Sections 168 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.
Section 168 says what a finder of lost goods may and may not claim from the owner: no suit for compensation for voluntary trouble and expense, but a right to retain the goods until compensation is received, and a right to sue for a specific reward if the owner offered one. Section 169 allows a finder to sell a thing commonly on sale in two stated cases. If you have found something valuable, or lost something and someone else has it, our legal consultation service can help.
The finder of goods has no right to sue the owner for compensation for trouble and expense voluntarily incurred to preserve the goods and find the owner; but he may retain the goods against the owner until he receives such compensation. Where the owner has offered a specific reward for the return of goods lost, the finder may sue for the reward and retain the goods until he receives it (s.168). A finder of a thing commonly the subject of sale may sell it if the owner cannot be found with reasonable diligence, or refuses on demand to pay the lawful charges, and (1) the thing is in danger of perishing or losing the greater part of its value, or (2) the lawful charges amount to two-thirds of its value (s.169).
The finder's responsibility comes first
Section 71 states the responsibility of a finder of goods: see section 71: responsibility of finder of goods. Sections 168 and 169 sit in the chapter on bailment and say what rights go with it. A finder is not defined as a bailee by these sections; this article deals only with the words of sections 168 and 169.
Section 168: no suit, but a right to retain, and a right to sue for a reward
The text: "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."
| Situation | Can the finder sue? | Can the finder retain the goods? |
|---|---|---|
| Finder spent trouble and expense voluntarily to preserve the goods and find the owner | No | Yes, until he receives the compensation |
| Owner offered a specific reward for return | Yes, for the reward | Yes, until he receives the reward |
Key words:
- "voluntarily incurred": the trouble and expense the finder took on without being asked.
- "retain the goods against the owner": a right to hold on to the goods, not a right to sue.
- "specific reward": an offer made by the owner for the return of the lost goods.
The Act prints no illustration under section 168.
Section 169: when the finder may sell
The text: "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."
Three parts must be read together:
- Which things. A thing "commonly the subject of sale".
- Two preconditions on the owner's side, either of which suffices: the owner cannot be found with reasonable diligence, or the owner refuses on demand to pay the lawful charges.
- Two grounds for sale, either of which suffices: (1) the thing is in danger of perishing or of losing the greater part of its value; (2) the lawful charges amount to two-thirds of its value.
| Requirement | What the text says |
|---|---|
| Kind of thing | "commonly the subject of sale" |
| Owner position | Cannot be found with reasonable diligence, or refuses on demand to pay lawful charges |
| Ground for sale | In danger of perishing or losing the greater part of its value, or lawful charges reach two-thirds of its value |
The "two-thirds" figure appears in the text exactly as quoted. The section does not say what "reasonable diligence" requires, or how the sale is to be conducted.
A modern example of our own
Yamini finds a leather bag in a taxi containing a laptop and papers, and spends her own money advertising to find the owner. Under section 168 she has no right to sue the owner for what she spent, but she may keep the bag against the owner until the compensation is paid. If the owner had put up a notice offering a fixed reward for the bag's return, Yamini could sue for that reward and keep the bag until she gets it.
For section 169: Zakir finds a consignment of fresh fruit abandoned in a lane. It is a thing commonly the subject of sale. He cannot trace the owner with reasonable diligence, and the fruit is in danger of perishing. Section 169 permits him to sell it. A different example: Zakir finds a lost bicycle, pays storage charges, and the owner refuses on demand to pay them. If the lawful charges grow to two-thirds of the bicycle's value, ground (2) is met.
What can the parties change?
These sections deal with a finder and an owner who have no prior contract, so there is no "contract to the contrary" wording. The text does not suggest that either section can be varied; a finder and owner who do make an agreement should record it in writing.
What the sections do not say
- Section 168 does not set an amount for compensation.
- Section 169 does not say what must be done with the sale proceeds. That is not addressed in the text.
- Neither section says the finder must keep records, though doing so is sensible.
- They do not cover things found in the course of employment or on private premises; the text is silent.
Practical points
- Finders: keep a note of when and where you found the item, what you did to find the owner and what it cost.
- Owners: if you offer a reward for lost goods, state it clearly, because section 168 allows the finder to sue for a specific reward.
- Before any sale under section 169, record your attempts to find the owner and the reason the sale is necessary.
- Other laws on lost property or specific items may also apply; check before acting.
- A bailee's lien for work done is explained in section 170.
Need help with found or lost goods?
Whether a finder may keep, claim for or sell a lost item depends on the facts and on what the owner has offered. Our legal consultation team can look at the situation against sections 168 and 169. Bring a note of how the goods were found and the steps taken to trace the owner.
Key takeaways
- A finder cannot sue for compensation for voluntary trouble and expense, but may retain the goods against the owner until compensation is received (s.168).
- If the owner offered a specific reward, the finder may sue for it and retain the goods until it is paid.
- A finder may sell a thing commonly on sale if the owner cannot be found or refuses to pay lawful charges, and the thing is in danger of perishing or the charges reach two-thirds of its value (s.169).
Read next
- Section 71: responsibility of finder of goods
- Section 170: bailee's particular lien
- 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.