Rights of Finder of Goods Under Indian Contract Act

The Indian Contract Act 1872 outlines the legal framework governing the rights and responsibilities of individuals who find goods that belong to others. Sections 71, 168 and 169 of the Act specifically address the position and rights of the finder of goods.

Position of the Finder of Goods: A Bailee’s Responsibility

Under Section 71 of the Indian Contract Act, a person who finds goods belonging to another and takes them into their custody assumes the role of a bailee. This section establishes that the finder is subject to the same responsibilities as a bailee. The key responsibilities of a bailee, as outlined in Section 151, include the duty to take care of the goods as a prudent person would take of their own goods. This duty encompasses protecting the goods from damage, loss or deterioration.

By aligning the finder’s responsibilities with those of a bailee, the law ensures that the finder cannot neglect or misuse the goods. The finder must act in a manner that preserves the value and condition of the goods, recognising their temporary custodianship until the rightful owner is located.

What are the Rights of Finder of Goods?

Rights of Finder of Goods to Retain the Goods

One of the significant rights of the finder is the right to retain the goods until they receive compensation for the efforts and expenses incurred in finding and preserving the goods. This right is crucial as it provides a form of security for the finder, ensuring that they are not at a loss for the time and resources spent.

However, this right comes with the obligation to make reasonable efforts to locate the owner. The finder must take steps to identify and contact the owner to return the goods. This might include reporting the found goods to the local authorities, posting notices in public places or using other reasonable means to locate the owner.

Rights of Finder of Goods to Sue for a Reward

Section 168 of the Indian Contract Act explicitly addresses the finder’s right to sue for a reward. If the owner has offered a specific reward for the return of the lost goods, the finder can claim this reward. The law allows the finder to retain the goods until they receive the reward, providing a legal mechanism to ensure the finder is compensated as promised by the owner.

This provision recognises the finder’s effort and incentivises the return of lost goods. It ensures that finders who act in good faith and return the goods are duly rewarded, thereby promoting honesty and integrity.

Rights of Finder of Goods of Particular Lien

The right of lien is another crucial aspect of the finder’s rights. According to Section 168, while the finder cannot sue the owner for the expenses incurred voluntarily, they do have a right of particular lien. This means the finder can retain the goods until they are compensated for their efforts and expenses.

The concept of lien serves as a protective measure for the finder, ensuring that their voluntary efforts in preserving the goods do not go unrewarded. It also creates a balance of power between the finder and the owner, ensuring that the owner acknowledges the finder’s contribution before reclaiming their property.

Rights of Finder of Goods to Sell the Goods

Section 169 of the Indian Contract Act provides the finder with the right to sell the goods under certain conditions. This right is significant, especially when the goods are perishable or if the owner’s lawful charges amount to two-thirds of the value of the goods. The conditions under which the finder can sell the goods are as follows:

• Inability to Find the Owner: If the owner cannot be found despite reasonable efforts, the finder can sell the goods.
• Refusal to Pay Lawful Charges: If the owner is found but refuses to pay the lawful charges of the finder, the finder has the right to sell the goods.
• Perishable Goods: If the goods are in danger of perishing or losing a significant portion of their value, the finder can sell the goods to preserve their remaining value.
• High Lawful Charges: If the finder’s lawful charges amount to two-thirds of the value of the goods, selling the goods becomes a viable option.

These provisions ensure that the finder is not left with a burden, especially in cases where the goods might lose their value or the finder incurs significant expenses in maintaining them.

Binding Promises and Compensation

If the owner of the goods promises to compensate the finder for their past voluntary services, such promises are binding. This means the owner is legally obligated to pay the promised amount. This provision ensures fairness and acknowledges the finder’s efforts even after the goods have been found.

The law recognises the voluntary nature of the finder’s actions but ensures that such actions do not result in undue financial or personal loss. By making these promises binding, the law provides a safety net for finders, encouraging them to act responsibly and in good faith.

Finder’s Duty to Care for the Goods

Alongside the rights, the finder also has significant duties. The finder must take reasonable care of the goods while they are in their possession. This duty includes protecting the goods from damage, deterioration or loss. The finder must act as a prudent person would with their own goods, ensuring that the goods are preserved in their original condition.

If the finder fails to take reasonable care and the goods are damaged or lost due to their negligence, they can be held liable. This liability aligns with the responsibilities of a bailee, ensuring that the finder cannot exploit their temporary custody for personal gain or neglect.

Legal Consequences of Refusal to Return Goods

If the finder refuses to return the goods to the rightful owner after they are found, they could be liable for conversion. Conversion refers to the unauthorised act of assuming rights over the goods that are inconsistent with the owner’s rights. This legal consequence ensures that the finder cannot unlawfully retain the goods, providing a legal remedy for the owner to reclaim their property.

The threat of liability for conversion serves as a deterrent against any potential misuse or unlawful retention of the goods by the finder. It reinforces the principle that the finder’s possession is temporary and conditional upon the eventual return of the goods to the rightful owner.

Conclusion

The rights of the finder of goods under the Indian Contract Act of 1872 are comprehensive, balancing the interests of both the finder and the owner. By aligning the finder’s responsibilities with those of a bailee, the law ensures that the goods are preserved and returned to their rightful owner. The provisions for retaining the goods, claiming a reward, exercising a lien and selling the goods under certain conditions provide a fair and structured approach to handling found property.

These legal principles not only protect the finder’s efforts and expenses but also promote ethical behavior and responsibility. The clear delineation of rights and duties helps in minimising disputes and ensuring that the process of returning lost goods is conducted smoothly and justly.