Central National Bank Ltd. Vs. United
Industrial Bank Ltd. [1953] INSC 77 (26 November 1953)
MUKHERJEA, B.K.
BHAGWATI, NATWARLAL H.
JAGANNADHADAS, B.
CITATION: 1954 AIR 181 1954 SCR 391
ACT:
Indian Sale of Goods Act (III of 1930), s.
30(2)-Indian Contract Act (IX of 1872), ss. 13, 14--Agreement to sell
goods-Buyer obtaining possession by fraud without paying price-Rights of bona
fide purchaser from buyer-"Consent" meaning of.
HEADNOTE:
The word "consent" in s. 30(2) of
the Indian Sale of Goods Act means "agreeing on the same thing in the same
sense" as defined in s. 13 of the Indian Contract Act and does not mean
"free consent" as defined in s. 14. Therefore, possession of goods
which is obtained by a person from another person who has agreed to sell them
to him, would be possession obtained "with the consent of the seller"
within the meaning of s. 30(2) of the Sale of Goods Act, even though it was
obtained by fraud, except where the fraud committed is of such a character as
would prevent there being consent at all.
The fact that the fraud or deception practiced
by the person obtaining possession is of such a character as to make him guilty
of a criminal offence would not make any difference in the application of this
principle.
A agreed to sell certain shares to B and sent
the share certificates and blank transfer deeds to the defendant bank to
deliver them to B on receiving payment of the price. The bank 392 sent one of
its clerks to B's office with these papers. The clerk placed them on the table
and allowed B to scrutinise then but insisted on payment of the price before B
took them. B left his office with these documents saying that he was going out
to bring the money but disappeared and subsequently pledged them with the
plaintiff Held, that in these circumstances B obtained possession of the shares
without the consent of A and that the plaintiff did not acquire any title
against the defendant bank or A. Folkes v. King ([1923] 1 K.B. 282) and Lake v.
Simmons ([1926] 2 K. B. 51) and Pearson v. Rose ([1950] 2 All E.R. 1027) relied
on.
Cahn v. Pockett's Bristol Channel Steam
Packet Co. ([1899] 1 Q.B. 643), Oppenheimer v. Frazer ([1907] 2 K.B. 50)
commented upon.
Judgment of the Calcutta High Court affirmed.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
32 of 1953.
Appeal from the Judgment and Decree dated the
12th March, 1951, of the High Court of judicature at Calcutta (Harries C. J.
and Banerjee J.) in Appeal from Original Decree dated the 21st March, 1950, of
the Calcutta High Court in its ordinary original civil jurisdiction in Suit No.
1112 of 1946.
P. C. Mullick and A. K. Dutt for the
appellant.
Sankar Banerjee (B. Das and S. N. Mukherji,
with him) for the respondent.
1953. November 26. The Judgment of the Court
was delivered by MUKHERJEA J.-This appeal is directed against a judgment and
decree of an appellate bench of the Calcutta High Court dated the 12th of
March, 1951, reversing, on appeal, the decision of a single Judge of that court
passed in Suit No. 1112 of 1946.
The suit,. out of which this appeal arises,
was commenced by the Central National Bank Limited, the appellant before us, in
the Original Side of the Calcutta High Court, for a declaration that the bank
acquired the rights of a pledgee in respect of two blocks Of shares in two
companies, to wit, the Indian Iron and Steel 'Company Ltd. and the Steel
Corporation of Bengal Ltd. and was e entitled to sell the shares in enforcement
of the pledge. There was a claim for recovery of possession of these shares and
also for, 393 damages alleged to have been suffered by the plaintiff by reason
of wrongful denial of its title by the defendant Bank.
The shares, to which the dispute relates, are
800 in number and admittedly they were the property of one Radhika Mohan
Bhuiya, the defendant No. 2 in the suit. Sometime in February, 1946, Bhuiya
agreed to sell these shares to one Dwijendra Nath Mukherjee for the price of
Rs. 38,562-8-0.
