# Gahn v. Pockett's Bristol Ohamiel'Steam Packet Co. ([1899]

- **Citation:** [1954] 1 S.C.R. 391
- **Court:** Supreme Court of India
- **Decided:** 1951-03-12
- **Case number:** Civil Appeal No. 32 of 1953
- **Bench:** B. K. MuKHERJEA, Bhagwati, Jagannadhadas
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/gahn-v-pockett-s-bristol-ohamiel-steam-packet-co-1899-274
- **Pages:** 16

## Headnote

Indian Sale of Goods Act (Ill of 1930), s. 30(2)-,:-lndian Con·
tract Act (IX of 1372), ss. 13, 14--Agreement to sell good1-Buyer
obtaini ig pouession by fraud u•ithout paying price-Rights of bona
fide purchaser from buyer-.. Consenl', meaning of.
The word "consent" in s. 30(2) of the
Indian Sale of Goods
Act means "'agreeing on the same thing in the same sensc
0
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 sdl
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 practised 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 appli·
cation of this p~ciple.
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
!953
Raja Kulkarni '
and O!hnJ.
v.
TheStauof ·
Bom1'ay.
Ghulam HaJan J.
!953
Nou. 26.
392
SUPREME COURT REPORTS
[1954]
1903
sent one of its clerks to B's office with these papers. The clerk placed
them on the table and allowed B to scrutinise them but'insisted on
Oeni'ral National payment of the price before B took them.
B left his office with
Rank Ltd.
these documents saying tha\ he was going out to bring the money,
.
v.
. but disappeared and subsequently pledged them with the plaintiff:
Unitfd Industrial Held, that in these circumstances B obtained possession of tho
Bank Ltd.
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] 1K.B.282) and Lake v. Simmons ([1926)
2 K. B. 51) and Pearson v. Rose ([1950] 2 All E.R. 1027) relied on.
Gahn v. Pockett's Bristol Ohamiel'Steam Packet Co. ([1899]
1 Q.B. 643), Oppenheimer v. Frazer ([1907) 2 KB. 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. 1112of1946.
P. C. Mullick and A. K. Dutt for the appellant.
Sankar Banerjee (B. Das and S. N. Mukher.Ji, with
him) for the respondent.
1953.
November 26. The Judgment of the Court
was delivered by
MuKHER.TEA 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. 1112of1946.
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 entitled to sell the shares in
enforcement of the pledge.
There was a claim for
recoyery of possession of these shares a,nd also for
' ...
••
•
'(
. '),
•
s.c.:Et.
SUPREME COURT REPORTS
\
39.3
damages alleged to have been suffered by the plaintiff
1953
by reason of wrongful denial of its title by the defend- 0
l N
.
1
entra
atsona
ant bank.
Bank Ltd.
The shares, to which the dispute relates, are 800 in
v.
number and admittedly they were the property of one United Industrial
Radhika Mohan Bhuiya, the defendant No. 2 in the
Bank Ltd.
suit. Sometime in February, 1946, Bhuiya agree

