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PETITIONER: CENTRAL NATIONAL BANK LTD.

       Vs.

RESPONDENT: UNITED INDUSTRIAL BANK LTD.

DATE OF JUDGMENT: 26/11/1953

BENCH: MUKHERJEA, B.K. BENCH: MUKHERJEA, B.K. BHAGWATI, NATWARLAL H. JAGANNADHADAS, B.

CITATION:  1954 AIR  181            1954 SCR  391

ACT:    Indian  Sale of Goods Act (III of 1930),  s.  30(2)-Indian  Contract  Act  (IX of 1872), ss. 13, 14--Agreement  to  sell  goods-Buyer  obtaining  possession by fraud  aithout  paying  price-Rights  of  bona fide purchaser  from  buyer-"Consent"  meaning of.

HEADNOTE: The  word "consent" in s. 30(2) of the Indian Sale of  Goods Act means "agreeing on the same thing in the same sense"  as defined  in  s. 13 of the Indian Contract Act and  does  not mean  "free  consent"  as  defined  in  s.  14.   Therefore, possession  of  goods  which is obtained by  a  person  from another person who has agreed to sell them to him, would  be possession obtained "with the consent of the seller"  within the  meaning  of  s. 30(2) of the Sale of  Goods  Act,  even though  it  was obtained by fraud, except  where  the  fraud committed  is  of such a character as  would  prevent  there being consent at all.   The  fact  that the fraud or deception practised  by  the person  obtaining  possession is of such a character  as  to make  him  guilty of a criminal offence would not  make  any difference in the application of this principle.   A  agreed to sell certain shares to B and sent the  share certificates and blank transfer deeds to the defendant  bank to deliver them to B on receiving payment of the price.  The bank 392 sent one of its clerks to B’s office with these papers.  The clerk  placed them on the table and allowed B to  scrutinise then  but  insisted on payment of the price  before  B  took them.  B left his office with these documents saying that he was  going  out  to  bring the  money  but  disappeared  and subsequently  pledged them with the plaintiff Held, that  in these  circumstances  B obtained possession  of  the  shares without  the  consent of A and that the  plaintiff  did  not acquire any title against the defendant bank or A.     Folkes v. King ([1923] 1 K.B. 282) and Lake v.  Simmons ([1926]  2 K. B. 51) and Pearson v. Rose ([1950] 2 All  E.R. 1027) relied on.    Cahn  v.  Pockett’s  Bristol Channel  Steam  Packet  Co.

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([1899]  1 Q.B. 643), Oppenheimer v. Frazer ([1907]  2  K.B. 50) commented upon.   Judgment of the Calcutta High Court affirmed.

JUDGMENT:      CIVIL   APPELLATE JURISDICTION Civil Appeal No.  32  of 1953. Appeal  from the Judgment and Decree dated the  12th  March, 1951,  of the High Court of judicature at Calcutta  (Harries C. J. and Banerjee J.) in Appeal from Original Decree  dated the  21st  March, 1950, of the Calcutta High  Court  in  its ordinary  original  civil jurisdiction in Suit No.  1112  of 1946.     P. C. Mullick and A. K. Dutt for the appellant.     Sankar  Banerjee (B.  Das and S. N. Mukherji, with  him) for the respondent.     1953.   November  26.   The Judgment of  the  Court  was delivered by     MUKHERJEA J.-This appeal is directed against a  judgment and decree of an appellate bench of the Calcutta High  Court dated  the  12th of March, 1951, reversing, on  appeal,  the decision of a single Judge of that court passed in Suit  No. 1112 of 1946.   The suit,. out of which this appeal arises, was  commenced by  the Central National Bank Limited, the appellant  before us,  in the Original Side of the Calcutta High Court, for  a declaration that the bank acquired the rights of  a    pledgee in respect of two blocks Of shares in two companies, to wit, the  Indian  Iron  and Steel ’Company  Ltd.  and  the  Steel Corporation  of Bengal Ltd. and was e entitled to  sell  the shares in enforcement of the pledge.  There was a claim  for recovery of possession of these shares and also for, 393 damages  alleged to have been suffered by the  plaintiff  by reason  of  wrongful denial of its title  by  the  defendant Bank. The shares, to which the dispute relates, are 800 in  number and  admittedly they were the property of one Radhika  Mohan Bhuiya,  the  defendant  No. 2 in  the  suit.   Sometime  in February,  1946, Bhuiya agreed to sell these shares  to  one Dwijendra  Nath Mukherjee for the price of  Rs.  38,562-8-0. On 14th February, 1946, Bhuiya sent these shares along  with the  relative  transfer  deeds to the  defendant  bank  with instructions to deliver over the share certificates and  the transfer  deeds  to the purchaser, against  payment  of  the entire  consideration  money stated above.  On the  18th  of February  following, the defendant bank directed one of  its officers,  to wit, Nilkrishna Paul, to see Mukherjee at  his office and hand over to him the shares after receiving  from him a pay order for the sum of Rs. 38,562-8-0 signed by  the Punjab  National Bank.  In accordance with  this  direction, Paul  went  to the ,office of Mukherjee and saw him  at  his chamber  at about 11 a.m. in the morning.   Mukherjee  asked for  the  shares, but Paul refused to make  over  the  share certificates  to  him  unless  the  pay  order  was   given’ Mukherjee  then  said that he wanted to have a look  at  the shares  and the transfer deeds just to satisfy himself  that they were all right.  After that Paul placed the shares  and the  transfer  deeds on the table.  Mukherjee  examined  the share  certificates one after another and when he was  about to  leave the chamber along with the share certificates  and the ranK transfer deeds, Paul raised an objection and  asked him  not  to  go  away without giving  him  the  pay  order.