On 14th February, 1946, Bhuiya sent these
shares along with the relative transfer deeds to the defendant bank with
instructions to deliver over the share certificates and the transfer deeds to
the purchaser, against payment of the entire consideration money stated above.
On the 18th of February following, the defendant bank directed one of its
officers, to wit, Nilkrishna Paul, to see Mukherjee at his office and hand over
to him the shares after receiving from him a pay order for the sum of Rs.
38,562-8-0 signed by the Punjab National Bank. In accordance with this
direction, Paul went to the ,office of Mukherjee and saw him at his chamber at
about 11 a.m. in the morning. Mukherjee asked for the shares, but Paul refused
to make over the share certificates to him unless the pay order was given'
Mukherjee then said that he wanted to have a look at the shares and the
transfer deeds just to satisfy himself that they were all right. After that
Paul placed the shares and the transfer deeds on the table. Mukherjee examined
the share certificates one after another and when he was about to leave the
chamber along with the share certificates and the ranK transfer deeds, Paul
raised an objection and asked him not to go away without giving him the pay
order.
Mukherjee then said to Paul: "I am going
out to get the pay order ; it is ready. You take your seat ; I am coming."
With these words Mukherjee went out of his chamber and did not return
thereafter. It appears that he went straight to the office of the plaintiff
bank and pledged the shares with it, taking an advance of Rs. 29,000 in terms
of an agreement which was previously arrived at between them. What happened in
substance was this : Mukherjee gave a cheque for Rs. 100 with which an 394
account in Ms name was opened for the first time with the plaintiff bank, and
the advance of Rs. 29,000 was given to Mukherjee by way of overdraft on this
current account.
Mukherjee also executed a promissory note for
the said amount in favour of the plaintiff. It is, the common case of the
parties that Mukherjee has not been heard of since then and his present
whereabouts are unknown. Coming now to Paul, the defendant's, officer, after
waiting vainly for Mukherjee; he had no other alternative but to come back to
his office and inform his superior officer of all that had happened. A
complaint was then lodged with the police on behalf of the defendant bank. The
cheque, which was given to the plaintiff by Mukherjee, was dishonored when it
was presented for payment. The plaintiff bank thereupon wrote a letter to
Mukherjee demanding payment of the loan at once and threatening to sell the
shares in case of default. As no reply came from Mukherjee, the plaintiff sold
these shares through a broker named jalan. jalan took delivery of the shares
and gave the plaintiff a cheque for Rs. 16,000 in part payment of the price. The
payment of the cheque, however, was stopped and the police, who had already
taken the matter in hand, took possession of the shares. As Mukherjee could not
be traced, a criminal case was started against an alleged accomplice of his,
named Shaw, but this proved unsuccessful and Shaw was acquitted. The defendant
bank, who had paid the full price of these shares to Bhuiya, then presented an
application to the Magistrate, praying that the shares might be returned to it
on the ground of its being the owner thereof. On getting information of this
application, the plaintiff bank instituted the present suit, the allegation in
substance being that the plaintiff being the pledge of the shares was entitled,
in law, to the possession thereof.As has been stated already, Bhuiya, having
been paid off by the defendant bank, had no further interest in the litigation.
The fight was thus entirely between the two banks.
It is not disputed that Mukherjee did not
acquire any legal title to the shares. There was only an agreement for sale
between him and Bhuiya, and under the 395 terms of,the contract the property in
the shares could not pass to him till the price was paid. The plaintiff bank,
therefore, Was not a pledgee of the shares from the real owner. It rested its
claim entirely upon the provision of section 30(2) of the Indian Sale of Goods
Act, the language of which is as follows :- "Where a person, having bought
or agreed to buy goods, obtains, with the consent of the seller, possession of
the goods or the documents of title to the goods, the delivery or transfer by
that person or by a mercantile agent acting for him, of the goods or documents
of title under any sale, pledge or other disposition thereof to any person
receiving the same in good faith and without notice of any lien or other right
of the original seller in respect of the goods shall have effect as if such
lien or right did not exist." The plaintiff's case was that it received
the shares by way of pledge in good faith and without notice of any defect in
the title of Mukherjee who had agreed to purchase these shares from Bhuiya and
had actual possession of the same with the consent of the seller. Consequently,
the pledge would be effective under the provision of section 30(2) of the Sale
of Goods Act in the same way as if the right of the original seller did not
exist.
