Indian Contract Act Section 159 — Restoration of goods lent gratuitously
CHAPTER IX OF BAILMENT
Commercial / Corporate
Summary
A lender who gives something for free use can ask for it back at any time, even if the loan was for a fixed period or a specific purpose. This right to demand return applies regardless of what was originally agreed.
However, if the borrower relied on the loan for that fixed time or purpose and returning the item early would cause them a loss greater than the benefit they actually got from using it, the lender must compensate the borrower. The compensation covers the amount by which the borrower's loss exceeds the benefit they received, but only if the lender insists on getting the item back before the agreed time.
Official 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.