1. This is an appeal by the plaintiff from a decree dis-missing his suit, claiming a perpetual Injunction restraining the defendant banking company from selling the shares pledged by him with the defendant. The plaintiff had a current overdraft account with the defendant. To secure the overdraft, the plaintiff pledged divers shares with the defendant. The plaintiff executed a letter of lien dated April 27, 1955, empowering the defendant to sell and dispose of the shares on default of payment of the moneys due on demand. On July 1, 1959, the plaintiff was indebted to the defendant for the sum of Rs. 36,46,627-82 nP. On July 1, 1959 the defendant instituted suit No. 858 of 1959 against the plaintiff for the recovery of Its dues and obtained leave under Order 2 Rule 2 of the Code of Civil Procedure, 1908 to take appropriate proceedings in respect of the shares. We are informed that this suit has now been decreed in full. During the pendency of this suit, on February 6, 1960 the defendant served a notice on the plaintiff demanding payment of its dues and stating in default of payment on or before February 18, 1960 'the pledged shares or such of them as the defendant might decide to sell would be sold by the defendant i. exercise of its rights and powers as the pledgeeand the nett proceeds would be applied in reduction of the plaintiff's indebtedness.' On June 27, 1960, the plaintiff wrote to the defendant stating inter alia that in view of the pendency of the suit instituted by the defendant, the defendant had no right to sell or dispose of any of the shares. On June 29, 1960, the plaintiff instituted this suit claiming perpetual injunction restraining the deten-dant from selling the shares on the ground that in view of the institution of Suit No. 858 of 1959, the defendant had no longer any right to sell the shares. By a subse-quent amendment made on September 7, 1961, the plaintiff alleged that the notice dated February 6, 1960, was not a reasonable notice of the sale and/or was in contravention of Sec, 176 of the Indian Contract Act. There was also a prayer in the plaint asking for a decree directing the defendant to accept the bullion offered by the plaintiff in exchange of the shares. This prayer is no longer pressed. The plaintiff now presses his claim !ur perpetual injunction in terms of prayer (a) cf the plaint only. The learned trial Judge has dismissed the suit.
2. Mr. R. C. Deb appearing on behalf of the plain-tiff contends that upon the institution of suit No. 858 of 1959 the defendant has lost the right to sell the shares in exercise of its rights as a pawnee under Section 1/6 of the Indian Contract Act. The argument is that the right of the pawnee to sue upon the debt or the promise is alternative to his right to sell the pawn and that he cannot sell the pawn after he elects to sue on the debt or the promise.
3. In support of this argument, Mr. Deb relied upon the dicta in Nimchand Baboo v. Jagabundhu Ghosh, ILR 22 Cal 21 at 24, in Mahalinga Radar v. Ganapathi Subblen, ILR 27 Mad 528 at 531 and Co-operative Hindusthan uanK Ltd. v. Surendranath Dey : AIR1932Cal524 to the effect that under Section 176 of the Contract Act, the pawnee is entitled either to bring a suit against the pawnor upon the debt or promise retaining the pawn as collateral security or he may sell it upon giving reasonable notice of the sale and that the section gives him the right to sell only as an alternative to the right to have his remedy by suit. On the otner side reliance was placed on the dicta in Saiyid Ali Khan v. Debi Prasad, ILR 24 All 251 at 253 and Lala Jyoti Praliash Nandi v. Lala Mukti Prahash Nandi, 22 Cal WN 297 at 301: (AIR 1918 Cal 947 at 949), to the effect that the section gives the pawnee the right to bring a suit on the debt retaining the pawn as collateral security and also empowers him to sell it after giving reasonable notice and to recover the balance of the debt, if any, remaining after such sale and that the two rights are concurrent rights. In this connection reference was also made to the dicta in ILR 27 Mad 528 at 529-30, to the effect Wat in a case where both the right to sue for the sale ot the pledged property and the right to sue for a personal decree exist, they are concurrent rights. It is to be observed that in none of these cases the Courts were called upon to decide the question whether the right to sell the pawn is alternative to the right to sue on the debt ana whether upon the institution of a suit upon the debt the pawnee loses his right to sell the pawn on giving reasonable notice. We think that we are free to decide the point in issue on a consideration of the relevant sections of the Indian Contract Act.