## Text

• - I 1· .r' ..
, ,,_,,..
:_ ··--
S.C.R.
SUPREME COURT REPORTS -
391
_to prevent the other unions or other -workers
from
forming a fresh' union 'and enrolling a higher - percentage so as to acquire the sole right of representation.
The appellants challenge, the validity of the
Act as
infringing_ their fundamental rights and yet they
base
their case of disc-rimination on the
provisions
of the
same Act. This position is not in accord with reason
or principle.·
\Ve hold, therefore, that the appellants have made
out no case for interference with the orders of the courts
below.
\Ve uphold the convictions and sentences
and
dismiss the appeal.
Appeal dismissed.
Agent for the appellant : Rajinder -Narain. - -
_ Agent for -the respondent : G. H. Rajadhyaksha. -
CENfRAL NATIONAL BANK LTD.
'
v. -
-
- .
UNITED INDUSTRIAL BANK'LTD.
[B. K. MuKHERJEA, BHAGWATI and
JAGANNADHADAS JJ.]
Indian Sale of Goods Act (Ill of 1930), s. 30(2)-,:-lndian Con·
tract Act (IX of 1372), ss. 13, 14--Agreement to sell good1-Buyer
obtaini ig pouession by fraud u•ithout paying price-Rights of bona
fide purchaser from buyer-.. Consenl', meaning of.
The word "consent" in s. 30(2) of the
Indian Sale of Goods
Act means "'agreeing on the same thing in the same sensc
0
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 sdl
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 practised 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 appli·
cation of this p~ciple.
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
!953
Raja Kulkarni '
and O!hnJ.
v.
TheStauof ·
Bom1'ay.
Ghulam HaJan J.
!953
Nou. 26.
392
SUPREME COURT REPORTS
[1954]
1903
sent one of its clerks to B's office with these papers. The clerk placed
them on the table and allowed B to scrutinise them but'insisted on
Oeni'ral National payment of the price before B took them.
B left his office with
Rank Ltd.
these documents saying tha\ he was going out to bring the money,
.
v.
. but disappeared and subsequently pledged them with the plaintiff:
Unitfd Industrial Held, that in these circumstances B obtained possession of tho
Bank Ltd.
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] 1K.B.282) and Lake v. Simmons ([1926)
2 K. B. 51) and Pearson v. Rose ([1950] 2 All E.R. 1027) relied on.
Gahn v. Pockett's Bristol Ohamiel'Steam Packet Co. ([1899]
1 Q.B. 643), Oppenheimer v. Frazer ([1907) 2 KB. 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. 1112of1946.
P. C. Mullick and A. K. Dutt for the appellant.
Sankar Banerjee (B. Das and S. N. Mukher.Ji, with
him) for the respondent.
1953.
November 26. The Judgment of the Court
was delivered by
MuKHER.TEA 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. 1112of1946.
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 entitled to sell the shares in
enforcement of the pledge.
There was a claim for
recoyery of possession of these shares a,nd also for
' ...
••
•
'(
. '),
•
s.c.:Et.
SUPREME COURT REPORTS
\
39.3
damages alleged to have been suffered by the plaintiff
1953
by reason of wrongful denial of its title by the defend- 0
l N
.
1
entra
atsona
ant bank.
Bank Ltd.
The shares, to which the dispute relates, are 800 in
v.
number and admittedly they were the property of one United Industrial
Radhika Mohan Bhuiya, the defendant No. 2 in the
Bank Ltd.
suit. Sometime in February, 1946, Bhuiya agreed to Mukhcrjca J.
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 h~ wanted to have a look at
the shares and tlie 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 blank 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
SUPREME COURT REPORTS
[1954)
1963
account in his name was opened for the first time with
Oentral--;;ational the plainMtiffkbhan~, abnd the afdvance off Rs. 2h9;000 was
Bank Ltd.
given to
u
eqee y way o overdra t on t is current
.v.
account. Mukherjee also executed a promissory note
United Induotrial for the said amount in favour of the plaintiff. It is
Bank Ltd.
the common case of the parties that Mukherjee has not
been heard of since then and his present whereabouts
J:i ukherjea J. 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 defendat bank. The cheque, which was given to
the plaintiff by Mukherjee, was dishonoured 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, w.as 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 accompiice 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 pledgee 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
•
S.C.R.
SUPREME COURT REPORTS
395
terms of the contract the property in the shares could
195a
not pass to him till the price was paid. The plaintiff ,
-N- .
1
· ·
f l
f
( cntral l ationa
bank, therefore, was not a pledgee o tie shares rom
Bank Ltd.
the real owner. It rested its claim entirely upon the
v.
provision of section 30(2) of the Indian Sale of Goods United Industrial
°"""
Act, the language of which is as follows :-
Bank Ltd.
J.
•
"Where a person, having bought or agreed to buy
MttkherJea J.
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 Bh~iya 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 the defect
of title.
The whole controversy thus centered round
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 meaniJ.1g 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
sbPREl'riE. ooDRT -R:E:Po:R'I's
i9;3
induced by fraud of Mukherjee or that his act amounted
a
-1 ,. , .
1 to an offence of "larceny bv trick " according to
entra ·''fl 1ona
.
.,
.
-
.
Bank Ltd.
English law. It was further found that the plamtiff
v.
acted in good faith without notice of any defect of
United Indu,trial title; and in view of these findings the trial Judge
Bank Ltd.
decreed the plaintiff's suit.
Mitkherjea J.
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 Mukherjee
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
•
.... '
,;'.
)
•
S.C.R.
SUPREME COURT REPORTS
397
the owner or not has to be determined with reference to
l953
the definition of " consent " as given in section 13 of n
-1 N
.
.
If h
. £
, •ntra
ationa
the Indian Contract Act.
t ere was consent m act,
Bank Ltd.
it is immaterial that it was induced by fraud or misv.
representation and in the determination of this matter, United Industrial
no principle of criminal law and much less the techniBank Ltd.
calities of the English criminal law should be imported.
Mukherjea J.
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 fals'e 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 cbnsent uninfluenced by fraud or false representation, and
secondly, whether the existence of such consent is
negatived, as a matteroflaw, if 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 rio decision on these points by any High Court
in India and we have been referre<l to a number of
•
,
398
SUPREME COURT REPORTS
[1954]
J95J
cases decided by English courts where similar questions
·-N .
1 have arisen in regard to the provisions of section 25 (2)
Oentml
atwna
f
E
l' h S l
f G d
.
Bank Lid.
o the
ng is
a e o
oo s Act and sect10n 2 ( 1) of
v.
the Factors Act which employ almost the same
Fni1ed fmltwrial language with reference to dispositions made by a purBank Ltd,
chaser or mercantile agent who obtained possession of
goods with the consent of the real owner. It is neither
Mukl.erjea J,
d . bl ,.
