Company law

The meaning and nature of a company

Features , types of company.
.
Procedure of incorruption ,
Memoramadum of association
Prospectus , shares , share capital membership , management of company.
Qualification and appointment of directors .
Removal of directors .

Appointment of managerial personal winding up of company .

Company
The meaning and nature of a company
The word ‘company’ has no strictly technical or legal meaning It may be described to
imply an association of persons for some common object or objects ,
It is normally reserved for those associatiated for economic purpose I e to carry on
business for gain .
It is applied to both parternership and joint stock Indian law regards company law district
form partnership and partnership law .
A company under act is defined to mean a company formed and registered under co act
1956 or under any of the previous law .
Company defined section 3[1] [ii] section 3[1] [ii] lays down that “an existing company
means a company formed and registered under any of previous company law .
Other defines co to understand clearly Lord justice Lindsey
“A company is an association of many who contribute money or monies worth to
common stock and employed in some trade or business and who share the profit and loss
arising there form.”
Prof Haney ‘ A company is an artificial person created by law , having separated
untimely with a perpetual succession and common seal’
The above definition clearly brings out the meaning of company in terms of its features .
A company to which the company act applies comes into existence only when it is
registered under the act . On registration a company becomes a body corporate i.e. it
acquired a legal personality of its own , separate and district form its members . A
registered co is there fore created by law and law alone can regulate modify or dissolve it.

Advantages of incorporated company

.
1 perpetual succession .
2 Limited liability .
3 Transferability of shares .
4 Corporate personality.
 5 Capacity to sue
6 Separate property
7 Flexibility and autonomy
From the above discussion it bit becomes very clear that an incorporated company
has an edge over other forms
.
A company is a legal person district from its members taken individually or
collectively .
A Company , being a Body corporate , can enter into contracts. A share holder
cannot enforce a contract made by the company. because he is neither a party to
the contract nor entitled to the benefited of it as a company is not a trustee for its
shareholders. Similarly shareholder cannot be held liable for contracts made by
the company or for any wrongful acts of the company.
The principal of legal entity of the first recognized by the House of lords in 1867
in case of oaks v/s Truant and Hording.
It was than held then that since an incorporated co has a legal personality district
from its members a creditor of the co has remedy only against the
Co and not against the co and not against an individual shareholder .
THE POSITION was further clarified in the famous case of Salomon v/s
Salomon and co. Ltd in this case all the members of the co belonged to one
family.
In conclusion it can be said that since the com has a separate corporate personality

Corporate personality , its members cannot be held liable for the debts , wrongs or
misdeeds of the company . because existence , its life is not affected by the death or
insolvency of any member

“Members may come and members may go but co will go on forever”

Prof Gower has said that even hydrogen bomb cannot destroy. A company.
DISTICTION BETWEEN A COMPANY AND PARTERSHIP FIRM
1 Mode of creation
2 membership private .co two [2 ] and in case public company seven [7]
3 legal status
4 liability of members
5 transfer of shares
6Agency of members
8 management
9 powers.
10 Dissolution
11 Legal obligation.
Types of companies
Explain in brief the different types of companies?

Kinds of companies
There are three types of companies:
1. Chartered companies: A chartered company is one of which is incorporated a
special charter granted by the king of England.
2. Statutory companies : These companies are incorporated by special Act of
Legislature (I,e. by the Act of Parliament or state legislature)
3. Registered companies : Companies registered under Indian companies Act,1956
or under any of previous companies Act or called registered companies. A
registered company comes into existence when it is registered under the
companies Act and certificate of incorporation issued by the registered
companies.
These companies may be
a) Companies limited by shares :
b) Companies limited by guarantee: or
c) Unlimited Companies.
Besides the above, the companies May also be classified as
a) Associations not for profit having licence under section 25 of the Act,
b) Government companies ;
c) Foreign companies ;
d) Holding and subsidiary companies.

Meaning of Private and Public Company:

According to sec 3(1)(iii) of the Companies Act, private company means a

company which has a minimum paid-up capital of one lakh rupees or such
higher paid up capital, as may be prescribed, and by this articles –
a) restrict the right to transfer it shares, if any
b) limits the number of its members to fifty( Excluding the present
or past employee member of company);
c) prohibits any invitation to the public to subscribe for any shares
or debentures of the company: and
d) prohibits any invitation or acceptance of deposits from persons other than
its members, directors or their relatives.

