SOKKMAL SUGANMULL Vs. GLOKANATHA ACHARI

JUDGEMENT

(1.) This appeal preferred by the 2nd Defendant arises out of a suit filed by the Plaintiff (1 Respondent) for a declaration that he is absolutely entitled to a pair of diamond thodus, which were wrongfully pledged by the 1 Defendant with the 2nd Defendant. It is common ground that the diamond thodus in question belonged to Plaintiff. Certain facts connected with the question how the Plaintiff came to part with the possession of the jewel, have been fairly established in the evidence. Plaintiff and 2nd Defendant are the only witnesses examined in this case, and some documents have also been filed. Plaintiff is a goldsmith by profession. There is no doubt, that by the machinations of two or three swindlers, the Plaintiff was made to believe that the 1 Defendant was a Government servant of respectable status, and hand over the jewel to 1 Defendant on 8th June, 1929, for inspection, and after approval for settlement of the price. When taking the jewel from Plaintiff, the 1 Defendant passed the chit (Ex. A). The approximate value of the jewel is fixed in Ex. A as Rs. 3,000. Though the jewel was given to 1 Defendant for inspection and return, in the belief that a sale can be effected on approval and settlement of the price, he clandestinely pledged the jewel wath the 2nd Defendant on the very next day for Rs. 1,500 (vide Ex. II). When making this pledge the 1 Defendant posed himself as a Corporation Overseer. To effectuate the scheme of fraud designed when first getting the jewel from the Plaintiff, the 1 Defendant along with his associates made a pretence of buying the jewel on 12 June, suppressing the fact of the pledge, and making the Plaintiff believe that the thodus suited the 1 Defendant's wife and were worn by her. After some higgling, the price was fixed at Rs. 2,350. The Plaintiff wanted the price to be paid In cash and said that he would sell on payment of the whole price in cash. But the associates of the 1 Defendant, representing that he was a Government servant and money was expected from Rangoon within 4 days, made a payment of Rs. 400 and a memo was accordingly signed by 1 Defendant and left with Plaintiff (Ex. B). It states that the price settled was Rs. 2,350 and a part payment of Rs. 400 was made. It is also noted therein that the inspection letter (Ex. A): was not received back from the Plaintiff, On the 14 June the Plaintiff came to know of the pledge, and of his having been swindled in this manner. A complaint was filed and it resulted in the conviction of 1 Defendant for the offences of cheating and criminal breach of trust. The diamond thodus were in the custody of the Chief Presidency Magistrate's Court, Madras, at the time of the filing of the present suit.

(2.) The main question is whether the pledge in favour of the 2nd Defendant on 9 June, 1929, is valid and binding on the Plaintiff. Section 178 of the Indian Contract Act, as it stood before its amendment by the Indian Contract (Amendment) Act, 1930, which came into force on 1 July, 1930, is the section governing the present case. According to that section, a person in possession of any goods may make a valid pledge of such goods: provided that the pawnee acts in good faith and under circumstances which are not such as to raise a reasonable presumption that the pawner is acting improperly: provided also that such goods have not been obtained from the lawful owner by means of an offence or fraud. With reference to the meaning of the word possession used in this section (as not distinguishable from the expression "when any person is, by the consent of the owner, in possession of any, goods" found in Exception (1) to Section 108 of the Act) it has been held, that what is contemplated in Section 178 is juridical possession as distinguished from bare custody. We are of opinion that such a construction is the only reasonable one, though the general word possession standing by itself without any qualification may be deemed to be wide enough to include any kind of possession. A gratuitous bailee, such as the 1 Defendant, who merely took the jewel from the Plaintiff on 8 June, 1929, for inspection and return, cannot be deemed to have been in possession of it within the meaning of Section 178, to enable him to make a valid pledge of it. Moreover, the pledge to 2nd Defendant on 9 June would not be valid unless the requisites of both the provisos are fulfilled. We shall assume for the present, that the 2nd Defendant acted in good faith and the condition laid down in the first proviso has been satisfied. Can we hold that the jewel in question has not been-obtained from the Plaintiff (the lawful owner) by means of an offence or fraud? The Indian Penal Code is one of the important guides for determining whether an act is an offence or not, according to Indian Law. According to Section 415, Indian Penal Code, cheating as defined therein is an offence. Whoever, by deceiving any person, fraudulently induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, is said to cheat . A dishonest concealment of facts is a deception within the meaning of this section. In the present case, it is clear from the evidence, that the Plaintiff was deceived into believing that the 1 Defendant was a Government servant (a Corporation Overseer) of respectable status, and the son of a Judge and that by the practice of such deception he was induced to deliver the diamond thodus to 1 Defendant on 8 June for inspection and purchase on approval and settlement of price. The Plaintiff was kept under the same spell of illusion about the 1 Defendant's status and worth, when he approached the Plaintiff on 12 June, with his associates, and negotiated for the purchase on credit (paying a small sum of Rs. 400, which in all probability was part of the sum of Rs. 1,500 raised by pledging the Plaintiff's jewel with 2nd Defendant), dishonestly concealing the fact of the pledge. If the delivery of the jewel to 1 Defendant on 8 June was brought about by means of the offence of cheating, we are of opinion that even on the 12 June, by the continuance of the same process of cheating, the Plaintiff was induced to consent to the retention of the jewel by 1 Defendant. But for that deceit, the Plaintiff would never have agreed to sell the jewel on credit to 1 Defendant, receiving only a minor portion of the price as ready cash. This contract of sale was itself Drought about by cheating, and the consent of the Plaintiff to such a bargain obtained by deceitful trick or fraud, cannot be deemed to be real consent. That this bargain of sale on credit was brought about on 12 June by cheating is apparent from the Illustration (a) to Section 415, Indian Penal Code, which runs thus: A, by falsely pretending to be in the Civil Service, intentionally deceives Z, and thus dishonestly induces Z to let him have on credit goods for which he does not mean to pay. A cheats.

(3.) It follows from what is stated above, that not only was the jewel obtained from the lawful owner on the 8 June by means of the offence of cheating, but even the consent of the lawful owner to the 1 Defendant's retention of the jewel as per the contract of sale on credit was by means of the same fraud amounting to cheating. The condition mentioned in the 2nd proviso to Section 178 not being satisfied, the pledge in favour of the 2nd Defendant is invalid and inoperative as against the diamond thodus in question.