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Mukherjee then said to Paul: "I am going out to get the  pay order  ;  it is ready.  You take your seat ; I  am  coming." With  these words Mukherjee went out of his chamber and  did not return thereafter.  It appears that he went straight  to the office of the plaintiff bank and pledged the shares with it, taking an advance of Rs. 29,000 in terms of an agreement which was previously arrived at between them.  What happened in substance  was this : Mukherjee gave a cheque for Rs. 100 with which an 394 account  in Ms name was opened for the first time  with  the plaintiff  bank, and the advance of Rs. 29,000 was given  to Mukherjee  by  way  of overdraft on  this  current  account. Mukherjee  also  executed  a promissory note  for  the  said amount  in favour of the plaintiff.  It is, the common  case of  the parties that Mukherjee has not been heard  of  since then and his present whereabouts are unknown.  Coming now to Paul,  the  defendant’s, officer, after waiting  vainly  for Mukherjee;  he had no other alternative but to come back  to his  office and inform his superior officer of all that  had happened.   A complaint was then lodged with the  police  on behalf  of the defendant bank.  The cheque, which was  given to  the plaintiff by Mukherjee, was dishonored when  it  was presented for payment.  The plaintiff bank thereupon wrote a letter  to Mukherjee demanding payment of the loan  at  once and  threatening to sell the shares in case of default.   As no  reply  came  from Mukherjee, the  plaintiff  sold  these shares through a broker named jalan. jalan took delivery  of the shares and gave the plaintiff a cheque for Rs. 16,000 in part  payment  of  the price.  The payment  of  the  cheque, however,  was stopped and the police, who had already  taken the  matter  in  hand, took possession of  the  shares.   As Mukherjee  could not be traced, a criminal case was  started against  an alleged accomplice of his, named Shaw, but  this proved  unsuccessful and Shaw was acquitted.  The  defendant bank, who had paid the full price of these shares to Bhuiya, then  presented  an application to the  Magistrate,  praying that the shares might be returned to it on the ground of its being  the  owner thereof.  On getting information  of  this application, the plaintiff bank instituted the present suit, the  allegation in substance being that the plaintiff  being the  pledge  of  the shares was entitled,  in  law,  to  the possession thereof.As    has  been stated  already,  Bhuiya, having been paid off     by  the  defendant  bank,  had   no further interest in the  litigation.   The  fight  was  thus entirely between the two banks. It is not disputed that Mukherjee did not acquire any  legal title  to the shares.  There was only an agreement for  sale between him and Bhuiya, and under the 395 terms  of,the contract the property in the shares could  not pass  to him till the price was paid.  The  plaintiff  bank, therefore,  Was  not a pledgee of the shares from  the  real owner.   It rested its claim entirely upon the provision  of section 30(2) of the Indian Sale of Goods Act, the  language of which is as follows :- "Where  a  person,  having bought or agreed  to  buy  goods, obtains,  with the consent of the seller, possession of  the goods  or the documents of title to the goods, the  delivery or  transfer by that person or by a mercantile agent  acting for him, of the goods or documents of title under any  sale, pledge or other disposition thereof to any person  receiving the  same  in good faith and without notice of any  lien  or other  right of the original seller in respect of the  goods shall have effect as if such lien or right did not exist."