4. Now, a pledge is a bailment of goods as security for payment of debt or performance of a promise, see Section 172 of the Indian Contract Act. The pawnee has the right to retain the pawn as security and the scope andambit of this right of retainer Is defined by Sections 273 and 174. Section 176 defines the pawnee's rights where the pawnor makes default. Section 177 gives the defaulting pawnor a right to redeem the pawn at any time before the actual sale of it. Section 176 reads thus:
'176. If the pawnor makes default in payment of the debt, or performance, at the stipulated time of the promise, in respect of which the goods were pledged, tne pawnee may bring a suit against the pawnor upon the debt or promise, and retain the goods pledged as a collateral security; or he may sell the thing pledged, on giving the pawnor reasonable notice of the sale.
If the proceeds of such sale are less than the amount due in respect of the debt or promise, the pawnor is still liable to pay the balance. If the proceeds of the sale are greater than the amount so due, the pawnee shall pay over the surplus to the pawnor.'
5. In construing this section too much importance should not he given to the semicolon in the first paragraph. In a case where the pawnor makes default, tne pawnee has three rights: (i) he may bring a suit against the pawnor upon the debt or promise, and (ii) he may retain the pawn as a collateral security, or (iii) he may sell it on giving the pawnor reasonable notice of the sale. The right to retain the pawn and the right to sell It are alternative and not concurrent rights. While the pawnee retains, he does not sell; and when he sells he does not retain. But the pawnee has the right to sue on the debt or the promise concurrently with his right to retain the pawn or to sell it. The retention of the pawn does not exclude this right of suit, since the pawn is a collateral security only. Nor does the sale of the pawn destroy this right; the pawnor is still liable on the original promise to pay the balance due. The sale does not give a fresh starting point of limitation for a suit to recover the balance. See ILR 24 All 251 and Yellappa v. Desayappa, ILR 30 Bom 218. Similarly, the institution of a suit upon tne debt or promise does not reduce the pledge to a passive lien and destroy the pawnee's right to sell the pawn. The right of sale is necessary to make the security effectual for the discharge of the pawnor's obligation and the rignt continues in spite of the Institution of the suit. The point in Issue arose directly for decision In Suit No. 860 of 1945, Gorakhram Sadhuram v. Agarchand Chunilal, decided by Sarkar J. on August 5, 1952. In that case Sarkar J. observed :
'I have already said that some of the sales took place after the suit had been filed. I did not understand learned counsel for the defendant to make any special point or this. Nor do I myself find that this makes any difference. The pledgee has admittedly the right to sell. I do not see that he loses this right by filing a suit.'
It is to be observed that this opinion was not challenged on appeal though some of the other findings of Sarkar J. were set aside in A.F.O.D. No. 12 of 1953, Agarchand Chunilal v. Gorakhram Sadhuram, decided on January 17, 1957.
6. The above conclusion sufficiently disposes of tne first contention raised by Mr. Deb. I may add however that even if it be assumed that the right of sale out ot Court is alternative to the right to Institute a suit on the debt or promise, I am by no means satisfied that the two alternatives are mutually exclusive and that tne exercise of one alternative right destroys all future recourse to the other alternative. Mr. Deb relied upon the following observation of Lord Simonds In Chlchester Diocesan Fund v. Simpson, reported in (1944) 2 All ER 60 at 73:
'These two words are Joined or separated by tneword 'or', a particle of which the primary function is to co-ordinate two or more words between which there Is an alternative. It is, I think, the only word in our language apt to have this effect; its primary and ordinary meaning is the same, whether or not the first alternative is preceded by the word 'either'.'
7. The House of Lords affirmed the judgment of the Court of Appeal in In re Diplock, Wintle v. Diplock, (1941) 1 All ER 193, wherein Sir Wilfrid Greene, M. R. at p. 200observed:
'The word 'or' is prima facie, and in the absence of some restraining context, to be read as disjunctive, and, if a testator wishes to give his trustees a discretion to apply his property either to charitable or to benevolent objects, I do not myself know that other word in the Englisn language he can more suitably use than the word 'or'. 1 approach this question, therefore, on the view that the word 'or' is prima facie to be read as meaning what it says.'