Section 12 of the Act lays down that a private company may formed with a
minimum of two members sec 13(1)(a) provides that in the case of a private
limited company.

Public Company:
A public company is defined under sec 3(1)(iv) of the Companies Act, 1956
as amended by the companies (Amendment) Act 2000 to mean a company
which –
a) Private company
b) has minimum paid up capital of five lakh rupees or such higher paid up
capital, as may be prescribed;
c) is a private company, which is subsidiary of a company, which is not
private company.
 Existing private and public companies.
Every private and Public company existing on the commencement of the
companies( Amendment ) Act 2000, (viz, 13-12-2000) with paid up
capital of less the amount prescribed must enhance its paid up capital to
the prescribed amount within a period of two years .
Section 25 Companies Exempted.

DISTINCTION BETWEEN PRIVATE AND PUBLIC COMPANY:

Following are the main points of distinction between a private company
and public company:
Private Company Public company.
1. Minimum member of persons to 1. it is seven in the case of
Form a company. Public Company
2. A minimum paid up capital of 2. Minimum paid up capital
Rs. 1 Lakh , of Rs. 5 Lakh,
3.The maximum member must not 3. No restriction on the
Exceed fifty. Numbers members .
4.Is Prohibited from inviting or accepting 4. on the other hand accept
Deposits from persons other then its deposits from the public.
Members.
5.The right to transfer shares is restricted, 5. The shares are freely
Transferable.
6. Cannot issue a prospectus, 6. Invite the general public
To subsribe for its shares
And debentures.

MEANING OF GOVERNMENT COMPANY.

According to sec 617, a Government company is one in which 51% or more of the
paid up capital is held by central Government, or by any one more state Government,
or party by central Government or party by one or more state Government.

IS GOVERNMENT COMPANY IS A STATE?

A Government company is a separate legal entity and should not be identified with
the state and its employees cannot claim to be Government servants (R.K.Chatterjes
V Union of India) In Heavy Engg. Mazdoor Union V state of Bihar, where the entire
Share capital is contributed by the central Government. The Supreme Court held that
the company is not the its shareholder.
2 Types of Companies
Q 1. Explain in brief the different types of companies?

Kinds of companies
On the basis of incorporation, there are three types companies:
1. Chartered companies:
2. Statutory Companies:
3. Registered Companies :
1. Chartered Companies: is one which is incorporated under a special charter granted
by the king or queen of England. The East India company and The Bank of England
are examples of companies incorporated England.
2. Statutory Companies: These companies are incorporated by a special Act of
Legislature. Reserve Bank of India, Life Insurance Corporation of India, Unit Trust
of India, Food Corporation of India are examples of such companies.
3. Registered companies: Companies registered under the Indian Companies Act, 1956
or under any of previous companies Acts called registered companies.

Company may either be Private company or a Public company.

These companies may be :
(a) Companies limited by shares : Where the liability of the members of a company is
limited by the Memorandum to the amount, if any unpaid on the shares, such a
company is known as a company limited by shares{Sec.12(2) (a)}.

ARTICLES OF ASSOCIATION.

The article of association is the rules and regulations or the bye laws which govern the
internal management of the company. They are like partnership deed in a partnership .it is
second imp document to be filled with register at the time of the co.
The true nature of Articles Can be understood by the observation of Lord Cairns in
Asbury rail carriage and iron co v/s Riche ‘The article proceed to define the powers of
governing body as between themselves and the mode and form in which the business of
co is at large , the mode and form in which business to carried on and the form in which
changes in which changes in the internal regulations of the may, form time in which
changes in the internal regulations of the co may, from time to time be made”
Thus Articles of association are subordinate to the Memoramadum of association of the
co.
Contents of articles of association.
A co should usually contain the following matters
1 the exclusion, whole or part of table A,
2 share capital
3 Rights of different classes of shareholders
4 allotments of shares
5 calls on shares
6 lien on shares
7 forfeiture of shares
8 transfer of shares
9. Surrender of shares
10. Share certificate
11. Issue of share warrants
12. Increase or Decrease of shares capital
13. Conversion of shares into stock,
14. Consolidation and sub-division of shares
15. Borowing powers
16. General meeting,
17. Appointment of managerial personnel;
18. Appointment and remuneration of auditors
19. Dividends and reserves
20. Accounts and audit;
21. Adoption or execution of preliminary contracts,
22. Capitalization of profit;
23. Notices;
24. Common seal;
25. Windings up.

