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Section 167 Indian Contract Act - Right of Third Person Claiming Goods Bailed

Section 167 of the Indian Contract Act, 1872 deals with a claim to bailed goods made by a person other than the bailor. It enables that third person to approach the Court to stop delivery of the goods to the bailor and to have the title to the goods decided.

What is Section 167 of the Indian Contract Act, 1872?

Section 167 forms part of Chapter IX of the Indian Contract Act, 1872, which deals with bailment. A dispute may arise when goods are in the custody of a bailee and someone other than the bailor asserts a right or title over those goods. Section 167 provides a statutory mechanism for that claimant to seek the intervention of the Court before the goods are delivered back to the bailor.

Text of Section 167 - Right of Third Person Claiming Goods Bailed

Section 167. If a person, other than the bailor, claims goods bailed, he may apply to the Court to stop the delivery of the goods to the bailor, and to decide the title to the goods.

Meaning and Scope of Section 167

The provision addresses competing claims over goods that are already under bailment. The person invoking Section 167 must be someone other than the bailor. Such a claimant may ask the Court to prevent delivery of the goods to the bailor while the question of title is determined.

  • There must be bailed goods: the provision operates in the context of bailment.
  • The claimant is a third person: the claim must be made by a person other than the bailor.
  • Court intervention may be sought: the claimant may apply to stop delivery of the goods to the bailor.
  • Title may be adjudicated: the Court can decide the title to the goods.

Meaning of Bailment, Bailor and Bailee

Section 148 of the Indian Contract Act, 1872 defines bailment as the delivery of goods by one person to another for a purpose, upon a contract that, when the purpose is accomplished, the goods shall be returned or otherwise dealt with according to the directions of the person delivering them. The person delivering the goods is called the bailor, and the person receiving them is called the bailee.

How Section 167 Works

Suppose goods are held by a bailee and the bailor asks for their return. If another person claims that the goods belong to that person, Section 167 permits the third-party claimant to approach the Court. The Court may be asked to stop delivery to the bailor and decide the competing claim of title. The section therefore helps preserve the disputed goods until the title dispute is judicially determined.

Relationship with Section 166

Section 166 protects a bailee who, in good faith, delivers goods back to the bailor or according to the bailor's directions even where the bailor has no title. Section 167 separately gives a third person claiming the bailed goods a route to approach the Court to stop delivery and seek a decision on title.

Judicial Understanding

In Sardar Carbonic Gas Co. v. Sher-I-Punjab Trading Co. (Delhi High Court, 6 August 1976), the Court discussed the scope of Section 167 and indicated that the provision is directed to a claim by a third person, other than the bailor, where delivery to the bailor is sought to be stopped while title is decided. The applicability of the section therefore depends on the facts and the relationship of the claimant, bailor and bailee.

Official Legal Source

For the authoritative statutory source and the current text of the Indian Contract Act, 1872, refer to the India Code - Indian Contract Act, 1872.

Legal note: This page is intended for general legal information. The appropriate remedy and procedure in a dispute over title to bailed goods depend on the facts and applicable procedural law.