Position of finder of goods is explained in Section 71 of Indian Contract 1872. According to this section, a person who finds goods belonging to another and takes them into his custody, is subject to the same responsibility as a bailee. Since the position of the finder of goods is that of a bailee, he is supposed to take the same amount of care with regard to the goods as is expected of a bailee under Section 151.
Finder of goods is also subject to all the duties of a bailee, including a duty to return the goods after the true owner is found. If he refuses to return, he could be made liable for conversion. Moreover, if by his default in returning the goods, there is some loss, destruction or deterioration of the goods, he will be liable for the same.
Sections 168 and 169 confer certain rights on the finder of goods. The provisions are as under:
“168 Right of finder of goods: May sue for specific reward offered.– The finder of goods has no right to sue the owner for compensation for trouble and expense voluntarily incurred by him to preserve the goods and to find out the owner, but he may retain the goods against the owner until he receives such compensation, and where the owner has offered a specific reward for the return of goods lost, the finder may sue for such reward, and may retain
the goods until he receives it.”
Also Read Rights of bailee under Indian Contract Act 1872
“169. When finder of thing commonly on sale may sell it.—When a thing which is commonly the subject of sale is lost, if the owner cannot with reasonable diligence be found; or if he refuses upon demand, to pay the lawful charges of the finder, the finder may sell it-
(1) When the thing is in danger of perishing or losing the greater part of its value; or
(2) When the lawful charges of the finder, in respect of the thing found, amount to two-third of its value.”
The rights conferred by these provisions are:
(i) Right of lien. (Section 168).
(ii) Right of claiming the reward, if announced by the owner. (Section 168).
(iii) Right to sell the goods found. (Section 169).
Also Read Five (5) Duties of Bailee
(i) Right of lien (Section 168)
According to Section 168, a finder of goods has no right to sue the owner for trouble and expense voluntarily incurred by him to preserve the goods and to find the owner. He has, however, the right of particular lien in respect of those goods. He may retain the goods against the owner until he receives compensation for the trouble and expense voluntarily incurred by him to preserve the goods and to find the owner.
(ii) Right of claiming the reward, if announced by the owner (Section 168)
It has been noted above that the finder has right to retain the goods until he is paid compensation for the trouble and expense voluntarily incurred by him to preserve the goods and find the owner. In addition to that, where the owner has offered a specific reward for the return of goods lost, the finder may sue for such reward, and also may retain the goods until he receives it.(Section 168)
It may be noted that the right to claim the reward being a statutory right would be available even in the absence of any contract to that effect. However, such right as mentioned above, is in respect of the lost goods only. If the reward does not pertain to the goods, then the same cannot be claimed unless there is a contract for the payment of the same (See Lalman Shukla v. Gauri Dutt, (1913) 11 All. L.J. 489).
Also Duties of Bailor under the Indian Contract Act 1872
If the goods have already been found voluntarily, and then the owner of the goods promises to compensate the finder for his past voluntary services, the contract is binding and the owner is bound pay the promised amount.(Section 25(2)
For example, A finds B’s purse and gives it to him. B promises to pay A Rs. 50. This is a contract, and B is bound to pay the amount.(Illustration (c) to Section 25.)
Also Read What is Bailment? What are essentials of Bailment?
(iii) Right to sell the goods found (Section 169)
The finder of the goods has also been given the right to sell the goods found by him under certain circumstance mentioned in Section 169. Such a right is available to the finder of the lost goods when the following conditions are satisfied:
(a) If the owner of the goods cannot with reasonable diligence be found; or if he refuses, upon demand, to pay the lawful charges of the finder; and
(b) When the thing is in danger of perishing or losing the greater part of its value; or when the lawful charges of the finder in respect of the thing found, amount to two-thirds of its value.