Sections 158 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Two sections of the chapter on bailment deal with bailments where the bailee gets no payment. Section 158 says the bailor must repay the bailee's necessary expenses where the bailee is to keep, carry or work on the goods without remuneration. Section 159 says a lender of a thing for use may call it back at any time if the loan was gratuitous, with a safeguard for a borrower who has relied on the loan. If you lend goods without charge, or hold goods for someone else without payment, our legal consultation service can help you understand the position.
Where the goods are to be kept, carried or worked on by the bailee for the bailor, and the bailee is to receive no remuneration, the bailor must repay the bailee the necessary expenses incurred for the purpose of the bailment (s.158). The lender of a thing for use may at any time require its return if the loan was gratuitous, even though lent for a specified time or purpose; but if the borrower, relying on the loan, has acted so that early return would cause him loss exceeding the benefit he derived, the lender who compels return must indemnify him for the excess (s.159).
Section 158: repayment of necessary expenses
The text: "Where, by the conditions of the bailment, the goods are to be kept or to be carried, or to have work done upon them by the bailee for the bailor, and the bailee is to receive no remuneration, the bailor shall repay to the bailee the necessary expenses incurred by him for the purpose of the bailment."
| Limb | Plain meaning |
|---|---|
| "to be kept or to be carried, or to have work done upon them" | The three kinds of bailment covered: keeping, carriage, work |
| "for the bailor" | The bailee acts for the bailor |
| "the bailee is to receive no remuneration" | The bailee is not paid for his service |
| "the necessary expenses incurred by him for the purpose of the bailment" | Only necessary expenses, incurred for the bailment |
| "the bailor shall repay" | The bailor must repay them |
Three points. The section applies where no remuneration is to be paid. The expenses must be necessary. The text does not define "necessary"; the Act prints no illustration. Where the bailee is paid, the section does not apply as written, and the contract's own terms govern the position.
Section 159: restoration of goods lent gratuitously
The text: "The lender of a thing for use may at any time require its return, if the loan was gratuitous, even though he lent it for a specified time or purpose. But if, on the faith of such loan made for a specified time or purpose, the borrower has acted in such a manner that the return of the thing lent before the time agreed upon would cause him loss exceeding the benefit actually derived by him from the loan, the lender must, if he compels the return, indemnify the borrower for the amount in which the loss so occasioned exceeds the benefit so derived."
Two parts:
- The lender's right. For a gratuitous loan he may "at any time" require return, even if lent for a set time or purpose.
- The safeguard. If the borrower, relying on the loan for a specified time or purpose, acted in a way that makes early return cost him more than he gained from the loan, the lender who compels return must indemnify him for the excess of the loss over the benefit.
The Act prints no illustration under section 159. A worked calculation may help. If the borrower gained a benefit equal to 10,000 rupees from the loan so far, and early return causes him a loss of 25,000 rupees, the lender who compels return must indemnify him for the amount by which the loss exceeds the benefit, that is 15,000 rupees. That calculation is our own, not the Act's.
The two sections side by side
| Section 158 | Section 159 | |
|---|---|---|
| Kind of bailment | Keeping, carriage or work, bailee unpaid | Loan of a thing for use, gratuitous |
| Who is protected | The bailee (repaid expenses) | The lender (can recall); the borrower (indemnity for excess loss) |
| Key words | "necessary expenses" | "at any time"; "loss exceeding the benefit" |
| Illustration | None printed | None printed |
A modern example of our own
Manoj agrees to keep Nisha's antique clock safely at his home for a year without charge, and has it carried to his home at Nisha's request. Manoj pays Rs 1,500 for a packing case and transport that were necessary. Under section 158, since he receives no remuneration, Nisha must repay those necessary expenses.
A loan example: Om lends his power tool to Pooja for a month, without charge, to complete a renovation job. Pooja, relying on the month's loan, hires two workers for the month. Om demands the tool back after a week. Under section 159 he may require its return at any time, but if early return causes Pooja loss that exceeds the benefit she has had from the tool, Om must indemnify her for the excess if he compels the return.
What can the parties change?
Neither section uses wording such as "in the absence of any contract to the contrary". Section 158 is framed around "the conditions of the bailment", so the parties' terms about who pays what decide whether it applies. Section 159 applies to a "gratuitous" loan. The text does not say whether the lender and borrower may agree that the lender will not recall the loan or that no indemnity will be owed; take advice on any such clause.
What the sections do not say
- Neither section defines "necessary" or "gratuitous".
- Section 158 does not say when or how the bailee should claim.
- Section 159 does not say how the "benefit actually derived" is valued.
- Neither section deals with a bailment for hire; payment terms there are for the contract.
Practical points
- Unpaid bailees: keep receipts for every expense incurred for the goods and give the bailor an itemised account.
- Bailors: agree in advance which expenses the bailee may incur and up to what amount.
- Lenders: if you may need the thing back, say so, and note section 159's safeguard for a borrower who has relied on a fixed period.
- Borrowers: if you take steps in reliance on a loan, keep a record of what you did and what it cost.
- Bailor, bailee and bailment are defined in section 148.
- The return of goods when the time ends is in sections 160 to 162.
Need help with an unpaid bailment or a loan of goods?
Lending, storing or carrying goods without charge still creates rights and duties. Our legal consultation team can look at what was agreed and explain how sections 158 and 159 apply. Bring any messages or notes about the arrangement and a list of the expenses.
Key takeaways
- Where the bailee is to keep, carry or work on goods without remuneration, the bailor must repay his necessary expenses (s.158).
- A lender of a thing for use may require its return at any time if the loan was gratuitous (s.159).
- If early return causes the borrower loss exceeding the benefit he derived, a lender who compels return must indemnify him for the excess.
- The Act prints no illustration under either section.
Read next
- Sections 160 to 162: return of goods bailed and death ending gratuitous bailment
- Sections 155 to 157: mixture of goods with and without bailor's consent
- Bailment and Pledge: sections 148–181 overview
Disclaimer: Based on the text of the Indian Contract Act, 1872 as consulted on 1 October 2026. Many questions under this Act turn on case law and on the wording of the particular contract, which this article does not cover. It is general information, not legal advice; check the official text and take advice before acting.