8. In the case above mentioned, a testator by his will gave the residue of his estate 'for such charltame institution or institutions or other charitable or benevolent object or objects in England as my acting executors or executor may in their or his absolute discretion select'. The House of Lords, Lord Wright -- dissenting -- held fhat upon the true construction of this clause, the words 'or benevolent' prima facie indicated an alternative purpose and, as there was nothing in the will to justify different interpretation the gift was void for uncertainty. The case was decided upon the principle that if the trustee is given a discretion to apply trust property for purposes, some of which are and some are not charitable, the trust is void for uncertainty. It is to be observed that the House of Lords did not decide that the power of the trustees to select a benevolent object would cease as soon as they would select a charitable object and devote a part of the trust fund to it. I think that when the word 'or' is used in relation to two or more alternatives, it is not necessarily the case that the alternatives are mutually exclusive. The question as to whether they are mutually exclusive or not must be determined by applying the general rule that words should be construed to ascertain the intention of the provision in question to be collected from the whole of Its terms, see Horsey v. Caldwell, (1946) 73 CLR 304 at 3134 (Australia). On a true construction of Section 176 I am satisfied that the right of the pawnee to sue upon the debt or promise does not exclude or destroy his right to sell the pawn.
9.Mr. Deb contended secondly that the notice dated February 6, 1960 was not a reasonable notice of the sale within the meaning of Section 176 because (a) the notice does not refer to the actual sale which Is going to be held and (b) because it does not give the place, date, and time of the sale. On the first branch of his contention, Mr. Deb argued that the notice dated February 6, 1960 was a notice of an intention to sell and tnat such notice is not enough. I am unable to accept this contention. The notice stated that in default of payment of the debt due to the defendant on or before the 18th February, 1960, 'The undernoted shares, or such of them as the Bank may decide to sell will be sold by .the Bank In exercise of its rights and powers as pledgee and the net proceeds applied in reduction of your indebtedness.' The notice gave a reasonable time to the plaintiff to pay the debt ana redeem the pawn and definitely and clearly stated that in default of payment within the time mentioned the defendant would sell the shares or such of them as the oeten-dant might decide to sell. The word 'sale' In Section 1/6means intended sale as opposed to the expression 'actual sale' in Section 177. Section 176 requires notice of we intended sale. Such notice was sufficiently given by the letter dated February 6, 1960. Mr. Deb relied upon the decision in ILR 59 Cal 667: (AER 1932 Cal 524) and the unreported decision in A.F.O.D. No. 12 of 1953, D/- 1/-1-1957 (Cal). Both these cases are distinguishable. In the first case, the notice could not reach the pawnor before the sale. Consequently the sale was not a sale on reasonable notice of it. Besides the notice there stated that failing payment by named date, the pawnee would arrange for the sale of hypothecated stock and on this ground this case was distinguished by Lahiri, J. in Hulas Kunwar v. Allahabad Bank Ltd. : AIR1958Cal644 where tne Court upheld the validity of a notice which stated that the pawnee would arrange to effect sale of the securities as and when opportunity offered. 1 must say however that 1 see no essential distinction between the notices in the two cases and speaking for myself, I am not prepared to say that the wording of the notice in the case in : AIR1932Cal524 was in any way defective. In the unreported case decided by S. R. Das Gupta J. and myself, the pawnee had not given any notice of the sale at ait. In that case the pawnee gave a notice in writing dated April 10, 1946 calling upon the pawnor to make immediate payment of the debt and take back the goods and stating that in default of compliance with the requisition within two weeks the pawnee would take further steps for the recovery of his dues and hold the pawnor liable fpr costs. The notice was not a notice of intended sale at all; it did not state that in default of payment the pawnee would proceed to sell the goods, in that case there was also evidence to show that the pledged goods were reconditioned at the pawnor's request for the sole purpose ot enabling the pawnee to sell them; the pawnor had there-fore knowledge of the pawnee's intention to sell; nevertheless It could not be said that the pawnor had received reasonable notice of the sale or any notice giving him reasonable time to redeem the pledged goods and stating that in default of payment the pawnee would proceed to sell the goods.
