Section 164 of ICA : Section 164: Bailor'S Responsibility To Bailee

Explanation using Example

Imagine that Rahul lends a car to Priya, which he claims to own, but in reality, the car belongs to his friend Aakash. Priya, believing Rahul to be the rightful owner, accepts the car and uses it for her daily commute. A week later, Aakash claims his car back, and Priya has to return it, which disrupts her plans and causes her to incur rental costs for a replacement vehicle. According to Section 164 of The Indian Contract Act, 1872, Rahul would be responsible for the loss Priya sustains due to the wrongful bailment, as he was not entitled to bail the car to her.