The contention of the defendant bank on the
other hand was that Mukherjee was not in possession of the Shares with the
consent of the seller, nor was the plaintiff a bona fide pledgee without notice
of thedefect of title. The whole controversy thus centeredround the point as to
whether on the facts that transpired in evidence, the plaintiff bank was
entitled to avail itself of the provision of section 30(2) of the Indian Sale
of Goods Act. Mr. Justice Sarkar of the Calcutta High Court, who tried the
suit, decided this question in favour of the plaintiff. The learned judge was
of opinion that Mukherjee had obtained possession of the shares with the
consent of Bhuiya or rather his agent, the bank officer, within the meaning of
section 30 (2), Indian Sale of Goods Act, and it was not at all material for
purposes of this sub-section that the consent was 396 induced by fraud of
Mukherjee or that his act amounted to an offence of "larceny by trick"
according to English law. It was further found that the plaintiff acted in good
faith without notice of any defect of title; and ,in view of these findings the
trial judge decreed the plaintiff's suit.
There was an appeal by the defendant against
this judgment which was heard by a bench consisting of Trevor Harries C. J. and
Banerjee J. The learned judges allowed the appeal and reversed the judgment of
the trial court holding that the defendant's agent never consented to
Mukherjee's obtaining possession of the shares as buyer. There was no intention
to give delivery at all. It was Mukherjee who took the shares and bolted and
"his act was as much theft as if he had taken them out of Nilkrishna
Paul's pocket." It is against this decision that the present appeal has
come before us at the instance of the plaintiff and the point for consideration
is, whether the view taken by the appellate bench of the High Court is right.
Mr. Mullick, who presented the appellant's
case with commendable fairness and ability, has argued before us that on the
facts of this case the appellate court ought to have held that the plaintiff
did acquire the rights of a pledgee in respect to the disputed shares under the
provision of section 30 (2), Sale of Goods Act. There is no dispute, he says,
that there was a valid contract of sale regarding these shares between Bhuiya,
the real owner, and Mukherjee; and that the plaintiff was a bona fide pledgee
from Mukherjee without notice of any other's rights has been found as a fact by
the trial Judge and this finding has not been reversed in appeal. The only
other thing necessary to entitle the plaintiff to claim the protection of
section 30 (2) of the Act is to show that Mukheriee obtained possession of the
shares with the consent of the seller or his agent, and it is on this point
alone that the courts below have' taken divergent views. It is argued by the
learned counsel that the word " possession" used in the section means
nothing else but physical custody and whether there was consent of 397 the owner
or not has to be determined with reference to the 2definition of
"consent" as given in section 13 of the Indian Contract Act. If there
was consent in fact, it is immaterial that it was induced by fraud or
misrepresentation and in the determination of this matter, no principle of
criminal law' and much less the technicalities of the English criminal law
should be imported. On the facts the learned counsel argues that the
defendant's agent really consented to part with the possession of the shares
and allow Mukherjee to have them, although he was duped by the false promise
given by Mukherjee which the latter never intended to keep.
The propriety of the propositions of law put
forward on behalf of the appellants has not been, for the most part,.
