Rights and liabilities of finder of lost goods

Rights and liabilities of finder of lost goods


As we know, the rights of the finder of goods are subject to the same obligation as that of the bailee. The finder of commodities would be a bailee of the goods and therefore, becomes obliged by an obligation of due care. He does not even have the right to sue the owner for damages and expenses incurred by him on a voluntary basis in order to protect the products and to search for the owner. Early English cases not only refused any pay-out, but also the right to a fee for expenses.

Sections 168 and 169, however, secure the interests of the finder in two respects. Section 168 requires the finder to keep the goods against the owner until he is paid for difficulty and cost. Furthermore, if the owner has given a specific incentive for the return of the missing goods, the finder may claim for that reward and may keep the goods until the goods have been received.

Section 169 permits the finder to sell the stuff under certain conditions. If the item found is generally the subject of the sale and the owner cannot be found with due diligence or if he refuses to pay the legal fees of the finder, the finder may in the following scenarios, can sell the goods:

  • When an item is in danger of perishing or reducing a significant part of its worth, or
  • Where the legal costs of the finder in respect of the item found are two-thirds of its worth.

The privileges of the products finder are discussed below: –

1. Right to compensation

the bailor shall be liable to the bailee for any damage that the bailor may have sustained on the ground that the bailee was not entitled to make a bailment or to obtain back the goods or to provide orders in respect of them. If the bailor does not have the right to bail the goods or to receive them back or to give orders concerning them and as a result, the bailor is subject to any loss, the bailor shall be liable for the same. Taken from the section 164 of the Indian contract act.

2. Right to expenses or remuneration 

Under the terms of the bailment, the goods are to be held or carried out, or if the bailee does the job for the bailor and the bailee does not receive any remuneration, the bailor shall refund to the bailee the requisite expenses incurred by the bailee for the purpose of the bailor. A bailee is entitled to compensate for his negotiated payments. And if there is no such agreement at all, Section 158 would come into effect.

The section states that if the bailee is expected by the terms of the bailment to hold or carry the goods or to do any work on them for the benefit of the bailor and the contract does not provide for any reward, the bailee is entitled to ask the bailor to pay the requisite expenses incurred by the bailee for the purpose of the bailor.  Where the bailment is gratuitous and the bailee is not benefited in any way, the bailor must bear the costs, if any of the bailee to hold the chattel.

3. Right of lien

If the bailee’s legal fees are not charged, he will retain the products. The right to hold any property until the payments due in respect of the property have been paid is referred to as the right of lien. The Supreme Court quoted the following passage from the HALSBURY LAWS OF ENGLAND as to the essence of that right:

“Lien is in its primary sense a right in one man to retain that which is in his possession are satisfied. In this primary sense it is given by law and not by contract.”

Liens are of two kinds namely:

  1. General lien, and
  2. Particular lien.
  • General Lien
    • A general lien is the privilege given to one person to hold any property or assets in his ownership belonging to another individual until as the obligation or liability has been fulfilled.
    • It is a right to hold property belonging to another person for the purposes of the general balance of the account.
    • Bankers, factors, High Court lawyers and policy brokers have access to a general lien.
  • Particular Lien
    • A particular lien is only available against the specific property in consideration of which the bailee has invested labour and skills.
    • A bailee is only entitled to a particular lien.

4. Right to sue

If a third party wrongfully deprives the bailee of the use or possession of the goods bailed out or causes any harm to the bailee, the bailee is entitled to use the remedies that the owner would have used in the same case if no bailment had been made; and either the bailor or the bailee may bring an action against a third party for such depravity or injury. Section 180 allows the bailee to sue any person who has wrongfully deprived the bailee of the use or possession of the goods, or who has caused any harm to the bailee.


While there is no contractual relation between the finder and the owner, yet there is a legal duty on the finder of goods as a bailee, as set out in Section 71[1] of the Indian Contract Act. Pursuant to section 151[2] of the Indian Contract Act, the bailee of the goods or the finder, in a broader interpretation, owes a general duty of care as per the expectations of a prudent man.

Few liabilities of the finder of the commodities, which are as follows.

  1. To try to figure out who the actual owner is.
  2. To take good care of the products. Such a finder is entitled, with the exception of the true owner, to the possession of such products in the world.
  3. Such a finder is entitled to a bond, to hold the goods even against the true owner, until such time as the owner pays them money. In the case of detention, treatment and preservation, but he is not entitled to sue for such compensation.

Author: Sampark Sampad,
National Law University, Odisha 2nd year/ Student

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