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Ramdas Vithaldas Durbar Vs. Chhaganlal Pitamber and S. Ameerchand and Co. - Court Judgment

LegalCrystal Citation
SubjectContract;Property
CourtMumbai
Decided On
Judge
Reported in(1916)18BOMLR670
AppellantRamdas Vithaldas Durbar
RespondentChhaganlal Pitamber and S. Ameerchand and Co.
DispositionAppeal dismissed
Excerpt:
.....act (ix of 1872), sections 102, 103, 108 and 178 - stoppage in transit-expressions 'document showing title', 'document of title,' and 'instrument of title' to goods-test to be applied in determining whether a document is a document of title-railway receipts are instruments of title-assignment by endorsement of railway receipts by the buyer by way of pledge-right of unpaid vendor-transfer of property act (iv of 1882), sections 4 and 137.;whenever any doubt arises as to whether a particular document is a 'document showing title' or a 'document of title' to goods for the purposes of the indian contract act (ix of 1872) the test is whether the document in question is used in the ordinary course of business as proof of the possession or control of goods, or authorising or purporting to..........his behalf. section 102 provides that the right of stoppage ceases if the buyer, having obtained a bill of lading or other ' document showing title' to the goods, assigns it, while the goods are in transit, to a second buyer, who is acting in good faith and who gives valuable consideration for them.3. the expression ' document showing title ' is used again in section 108, which refers to a ' bill of lading, dock warrant, warehouse-keeper's certificate, wharfinger's certificate or warrant or order for delivery, or other document showing title to goods.' the same enumeration is found in 3.178, except that in this section the expression ' document of title ' is substituted for 'document showing title.' sections 108 and 178, though they very possibly extend, at least cover the same ground.....
Judgment:

Parker, J.

1. The question which arises on these appeals is whether a railway receipt issued to the consignor of goods in the form appearing on pp. 70 and 71 of the record is ' an instrument of title ' within the meaning of Section 103 of the Indian Contract Act.

2. Section 103 of this Act is one of a group of sections relating to a seller's right to stop goods while they are in transit to the buyer. Section 99 defines the right. Section 100 provides that goods shall be deemed to be in transit while in course of transmission to and not yet come into the possession of the buyer. Section 101 lays it down that the right does not, except in the cases thereinafter mentioned, cease on the buyers reselling the goods while in transit and receiving the price, but continues until the goods have been delivered to the second buyer or to some one on his behalf. Section 102 provides that the right of stoppage ceases if the buyer, having obtained a bill of lading or other ' document showing title' to the goods, assigns it, while the goods are in transit, to a second buyer, who is acting in good faith and who gives valuable consideration for them.

3. The expression ' document showing title ' is used again in Section 108, which refers to a ' bill of lading, dock warrant, warehouse-keeper's certificate, wharfinger's certificate or warrant or order for delivery, or other document showing title to goods.' The same enumeration is found in 3.178, except that in this section the expression ' document of title ' is substituted for 'document showing title.' Sections 108 and 178, though they very possibly extend, at least cover the same ground as, the provisions of the Indian Factors' Act (XX of 1844), which with certain -modifications not material for the purposes of this appeal made the provisions of the English 1 actors' Act, 1842, applicable to British India. Both the last-mentioned Acts use, the expression document of title to goods, and define it as including any bill of lading, dock warrant, warehouse-keeper's certificate, wharfinger's certificate, warrant or order for the delivery of goods, and any other document used in the ordinary course of business as proof of the possession or control of goods or authorising or purporting to authorise, either by endorsement or by delivery, the possessor of the document to transfer or receive the goods thereby represented. In their Lordships' opinion the only possible conclusion is that whenever any doubt arises as to whether a particular document is a ' document showing title' or a ' document of title' to goods for the purposes of the Indian Contract Act, the test is whether the document in question is used in the ordinary course of business as proof of the possession or control of goods, or authorising or purporting to authorise, either by endorsement or delivery, the possessor of the document to transfer or receive the goods thereby represented. In the present case it has been found as a fact by both the Courts below, and is not, and indeed cannot, be disputed before this Board that the railway receipts in question satisfy this test. It is therefore unnecessary to consider whether, apart from evidence as to the ordinary course of business, the effect of Sections 4 and 137 of the Transfer of Property Act (II of 1900) would be conclusive on the point. It is clear that, even without the assistance of these sections, the receipts in question are documents showing title to goods within Sections 102 and 108 and documents of title to goods within Section 178 of the Indian Contract Act.

