Rights of Finder of Goods Under Indian Contract Act
Rights of Finder of Goods under Indian Contract Act, 1872
1. Who is a Finder of Goods?
A finder of goods is a person who finds lost goods belonging to someone else.
The finder is not the owner but has possession of the goods.
2. Legal Framework
The rights and duties of a finder of goods are primarily governed by Section 71 of the Indian Contract Act, 1872.
This section deals with the liability of a person who finds goods belonging to another and takes them into their custody.
3. Rights and Duties of the Finder
A. Duty to Take Care
The finder must take reasonable care of the goods as a prudent person would.
They are liable for any loss or damage caused due to negligence.
B. Right to Retain Possession (Lien)
The finder has a right to retain the goods until the owner pays reasonable expenses incurred in taking care of the goods.
This is called a “right of lien”.
C. Right to Reward
If a reward was offered for finding the goods, the finder is entitled to claim it.
D. Right to Sue for Loss
If the goods are lost or damaged while in the finder’s custody, the finder may have a right to sue for compensation if the loss was caused by third parties.
4. Owner’s Rights
The true owner has the primary right to reclaim the goods.
The finder must return the goods upon demand from the owner.
Failure to return goods may amount to theft or conversion.
5. Relevant Case Law
🏛️ Ramaswamy v. The State (1958 AIR Mad 66)
The court held that a finder who takes possession of lost goods is obliged to take reasonable care.
The finder is not the owner but has a duty to return the goods when the true owner claims them.
🏛️ Khanna Ram v. Prithvi Singh (AIR 1915 PC 202)
Emphasized that a finder cannot claim ownership over goods but has a right to retain goods till expenses are paid.
🏛️ Kundan Lal v. Union of India (AIR 1955 SC 590)
The Supreme Court observed that a finder’s right to lien is limited to the reimbursement of expenses and does not extend to ownership rights.
6. Distinction from Bailment
A finder of goods automatically becomes a bailee by taking possession.
The finder is expected to exercise reasonable care and diligence.
The relationship is not contractual initially, but the finder owes duties similar to a bailee.
7. Summary Table
| Right/Duty | Explanation |
|---|---|
| Duty of Care | Take reasonable care of goods |
| Right to Lien | Retain goods till expenses are reimbursed |
| Right to Reward | Claim reward if offered |
| Duty to Return | Return goods to the rightful owner on demand |
| Liability | Liable for loss due to negligence |
8. Conclusion
The finder of goods, while not the owner, gains certain limited rights and duties. They must take care of the goods and return them to the true owner but can hold the goods until reimbursed for necessary expenses. These provisions aim to protect owners while ensuring fairness to the finder.
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