Section 158 Indian Contract Act, 1872 - Repayment by Bailor of Necessary Expenses
Section 158 of the Indian Contract Act, 1872 deals with the bailor's obligation to repay necessary expenses incurred by a bailee where the bailment is gratuitous and the bailee receives no remuneration.
What does Section 158 provide?
Where, by the conditions of the bailment, the goods are to be kept or to be carried, or to have work done upon them by the bailee for the bailor, and the bailee is to receive no remuneration, the bailor shall repay to the bailee the necessary expenses incurred by him for the purpose of the bailment.
In simple terms, when a person accepts goods as a bailee without receiving payment for keeping, carrying, or doing work upon those goods for the bailor, the bailor must reimburse the necessary expenses properly incurred for the purpose of that bailment.
Meaning of bailor, bailee and bailment
Section 148 of the Indian Contract Act, 1872 defines a bailment as the delivery of goods by one person to another for a purpose, upon a contract that, when the purpose is accomplished, the goods shall be returned or otherwise dealt with according to the directions of the person delivering them. The person delivering the goods is called the bailor, and the person receiving them is called the bailee.
Section 158 operates within Chapter IX of the Act, which governs bailment. It specifically addresses expenses in a bailment where the bailee is not remunerated.
Essential conditions for repayment under Section 158
- There must be a bailment of goods.
- The goods must be kept, carried, or have work done upon them by the bailee for the bailor.
- The bailee must receive no remuneration for performing the purpose of the bailment.
- The expenditure claimed must be necessary and incurred for the purpose of the bailment.
- When these statutory conditions are satisfied, the bailor is required to repay the necessary expenses to the bailee.
What are "necessary expenses"?
The expression refers to expenses reasonably required to carry out the purpose for which the goods were bailed. Whether an expense is necessary depends on the terms and circumstances of the particular bailment. Section 158 does not state that every expenditure chosen by the bailee must be reimbursed; the statutory requirement is that the expense be necessary and incurred for the purpose of the bailment.
Example of Section 158
If A leaves goods with B without agreeing to pay B for keeping them, and B necessarily incurs reasonable expenditure solely to preserve or handle those goods in accordance with the bailment, Section 158 requires A, as bailor, to repay those necessary expenses. The example is illustrative; the actual liability in a dispute depends on the terms and facts of the bailment.
Section 158 and gratuitous bailment
The provision is particularly relevant where the bailee receives no remuneration. The statutory rule prevents the unpaid bailee from having to bear necessary expenditure incurred for the bailor's purpose. This should be distinguished from a remunerated bailment, because Section 158 expressly applies where the bailee is to receive no remuneration.
Related provisions
Section 158 should be read with the other provisions governing bailment, including Section 148 on bailment, bailor and bailee, Section 151 on the care to be taken by a bailee, Section 159 on restoration of goods lent gratuitously, and Section 160 on return of goods after expiry of time or accomplishment of purpose.
Official legal source
The current text of the Indian Contract Act, 1872 can be verified from the Government of India's official India Code text of the Indian Contract Act, 1872.