Section 166 of Indian Contract Act, 1872: Bailee Not Responsible on Redelivery to Bailor Without Title

Section 166 protects a bailee in a specific situation: the bailor does not have title to the goods, but the bailee, acting in good faith, returns the goods to the bailor or follows the bailor's directions for delivery.

Text of Section 166

166. Bailee not responsible on re-delivery to bailor without title.
If the bailor has no title to the goods, and the bailee, in good faith, delivers them back to, or according to the directions of, the bailor, the bailee is not responsible to the owner in respect of such delivery.

Meaning and Scope of Section 166

A bailment generally involves delivery of goods by one person, called the bailor, to another person, called the bailee, for a purpose upon a contract that the goods will be returned or otherwise dealt with according to the bailor's directions when that purpose is accomplished. Section 166 deals with the risk faced by a bailee when the person who delivered the goods was not their true owner.

The provision gives statutory protection to a bailee where two central conditions are present: the bailor lacks title to the goods, and the bailee nevertheless makes the redelivery in good faith to the bailor or in accordance with the bailor's directions. In that situation, Section 166 states that the bailee is not responsible to the true owner merely because of that delivery.

Essential Conditions for Protection

The goods must have been received in a relationship of bailment.
The bailor must have no title to the goods.
The bailee must act in good faith.
The goods must be delivered back to the bailor or according to the bailor's directions.
The statutory protection concerns responsibility to the owner in respect of that delivery.

Relationship with Sections 164 and 167

Section 164 places responsibility on the bailor for loss sustained by the bailee where the bailor was not entitled to make the bailment, receive back the goods, or give directions concerning them. Section 167 addresses a competing claim by a third person: a person other than the bailor who claims the bailed goods may apply to the court to stop delivery to the bailor and have title decided.

Read together, these provisions distinguish between a bailee who has already made a good-faith redelivery under Section 166 and a situation in which a third-party claim to the goods is brought before the court under Section 167.

Practical Example

Suppose A delivers movable goods to B for safekeeping, and B reasonably treats A as the bailor. If A is later found not to be the true owner, but B had already returned the goods to A in good faith, Section 166 may protect B from responsibility to the true owner in respect of that redelivery. The statutory requirement of good faith remains important to the application of the section.

Legal note: Section 166 is a specific rule concerning good-faith redelivery. Where a third person asserts a claim before redelivery, Section 167 should also be considered. The application of these provisions depends on the facts and evidence of the particular bailment.

Official Legal Source

For the current official text of the Indian Contract Act, 1872, consult India Code, the Government of India legislation database.

Related Indian Contract Act Provisions

Continue with Section 167 - Right of third person claiming goods bailed, Section 168 - Right of finder of goods, and Section 170 - Bailee's particular lien.