SPECIAL PROVISIONS IN ARTICLES

Following types of companies,

I ) . Private limited company with shares,

According to sec 3 (I) (iii) of the companies Act, the Articles of a private limited
company must:
(a) prohibit an invitation to the public to subscribe to its shares debentures,
(b) restrict the right of its members to transfer shares,
(c) limited member of its members to fifty,
(d) Prohibits any invitation or acceptance of deposits from persons other than its
member, directors or their relations.
ii) Unlimited company;
According to section 27(1) of the Act , the articles of an unlimited company must;
(a) state the number of member with which the company is to be registered;
(b) if such a company has shares capital,

iii) Company limited by guarantee

According section 27(2) of the companies Act, the Articles of the company limited by
guarantee must contain.
ALTERATION OF ARTICLES OF ASSOCIATION.

A company has wide powers to alter it Articles to suit its requirements from time to time .
The procedure for alteration of articles is contained in section 31 of the companies Act.

Steps of Alteration:
The following alteration;
(1) A decision in the meeting of the Board must be taken to change all any of the
regulations of the existing articles and they should fix up the day, time, place and
agenda for the general meeting.
(2) It should be seen that the proposed alteration conformed to provision of the Act
and memorandum.
(3) A calling the general meeting should be sent to every member.
(4) If the shares of the company are enlisted with any recognized stock exchange,
(5) A special resolution should be passed by shareholder in the general meeting.
(6) After the articles have been altered.
(7) A copy of the special resolution along with explanatory statement in form no 23
must filed with register within thirty days after passing of the resolution.
(8) Necessary changes must be made in all copies articles.
(9) If the effect of alteration is to convert a public company into a private company,
Effect of Altered Articles
Alternation bind the members in the same way as original articles sec 36
The legal reprehensive of co can challenged the alternation on ground that a retrospective
effect.
Relation between memorandum and articles
Lord cairns in ash bury carriage co v/s riche observed that ‘the article play a part
subsidiary to the memorandum of association’ .
The article cannot give to the co power which are given by the memorandum of
association.
Binding effect of articles sec 36[1]
1 members to the company
2 company to the members
3 member inter se
4 company to outsiders [ a person who is not a member of co ]
Doctrine of indoor management
Memorandum and article of association when registered with the register of co assume
the register of public document

Under sec 610 of the act

Every person dealing with the co to have notice of their continents and shall be bound by
them this role is know as doctrine of constructive notice .
It is an internal management .
Exception to the doctrine of indoor management
The doctrine of indoor management is subject to the following limitations
1 knowledge of irregularity
2 negligence on the part of the outsider
3 forgery
4 no knowledge of the articles.
5Acts outside apparent authority
6 void or illegal tractions

Prospectus
A prospectus as per sec 2 [36] read along with sec 58A means any document described or
issued as prospectus and includes any notice ,circular advertisement circular or other
document from public or inviting offers from public for the subscription or purchase of
any shares in or debentures of body corporate.
Two things if it satisfied
1 invites deposits
2the adored invitation is made to the public.
Continents of prospects
1 General information

2 Capital structure of the company

A]authorized, issued paid up capital .
B ] size of the present , giving separately reservation for preferential allotment to
promoters and others e

3 terms of the present issue

[i] terms of payment.
[ii] how to apply.
[iii]any sepal tax benefits.
4 particulars of the issue
[i]objects .[ii] project cost. [iii] means of financing[including contribution of
prompters .
5 company management and project
6 certain prescribe particulars to the company and others listed co under same
management which made any capital issue during the last 3 years.
Management perception of risk factors
Statutory requirements to a prospectus

1 issue after incorporation .

2 dating of prospectus [sec55]
3registraction of prospectus [sec60]
4 the prospectus must issue within 90 days after the date on which a copy thereof has
been delivered for registration.
Fundamental Rights
Meaning:-
 Rights which are considered essential or fundamental for the well-being of a
person are called Fundamental Rights.

