred to as involuntary or constructive bailments, occupy a doctrinal grey area between contract and obligation. The 13th Law Commission of India acknowledged this gap in its 1958 Report and recommended that involuntary bailments be expressly recognised in the ICA as quasi-contracts.

While the Commission’s recommendation to statutorily recognise involuntary bailment is largely uncontroversial, its further proposal, that involuntary bailors and bailees be subject to the same rights, duties, liabilities, and disabilities as parties to a contractual bailment, raises more difficult questions. This article argues that treating voluntary and involuntary bailments uniformly is neither doctrinally sound nor normatively desirable. Involuntary bailment, by its very nature, lacks the consensual foundation that justifies imposing the full contractual standard of care. Consequently, the threshold of liability for involuntary bailees must be different.

Involuntary Bailment in Indian Law: A Brief History

Prior to the Law Commission’s proposal to codify the doctrine of involuntary bailment, Indian courts had already begun grappling with the concept. Early cases such as Ram Gulam v Government of Uttar Pradesh, 1950,  took the categorical view that bailment obligations could not “arise independently of a contract.” Subsequent decisions, however, adopted a broader understanding. In L.M. Co-Operative Bank v Prabhudas Hathibhai, 1966, the Bombay High Court held that the Bank stood in the role of a bailee and was accountable for a failure in the duty of care under s. 151 of the ICA for goods seized and damaged while in its custody, thereby implying that a bailment may be non-contractual. Similarly, the Delhi High Court in Sardar Carbonic Gas Co. v Sher-I-Punjab Trading Co, 1976,  recognised that bailment is a relationship sui generis, not exhaustively governed by the Contract Act, holding that it is possible to create the “relationship of a bailor and a bailee in respect of specific property without there being an enforceable contract.” This position was also endorsed by the Supreme Court in State of Gujarat v Memon Mahomed Haji Hasam, 1967, which held that neither an enforceable contract, nor consent, are indispensable for a bailment to arise.

These decisions demonstrate a clear judicial acceptance of involuntary bailment as a legal relationship giving rise to obligations. The more contentious question that follows is how far liability should extend once this relationship is established. The Law Commission proposed the insertion of a new provision (Section 181A) defining involuntary bailment as bailment arising “otherwise than by a mutual contract of bailment.” While it recognised involuntary bailment as a distinct concept, the proposed section stated that parties are “subject to the same liabilities and disabilities” as if the bailment had arisen under s.148.

A Case for a Differential Standard of Care in Involuntary Bailment

Two considerations support a differential threshold of liability for involuntary bailment. Firstly, the absence of a contract or agreement means that involuntary bailees cannot reasonably be expected to adhere to obligations typically arising from negotiated terms and consensus ad idem. The duties under s.151 of the ICA, which require care equivalent to that taken of one’s own goods, are premised on voluntary assumption of possession. Extending this standard mechanically to involuntary bailees disregards the role of consent. Secondly, involuntary bailments are frequently characterised by informational asymmetry. Bailees may be unaware of the nature, value, contents, or risks associated with the goods in their possession. Unlike voluntary bailees, they may lack knowledge of storage requirements, fragility, or hazards. Imposing a uniform standard of care in such circumstances risks holding parties liable for failures that could not reasonably have been anticipated. Indian law has not sufficiently interrogated this distinction. Courts have tended to apply s. 151 uniformly, placing the burden on the bailee to prove reasonable care, even where possession was neither sought nor understood.

Comparative Insights

American courts have described involuntary bailment as a situation in which goods are thrust unexpectedly upon a person, and have consistently recognised that involuntary bailees should not be held to the same standard as voluntary ones. The interrogation undertaken by these courts is: Did the bailee knowingly exercise control over the goods? This question considers, firstly, volition, asking whether the bailee consented to interact with the goods of their own free will, and secondly, dominion, did the bailee take any action (moving, using, disposing) which brought the goods into their control or otherwise affected them? Accordingly, the New York District Court in Cowen v Presspich, 1922,  which held an involuntary bailee liable for mis-delivery under conversion, clarified that one is an involuntary bailee “as long as his lack of volition continues, is not under the slightest duty to care for or guard the subject of the bailment, and cannot be held, in respect of custody, for what would even be the grossest negligence in the case of a voluntary bailment”. However, “in case the involuntary bailee shall exercise any dominion over the thing so bailed, he becomes as responsible as if he were a voluntary bailee”.  This distinction is further clarified in the judgement relied upon of Hiort v Bott, 1874, where “the defendant by reason of his affirmative act exercised dominion over the barley, thus causing a mis-delivery, he was liable in conversion as a matter of law.” The same is more conclusively established in Coggs v Bernard, 1703, where Chief Justice Holt held that the plaintiff, who had begun to move the caskets of brandy in question, had signified an “actual entry upon the thing” and taken “the thrust [of the duty] upon himself”. Therefore, regardless of present or “future agreement” in the contract regarding the casks, the fact that the defendant had started to move them, granted him the status of a bailee.^[1] The crucial caveat is of animus possidendi or “intent to possess”, without which mere physical presence of goods does not amount to taking “custody” in law. As long as the bailee’s lack of volition continues, they are not under a duty to guard the goods, and cannot be held liable even for what would amount to gross negligence in a voluntary bailment. However, once the involuntary bailee acts upon the goods, the bailment may take on a voluntary character, and a higher standard of care may justifiably apply.