necessary nor es1ra e ior om· purpose to enter into a
detailed discussion of the English cases that have been
cited before us.
vVe 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 thing
in 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 free when it is not caused
by coercion, undue 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 pledgee 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 title in
fovour of aq iqnocent tra11sferee fof Vfl!lUe Witpout
I
' '
•
,,
•
S.C.R.
SUPREME COURT REPORTS
399
notice. This proposition is well recognised in English
1953
law and seems. to us to be well founded on principle. 0
z N
.
1
.
entra
ationa
In Cahn v. Pockett's Bristol Channel Steam Packet
Banlc Ltil.
Oompany(1), Collins L. J. made the following oftv.
quoted observation :-
United Industrial
Bank Ltd.
" 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 socalled 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(8) :
"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 pretence 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) (\899] 1 Q.B. 643 at 659,
(2) Vide the cases referred to by Scrutton L.J. iil Folkes v, King (1923}
1 l\,B. 282 at 301.
'
(3) [1950) z:All E.R. 10~7 at 1032.
~3
Mukherjea J.
' 'S.GR. .
. SUPREME'COURT REPORTS
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 preconcerted 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
actual! y 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('), 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 owrier
(I) [1923] I K.B; 282 at '297.·
1953
Ctntral National'
Bank.Lid.
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United lndustritil
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SUPREME cout::r Rl£POH/:t&
401
deception, practised by a person in obtaining possesIYSJ
sion of goods from the owner, is of such a character as 0
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regard to what has been said above, this question
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should not present any difficulty, had it not been for United Industrial
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duced into the subject by reason of certain technical
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rules of the Engbs cnmina aw.
tis 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 preconcerted 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 good_s must be punished
criminally, the material thing is his dishonest intention; but as was said by Bankes L.J. in Folkes v.
King('), 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 sw1eep 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.
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As has been said already, obtaining of goods by.
false pretences does not negative consent of the owner
(l) (1923] I l'~.B. 282 at 297 •
402
SUPREME COURT :REPORTS
[1954]
1963
of the goods for purposes of the English Factors Act.
Central National Even larceny by a bailee does not exclude consent
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according to the English decisions.
This means that
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if the owner .allows an agent to have his goods on hire
United Industrial or for repair and the agent later on makes up his mind
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to steal or misappropriate them and sell them to anoMukherjea J. th er, the agent may be guilty oflarceny 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 iu the illustration given above
the agent instead of making up his mind subsequently
to steal the goods had that dishonest intention at the
very begiuning 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 fiirandi.
Secondly, when the
accused contrives to get possession of goods 'by representing himself to be some other person or by deceiviug
the owner into thinking·that he was delivering different goods ('). 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~· Davison [1911] 1 K.B. 463 1 479,
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SUPREME COURT REPORTS
403
With regard to the first category of cases, however,
1953
the decisiohs of the English courts are not at all uni- 0
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Pockett's Bristol Channel etc. ( ') made the observation·
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that "however fraudulent a person in actual custody United Industrial
may have been in obtaining possession, provided it
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did not amount to larceny by trick ...... he can by his Mukherjea J.
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 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
(I) [1899] l Q.B, 643 at 659.
(2) [1907) 2 K.B. 50.
(3) [1923] l K.B. 282.
(4) [1926] 2 K.B, 51.
(5) [1927] A.C. 487.
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(6) [1950) 2 All E.R. 1027.
(7) Vide Lake'" Simmons (1927] A.C. 487 at 510,
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SUPREME CODR'l' REPOR'l'S
(1954j
1963·
highly technical rule of English criminal law which had
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pumsh a thief, whb would otherwise have escaped conv- ·
viction, into the provisions of the Indian Sale of Goods
u,.;,,d Industr;ai Act.
Whether there is consent or not has to be
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M!tkherJca J. of the law of c:ontract 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."
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·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 aud 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
lllOde of payment, Sen says that it was already
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SUPREME COURT REPORTS
405
1963
arranged between him and Mukherjee that instead of
paying the money in cash, he would give a pay order Central National
of the Punjab National Bank, where he had an acBank Ltd.
count, upon the defendant bank. Sen told Paul to
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examin<:! the pay order carefully and to part with the United Industrial
shares only if he was satisfied about it; otherwise, he
Bank Ltd.
should come back with the shares to the office. Paul, Mukherjea J.
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 orde~. Paul saw Mukherjee at his office
chamber at about 11 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. 'Phe evidence
shows that faul actually protesteq and objected to
406
SUPREME COURT REPOR,TS
[1954].
1963
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his going away with the shares without making any
Uentral Nationaipayment. It is true that Mukherjee told Paul that he
Bani' Lt4.
was going out for getting the pay order, and would be
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. coming back immediately; but we cannot agree with
United Industrial Mr. Mullick that Paul consented to Mukherjee's taking
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away t e papers, re ymg on
e atter s promise to
Mttkherjea J. 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, he
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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