 The Fundamental Rights embodied in the Indian constitution acts as a guarantee

that all Indian citizens can and will lead their life’s in peace as long as they live in
Indian democracy.
 The Fundamental Rights in India preserve in the Part III of the Constitution of
India guarantee civil liberties such that all Indians can lead their lives in peace and
harmony as citizens of India.
 Fundamental rights for Indians have also been aimed at overturning the
inequalities of pre-independence social practices. Specifically, they have also
been used to abolish un touch ability and hence prohibit discrimination on the
grounds of religion, race, caste, sex, or place of birth. The six fundamental rights
are:-
 1. Right to equality
 2. Right to freedom
 3. Right against exploitation
 4. Right to freedom of religion
 5. Cultural and educational rights
 6. Right to constitutional remedies
 1) Right to equality:- Right to equality is an important right provided for in
Articles 14, 15, 16, 17 and 18 of the constitution.
 a)Equality before law(Article 14)
 b)Social equality and equal access to public areas(Article 15)
 c) Equality In matters of public employment(Article 16)
 d)Abolition of untouchability(Article 17)
 e)Abolition of Titles(Article 17 )
 f)Abolition of Titles: (Article 18)
  )Right to freedom:-The Constitution of India contains the right to freedom, given
in articles 19, 20, 21 and 22.
 a)Freedom of speech and expression

 b)Freedom to assemble peacefully without arms
 c)Freedom to form associations or unions
 d)Freedom to move freely throughout the territory of India
 e)Freedom to reside and settle in any part of the territory of India
 f)Freedom to practice any profession or to carry on any occupation.

g)Protection with respect to conviction for offences

h)Protection of life and personal liberty
i)Rights of a person arrested under ordinary circumstances
3)Right against exploitation:-
Child labour and Begar is prohibited under Right against
exploitation. The right against exploitation, given in Articles 23 and 24, provides
for two provisions, namely the abolition of trafficking in human beings and Begar
(forced labor), and abolition of employment of children below the age of 14 years
in dangerous jobs like factories and mines.
4)Right to freedom of religion:Right to freedom of religion, covered in Articles
25, 26, 27 and 28, provides religious freedom to all citizens of India. The
objective of this right is to sustain the principle of secularism in India.

5)Cultural and educational rights:As India is a country of many languages,

religions, and cultures, the Constitution provides special measures, in Articles 29
and 30, to protect the rights of the minorities. Any community which has a
language and a script of its own has the right to conserve and develop them.
6)Right to constitutional remedies:Right to constitutional remedies empowers
the citizens to move a court of law in case of any denial of the fundamental rights.
For instance, in case of imprisonment, the citizen can ask the court to see if it is
according to the provisions of the law of the country
Bailment
S-148 a bailment is the delivery of goods by one person to
to another for some purpose upon a contract that they shall, when the purpose is
accomplished ,be returned or other wise disposed of according to the directions of the
person delivering them. The person delivering the goods is called the bailor The person to
whom it is delivered is called bailer .
Essentials of a bailment
1 The delivery of the goods for some purpose .
2 Returned of the goods after the purpose is achieved or disposed according to the bailers
directions .
Delivery means transfer of possession of goods from one person to another .
It need not always be actual
It may sometimes be a symbolic
The provision s-148
If a person already in possession [having ]of the goods of another contracts to hold them
as a bailer , he there by becomes bailer and owner becomes the bailor of the such goods
although they may not been .delivered by way of bailment .
Example
A sells his watch to B.Instead of delivering the watch to B.A is asked to continue keeping
the watch with him for a month on B’s behalf.
After the arrangement A is the bailer of the watt the was already in the possession of A .
Earlier he having as owner but now he holds the some as a bailer for B .
A finder of goods is also deemed to be bailer of these goods .
Ultzen –Plaintiff-Bailor

Nicols- Defendant-Bailee

Ultzen want to the Nicols’ restaurant for the purpose of dinning there . when he ultzen
entered the restaurant , A waiter took the plaintiff coat from him with out being requested
to do so and having it on a nook behind the plaintiff .
When plaintiff wanted to leave He found that the coat had been lost .It was held that
defendant was the bailee of the coat as his servant had assumed the possession of some
and he was therefore liable fore its loss which was due to his negligence .
If the owner maintained control over the goods, there is no bailment .when a person
keeps his goods in premises of another person but himself continues to have the control
over him, this is not sufficient delivery for being to b e
bailment .