10. On the second branch of his second contention Mr. Deb argued that the notice dated February 6, 1960 is not a reasonable notice of the sale as it did not give the place, date and time of the sale. I am unable to accept this contention also. It is true that in Grison Knitting Works, Ludhiana v. Laxmi Commercial Bank Ltd. , Tekchand, J. observed that a notice merely of an intention to sell at some future date without specifying the date, time or place of the sale cannot be deemed a reasonable notice. With respect I am unabla to agree with these observations. In the same case Meherchand J. differed from the opinion of Tekchand J. Besides Tekchand J. based his conclusion on the American law which materially differs from our law on this point. Under the law prevailing in the United States of America, in the absence of a special agreement, a sale of the pledged property must foe by a public auction and consequently as a general rule the pawnee must give the pawnor reasonable notice of the time and place of the sale (See 'Corpus Juris Secundum- A complete restatement of the entire American law' by Francis J. Ludes and Harold J. Gilbert Francis, Vol. lXXII, Arts. 59-60, pp. 117 to 123). Under our law the pawnee Is not bound to sell the pawn by public auction. He may sell it by private treaty after giving reasonable notice or the sale under Section 176. Such a notice may be sufficiently given without specifying the place, date and time of the sale, see Kunja Behari v. Bhargava Commercial Bank,ILR 40 All 522: (AIR 1918 All 363 (2)) and : AIR1958Cal644 . Section 176 does not require that the notice of sale must in all cases give such particulars. The reasonableness of a notice varies from case to case. The special circumstances of some particular case may require that a reasonable notice of the sale should give such particulars, but the onus is upon the pawnor to establish that such special circumstances exist. In the instant case the plaintiff has failed to discharge that onus. He has not called any cral evidence whatsoever. He has not proved any fact showing that in the particular crlcumstances of this case notice of the place, date and time of the sale should have been given. On receipt of the notice dated February 6, 1960 lie did not write to the defendant stating that the notice was unreasonable or that the defendant should have given notice of the date, time and place of sale. On the contrary, the only plea taken by him in his letter dated June 27, 1960 was that in view of the institution of the sun for the recovery of the debt, the defendant had lost the right to sell the pledged goods. In the plaint as originally filed, the contention that the notice was not a reasonable notice was not raised. There is no evidence that the plaintiff has suffered or will suffer any prejudice by the absence of the specification of the place, date and time or the sale.
11. Mr. Deb contended thirdly that the proposed sal* is mala fide having regard to (a) an offer made by the plaintiff in the interlocutory proceedings and repeated at the trial that the plaintiff was agreeable to pay four annas more per share than the highest offer to be obtained by the defendant in respect of the shares and (b) the fact that the shares constituted a part of the controlling block of shares in the British India Corporation Ltd. In ray opinion this contention also should be rejected. The defendant was not bound to accept the offer. The acceptance of the offer was bound to lead to complications. The otter cannot be satisfactorily worked out as pointed out by G. K. Mitter J. in his judgment given on July 2, 1960 in the interlocutory proceedings in the suit. The allegation that the shares constitute a part of controlling block of shares in the British India Corporation Ltd. is not proved. The plaintiff has not established that the defendant is acting mala fide.
12. Several other contentions Were raised in the plaint in aid of the prayer for injunction restraining the defendant from selling the pledged shares; but those contentions are no longer pressed.
13. In view of these findings it must follow that the plaintiff has not made out any case for injunction.
14. The plaintiff has not yet instituted a suit for redemption of the shares. He has defaulted in payment of the debt due to the defendant. The debt is not fully secured. In these circumstances even if I were, in a proper case, inclined to grant an injunction restraining sale of the shares I would have done so only upon the term that the plaintiff should deposit In Court the entire amount due to the defendant. Mr. Deb however, stated that tha plaintiff was unable to deposit any money. Consequently, in the exercise of my discretion I would, in any event refuse to grant the injunction.