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  The  plaintiff’s case was that it received the shares  by way of pledge in good faith and without notice of any defect in  the title of Mukherjee who had agreed to purchase  these shares  from  Bhuiya and had actual possession of  the  same with  the consent of the seller.  Consequently,  the  pledge would  be effective under the provision of section 30(2)  of the Sale of Goods Act in the same way as if the right of the original seller did not exist.    The  contention of the defendant bank on the  other  hand was that Mukherjee was not in possession of the Shares  with the consent of the seller, nor  was the plaintiff   a   bona fide pledgee without notice of thedefect   of  title.   The whole controversy thus centeredround  the  point  as  to whether  on  the  facts that  transpired  in  evidence,  the plaintiff bank was entitled to avail itself of the provision of  section  30(2)  of the Indian Sale of  Goods  Act.   Mr. Justice  Sarkar  of the Calcutta High Court, who  tried  the suit, decided this question in favour of the plaintiff.  The learned  judge  was of opinion that Mukherjee  had  obtained possession  of  the  shares with the consent  of  Bhuiya  or rather  his agent, the bank officer, within the  meaning  of section 30 (2), Indian Sale of Goods Act, and it was not  at all  material  for  purposes of this  sub-section  that  the consent was 396 induced by fraud of Mukherjee or that his act amounted to an offence of "larceny by trick" according to English law.   It was  further  found that the plaintiff acted in  good  faith without notice of any defect of title; and ,in view of these findings the trial judge decreed the plaintiff’s suit.   There was an appeal by the defendant against this judgment which  was heard by a bench consisting of Trevor Harries  C. J. and Banerjee J. The learned judges allowed the appeal and reversed  the judgment of the trial court holding  that  the defendant’s  agent never consented to Mukherjee’s  obtaining possession  of the shares as buyer.  There was no  intention to  give  delivery at all.  It was Mukherjee  who  took  the shares  and bolted and "his act was as much theft as  if  he had  taken  them  out of Nilkrishna Paul’s  pocket."  It  is against  this  decision  that the present  appeal  has  come before us at the instance of the plaintiff and the point for consideration  is, whether the view taken by  the  appellate bench of the High Court is right.      Mr.  Mullick, who presented the appellant’s  case  with commendable fairness and ability, has argued before us  that on the facts of this case the appellate court ought to  have held that the plaintiff did acquire the rights of a  pledgee in respect to the disputed shares under the   provision   of section 30 (2), Sale of Goods Act.      There is no dispute, he says, that there was a valid    contract     of      sale regarding  these shares between Bhuiya, the real owner,  and Mukherjee;  and that the plaintiff was a bona  fide  pledgee from Mukherjee without notice of any other’s rights has been found as a fact by the trial Judge and this finding has  not been reversed in appeal.  The only other thing necessary  to entitle the plaintiff to claim the protection of section  30 (2) of the Act is to show that Mukheriee obtained possession of  the shares with the consent of the seller or his  agent, and  it is on this point alone that the courts  below  have’ taken divergent views.  It is argued by the learned  counsel that  the  word  " possession" used  in  the  section  means nothing  else  but physical custody and  whether  there  was consent of 397 the owner or not has to be determined with reference to  the