In Kaliaporumal Pillai ,
V/s Visalakeshmi
A lady took her old Jewel to a goldsmith for being meted and burning convert into new
jewels .
Every evening she used to receive the half made jewels . put the same into a box & to
lock the same .
She allowed locked box to remain the premises of the goldsmith but kept the key
(boxkey) in her Possession . One night the jewels were Stolen . it was herd that there was
no bailment as she did not handed over the possession of jewels to the goldsmith ,&
therefore the goldsmith could not liable for the loss .
Similar in case of national Bank of Lahore V/s Sohan lal .
Similar would be the position if a locker in a safe deposit values given by a bank to the
customer and customer is also given one key of the such locker, with out which the
locker cannot be opened.
In such case locker may be in the Premises of Bank . The person who kept the valuable in
the locker has control over such goods and there is no bailment of such goods to the
bank . The position would However be different if the locker in the safe deposit value of
bank can operated even with out the key of the Customer.
It was held that In such case like the locker had be operated even without the key with the
customer , customers control over the valuable in that locker had gone, and the same was
with the bank & therefore the bank was bailee and was liable for loss of the belongings of
the customers in the lockers
In addition to that the bank was course also liable on account of vicarious liability for the
fraud committed by the bank manager.
.
There cannot be bailment with out a contract
In Ram Guam v/s Govt of U P The Aallabhad H C expressed the view that obligation of
a bailee can arises only out of contract of bailment and not otherwise .
In this Ram-plaintiff
Govt- -dffident
Pf ‘s property had been stolen . The same was recovered by police and kept Malkhana
from there , it was again stolen and could not be traced . The pf brought action to recover
the value of the property .
The state got was held not liable firstly, because it was not liable, as such and secondly
The police , took and kept the property in possession , acting in charge of obligation
imposed by law , rather than in obedience to some executive orders .
The point of decision in the above case that bailment cannot arise without a contract does
not appear to be convincing the law it self recognizes the finder of goods as a bailee .
In some cases, it has been held that bailment can be there even without a contract .
2 Return of the goods after the purpose is achieved .
The delivery of the goods ,in a bailment is only for some purpose eg for safe custody , for
carriage , or repair etc when purpose accomplished return other wise according to the
directions of the person delivery them .
It is that in every bailment the something is to be returned or either in some form or is an
altered form Eg:- when cloth is given for stitched into a suit or gold for being converted
into ornament , wheat for being converted into a flour .
There is a bailment in each case
When money is deposited in a bank it is not bailment because the banker is not to return
the same money to the depositor similarly when an agent receives some payment on
behalf of principal he is not bailer.
In one case Kalayani Breweries ltd v/s state of west Bengal
In this case pf brewed and sold beer in beer bottles . customer were required to pay the
exact cost of bottles apart from the price of the contents . The empty Bottles paid by him.
was to be refunded to him. It was held that there was only sale of bottles rather than
bailment .The deposit amount of bottle was there for liable to sales tax .

Bailor’s duty when goods bailed are defective :-

Section 150 mentions the duty of a bailor in respect of the goods bailed by him .

1 The bailor is bound to disclose to the bailee faults in the goods bailed , of
which the bailor is aware , & which material interfere with use of them or
expose the bailee to extraordinary risks and if he does not make such
disclosure . he is responsible for damage arising to the bailer directly from
such faults .
 2 If the goods are bailed for hire , bailor is responsible for such damage ,
whether he was not aware of existence of such in the goods bailed .

GRATUITOUS BAILMENT :-
Gratuitous bailor or without reward , because when the bailor bails the goods the
for reward he is liable for damage caused by the defective goods even though he
not aware of the effect in them
Ex

- “A” lends a horse which he know to be vicious to B . The dose not disclose the fact that
the horse is vicious. The horse runs away B is thrown and injured . A is responsible to
“B” for damage Sustained ,.

Sec 150 deals with bailment of goods for reward .

