Finder of Goods under Section 71 of the Indian Contract Act, 1872: The Finder's Duties as a Bailee, His Right of Lien under Section 168, the Power of Sale under Section 169, and His Title Against the World

A person who picks up goods belonging to somebody else is in an odd position. He never agreed to take charge of them, yet the law makes him responsible for them; he has no title, yet the law protects his possession against everyone except the true owner; and he has no contract, yet the law gives him a lien and, in defined circumstances, a power of sale. Section 71 creates the relationship by placing the finder in the position of a bailee, which imports the duties in Sections 151 to 153. The finder's rights are then supplied by Sections 168 and 169, which sit in the chapter on bailment.

The finder as bailee: his duties, his rights, and his title

1. The Provision

Sections 71 and 151, Indian Contract Act, 1872

71. Responsibility of finder of goods. A person who finds goods belonging to another, and takes them into his custody, is subject to the same responsibility as a bailee.

151. Care to be taken by bailee. In all cases of bailment the bailee is bound to take as much care of the goods bailed to him as a man of ordinary prudence would, under similar circumstances, take of his own goods of the same bulk, quality and value as the goods bailed.

Two conditions are required before the section operates. The person must find goods belonging to another, and he must take them into his custody. A person who sees goods and leaves them where they are assumes no responsibility; the obligations attach only when he assumes control. From that moment the law treats him as a bailee, even though there has been no delivery by an owner and no contract of any kind.

2. The Finder's Duties

To take reasonable care of the goods, to the standard in Section 151, that of a man of ordinary prudence dealing with his own goods of the same bulk, quality and value. Under Section 152 he is not liable for loss or damage if he has taken that degree of care.
Not to mix the goods with his own. Sections 155 to 157 govern mixture, and where the mixture is without consent and the goods cannot be separated, the finder bears the loss and the expenses of separation.
Not to use the goods for his own purpose. Section 154 makes a bailee who uses the goods inconsistently with the terms of the bailment liable to make compensation for any damage arising, and this applies to a finder who treats the goods as his own.
To take reasonable steps to trace the true owner. The finder who makes no effort is in a weaker position, and the right to sell under Section 169 depends on having taken reasonable efforts.
To return the goods to the true owner when he is found, together with any increase or profit which has accrued from them, under Section 163.

3. The Finder's Rights

Sections 168 and 169, Indian Contract Act, 1872

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.

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 of 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-thirds of its value.

3.1 The lien, and its limit

⚠ The finder has a lien but no right to sue for his expenses

Section 168 draws a distinction that is easy to miss and is regularly tested. The finder cannot sue the owner for the trouble and expense he voluntarily incurred in preserving the goods and tracing the owner, because he was a volunteer and the owner never asked him to do anything. What he can do is retain the goods until he is paid, which is a particular lien and a purely defensive right. The position changes where the owner has offered a specific reward: that is an offer which the finder accepts by performing, so there is a contract, and he may sue on it as well as retain the goods until it is paid.

3.2 The power of sale

Section 169 is a limited statutory power and each of its conditions must be satisfied. The thing must be one commonly the subject of sale. There must be either an inability to find the owner with reasonable diligence, or a refusal by him on demand to pay the lawful charges. And one of the two further circumstances must exist: the thing is perishing or losing the greater part of its value, or the finder's lawful charges amount to two-thirds of its value. A sale outside these conditions is a conversion, and the finder is liable to the owner for it.

4. The Finder's Title

📖 Armory v. Delamirie, (1722) 1 Str 505

Facts: A chimney sweep's boy found a jewel and took it to a goldsmith's shop to learn what it was. The goldsmith's apprentice took the stone out of the socket under pretence of weighing it, and the goldsmith offered the boy a small sum for it, which he refused, asking for the jewel back. It was returned to him without the stone. He sued in trover.

Held: The boy succeeded. The finder of a chattel, though he does not acquire an absolute property in it, has such a property as will enable him to keep it against all but the rightful owner, and may therefore maintain an action against a person who takes it from him. As the goldsmith had not produced the stone, the jury was directed to presume the strongest case against him and to measure the damages by the value of a jewel of the finest water that would fit the socket.

Ratio: A finder acquires a possessory title good against everyone except the true owner and those claiming through him. Where a wrongdoer withholds the article, the court presumes against him on the question of its value.