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2definition  of  "consent"  as given in section  13  of  the Indian  Contract Act.  If there was consent in fact,  it  is immaterial that it was induced by fraud or misrepresentation and  in  the determination of this matter, no  principle  of criminal  law’  and  much less  the  technicalities  of  the English  criminal law should be imported.  On the facts  the learned  counsel  argues that the defendant’s  agent  really consented  to  part with the possession of  the  shares  and allow  Mukherjee to have them, although he was duped by  the false  promise  given by Mukherjee which  the  latter  never intended to keep.      The propriety of the propositions of law put forward on behalf  of the appellants has not been, for the most  part,. controverted by Mr. Banerjee. who appeared for the defendant respondent.  The dispute between them, as we shall presently see,  is mainly on the point as to whether, on the facts  of the case, it could be held that Mukherjee got possession  of the  shares with the consent of the defendant’s agent.   As, however,  the  points  of law have  been  discussed  in  the judgments of the courts below and reference has been made by the learned Judges to a number of English cases turning upon analogous  provisions  in cognate statutes  in  England,  we think  it proper to express our views shortly on the  points raised,  just for the purpose of clearing up any doubt  that might  exist  regarding the meaning and implication  of  the word  "consent"  as has been used in section 30 (2)  of  the Sale of Goods Act.  The two principal questions that require consideration are first, whether the consent necessary under section  30  (2)  of the Sale of Goods Act must  be  a  free consent  uninfluenced by fraud or false representation,  and :secondly,   whether  the  existence  of  such  consent   is negatived, as a matter of law, it a person of the  requisite description  mentioned in the section obtains possession  of goods from the owner by trick or other deceitful means which makes  his act punishable as a crime.  There is no  decision on these points by any High Court in. India and we have been referred to a number of 398 cases decided by English courts where similar questions have arisen in regard to the provisions of section 25 (2) of  the English  Sale of Goods Act and section 2(1) of  the  Factors Act which employ almost the same language with reference  to dispositions  made by a purchaser or mercantile  agent  ’who obtained  possession of’ goods with the consent of the  real owner.   It  is  neither necessary  nor  desirable  for  our purpose to enter into a. detailed. discussion of the English cases  that  have  been  cited before  us.   We  would  only examine, where necessary, the salient principles upon  which the leading pronouncements of the English judges purport  to be  based  and  see  whether they throw  any  light  on  the questions that require consideration in this case.      We  agree with the learned counsel on both  sides  that the word "consent" as used in section 30 (2) of the Sale  of Goods  Act  means "agreeing on the same  thinging  the  same sense" as defined in section 13 of the Indian Contract  Act. There is no definition of "consent" in the Sale of Goods Act itself,  but section 2(15) of the Act definitely  lays  down that  the expressions used and not defined in the  Act,  but which are defined in the Indian Contract Act, shall have the same  meaning  as. has been assigned to them in  the  latter Act.  Section 14 of the Contract Act defines theexpression "free  consent" and a consent is tree when it is not  caused by  coercion, under influence, fraud,  misrepresentation  or mistake. A consent induced byfalse  representation may  not be  free, but it can nevertheless be real,  and’  ordinarily

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the  effect  of fraud or misrepresentation is  to  render  a transaction  voidable  only and not void.   If  an  innocent purchaser  or  pledgee  obtains goods  from  the  person  in possession thereof, whose possessory right is, defeasible on the  ground of fraud but had not actually been  defeated  at the time when the transaction took place, there is no reason why the rights of such innocent purchaser or pledgee  should not be protected.  The, right in the possessor or bailee  in such  circumstances is determinable no doubt but so long  as it  is  not  determined it is sufficient to  enable  him  to create tide in,, favour of an innocent transferee for  value without 399 notice.  This proposition is well recognised in English  law and seems to us to be well founded on principle. In Cahn  v. Pockett’s Bristol Channel Steam Packet Company( 1),  Collins L. J. made the following oftquoted observation :-    "However  fraudulent a person in actual custody may  have been,  in  obtaining the possession, provided  it  does  not amount to larceny by trick and however grossly he may  abuse confidence  reposed  in him, or violate  the  mandate  under which he got possession, he can, by his disposition, give  a good title to the purchaser."    The  opinion  of the learned judge in regard to  the  so- called  exception  where there is a "larceny by  trick"  has been the subject of much comment both favourable and adverse in  later  cases  as we shall see presently;  but  the  main proposition enunciated by him has never been disputed( 2  ). The law on this point has been thus summed up by Denning  L. J. in Pearson v. Rose(3):    "The effect of fraud...... is as a rule only to make  the transaction  voidable and not void, and if,.  therefore,  an innocent   purchaser  has  bought  the  goods   before   the transaction  is  avoided the true owner  cannot  claim  them back.   For instance, if a mercantile’ agent  should  induce the owner to pass the property to him by some false presence as  by giving him a worthless cheque, or should  induce  the owner  to entrust the property to him for display  purposes, by falsely pretending that he was in a large way of business when he was not, then the owner cannot claim the goods  back from an innocent purchaser who has bought them in good faith from  the mercantile agent...... The consent may  have  been obtained by fraud but, until avoided, it is a consent  which enables the Factors Act to operate."     Thus  obtaining possession of goods by  false  pretences does not exclude the operation of the Factors Act in (1)  [1899] 1 Q.B. 643 at 659. (2)  Vide  the cases referred to by Scrutton L. J. in  Folks v. King [1923], I    K.B. 282 at 301. (3)  [1950] 2 All E.R. 1027 at 1032. 400 England and in our opinion it does not exclude the operation of section 30(2) of the Sale of Goods Act in India.   The position, however, is entirely different if the  fraud committed  is  of such a character as  would  prevent  there being  consent  at  all on the part of  the  owner  to  give possession  of  the goods to a particular  person.   Thus  A might  obtain possession of goods from the owner by  falsely representing  himself to be B. In such cases the  owner  can never  have consented to the possession of goods by  A;  the so-called consent being not a real consent is a totally void thing  in law. In Lake v. Simmons( 1) Lord Haldane made  the following observations while dealing with a similar point     "The  appellant  thought  that he  was  dealing  with  a

