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Katta Ramaswami Gupta Vs. Kamalammal - Court Judgment

LegalCrystal Citation
SubjectContract;Trusts and Societies
CourtChennai
Decided On
Reported inAIR1922Mad44; (1922)42MLJ32
AppellantKatta Ramaswami Gupta
RespondentKamalammal
Cases ReferredSeshappier v. Subramania Chettiar I.L.R.
Excerpt:
.....by the consent of the owner, in possession of any goods &c, and it is urged for the defendant that meenakshi ammal being in possession of these goods was able to pass the ownership of the goods to himself as he acted in good faith and there was nothing to show him that meenakshi ammal had no right to sell. ' the cases cited to us seem clearly to show the nature of possession alluded to in the two sections, and from the authorities we can deduce no other inference than that the defendant is not protected in the present case. 42 was a case of a hire of a piano on the instalment system which was sold by the hirer and purchased by the defendant in good faith. 424 alluded to above was a case of a jewel hired to the defendant who pledged it with another the latter acting in good faith; it.....1. in this case the plaintiff lent certain jewels to one meenakshi ammal for the purpose, as the plaintiff says, of decking the latter's daughter for a prospective bridegroom. meenakshi ammal took the jewels and pledged them with thangavelu mudali and chinnaswami sah. the defendant after redeeming the jewels from the pledgees bought them from meenakshi ammal. the plaintiff brought the suit against the defendant for the recovery of the value of the jewels which was decreed to her. the defendant now appeals against this judgment.2. two points are raised on defendant's behalf, first, one of fact, that the sale to the defendant was by the consent of the plaintiff. we have examined the evidence with great care. it appears that the plaintiff, who is described as somewhat simple-minded, handed.....
Judgment:

1. In this case the plaintiff lent certain jewels to one Meenakshi Ammal for the purpose, as the plaintiff says, of decking the latter's daughter for a prospective bridegroom. Meenakshi Ammal took the jewels and pledged them with Thangavelu Mudali and Chinnaswami Sah. The defendant after redeeming the jewels from the pledgees bought them from Meenakshi Ammal. The plaintiff brought the suit against the defendant for the recovery of the value of the jewels which was decreed to her. The defendant now appeals against this judgment.

2. Two points are raised on defendant's behalf, first, one of fact, that the sale to the defendant was by the consent of the plaintiff. We have examined the evidence with great care. It appears that the plaintiff, who is described as somewhat simple-minded, handed the jewels to Meenakshi Ammal without the knowledge of her husband but with the knowledge of one of her sons a High Court Vakil. Meenakshi Ammal who was subsequently convicted in connection with these jewels contended that the jewels were given to her to sell or pledge in order to raise money for some theatrical business in which the plaintiff was interested. This story, was, we think, quite rightly discredited as improbable by the judge, and on the evidence it is to our minds perfectly clear that the plaintiff did in fact lend the jewels to Meenakshi Arnmal for the purpose of decking her daughter and for no other. This gratuitous bailment, for such it is in law, took place in 1917. The pledge by Meenakshi Ammal and the subsequent purchase by the defendant took place some 6 or 7 months afterwards, i. e., in June 19l8. On the facts we are of opinion that the sale to the defendant was not with the plaintiff's consent.

3. The more serious defence is that the defendant was a purchaser for value without notice of any defect in the title of Meenakshi Ammal to these jewels and that he is therefore protected either as falling within the Trusts Act or secondly by the provisions of Sections 108 and 178 of the Contract Act. To take the first of these, it was, strenuously argued by Mr. G. Krishna-swami Aiyar on the defendant's behalf that as Meenakshi Ammal was bailee she was therefore a trustee; if not an express trustee at least as falling within chapter IX of the Trusts Act and that the defendant as purchaser from her was therefore protected by Section 96 of the Trusts Act. Now, although a bailee may be in some respects in a fiduciary position as regards his bailor it is a very different thing from saying that a bailee is a trustee pure and simple.' To begin with, the definition of a 'trust' in Section 3 of the Indian Act is that it is an obligation annexed to the ownership of property whereas a 'bailment' is a contract where the ownership in the chattel bailed does not pass to the bailee, and the fact that fiduciary relationship may exist between the bailee and the bailor does not necessarily make the bailee a trustee within the meaning of the Trusts Act. Now although a bailee may have sufficient interest in the property bailed to be able to maintain an action against a third person in respect of the property, still once the bailment is terminated owing to the tortious act of the bailee, there can be no doubt that the bailor is at once reinvested with the full ownership of the property bailed, and there is thus no bailment if the thing delivered is not to be specifically returned or accounted for, i. e. no bailment where the whole property is transferred. Now, with regard to chapter IX of the Trusts Act, it is headed 'Of certain obligations in the nature of trusts.'' Of those obligations Sections 81 to 86 are examples of what is known in the English law as 'resulting trusts;' those from S.87 to Section 94 are cases of 'constructive trusts.' There is no illustration appended to the sections, nor has any authority been quoted to us to cause us to include bailment among the obligations set out in this chapter. The contention seems to have been derived from the fact that in re re Hallett's Estate (1880) L.R. 13 Ch. D. 696 Thesiger L.J. at p 722 says that 'the principles , relating to the following of trust property are equally applicable to the case of a trustee, and to the case of factors, bailees, or other kinds of agents. . . . whereas a specific chattel is intrusted by one man to another, ... then,. either the chattel itself, or the proceeds of the chattel, whether the chattel has been rightfully or wrongfully disposed of, may be followed at any time.' This extract from the judgment of the learned Lord Justice does not, in our opinion, warrant the larger assumption that bailments are to be included in Chapter IX of the Trusts Act so as to afford the defendant in this case protection under Section 96. Further in Halsbury, Vol. 1, p. 563 para 1142 it is said, 'Further, where the bailee, by a wrongful dealing with the chattel, has determined the bailment, all third persons, however, innocent, who purport in any way to deal with the property in the chattel, are guilty of conversion and liable to the bailor.' This disposes of the first contention under this head,