15. There is no merit in this appeal. We pass tnefollowing order: The appeal be and is hereby dlsmisseawith costs. Certified for two counsel. The interim injunction be and is hereby vacated and discharged.
16. Mr. Mukherjee orally prayed for stay of the operation of the order for a fortnight. Mr. Roy Choudhury opposedthis prayer. The prayer of Mr. Mukherjee is refused.
17. I substantially agree with the reasonings given in the judgment just delivered by my learned brother Badiawat J. and respectfully agree with the conclusion arrived at Dy my Lord but I like to add a few words.
18. As to whether the right of the suit is alternative or not on the interpretation of Section 176 of the Contract Act Mr. Deb, the learned counsel for the appellant, lays stress on the word 'or' after the words 'collateral security' and before the words 'he may sell' and the punctuation 'semi-colon' in the first paragraph of the said section. The learned counsel argues that the right of suit and sale are not concurrent and once the right of suit is availed of, the right of sale is barred.
19. My view is that the said rights are not mutually exclusive but concurrent. My Lord has first now dealt with the above argument elaborately and has referred to many decisions. I need not repeat them but I may refer to a Bench decision of this Court in Nayan Manjuri Dasi v. Howrah Municipality reported in : AIR1925Cal1067 where it has been held that it is sometimes necessary to read tne conjunctions 'or' and 'and' as one for the other. The same view has been expressed by the Full Bench of Madras High Court in Rayarappa v. Kelappa reported in ILR 40 Mad (602): (AIR 1918 Mad 1025 (1030)) (FB).
20. In a case arising out of an Income-tax Act, tne word 'or' was interpreted by their Lordships of the Supreme Court where it was observed that in appropriate context 'or' might' mean 'and'. Vide Mazagaon Dock Ltd. v. Commr. of income-tax and Excess Profits Tax : 34ITR368(SC) . There also it was argued that the assessment on one, would be a bar to the assessment on the otner-, but that argument was negatived by their Lordships in tne Supreme Court. The instant case is one where the said interpretation should be followed.
21. In the case cited by Mr. Deb, reported in (1944) 2 AllELR 60 which has been elaborately discussed by myLord, I may point out that their Lordships at p. 73 otthe said report observe, that it is possible that a con-text may justify that the meaning of 'or' is not exclusive.In my view the word 'or' in the context of Sec. 176 lustitlesthe said meaning. Moreover, their Lordships interpreted theword 'or' in a document and not in a statute in the saioreported decision which should also be taken note ot.
22. As to tne argument of punctuation of semi-colon, which according to Mr. Deb is also conclusive to snow tnai the rights are exclusive, I may add that their Lordsmps In the Supreme Court observed in the case of Aswini Kumar Ghosh v. Arabindo Bose : 4SCR1 , to the effect that punctuation is after all a minor element in the construction of a Statute ana very little attention is paid to it even by the English Courts. It may have some uses in some cases where there is doubt, (but it cannot be allowed to control the plain meaning of a text. Here the plain meaning of Section 176 should not be allowed to be controlled by semi-colon.
23. It was argued on the other hand on behalf of the respondent that the marginal note in the said Section 173 is made only for the benefit of the Pawnee and not for the Pawnor. This view aiso cannot be accepted, because the marginal note cannot be referred to for the purpose of construing a Statute (vide Commr. of Income-tax v. Ahmed-bhai Umarbhai and Co. : 181ITR472(SC) . Marginal notes cannot also control the meaning of a body of a section. [See NalinakhyaBysack v. Shyamsundar Haldar : 4SCR533 . Therefore my conclusion is that the word 'or' is an alternative between the two words 'retention' and 'sale'. In other words, the Pawnee under Section 176 of the Contract Act has got the concurrent rights to sue, as well as either to retain or to sell.