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different  person, the wife of Van der Borgh, and it was  on that footing alone that he parted with the goods.  He  never intended to contract with the woman in question.  It was  by deliberate  fraud and trick that she got possession.   There was  not the agreement of her mind with that of  the  seller that  was  required in order to  establish  any  contractual right  at all.  The latter was entirely deceived as  to  the identity  of  the person with whom he was  transacting.   In circumstances such as these, I think that there was no  con- sensus ad idem."     The  position, therefore, is that when the  transfer  of possession is voidable merely by reason of its being induced by fraud, which can be rescinded at the option Of the owner, the  consent  which  followed  false  representation  is   a sufficient  consent within the meaning Of section  30(2)  of the Sale of Goods Act.  But where the fraud induced an error regarding the identity of the person to whom or the property in respect of which possession was given, the whole thing is void and there is no consent in the sense of an agreement of two persons on the same thing in the same sense. The other question that requires  consideration is,  whether it  would  make  any difference in the  application  of  the principles stated above if the fraud or (1)  [1927] A. C. 487, 500.                             401 deception, practised by a person in obtaining possession  of goods from the owner, is of such a character as to make  him guilty  of  a criminal offence ? Having regard to  what  has been  said  above,  this question  should  not  present  any difficulty,  had it not been for the fact that an amount  of complexity has been introduced into the subject by reason of certain technical rules of the English criminal law.  It  is to  be  remembered that what section 30(2) of  the  Sale  of Goods  Act  contemplates  is that the  buyer,  to  whom  the property  in  the  goods sold has not passed  as  yet,  must obtain  possession  of  the goods with the  consent  of  the seller  before he can give a title to an innocent  purchaser or  pledgee.   There  can be no dispute  that  to  establish consent  of the owner of the goods, it is his state of  mind that  is the only material thing for consideration  and  not that  of the receiver of the goods.  Even if the  owner  was induced    to   part   with   the   goods   by    fraudulent misrepresentation  he must yet be held to have consented  to give  possession  ;  and the fact that the  receiver  had  a dishonest  intention  or a preconcerted design to  steal  or misappropriate the goods and actually misappropriated  them, may make him liable for a criminal offence, but the  consent of the owner actually given cannot be annulled thereby.   In order that a fraudulent receiver of goods must be  punished’ criminally, the material thing is his dishonest intention  ; but  as was said by Bankes L. J. in Folkes v. King(1),  that is  altogether  immaterial for the  purpose  of  determining whether  there was consent on the part of the owner  of  the goods  under  the Factors Act.   "The  two  considerations," observed  the  learned  judge, "  should  be  kept  entirely distinct.  To allow the one to be defeated by  consideration of the other is in my, opinion to sweep away a great part of the  protection  which  the  Factors  Act  was  intended  to provide." The same ratio, in our opinion, applies in  regard to the, provisions of the Sale of Goods Act.   As has    been said already, obtaining of goods by,  false pretences does not negative consent of the owner (1)  [1923] 1 K.B. 282 at 297. 402 of the goods for purposes of the English Factors Act.   Even