Section 71, ICA

According to the discussion above, two minimum conditions must be satisfied for classification as involuntary bailment. Firstly, the bailee must not have actively rejected possession. A person cannot be subjected to obligations they have expressly refused. Secondly, the bailee must have actual or constructive knowledge of the goods’ existence. A person cannot be expected to care for property they do not know they possess. A common position in courts has been to draw an analogy between the involuntary bailee and the “finder of goods of another [who] has been held to be a bailee in certain circumstances”,  in s.71, ICA. Read with s.168  and s.169, finders of goods, much like bailees, are liable for exercising a duty of care, but also entitled to compensation for trouble and expense, the retention of goods until reimbursed, and even the sale of goods under certain conditions. The finder, having been placed in the role of bailee with no pre-existing contract, no determined consideration, and, most importantly, no instructions from the bailee, yet nevertheless subject to a statutory obligation, is a reasonable parallel to be drawn with involuntary bailees.

Involuntary bailment, however, lacks even this element of voluntary possession. To distinguish, an involuntary bailment occurs when a proprietor leaves their belongings at an establishment, such as luggage in a hotel or a bag in a store, without the proprietor's consent, while a finder takes into safekeeping an unattended bag or suitcase. Similarly, involuntary bailment may occur when the wrong goods are delivered to and placed within one’s premises, whereas a finder may choose to pick up a delivered parcel that no one has collected. In Hunter v Reed Sons, for example, a man who left a diamond ring in his waistcoat pocket in a store was not entitled to compensation from the storeowners for failing to care for the ring, as it is not a thing prudently carried in one’s pocket. This distinction demonstrates that an involuntary bailee may be categorised as a finder within the realm of s.71 by using the metrics of volition and dominion discussed above. However, a purely involuntary bailee remains outside the net of s.71 and demands that a separate threshold of care, if any, be established.

Duties and Liabilities of Involuntary Bailment

The following section outlines potential considerations for thresholds of care and liability for parties involved in an involuntary bailment.

A.   Potential Duties of Involuntary Bailee

Under the prevailing s.148, read with s.151 ICA, Indian law places an obligation on a man of “ordinary prudence” to extend the same care to bailed goods, as he would care for his “own goods”. This stipulates taking “the greatest possible care” and “all precautions”.   Moreover, failure to safely re-deliver the goods to the owner results in liability for conversion. The burden of proof, too, lies on the bailee to show that reasonable care was taken. 

English law, however, distinguishes between two metrics for the duty of care: gratuitous bailee, i.e., a bailee holding goods for no compensation and deriving no benefit from the bailment relationship, and bailee for reward.^[2]   Several United Kingdom judgments have established that a gratuitous bailee, for care rendered without quid pro quo, adheres to a lower standard of care. They are essentially liable for loss or damage arising out of the degree of “gross negligence” and for negligence only in the course of misdelivering the goods,  but not for mere want of care, careless damage, or innocent conversions,  all of which would implicate a bailee for reward, and any bailee under Indian law. This standard of care attached to a gratuitous bailee is most appropriate for involuntary circumstances, where the absence of benefit to the bailee is equivalent. Scholars have also argued for involuntary bailees to be classified as “bare-naked” bailees, liable only for losses attributable to their own negligence, as opposed to voluntary bailees, who are strictly liable for harm or loss accruing to goods while in their possession. 

Additionally, courts^[3] have recognised that an involuntary bailee’s express undertaking to adhere to a higher standard of care for involuntarily bailed goods, such as the use of a professional privilege in locating the owner, or safeguarding their interests, would also open this bailor to a higher level of scrutiny and liability. However, here too, information is crucial, exemplified by Theobald v Satterthwaite, where a customer hung her coat in an unattended room without informing any of the service personnel; she was not entitled to compensation.

