Section 168 of the Indian Contract Act, 1872: Rights of Finder of Goods
Section 168 of the Indian Contract Act, 1872 deals with the rights of a person who finds another person's goods. It addresses compensation for efforts made to preserve the goods and locate the owner, the finder's right to retain the goods, and the right to recover a specific reward offered by the owner.
In brief: a finder generally cannot sue the owner merely for voluntary trouble and expense incurred in preserving the goods and finding the owner. However, the finder may retain the goods until the relevant compensation is received. If the owner has offered a specific reward for return of the lost goods, the finder may sue for that reward and may retain the goods until the reward is paid.
What does Section 168 provide?
The statutory heading on India Code is "Right of finder of goods". The provision gives a finder two important forms of protection while also limiting the finder's ability to bring a claim for voluntarily incurred expenses.
Section 168 - substance of the provision
A finder has no general right to sue the owner for compensation merely for the trouble and expense voluntarily incurred in preserving the goods and finding the owner. The finder may nevertheless retain the goods against the owner until such compensation is received. Where the owner has offered a specific reward for return of the lost goods, the finder may sue for the promised reward and may retain the goods until it is paid.
Meaning and legal effect
Section 168 should be read with Section 71 of the Indian Contract Act, 1872. Section 71 provides that a person who finds goods belonging to another and takes them into custody is subject to the same responsibility as a bailee. Thus, taking custody of lost goods carries duties concerning their care, while Section 168 deals with important rights available to the finder.
1. No general suit for voluntary trouble and expense
The finder cannot ordinarily maintain a suit against the owner simply to recover compensation for voluntary efforts or expenditure incurred in preserving the goods and tracing the owner. This is the limitation expressly stated in Section 168.
2. Right to retain the goods
Although the finder cannot ordinarily sue for those voluntary expenses, Section 168 permits the finder to retain the goods against the owner until the compensation contemplated by the provision is received. This gives the finder a possessory protection while the goods remain in the finder's lawful custody.
3. Right to sue for a specific reward
If the owner has offered a specific reward for the return of the lost goods, Section 168 expressly allows the finder to sue for that reward. The finder may also retain the goods until the reward is received.
When can a finder claim a reward?
The special right to sue under Section 168 applies where the owner has offered a specific reward for return of the lost goods. A reward should therefore be distinguished from a general claim by the finder for time, inconvenience or expenditure. The statutory right of action concerns the specific reward offered by the owner.
Related provisions
- Section 71: responsibility of a finder of goods who takes the goods into custody.
- Section 168: rights of the finder, including retention of the goods and recovery of a specific reward where offered.
- Section 169: circumstances in which a finder of a thing commonly on sale may sell it.
Practical point: finding property does not make the finder its owner. A finder who takes custody of another person's goods assumes legal responsibilities, and any right to retain or deal with the goods must be understood within Sections 71, 168 and 169 of the Indian Contract Act, 1872.
Official legal source
The Indian Contract Act, 1872 is Act No. 9 of 1872. The official India Code record states that the Act was enacted on 25 April 1872 and came into force on 1 September 1872. For the current official text and legislative record, refer to the Government of India's India Code portal.