4. Returning to Section 102, its effect may be stated as follows: First, so far as bills of lading are concerned, it enacts the rule of the common law by which a second buyer who obtained an assignment of the bill of lading obtained constructive delivery of the goods represented by the bill, so that the vendor's right of stoppage ceased. Secondly, so far as other documents of or showing title to the goods are concerned, it makes their assignment to a second buyer have the same effect as the assignment of a bill of lading. If, therefore, the respondents in these appeals had been second buyers and not pledgees of the goods represented by the receipt in question, the appellant's right of stoppage would have been displaced.

5. Passing now to Section 103, it will be found to provide that where a bill of lading or other 'instrument of title' to any goods is assigned by the buyer of such goods by way of pledge to secure an advance made specifically upon it in good faith, the seller cannot, except on payment or tender to the pledgee of the advance so made, stop the goods in transit. If this section had used the expression ' document showing title ' or ' document of title ' instead of the expression ' instrument of title,' it is, in their Lordships' opinion, quite clear that it would have applied to the receipts in question, and that the vendor could not have stopped the goods in transit without payment or tender to the respective respondents of the amounts of their advances, which were admittedly made in good faith and specifically upon the security of the receipts in question. In other words, the section would have done, in the case of assignments by way of pledge, precisely what had been done in the previous section in the case of assignments upon a resale.

6. Great stress was naturally laid by the appellants on this difference of expression. They argued that ' instruments of title' were a particular species of the genus ' documents of title,' and they attempted to define the species as consisting , of documents which conferred title' in the same manner and sense as title is conferred by a bill of lading. They supported this argument by the following considerations : First, they contended that the Indian Contract Act was primarily a consolidation Act, and therefore ought, in default of a clear expression to the contrary, to be read as embodying the law as existing when it was passed. Secondly, they urged the improbability of the Indian Legislature having taken the lead in a legal reform for which this country had to wait until the passing of the English Factors' Act of 1877. Their Lordships cannot attach any weight to either consideration. The Indian Contract Act recites the expediency of defining and amending certain parts of the law relating to contracts. It is therefore an amending as well as a consolidating Act, and beyond the reasonable interpretation of its provisions there is no means of determining whether any particular section is intended to consolidate or amend the previously existing law. Again, their Lordships do not see any improbability in the Indian Legislature having taken the lead in a legal reform. Such reform may have been long recognised as desirable without an opportunity occurring for its embodiment in a legislative enactment, and it may well be that the opportunity occurred sooner in India than in this country, where the calls for legislative action are so much more numerous.

7. It remains to consider the appellant's argument, so far as it is based on the use of the expression ' instrument' instead of 'document' of title. In the first place it is to be observed that ' title ' in both expressions can relate only to the right to receive delivery of the goods to ' which the instrument or document relates. It can have no thing to do with ownership. A bill of lading may in this sense be an instrument or document conferring title; but, if so, the same is true of all the other documents contained in the genus ' document of title.' The fact that a document confers title in this sense cannot therefore be used as the distinguishing mark of a particular species of the genus. The truth is that the only point in which a bill of lading differs from other 'documents of title' is that its. assignment, whether upon a resale or by way of pledge, operates as a constructive delivery of the goods to which it refers. The appellant's counsel was unable to mention, and their Lordships are not aware of any other document with this peculiarity. In their Lordships' opinion the suggestion that the words ' or other instrument of title ' were inserted per cautelam in case there were any such instrument other than a bill of lading is far-fetched. Moreover, they cannot help thinking that the section, if intended to have the effect for which the appellant contends, would have been otherwise worded. Further, no reason can be suggested why, if (as is clearly the case) the Legislature intended by Section 102 to assimilate other documents of title to bills of lading for the purpose of determining the right of stoppage in transit in favour of a bond, fide purchaser for value, it should not have by Section j 03 intended to do the same in favour of a bona fide pledgee for value. Under these circumstances little importance can be attached to the fact that one section employs the word ' document ' and the other the word ' instrument,' more especially as the use of the two expressions, document showing title and document of title, in the same sense shows that the draughtsman was not very careful in his use of language,

8. For the foregoing reasons their Lordships are of opinion that these appeals fail, and should be dismissed with costs, and they will humbly advise His Majesty accordingly.


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