24. On the second branch of Mr. Deb's argument that the notice mentioned in Section 176 of the Contract Act must mention the date, time and place of the sale. In my view it cannot be laid down as a general proposition of law that no mention of date, time and place in the notice is necessary. It cannot also be 'equally laid down that the said three elements are absolutely necessary to bring a notice within the category of a reasonable notice within the meaning of Section 176 of the Contract Act. It depends upon the facts of each case and no standard or guide can be laid down to govern all the cases. Take for example, a notice is given and served on the Pawnor. in the evening of previous day. informing him that the sale is going to be held next day at a given place and time. In my view, the Court should strike down that notice as unreasonable, though it might state the place, date and time and fifth the requirements of the section so to speak.
25. In my view there is some difference between a notice giving mere intention to sell and a notice of the intended sale. I am also of the view that a mere intention without giving specific particulars will not be enougn and such notice will be unreasonable. But the notice in Section 176 must be of the intended sale and the notice in the instant case is reasonable. The word 'the' before the word 'sale' in Section 176 does not mean actual sale, as sought to be argued by Mr. Deb, because the legislature in that event could have used the word 'actual' also in Section 176 as in Section 177. The word the' has got no special significance. It only refers to a sale.
26. Before I part with this branch, I may reter to the said unreported decision in A. F. 0. D. No. 12 of 1953 (sic) of S. R. Das Gupta, J. sitting with my Lord. It is strenuous-ly argued at the bar that the said decision is just opposite to the decision of the Division Bench in : AIR1958Cal644 , Sarhar, J. in the trial Court in Agarchand's case, A. F. O. D. No. 12 of 1953 (Cal), noticed that the sale in the said case was held at the specific request of the defendant and also that no notice of sale had been given by the plaintltt to the defendant and then said 'It is clear therefore that no notice of the sale, time or place ot the sale need he given. All the authorities take that view'. In the appeal S. R. Das Gupta, J. sitting with my Lord set aside the Una-ings of Sarkar, J. on the question of notice.
27. In view of the principles laid down in Madnolai Sindhu v. Official Assignee of Bombay, 1949 FCR 441 at p. 482 : (AIR 1950 FC 21 at p. 38), where the sale was held at the request of the defendant, no notice under Section 176 is at all necessary and the findings of Sarkar, J. on the question of notice should neither have been not necessary to be upset. The said alleged findings of Sarkar, J. should not be read without the context. Moreover, they are not strictly findings but strong obiter dicta being not the ratio for the decision. Hence in my view it would not be correct to say that the said unreported decision was contrary to the decision reported in : AIR1958Cal644 .
28. The reasonings given by Tekchand, J. in (supra) were adopted by Mr. Deb as his argument before us. But as has been found by my Lord Tekchand, J. drew the source of inspiration from the American Law and the principles laid down therein are admittedly not correct. Moreover, Tekchand, J. expressly dissents from the Benchdecision of this Court, viz. : AIR1958Cal644 (supra), with which I respectfully agree. I differ from the views of Tek-chand, J. with great respect.
29. Lastly, the two considerations stated hereinbelow would be sufficient in refusing to grant the injunction in the present case, which is a discretionary relief.
30. In the earlier suit by the Respondent Bank that is, Suit No. 858 of 1959 for recovery of its dues, the appellant filed the written statement to the effect that the plaintiff must sell the shares and without selling those shares, the Bank would not be entitled to proceed against the defendant in the suit for recovery of money. I may state that the pleadings in the said suit have been relied on by appellant in this suit, out of which the present appeal arises. And, as a matter of fact, during the pendency of the said suit, when the notice of sale dated 6th February, 1960 is given, the present suit is filed by the appellant, now objecting that the Bank cannot proceed with the sale of the shares because of the pending suit. This is a conduct which must be taken note of and which alone should disentitle the appellant for getting relief in the way of injunction.
31. The pecuniary compensation being also the adequate relief in the instant suit, the Courts should lie reluctant in granting injunction in favour of the plaintiff appellant. The appellant 'in his letter dated 25th June, 1960 has himself given the market value of the shares. Hence I cannot accept Mr. Deb's argument that the shares which have been pledged, cannot be compensated for pecuniary loss if injunction is not granted.
32. On these grounds also I concur in dismissing theappeal with costs.