controverted by Mr. Banerjee. who appeared
for the defendant respondent. The dispute between them, as we shall presently
see, is mainly on the point as to whether, on the facts of the case, it could
be held that Mukherjee got possession of the shares with the consent of the
defendant's agent. As, however, the points of law have been discussed in the
judgments of the courts below and reference has been made by the learned Judges
to a number of English cases turning upon analogous provisions in cognate
statutes in England, we think it proper to express our views shortly on the
points raised, just for the purpose of clearing up any doubt that might exist
regarding the meaning and implication of the word "consent" as has
been used in section 30 (2) of the Sale of Goods Act. The two principal
questions that require consideration are first, whether the consent necessary
under section 30 (2) of the Sale of Goods Act must be a free consent
uninfluenced by fraud or false representation, and :secondly, whether the
existence of such consent is negatived, as a matter of law, it a person of the
requisite description mentioned in the section obtains possession of goods from
the owner by trick or other deceitful means which makes his act punishable as a
crime. There is no decision on these points by any High Court in. India and we
have been referred to a number of 398 cases decided by English courts where
similar questions have arisen in regard to the provisions of section 25 (2) of
the English Sale of Goods Act and section 2(1) of the Factors Act which employ
almost the same language with reference to dispositions made by a purchaser or
mercantile agent 'who obtained possession of' goods with the consent of the
real owner. It is neither necessary nor desirable for our purpose to enter into
a. detailed. Discussion of the English cases that have been cited before us. We
would only examine, where necessary, the salient principles upon which the
leading pronouncements of the English judges purport to be based and see
whether they throw any light on the questions that require consideration in
this case.
We agree with the learned counsel on both
sides that the word "consent" as used in section 30 (2) of the Sale
of Goods Act means "agreeing on the same thinning the same sense" as
defined in section 13 of the Indian Contract Act.
There is no definition of "consent"
in the Sale of Goods Act itself, but section 2(15) of the Act definitely lays
down that the expressions used and not defined in the Act, but which are
defined in the Indian Contract Act, shall have the same meaning as. has been
assigned to them in the latter Act. Section 14 of the Contract Act defines the expression
"free consent" and a consent is tree when it is not caused by
coercion, under influence, fraud, misrepresentation or mistake. A consent
induced by false representation may not be free, but it can nevertheless be
real, and' ordinarily the effect of fraud or misrepresentation is to render a
transaction voidable only and not void. If an innocent purchaser or pledgee
obtains goods from the person in possession thereof, whose possessory right is,
defeasible on the ground of fraud but had not actually been defeated at the
time when the transaction took place, there is no reason why the rights of such
innocent purchaser or pledge should not be protected. The, right in the
possessor or bailee in such circumstances is determinable no doubt but so long
as it is not determined it is sufficient to enable him to create tide in,,
favour of an innocent transferee for value without 399 notice. This proposition
is well recognised in English law and seems to us to be well founded on
principle. In Cahn v.
Pockett's Bristol Channel Steam Packet
Company( 1), Collins L. J. made the following oftquoted observation :-
"However fraudulent a person in actual custody may have been, in obtaining
the possession, provided it does not amount to larceny by trick and however
grossly he may abuse confidence reposed in him, or violate the mandate under
which he got possession, he can, by his disposition, give a good title to the
purchaser." The opinion of the learned judge in regard to the so- called
exception where there is a "larceny by trick" has been the subject of
much comment both favourable and adverse in later cases as we shall see presently;
but the main proposition enunciated by him has never been disputed( 2 ).
The law on this point has been thus summed up
by Denning L. J. in Pearson v. Rose(3):
"The effect of fraud...... is as a rule
only to make the transaction voidable and not void, and if,. therefore, an
innocent purchaser has bought the goods before the transaction is avoided the
true owner cannot claim them back. For instance, if a mercantile' agent should
induce the owner to pass the property to him by some false presence as by
giving him a worthless cheque, or should induce the owner to entrust the
property to him for display purposes, by falsely pretending that he was in a
large way of business when he was not, then the owner cannot claim the goods
back from an innocent purchaser who has bought them in good faith from the
mercantile agent...... The consent may have been obtained by fraud but, until
avoided, it is a consent which enables the Factors Act to operate." Thus
obtaining possession of goods by false pretences does not exclude the operation
of the Factors Act in (1) [1899] 1 Q.B. 643 at 659.
(2) Vide the cases referred to by Scrutton L.
J. in Folks v. King [1923], I K.B. 282 at 301.
(3) [1950] 2 All E.R. 1027 at 1032.
