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Section 155: Effect of mixture, with bailor's consent, of his goods with bailee's

Indian Contract Act • Official Statutory Text & Practice Guide

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Act 1872
Section 154 All 266 Sections of Indian Contract Act Section 156

Legal Commentary & Landmark Judgments: Section 155

Section 155 governs the consensual commingling of goods, providing that when a bailee, with the bailor's consent, mixes the bailed goods with his own goods, both parties acquire an interest in the resultant mixture as tenants-in-common in proportion to their respective shares.

  • Mutual Consent as Prerequisite: Requires express or implied consent of the bailor to mix the bailed goods with the bailee's goods; consensual commingling negates any tort of conversion or unauthorized alteration.
  • Creation of Tenancy-in-Common: The legal effect of consensual mixture is the creation of a proportionate tenancy-in-common, whereby bailor and bailee become co-owners of the aggregate bulk in proportion to the value or volume contributed.
  • Preservation of Fungible Property Rights: Commonly operates in commercial warehousing, grain silos, petroleum bunkering, and fungible bulk commodity storage where individual units lose identity but fractional proprietary interests remain protected.
Key Landmark Precedents:
  • Indian Oil Corporation Ltd. v. NEPC India Ltd. (2006) 6 SCC 736: The Supreme Court analyzed the nature of commingling of fungible fuel, holding that consensual mixture gives rise to proportionate property interests under Section 155, preventing criminal breach of trust absent dishonest misappropriation.
  • Spence v. Union Marine Insurance Co. (1868) LR 3 CP 427: The Court of Common Pleas ruled that where goods of different owners are accidentally or consensually mixed so that individual identification is impossible, the owners become tenants in common of the total mass in proportion to their respective contributions.
Courtroom Practice & Strategic Litigation Guidance:

In commercial supply and storage disputes, contracts must explicitly specify whether commingling is permitted. When drafting warehousing or fungible asset agreements, include clauses determining measurement standards, evaporation allowances, and proportional extraction rights. In pleadings, establish delivery invoices showing quantity and quality of deposit to determine exact percentage ownership in the commingled mass.

Section 154 All 266 Sections of Indian Contract Act Section 156