Ace to this provision when the goods are bailed for hire , the bailor is liable for
the damage caused to the bailer by the defective goods whether the bailor is aware
of the existence of faults in the goods or not .

Ex “A” hire a carriage of B . The carriage is unsafe , though B is not aware it

and A is injured B is responsible to A for the injury .

Hyman V/s Nye &sons

The pf hired a carriage and horses from the Df for a particular Journal .The
carriage . The carriage being defective , it was upset and the pf was injured there
by .The df was held liable injures to the plaintiff .

1 . DUTIES OF BAILEE . Sec 151 – 152

In all cases of bailment the bailer is bound to take as much care of the goods.
bailed to him as a man of ordinary prudence would under similar circumstance ,
take of his own goods of the same bulk, quality and value as the gods bailed”

Bailer should act as a prudent man

Ace Sec 151 the bailer should take such care of goods as man of ordinary
prudence would take of his own goods . if the bailer has not acted like an ordinary
prudent man , he cannot be excused by pleading that he had taken similar care of
own goods also, & his goods have lost or damaged along with those bailor or that
he bailor .
Had its knowledge that his goods were being kept in a negligent manner .
Its is observed that . In cases that “ The obligation of the bank to take care of the
pledged goods must be seas in the in the conduct of the extordinary situation that
developed”
If the bailer has taken due care & the damage to the goods is because of the
circumstance beyond his control , he will not be liable for the loss “
 There if food grains stored in the bailer’s go down are damaged by un India V /s
united precedence floods in the town, the bailer cannot be made liable for the loss.
Union of India Fire, etc Insurance co Ltd . cotton bales belongs to consignee .
Company it self and kept out side the railway goods sets covered with terpailin .
The consequence company did not have sufficient ware choosing facilities, and
its ordinary goods including the cotton boles were laying in and out side the goods
shed .
The Company had provided watchman and railway protection staff was also the
to take care of these goods .
The company did not taken delivery of its goods in take care of these goods . The
do so .and 13 day’s after the unloading of the said boles the cotton boles caught
fire for unknown reasons . The railways held that the railway authorities could not
be held liable for negligence under these circumnistance.
In Sunder Lal v/s Ram sarup
A wooden shop was hired under a written agreement that shop will be edreturen
in the some conditions and the hirer will be liable for any loss or damage to it. It
the shop was burnt by the mob during the riots in the city .It was held that since
the destruction of the shop was due to no negligence on the hirer he was not liable
for the loss.

3 Duty not make unauthorized use of the goods bailed[ s-153-and 154]
When the goods have bailed for a particular purpose the baile is supposed to use
them only for that purpose and none else . If he makes unauthorized use of goods
there are two remedies available to the bailor
s-153 The bailor may terminated the bailment .s-154 The bailor may recover
compunction for the loss caused due to unauthorized use of goods .
Termination of bailment by bailee ‘s act inconsistent with conditions:-
Illustration :-A lets to B for hier a horse for his own riding. B drives the horse in
his carriage . This is at the opinion of A , a termination of the bailment .
2 . Damages for loss due to unauthorized use
If the bailere makes such use of the goods which is contrary to the conditions of
bailment, He liable to make compensation to the bailor for any damage to the
goods due to unauthorized use such a liability arises even if the unauthorized use
being made with care .

Sec 154. Liability of bailer making unauthorized use of making use of goods
bailed .
When the mixture goods cannot be separated
In case it cannot be separated from those of the bailee it is deemed to be loss of
goods and the bailor can recover composition for same from the baillee s -157
Then bailor is entitled to be compensated by the bailee for the loss of the goods .
Illustration
Bails a barrel of flour worthRS-45 to B. with out A s consent mixes the flour with
country of his own worth Rs25 only a barrel B must compensate A for the loss of
his flour.
 Ex oil also can be given

4 Duty to return the goods on the fulfillment of purpose

5
[160
and 161 -165- 167 ] s-160 “It is the duty of the bailee to return or delivery
according to the bailers directions the goods bailed , with out demand , as soon as
time for which they were bailed has been accomplished .”
If , by default of the bailee, the goods are not returned at the proper time, he is
responsible to the bailor for loss, destruction or degeneration of the form the time.
Return when bailment by several joint owners .
If several joint owners of goods bail then bailey may deliver them to back to
according to directions of one joint owner without the consent of all, absence of
any agreement to the contrary.
6 Duty to deliver to the bailor increase or profit on the goods bailed. S-163