400 England and in our opinion it does not
exclude the operation of section 30(2) of the Sale of Goods Act in India.
The position, however, is entirely different
if the fraud committed is of such a character as would prevent there being
consent at all on the part of the owner to give possession of the goods to a
particular person. Thus A might obtain possession of goods from the owner by
falsely representing himself to be B. In such cases the owner can never have
consented to the possession of goods by A; the so-called consent being not a
real consent is a totally void thing in law. In Lake v. Simmons( 1) Lord
Haldane made the following observations while dealing with a similar point
"The appellant thought that he was dealing with a different person, the
wife of Van der Borgh, and it was on that footing alone that he parted with the
goods. He never intended to contract with the woman in question. It was by
deliberate fraud and trick that she got possession. There was not the agreement
of her mind with that of the seller that was required in order to establish any
contractual right at all. The latter was entirely deceived as to the identity
of the person with whom he was transacting. In circumstances such as these, I
think that there was no con- sensus ad idem." The position, therefore, is
that when the transfer of possession is voidable merely by reason of its being
induced by fraud, which can be rescinded at the option Of the owner, the
consent which followed false representation is a sufficient consent within the
meaning Of section 30(2) of the Sale of Goods Act. But where the fraud induced
an error regarding the identity of the person to whom or the property in
respect of which possession was given, the whole thing is void and there is no
consent in the sense of an agreement of two persons on the same thing in the
same sense.
The other question that requires
consideration is, whether it would make any difference in the application of
the principles stated above if the fraud or (1) [1927] A. C. 487, 500.
401 deception, practised by a person in
obtaining possession of goods from the owner, is of such a character as to make
him guilty of a criminal offence ? Having regard to what has been said above,
this question should not present any difficulty, had it not been for the fact
that an amount of complexity has been introduced into the subject by reason of
certain technical rules of the English criminal law. It is to be remembered
that what section 30(2) of the Sale of Goods Act contemplates is that the
buyer, to whom the property in the goods sold has not passed as yet, must obtain
possession of the goods with the consent of the seller before he can give a
title to an innocent purchaser or pledgee. There can be no dispute that to
establish consent of the owner of the goods, it is his state of mind that is
the only material thing for consideration and not that of the receiver of the
goods. Even if the owner was induced to part with the goods by fraudulent
misrepresentation he must yet be held to have consented to give possession ;
and the fact that the receiver had a dishonest intention or a preconcert design
to steal or misappropriate the goods and actually misappropriated them, may
make him liable for a criminal offence, but the consent of the owner actually
given cannot be annulled thereby. In order that a fraudulent receiver of goods
must be punished' criminally, the material thing is his dishonest intention ;
but as was said by Bankes L. J. in Folkes v.
King(1), that is altogether immaterial for the purpose of determining whether
there was consent on the part of the owner of the goods under the Factors Act.
"The two considerations," observed the learned judge, " should
be kept entirely distinct. To allow the one to be defeated by consideration of
the other is in my, opinion to sweep away a great part of the protection which
the Factors Act was intended to provide." The same ratio, in our opinion,
applies in regard to the, provisions of the Sale of Goods Act.
As has been said already, obtaining of goods
by, false pretences does not negative consent of the owner (1) [1923] 1 K.B.
282 at 297.
402 of the goods for purposes of the English
Factors Act. Even larceny by a bailee does not exclude consent according to the
English decisions. This means that if the owner allows an agent to have his
goods 'on hire or for repair and the agent later on makes- up his mind to steal
or misappropriate them and sell them to another, the agent may be guilty of
larceny as bailee but the owner's consent to his possession could not be
affected thereby. But curiously enough in English law a difference is made
between larceny by bailee and larceny by trick ; and if in the illustration
given above the agent instead of making up his mind subsequently to steal the
goods had that dishonest intention at the very beginning when he got
possession, he is guilty of "larceny by trick" and the possession in
law is deemed to remain with the owner and he is regarded as "taking"
without the owner's consent. This apparently involves a legal fiction, for
although the goods are actually delivered over by the owner to the accused
person, yet because of the trick committed by the latter the owner is still
supposed to continue in possession of the goods and the accused is held guilty
of larceny for taking possession of the goods against the will of the owner.