Palmer additionally notes that an involuntary bailee should be estopped from denying the bailor’s title, as he has neither “bargained for possession … nor induced the bailor to relinquish it.” Accordingly, in Banks v Ferrari, the court held that an involuntary bailee lacks the jus tertii to create rights in a third party to the goods.

B.    Potential Duties of Involuntary Bailor

A second duty of care requiring analysis is that of the involuntary bailor. S.150 of the ICA requires bailors to “disclose to the bailee faults in the goods bailed…[which] expose the bailee to extraordinary risks” or be held responsible for the damage caused. While this low threshold of care is designed for voluntary bailment, where goods of a known nature are entrusted to the bailee, it falls short in cases of involuntary bailment, where the bailee is placed in a vulnerable position vis-à-vis unknown goods. Similarly, s.164 ICA outlines the bailor’s duty to indemnify the bailee, but implies that this indemnification is contingent on aberrations from the contract or agreement. Thus, the question still remains: what indemnification may be plausible when no contract or directions accompanied the voluntarily incurred loss and expense by an involuntary bailee?

To begin, an involuntary bailor must, as far as possible, disclose the details of the goods involuntarily bailed. In Bowdon v Pelleter, Justice Story held that while non-disclosure of a chest’s contents does not per se defeat bailment, concealment is material where it induces the bailee to accept custody that he would otherwise have refused or accepted on different terms. This lays down a clear duty of care against involuntary bailors, particularly for hazardous, risk-inducing, illegal, or otherwise dangerous substances, which may trap an unwitting involuntary bailee.  Thus, involuntary bailors must bear “liability for loss or damage resulting from the unsafe character of his chattel”. In addition, bailees must be entitled to remuneration and particular liens for any expenses incurred, even if at a premium, due to the unexpected nature of the bailment for which they were unprepared.

This absence of shared knowledge and consensus ad idem raises another question - of whether involuntary bailees, who are now in possession of a good though they may not have intended to be, may be allowed to use it in some capacity, with reasonable standard of care; and in such a case, whether the involuntary bailor could he held liable for injury occurring due to a substantial defect in the good, for example, a ladder, without visible defect but immediately collapses. Generally, it is understood that no liability arises from that which could “not have been contemplated”,[4]  and hence imposing liability upon an involuntary bailor, who could not have contemplated the technically unauthorised use of their goods, would still be unreasonable.  

Conclusion

The Law Commission’s recommendation for equal thresholds of care rests on an incomplete view of bailment as a monolithic category. In doing so, it overlooks the doctrinal nuance developed through case law and scholarship. Uniform standards produce perverse outcomes. Courts are forced either to deny the existence of bailment altogether or to impose unduly harsh liability on innocent parties. This dilemma has already manifested in Indian jurisprudence and will continue to do so unless legislative guidance acknowledges gradations of responsibility. Indian law no longer questions the existence of involuntary bailment. Courts have repeatedly recognised bailment relationships arising without contract or consent. The Law Commission was therefore right to recommend statutory recognition of the doctrine as a quasi-contract.

However, recognition alone is insufficient. Codifying involuntary bailment without recalibrating the standard of care misunderstands the nature of obligations which arise. The absence of mutual consent, the unpredictability of possession, and the informational disadvantages faced by involuntary bailees all militate against imposing the same liabilities that arise from voluntary arrangements. Comparative jurisprudence demonstrates that the threshold of care in involuntary bailment is different—not lower in every case, but contingent upon the bailee’s degree of volition and control. Indian law already reflects this logic in its treatment of finders of goods. Extending similar reasoning to distinguish involuntary bailment is both principled and necessary, with limited liabilities for involuntary bailees.

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Aadya Narain is a student of the Batch of 2026, B.A. LL.B (Hons), Jindal Global Law School.

[1] Michael Furmston, ‘Cheshire, Fifoot, and Furmston’s Law of Contract’ (17^th edn, Oxford University Press 2017) 119.

[2] Avtar Singh, Law of Contract & Specific Relief (12th edn, Eastern Book Company 2017).

[3] See Kettle v Bromsall [1738] 125 ER 1087 and Trefftz and Sons Ltd v Canelli [1872] LR 4 PC 277.

[4] Norman Palmer, ‘Palmer on Bailment’ (3^rd edn, Thomson Reuters 2008) 673.