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Section 71: Responsibility of finder of goods

Indian Contract Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1872
Section 70 All 266 Sections of Indian Contract Act Section 72

Legal Commentary & Landmark Judgments: Section 71

Section 71 of the Indian Contract Act, 1872 establishes the quasi-contractual doctrine of constructive bailment, providing that a person who finds goods belonging to another, and takes them into his custody, is subject to the same responsibility as a bailee.

  • Taking Custody of Lost Chattels as Jurisdictional Trigger: The finder must physically discover and intentionally assume custody and control of goods belonging to another without prior contractual privity.
  • Bailee's Standard of Reasonable Care: The finder is legally bound by Section 151 to take as much care of the goods as a person of ordinary prudence would of his own goods, and is prohibited from commingling them under Section 157.
  • Statutory Rights of Retainer and Conditional Sale: Under Section 168, the finder has a right of lien to retain the goods against the owner for necessary preservation expenses, and under Section 169, may sell the goods if the owner cannot be found or refuses to pay expenses and the goods are perishable or expenses equal two-thirds of value.
Key Landmark Precedents:
  • Union of India v. Amar Singh 1960 (2) SCR 75 / AIR 1960 SC 233: The Supreme Court recognized that bailment can arise without an underlying consensual contract; Section 71 creates a statutory constructive bailment, imposing on the finder all the legal duties and liabilities of a bailee under Chapter IX.
  • State of Gujarat v. Memon Mahomed Haji Hasam (1967) 3 SCR 938 / AIR 1967 SC 1885: The Supreme Court affirmed that constructive bailment principles govern statutory authorities holding property, holding the state liable for failure to exercise the reasonable care required of a bailee under Section 71/151.
  • Hollins v. Fowler (1875) LR 7 HL 757: Classic common law authority on finders: a finder has good title against all the world except the true owner, but dealing with the goods in denial of the true owner's rights constitutes actionable conversion.
Courtroom Practice & Strategic Litigation Guidance:

When a client receives mistaken deliveries, misdirected freight, or discovers third-party property, advise them immediately to issue written notice to the true owner, store the goods securely under Section 151, and avoid using or altering them. Under Section 71 r/w 168, maintain a meticulous expense ledger to exercise a possessory lien for preservation and storage costs before releasing custody.

Section 70 All 266 Sections of Indian Contract Act Section 72