Ordinarily, the offence of larceny by trick, according to the English law, can
be committed in two ways:
first, where the owner of goods, being
induced thereto by trick, voluntarily parts with the possession of goods in
favour of the accused but does not intend to pass property therein and the
recipient has the animus furandi. Secondly, when the accused contrives to get
possession of goods by representing himself to be some other person or by
deceiving the owner into thinking that he was delivering different goods( 1).
In the second class of cases, there is no real consent on the part of the owner
and when a larceny by trick of this type is committed, it is well settled in
England that the operation of the Factors Act would be excluded. The position
under the Indian law is the same in accordance with the principles explained
above.
(1) Vide Whitehorn v. Davison [1911] 1 K.B.
463, 479.
403 With regard to the first category of
cases,however, the decisions of the English courts are not at all uniform. As
has been said already, Collins J. in Cahn v. Pockett's Bristol Channel etc.(1)
made the observation that "however fraudulent a person in actual custody
may have been in obtaining possession, provided it did not amount to larceny by
trick...... he can by his disposition give a good title." The observation
as regards the exception in case of larceny by trick, though it could not rank
higher than an obiter, was accepted as good law by the Court of Appeal in
England in Oppenheimer v. Frazer( 2 ). On the other hand, it was held by Bankes
L. J. and and Scrutton L. J. in Folkes v.
King(3) that when consent was In fact given
by the owner of the goods, it was immaterial that the receiver was guilty of
larceny by trick, and this view was approved of by the majority of the Court of
Appeal in Lake v. Simmons(4), though Atkin L. J. delivered a dissenting
judgment The decision in Lake v. Simmons ( 4 ) was reversed by the House of
Lords(5) but their Lordships proceeded not on any technical doctrine of
criminal law but on the broad ground which we have already discussed that there
was a mistake fatal to there being a consenting mind at all. The view taken in
Folkes v. King(3) has been approved of in the recent decision of Pearson v.
Rose( 6). Thus, to quote the language of Lord Sumner, "there is a signal
and indecisive conflict of authoritative opinion on this point" (7). In
our opinion, the view taken in Folkes v. King(3 ) is the proper view to take;
and if, as was said by Scrutton L. J.
in that case, the Parliament could not
possibly have intended to apply the artificial distinctions of criminal law to
a commercial transaction governed by the Factors Act, there is still less
justification for importing a (1) [1899] 1 Q. B. 643 at 659.
(2) [1907] 2 K.B. 50.
(3) [1923] 1 K.B. 282.
(4) [1926] 2 K.B. 51.
(5) [1927] A.C. 487.
(6) [1950] 2 All E.R. 1027.
(7) Vide Lake v. Simmons [1927] A. C. 487 at
510.
404 highly technical rule of English criminal
law which had its origin' in a legal fiction devised by English Judges to
punish a thief, who would otherwise have escaped conviction, into the
provisions of the Indian Sale of Goods Act.
Whether there is consent or not has to be
proved as a fact in accordance with the principles of the law of contract and
when it is, proved to, exist, its existence cannot be nullified by application
of any rule of criminal law.
It is in the light of these principles that
we would proceed now to examine the facts of this case. The whole question is,
whether Mukherjee got possession of the shares with the consent of the seller,
and it is not disputed that the consent of the defendant's clerk, who was
acting as the agent of the owner, would be as effective as the consent of the
owner himself.
As has been said already, Bhuiya sent the
shares to the defendant bank on the 14th of February, 1946. The letter written
by him to the defendant on that date concludes as follows :
"I shall be highly obliged if you kindly
realise the sum of Rs. 38,562-8-0 as per the enclosed bill from Mr. D. N. Mukherjee
and deliver the shares to him and credit the realised sum to my account No. 1
and oblige." On the next day, that is to say on the 15th, Bhuiya wrote to
Mukherjee informing him that he had deposited in the Barabazar branch of the
United Industrial Bank, 300 iron and 500 Steel Corporation shares and Mukherjee
was requested to take delivery of the shares against payment immediately.
