Section 71 of the Indian Contract Act, 1872 deals with the finder of goods. A finder of goods means a person who finds goods that belongs to another and place them into his custody. The finder of the goods holds the same position as that of bailee and he is required to take care of the goods in the same manner as is expected out of bailee under Section 151 of the Indian Contract Act, 1872. He is also responsible for all the duties of bailee such as duty to return the goods after the true owner is found. If he refuses to return such goods then he would be made liable for the same.
For instance: Mohan find a mobile phone belonging to Shyam in the metro. Mohan picked the phone. Here, Mohan is the finder of the goods.
Rights and duties of the finder of goods
Rights of finder of goods
The rights of the finder of goods are mentioned under Section 168 and Section 169 of the Indian Contract Act, 1872.
i. Right of Lien
Section 168 of the Indian Contract Act deals with the right of lien which the finder of goods has. It says that the finder of goods has no right to sue the owner for the trouble and expenses which are borne by him for maintenance and preservation of goods. He only has the right of particular lien regarding such goods. He only has the right to retain those goods against the owner until and unless he receives some compensation for trouble and expenses voluntarily incurred by him in preservation and maintenance of goods.
ii. May sue for specific reward
According to Section 168 of the Act, the finder of the goods cannot sue the owner of the goods for the trouble and expenses incurred by him in preserving those goods. He only has the right to receive compensation where the owner of the goods promised to give a specific reward to the person who returns him the goods which he has lost. Here the acquirer of the goods can only sue the owner for non-payment of compensation or reward and has the power to retain them until he receives it.
iii. When finder of thing commonly on sale may sell it
Section 169 of the Indian Contract Act, 1872 says that where a thing which is commonly the subject of sale is lost and the owner of the goods cannot be found or if he refuses to pay compensation or lawful charge of such goods to the finder then the finder has the power to sell it where:
a. The thing is of perishable nature or will lose the greater part of its value, or
b. Where the lawful charge of the finder in respect of the thing found amount to two thirds of its value.
Duties of finder of goods
The duties of finder of goods are similar to that of the bailee. The following are the duties of finder of goods:
i. Duty take reasonable care
According to Section 151 of the Act[1], the finder of the goods has the duty to take care of the goods in the manner he would taken care of the goods if they belonged to him. So the acquirer of the goods is required to take reasonable care of the goods of the owner as he would have taken care of the goods under the similar circumstances.
Section 152 of the Act[2] lays down that in the absence of a special contract to the contrary then in such case, the acquirer of the goods or the bailee cannot be made liable for the loss, destruction or deterioration of the goods provided that he has taken reasonable care of the goods.
The burden of proof that the reasonable care of the property was taken by the bailee has to be proved by the finder only. If he establishes such ground then he would not be held liable.
Section 154 of the Act[3] says that the bailee should not use the goods in an unauthorised manner. If he makes the unauthorised use of goods then he will liable for the same and has to provide compensation to the owner or the bailor for such unauthorised use.
iii. Duty not to mix
The finder of the goods has the duty not to mix his goods with that of the owner of the goods. According to Section 155 of the Act, if the goods of the owner are mixed with that of the acquirer with the consent of the owner then in such a case both the bailor and the bailee will have the proportional share in those goods. Section 156 of the Act states that if the property which is mixed by the acquirer is of such a nature that they can be separated from the owner goods, then the cost of separation of such goods will be incurred by the finder only. Section 157 of the Act says that if the property which is mixed by the acquirer with those of owner goods cannot be separated then it is the duty of the acquirer to compensate for the loss incurred to the owner of the goods.
iv. Duty to return the goods
The finder of the goods has the duty to return the property possessed by him to it its true owner as per Section 160 of the Act. But he can exercise his right of lien if the compensation or lawful charges are not paid to the acquirer by the owner of the goods.
v. Duty to return the increase
Section 163 of the Act says that if any profit is earned by the finder of the goods on the property that belonged to the owner, then it is the duty of the acquirer to return such profit to the owner of the goods.
Nature of lien that the finder has over the goods
The finder of the goods has the power to retain the goods if the lawful charges for the maintenance are not given to the acquirer by the owner.
In K. Sardambal v. Jagannathan and Brothers[4], the Court held that the finder of the goods only has the right to retain the goods until payment and does not carry with it a right of sale to secure the amount. He is also entitled to exercise the right of lien notwithstanding that he is in possession of the goods as agent or bailee for the buyer.
Conclusion
The finder of the goods is a part of the quasi-contract. The finder of the goods has the rights and duties as that of the bailee and it has been stated under Section 71 of the Indian Contract Act, 1872.
[1] Indian Contract Act, 1872
[2] Ibid
[3] Ibid
[4] 1972 42 Comp Cas 359 Mad
This Article is Authored by Shreya Garg, 4th Year BBA LLB Student at Gitarattan International Business School.
