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Emperor Vs. Phirozshah Manekji Gandhi - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case NumberCriminal Application For Revision No. 183 of 1934
Judge
Reported in(1934)36BOMLR731; 152Ind.Cas.706
AppellantEmperor
RespondentPhirozshah Manekji Gandhi
DispositionAppeal rejected
Excerpt:
presidency-towns insolvency act (iii of 1909), section 102 - undischarged insolvent-obtaining goods on jangad-' obtaining credit.'; obtaining goods on jangad (i.e. sale or return) from a person by an undischarged insolvent, without informing him that he is such, amounts to ' obtaining credit' within the meaning of section 102 of the presidency-towns insolvency act, 1909. - section 31(4) (since repealed) :[tarun chatterjee & h.l.dattu, jj] jurisdiction of high court - respondent, a government company, chartered appellants vessel to carry rock phosphate from togo to west coast india - dispute arose between parties - under agreement, respondent had chosen mumbai as port of delivery vessel carrying rock phosphate was delivered at port of bombay - application filed by respondent earlier.....ragnekar, j.1. the question in this revisional application is, whether obtaining goods on jangad is 'obtaining credit' within the meaning of section 102 of the presidency-towns insolvency act, 1909.2. the applicant, who is an undischarged insolvent, was charged under section 406 of the indian penal code, or alternatively, under section 102 of the presidency-towns insolvency act. the learned presidency magistrate, fifth court, bombay, held the alternative charge established, and sentenced him to four months' rigorous imprisonment and a fine of rs. 100.3. the facts are that, on february 21, 1933, the applicant visited the shop of the complainants, who are jewellers. he took on approval or jangad a ring valued at rs. 290, the period of approval being three days, and signed an entry to that.....
Judgment:

Ragnekar, J.

1. The question in this revisional application is, whether obtaining goods on jangad is 'obtaining credit' within the meaning of Section 102 of the Presidency-towns Insolvency Act, 1909.

2. The applicant, who is an undischarged insolvent, was charged under Section 406 of the Indian Penal Code, or alternatively, under Section 102 of the Presidency-towns Insolvency Act. The learned Presidency Magistrate, Fifth Court, Bombay, held the alternative charge established, and sentenced him to four months' rigorous imprisonment and a fine of Rs. 100.

3. The facts are that, on February 21, 1933, the applicant visited the shop of the complainants, who are jewellers. He took on approval or jangad a ring valued at Rs. 290, the period of approval being three days, and signed an entry to that effect in the complainants' approval book on the delivery of the ring. Admittedly, he is an undischarged insolvent, and the evidence shows that he did not at this time disclose this fact to the complainants. On the day following after he obtained the ring on jangad, the applicant pledged it with a Marwadi for Rs. 100. He redeemed the ring on February 27, but pledged it again with the same Marwadi on February 28. As he failed to return the ring, or to pay for the same, within three days as agreed, the complainants informed the police, who obtained the ring from the Marwadi. It is in these circumstances that the applicant was brought to his trial.

4. Section 102 of the Presidency-towns Insolvency Act is in the terms following:

102. An undischarged insolvent obtaining credit to the extent of fifty rupees or upwards from any person without informing such person that he is an undischarged insolvent shall,...be punishable with...&c.;

5. The ingredients of the offence, therefore, are: (1) obtaining credit, (2) to the extent of Rs. 50 or upwards, and (3) without disclosing that the person obtaining credit is an undischarged insolvent. There is no dispute in this case that the last two conditions were satisfied. The question is, whether obtaining goods on jangad amounts to 'obtaining credit'. The learned Counsel for the applicant says it does not, and relies on an English case. That, however, was a decision under a section of the English statute, which does not correspond with Section 102 of the Presidency-towns Insolvency Act.

6. Section 24 of the Indian Sale of Goods Act, 1930, is in these terms:

24. When goods are delivered to the buyer on approval or 'on sale or return' or other similar terms, the property therein passes to the buyer-

(a) when he signifies his approval or acceptance to the seller or does any other act adopting the transaction;

(b) if he does not signify his approval or acceptance to the seller but retains the goods without giving notice of rejection, then, if a time has been fixed for the return of the goods, on the expiration of such time, and, if no time has been fixed, on the expiration of a reasonable time.

7. The marginal note to the section is, ' Goods sent on approval or ' on sale or return'.' A jangad transaction is a 'sale or return', and involves a representation that the purchaser will (a) signify his approval or acceptance of the goods and pay for it; and (b) if not, return the same within the period fixed for their return, or where no time is fixed, on the expiration of a reasonable period. But until one or the other condition is fulfilled, no property passes to the buyer. The delivery of goods under such a contract, therefore, means that the buyer obtains the goods subject to certain conditions and subject to an option to become the owner thereof, in which case he is liable to pay the price. It is difficult to see why until either the one or the other condition is fulfilled it cannot be said that the seller gave him credit, or why the buyer cannot be held to have obtained credit.

8. The word 'credit' is defined in the short Oxford Dictionary as meaning ' belief ', ' confidence ', ' trust', ' faith ', and also ' confidence in a buyer's ability and intention to pay at some future time for goods entrusted to him without present payment.' To give credit, therefore, is to trust in a person's ability and intention to pay, and to obtain credit is to tell a person in effect that he is able and intends to pay.

9. In the case of a jangad transaction the owner of the goods gives credit to the deliveree though it is subject to certain conditions, and to that extent the deliveree obtains credit. The section is satisfied if credit in fact is given, and we are clearly of opinion that in the case of a 'sale or return' or jangad transaction it is given. The object of the section is clearly to protect the unwary public from undischarged insolvents, and to take any other view would be to defeat it. It is well-known that the jangad transactions in this country are very common and often involve property of a considerable value.

10. In our opinion, the conviction is right, and the application fails and must be rejected.


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