4.1 Finder and occupier of the premises

📖 Parker v. British Airways Board, [1982] QB 1004 (CA)

Facts: A passenger found a gold bracelet on the floor of an executive lounge at an airport, an area to which only certain passengers had access. He handed it to an employee of the airline with his name and address, asking that it be returned to him if the owner was not found. The owner was never traced and the airline sold the bracelet and kept the proceeds. The finder sued.

Held: The finder was entitled to the bracelet. The Court of Appeal set out the competing rights. A finder acquires rights over an article found in or attached to land only if the occupier has manifested an intention to exercise control over the land and the things upon it. An occupier of a building has such rights over things in or attached to the building, but as to things merely lying unattached on the surface, he must show that he manifested such an intention before the article was found. The airline had not done so, and the finder's rights prevailed. The Court also confirmed that a finder who takes an article into his care assumes an obligation to take reasonable measures to trace the owner.

Ratio: As between a finder and an occupier, an article lying loose on the surface belongs to the finder unless the occupier had manifested an intention to control things on the premises. Articles in or attached to the land go to the occupier.

5. The Finder's Position Summarised

Question	Position under the Act
When do the obligations attach?	When the finder takes the goods into his custody, under Section 71; merely seeing them is not enough
What standard of care applies?	That of a man of ordinary prudence with his own goods of the same bulk, quality and value, under Section 151
Is he liable for loss despite care?	No, under Section 152, if he took the required care
Can he use the goods?	No. Section 154 makes unauthorised use a breach, and he must compensate for damage
Can he sue for his expenses?	No, under Section 168, the expense being voluntarily incurred
Can he retain the goods until paid?	Yes. He has a particular lien until his compensation is received
Can he claim a reward?	Only where a specific reward was offered, in which case he may sue for it and retain the goods until paid
Can he sell the goods?	Only within Section 169, and only if the thing is commonly the subject of sale
What is his title?	A possessory title good against all the world except the true owner, per Armory v. Delamirie

6. Related Points

A finder is not a trespasser provided he came lawfully into the place where the goods were found. A person who finds goods while trespassing is in a materially weaker position.
Treasure trove is governed by separate legislation and not by Section 71, articles of that description vesting in the Government.
Dishonest misappropriation of property found is an offence. Section 403 of the Indian Penal Code, 1860, now Section 314 of the Bharatiya Nyaya Sanhita, 2023, penalises dishonest misappropriation of movable property, and its Explanations deal expressly with property found, providing that a finder may take the property to protect it or to restore it to the owner, but commits the offence if he appropriates it to his own use when he knows or has means of discovering the owner.
An employee who finds goods in the course of employment ordinarily finds for his employer, and the rights are the employer's.
The true owner's title is never lost by the finding, and he may recover the goods at any time subject to limitation and to the finder's lien for his charges.

7. The Position Stated Shortly

Section 71 makes a person who finds goods belonging to another and takes them into his custody subject to the responsibility of a bailee.
The obligations attach on taking custody, not on merely seeing the goods.
The duties are those of a bailee under Sections 151 to 154 and 163: reasonable care, no mixture, no unauthorised use, and return with any accretion.
Section 168 gives the finder a lien but no right to sue for his trouble and expense.
Where a specific reward has been offered, the finder may sue for it and may retain the goods until it is paid.
Section 169 permits sale only of a thing commonly the subject of sale, and only where the owner cannot be found with reasonable diligence or refuses to pay the lawful charges, and only where the thing is perishing or the charges reach two-thirds of its value.
Armory v. Delamirie: a finder has a possessory title good against everyone but the true owner.
Parker v. British Airways Board: as against an occupier, an article lying loose on the surface goes to the finder unless the occupier had manifested an intention to control things on the premises.
Dishonest misappropriation of found property is an offence under Section 314 of the Bharatiya Nyaya Sanhita, 2023, corresponding to Section 403 of the Indian Penal Code, 1860.

8. Related Topics and Provisions

Topic or provision	Connection
Quasi-Contracts under Sections 68 to 72	The chapter as a whole
Doctrine of Unjust Enrichment	The principle underlying the chapter
Obligation of a Person Enjoying a Non-Gratuitous Act under Section 70	The neighbouring provision
Section 71, Indian Contract Act	Responsibility of a finder of goods
Sections 148 to 157, Indian Contract Act	The duties of a bailee, which the finder assumes
Sections 168 and 169, Indian Contract Act	The finder's lien, reward and power of sale
Section 163, Indian Contract Act	Bailor's entitlement to any increase or profit
Section 314, Bharatiya Nyaya Sanhita, 2023	Dishonest misappropriation of property, including property found