4. Now with regard to the sections of the Contract Act, the learned Judge below held that the defendant was not protected as, although he may have acted in good faith, he did not satisfy the second part of Section 17 that the goods had not been obtained from their lawful owner by means of an offence or fraud. With regard to this we think with respect that it may have escaped the attention of the learned Judge that, although the bailment was in November, the pledge by Meenakshi Ammal did not take place till a very considerable length of time had elapsed. If she had represented to the plaintiff that the jewels were wanted for decking her daughter when all the time she intended to raise money on them by pledge, that would clearly be obtaining the goods by false pretences or criminal breach of trust within the meaning of Section 410 of the Indian Penal Code. It is said for the plaintiff that illustration (a) to Section 108 of the Contract Act covers this case. But we would point out that the illustration only applies to cases of theft. Here the jewels were obtained with the consent of the owner and the Illustration does not apply. It may however be that Meenakshi Ammal did in fact borrow them for the purpose she stated, but that owing to the negligence of the plaintiff in recovering the jewels from her within a reasonable time afterwards she conceived the notion of converting the jewels to her own use. We cannot therefore say there is reliable evidence that the goods were obtained by fraud. It appears to us that this is a case of conversion like that in Seshappier v. Subramania Chettiar I.L.R. (1916) Mad. 678. Now with regard to Section 108 exception 1, the question turns on the meaning of the word 'possession'--' when any person is, by the consent of the owner, in possession of any goods &c;, and it is urged for the defendant that Meenakshi Ammal being in possession of these goods was able to pass the ownership of the goods to himself as he acted in good faith and there was nothing to show him that Meenakshi Ammal had no right to sell. The possession alluded to in Exception 1 is of course the possession of a factor or an agent for sale. Section 178 contains very similar words but omits; the words 'by consent of the owner' and 'notwithstanding any. instructions of the owner to the contrary.' As Pollock points out in his commentary on the Contract Act the absence of those expressions in Section 178 has no bearing on the section and does not warrant any inference that the word 'possession' is used in a different sense to what it is in Section 108. In fact in Naganada Davey v. Bappu Chettiar I.L.R. (1904) Mad. 424. Boddam, J. held that the possession in the two sections is similar. It may be remarked that in a note on Naganada Davey v. Bappu Chettiar I.L.R. (1904) Mad. 424 Pollock remarks 'it is impossible to hold that the act meant to authorize a pledge in such a case; yet the hirer surely has possession and not bare custody. The language of the Act seems incautiously wide.' The cases cited to us seem clearly to show the nature of possession alluded to in the two sections, and from the authorities we can deduce no other inference than that the defendant is not protected in the present case. The earliest case Greenwood v. Holquette (1873) 12 Ben. L.R. 42 was a case of a hire of a piano on the instalment system which was sold by the hirer and purchased by the defendant in good faith. It was held that Section 108 Exception 1 does not apply where there is only a qualified possession, e.g. that of a hirer or where the possession is for a specific purpose. Such possession is of a different nature from the unqualified possession referred to in the exception to the section where the owner has power to give instructions. Again, in Shanker Maurlidhar v. Mohanlal Jaduram I.L.R(1914) 11 Bom 704 it was held that where detention is allowed for a limited purpose it is not within the exception, and that in' the case of a gratuitous bailment of a chattel, the possession remains constructively with the owner. Naganada Davey v. Bappu Chettiar I.L.R. (1904) Mad. 424 alluded to above was a case of a jewel hired to the defendant who pledged it with another the latter acting in good faith; held that he was not protected by Section 178 or 179 as the possession of the hirer was not that contemplated by Section 178. Seshappier v. Subramania Chettiar I.L.R. (1914) Mad 383 which was subsequently reversed in Seshappier v. Subramania Chettiar I.L.R.(1916) Mad. 678 turned on a question of evidence i.e. as to whether the husband of the defendant was in fact an agent for sale or simply entrusted with a jewel to find a purchaser and settle the price in the presence of the plaintiff. Seshagiri Aiyar, J who first tried the case held on the evidence that he was the latter. The learned Judges who heard the Letters Patent Appeal decided on the evidence that he was an agent for sale. This cannot affect the question of law involved in this case. It seems therefore clear on the authorities, and none were quoted contra, that the defendant here cannot avail himself of either Section 108 or Section 178 of the Contract Act though he purchased the jewellery in good faith from Meenakshi Ammal, since she had only qualified possession and possession as we find on the evidence for a specific purpose viz., that of decking her daughter for a briderg rom. We therefore affirm the decision of the learned trial judge and dismiss the appeal with costs.


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