On the 18th of February following, Nilkrishna
Paul, an old employee in the cash department of the defendant bank, was
directed by the head cashier to see Mukherjee at his office for the purpose of
collecting the money from him and delivering over the shares. Sachindra Sen, an
officer of the defendant under whose advice Paul was sent to Mukherjee, says in
his deposition, that he definitely instructed Paul not to deliver the shares
unless he received payment. As regards the mode of payment, Sen says that it
was already 405 arranged between him and Mukherjee that instead of paying the
money in cash, he would give a pay order of the Punjab National Bank, where he
had an account, upon the defendant bank. Sen told Paul to examine the pay order
carefully and to part with the shares only if he was satisfied about it;
otherwise, he should come back with the
shares to the office. Paul, who is the principal witness on behalf of the'
defendant, says in his deposition that the instruction which he received was to
deliver the shares after he obtained the pay order. Paul saw Mukherjee at his
office chamber at about 1 1 a.m, on the 18th and on his telling Mukherjee that he
had come from the United Industrial Bank to deliver over the shares, Mukherjee
asked him to take his seat. Mukherjee then asked for the shares. Paul told him
that he could not deliver the shares unless he was given the pay order.
Mukherjee then said "I just want to have a look at the shares and the
papers only to see whether they are all right or not." Upon this, Paul
placed the shares on the table. What happened afterwards is thus narrated by
him in his deposition :
"Then he was looking at the shares one
after another.
When Mukherjee was about to leave the
chamber, I told him not to go away but to give me the pay order. He told me 'I
am going out, to get the pay order, it is ready, you take your seat, I am
coming.' Then he went out of the chamber." It is quite clear that when
Paul placed the share certificates upon the table and allowed Mukherjee to
scrutinise them, he did not part with the possession of or control over the
shares. It is true that Mukherjee handled the papers, but he did so in the presence
-of Paul who was sitting by his side in front of the same table. At the most,
Mukherjee could be said to have the barest physical custody for the purpose of
examining the papers. When Mukherjee went out of the room with the shares in
his hand, he undoubtedly got possession of the shares ; but on the evidence on
the record, we do not think it possible to hold that he got possession with the
consent of Paul. The evidence shows that Paul actually protested and objected
to 4-93 S. C. India/59. his going away with the shares without making any
payment.
It is true that Mukherjee told Paul that he
was going out for getting the pay order, and would be coming back immediately;
but we cannot agree with Mr. Mullick that Paul consented to Mukherjee's taking
away the papers, relying on the latter's promise to come back with the pay
order.
Mukherjee gave Paul no opportunity whatsoever
to express his assent or dissent in this matter. In spite of Paul's protest,
lie bolted away with the papers asking Paul to wait. Paul says in his
deposition that he waited for 2 or 3 minutes, and when Mukherjee did not come
back, he became anxious and went out of the chamber towards the counter where
he found an old gentleman sitting. The gentleman told him that Mukherjee was
nowhere in the office. This shows that Paul did not really rely upon the
assurance of Mukherjee , and did not allow Mukherjee to have possession of the
shares upon that assurance. It was against his express desire that Mukherjee
took the shares and left the chamber with them and he had to wait for a minute
or two as he could not think of any other alternative open to him at that
juncture. Taking the evidence as a whole, we think that the decision of the
appellate bench of the High Court is correct and that on the facts and
circumstances of this case it cannot be held that Mukherjee got possession of
the shares with the consent of Paul. The result, therefore, is that the appeal
is dismissed and the judgment of the appeal court is affirmed. As both the
plaintiff and the defendant were innocent persons, who suffered on account of
the fraud of a third party, we direct that the parties shall bear their own
costs in all the courts.
Appeal dismissed.
Agent for the appellant: Sukumar Ghose.
Agent for the respondent: B. N. Ghose.
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