Acc s-163 Increase or profits which have accrued from the goods bailed. bound to
the bailor .
Illustration
A leaves a cow in the custody of B. To be taken care of the cow. cow has a calf B
is bound to deliver the calf as well as the cow to A .
The bailey of the goods has some rights
1Right to recover necessary expenses incurred on bailment s-158
2Right to recover compensation from the bailor s-164
3Right to have a lien on goods bailed s-170-171
4 Right of suit against .a wrong doer.

• 1. Right to recover necessary expenses incurred on bailment (Sec 158).

For instance A leaves his horse with neighbor B for safe custody for one
week B is entitled to recover the expenses incurred by him in feeding the
horse.
( cat , dog, sheep, goat, etc)
2. Right to recover compensation from the bailor (164)
Some times the bailor may not be entitle to make the bailment or to receive
back the goods this result in some loss to the bailey the bailey is entitled to
recover from bailor such loss as may be caused due to advertised
Reason.
3. Right of lien on the goods bailed (Sec170 – 171)
Lien is the right of bailey under which bailey can retain the goods of the
bailor and refuse to deliver them bailor until his due revocation for services in
respect of the goods bailed or amount due is paid

Two types of Lien (eight)

1. General Lien.
2. Particular Lien.
1. General Lien: General lien entitle bailey to action goods of the bailor
genera Balance of account.
Ex: - Express for preserving the goods.
The right of particular lien entitle to action.
Those very goods for the service regarding which the revocation is due the
general lien.

When the bailey loses his possession of goods, his right of lien is lost by
Sec170 Particular Lien .A delivery rough (duplicate) diamond to B, jewels to
be cut and polished which is accordingly done it is entitle to retain the stone
till he is paid for services he was rendered .
The right particular lien has been recognized not only in fever of bailey but in
some other cases also like
1). Lien of finder goods sec {168}.
2} Pledge’s Lien sec [173 174]
3] Agent’s Lien Sec
4] Unpaid seller’s Lien sec 47 sale goods act 1930.
5} Partner’s Lien sec 52 Indian partnership act 1932

The right of general lien has been conferred on the following kinds of
bailey.
1 Baker 2 Attorney general of high court 3 Factors 4 Policy brokers 5
war fingers.
The right is awe able to the above categories of baileys. Only and none
else “Unless there is an express contract to that effect.
General lien of war fingers.

Whereof means a loading stage side a receiver for loading and unloading
vessels.
Where of means a person who owns or has the care of a whereof.
A war fingers has a lien over it goods of his customers. Until his war fingers is
the changes for the use of whereof are paid to him.
Its claim of general lien is only in respect of those goods which he received in
his couatg as war fingers.
General lien on attorney. Sec 171 H.C. attorney’s also got a right of general
lien. This right is presumed to be available to Advocates and other legel
Practionars.
The right can be excused in respect of the documents are belonging to the
client which are with him.
He can retain them until his fees for the professional services and other cost
and expenses incurred by him for a client are paid to him.

General lien of Policy-Brokers.

A Policy broker means person who acts as an insurance agent to effect
marine insurance.
He is one the person mentioned in such on sec 171 having a right of general
lien.
H.C. can exegeses such right until he balance of account due to him from a
client has been paid.
Right of suit against a wrong dour sec180.
When goods have been bailed if a third person wrongfully deprives the bailey
of there use or possession or causes an injury to the goods bailey can sue such
person for wrong to the goods. It may be noted that not only bailey but basilar
also can bring an action against such third party.
If a person fraudulently or forcibly takes away the goods from the bailey the
bailey has a right to recover the same.

In purushottam das, and bananas das V/s Union of India. A obtained delivery
of certain goods from the railway on a forged railway receipt. A Pledge the
goods to B it was held that the railway authorities had a right to recover those
goods from B .

Possession of Finder goods.

A person who finds goods belonging to another and takes them into his
custody is called finder of goods.
Person who find a goods will be finder.
He is subject to all duties of bailey return the goods after true owner is found.