1. I think that the protection given to pledgees by Section 178 of the Contract Act is similar to that given to buyers under Exception 1 to Section 108 of the same Act and that the possession intended is the same in both Sections . In interpreting the section the English cases are of no assistance. The meaning of the section must be determined by a consideration of the statute and of the words of the section itself. The word ' possession' in the section is clearly not intended to cover all cases in which the goods, etc., are in the physical control of the pledgor because the ' possession' in the first part of the section is distinguished from the ' custody' of them in the last paragraph of the same section. It has, therefore, been held that goods in the custody of a servant, though they are in his physical possession, cannot be pledged under the section. BiddomayeeDabee Dabee v.Sitaram and Biddomayee Datee Datee v. Soobul Das Mullick I.L.R. 4 Cal. 497 and Shanhar Murlidhar v. Mohanlal Jaduram I.L.R. 11 B. 704 and the same has been held to apply to jewels in the custody of a wife. Seagar v. Hukma Kessa I.L.R. 24 B. 458 Moreover the possession intended is not the possession of a person who has a limited interest, because that case is specially provided for in Section 179.
2. The word 'possession' is also used in Section 108, exception and though the words in that section are not identical with the words in Section 178, they are very similar and I think that the possession intended is the same. Section 108 contains the words notwithstanding any instructions of the owner to the contrary', which are not in Section 178 and it has been held continuously ever since 1873 when Greenwood v. Holquette 12 B.L.R. 42 was decided that the existence of these words in the section indicate that the possession meant in that section is a possession which is unqualified and not to be restricted otherwise than by the owner giving instructions to the person who has it. The section was, therefore, held not to apply to a person in possession of a piano under a hire purchase agreement, but that the possession intended must be similar to that of a factor or agent. The possession must be such a possession as an owner has, not a qualified possession such as the hirer of goods has, or where the possession is for a specific purpose.
3. As the word ' possession' in both Sections is intended to be restricted and as the wording of both the Sections is so similar, I think the word as used in Section 178 of the Contract Act is intended to have the same meaning as in Section 108, though the words 'notwithstanding any instructions of the owner to the contrary' are not repeated in the former section. In these circumstances the pledgee of a jewel hired is not, in my opinion, protected.
4. I think, therefore, that the decree of the Subordinate Judge is right and would dismiss this appeal with costs.
Subrahmania Aiyar, J.
5. I agree. Sections 179 and 178 of the Indian Contract Act, which are the only Sections bearing on the question under consideration, respectively contemplate mutually exclusive cases. Section 179 refers to certain cases where the pawnor has possession which is necessarily traceable to and is an incident of a limited interest he has in the goods pledged. On the other hand, Section 178 refers to cases where a pawnor has a document of title to goods or has possession of goods unconnected with and independent of, any interest of his therein, though as one invested with the symbol or indicia of property, he may, notwithstanding the absence of any interest, make a valid transfer of the goods in certain circumstances.
6. In the present case, the pawnor had, no doubt, possession, but as that possession was traceable to and was an incident of, his right as the hirer of the jewel for four days, it was not such possession as is contemplated by Section 178. In the course of the argument, Mr. Sivaswami Aiyar referred to the case of a pledge by a factor in possession, who has made an advance thereon so as to make his agency one coupled with an interest, in favour of a pawnee acting in good faith and without any reason to believe that the pawnor was making the pledge improperly, as an instance inconsistent with this view.
7. This argument however reverses the true relation of things and assumes that the possession of the factor in the case supposed is the consequence of his interest, while the fact is the possession is directly attributable to his character as agent--in other words it is attributable to the agency irrespective of whether it is one coupled with an interest or not.
8. As to Section 179, the language thereof assumes and necessarily implies that the limited interest contemplated therein is such as to make a pledge valid to some extent and not altogether invalid. That, however, is not the case here, for, though the pawnor had a right to retain and use the jewel for the very limited period of four days, yet such right even if it were not merely personal had terminated at the date of the pledge, which was consequently a wholly tortious act--a conversion for which the owner may maintain an action against the hirer as well as the person taking delivery from him. (See Beal on Bailments, pp. 226 and 231). Section 179 also could not therefore apply.
9. As neither of the provisions of the Contract Act that could be relied on in support of the pledge in question applies, the second appeal fails and must be dismissed with costs.