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larceny  by a bailee does not exclude consent  according  to the English decisions.  This means that if the owner  allows an  agent to have his goods ’on hire or for repair  and  the agent later on makes- up his mind to steal or misappropriate them  and sell them to another, the agent may be  guilty  of larceny as bailee but the owner’s consent to his  possession could  not  be affected thereby.  But  curiously  enough  in English  law a difference is made between larceny by  bailee and  larceny  by trick ; and if in  the  illustration  given above  the agent instead of making up his mind  subsequently to steal the goods had that dishonest intention at the  very beginning  when he got possession, he is guilty of  "larceny by trick" and the possession in law is deemed to remain with the owner and he is regarded as "taking" without the owner’s consent.   This  apparently involves a  legal  fiction,  for although the goods are actually delivered over by the  owner to the accused person, yet because of the trick committed by the  latter  the  owner is still  supposed  to  continue  in possession  of the goods and the accused is held  guilty  of larceny for taking possession of the goods against the  will of the owner.  Ordinarily, the offence of larceny by  trick, according to the English law, can be committed in two  ways: first,  where the owner of goods, being induced  thereto  by trick,  voluntarily  parts with the possession of  goods  in favour  of the accused but does not intend to pass  property therein and the recipient has the animus furandi.  Secondly, when  the  accused contrives to get possession of  goods  by representing himself to be some other person or by deceiving the  owner  into thinking that he was  delivering  different goods(  1).   In  the second class of  cases,  there  is  no real consent on the part of the owner and when a larceny  by trick of this type is committed, it is well settled    in England  that  the operation of the Factors   Act  would  be excluded.  The position under the Indian law is the same  in accordance with the principles explained above.   (1)     Vide Whitehorn v. Davison [1911] 1 K.B. 463, 479. 403    With  regard to the first category of cases,however,  the decisions of the English courts are not at all uniform.   As has  been  said  already, Collins J. in  Cahn  v.  Pockett’s Bristol  Channel etc.(1) made the observation that  "however fraudulent  a  person  in actual custody may  have  been  in obtaining possession, provided it did not amount to  larceny by trick...... he can by his disposition give a good title." The observation as regards the exception in case of  larceny by  trick, though it could not rank higher than  an  obiter, was  accepted as good law by the Court of Appeal in  England in  Oppenheimer  v. Frazer( 2 ). On the other hand,  it  was held  by  Bankes L. J. and and Scrutton L. J. in  Folkes  v. King(3) that when consent was In fact given by the owner  of the goods, it was immaterial that the receiver was guilty of larceny  by  trick,  and this view was approved  of  by  the majority  of  the  Court of Appeal in  Lake  v.  Simmons(4), though  Atkin  L.  J. delivered a  dissenting  judgment  The decision in Lake v. Simmons ( 4 ) was reversed by the  House of  Lords(5)  but  their  Lordships  proceeded  not  on  any technical  doctrine of criminal law but on the broad  ground which  we  have already discussed that there was  a  mistake fatal  to  there being a consenting mind at all.   The  view taken  in  Folkes  v. King(3) has been approved  of  in  the recent decision of Pearson v. Rose( 6).  Thus, to quote  the language  of Lord Sumner, "there is a signal and  indecisive conflict  of authoritative opinion on this point"  (7).   In our  opinion,  the view taken in Folkes v. King(3 )  is  the proper  view to take; and if, as was said by Scrutton L.  J.

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in  that  case,  the  Parliament  could  not  possibly  have intended  to apply the artificial distinctions  of  criminal law to a commercial transaction governed by the Factors Act, there is still less justification for importing a (1)  [1899] 1 Q. B. 643 at 659. (2)  [1907] 2 K.B. 50. (3)  [1923] 1 K.B. 282. (4)  [1926] 2 K.B. 51. (5)  [1927] A.C. 487. (6)  [1950] 2 All E.R. 1027. (7)  Vide Lake v. Simmons [1927] A. C. 487 at 510. 404 highly technical rule of English criminal law which had  its origin’  in  a legal fiction devised by  English  Judges  to punish a thief, who would otherwise have escaped conviction, into  the  provisions  of  the Indian  Sale  of  Goods  Act. Whether  there is consent or not has to be proved as a  fact in accordance with the principles of the law of contract and when  it  is,  proved to, exist,  its  existence  cannot  be nullified by application of any rule of criminal law.    It  is  in the light of these principles  that  we  would proceed  now to examine the facts of this case.   The  whole question is, whether Mukherjee got possession of the  shares with  the  consent  of the seller, and it  is  not  disputed that the consent of the defendant’s clerk,who was acting  as the agent of the owner, would be as effective as the consent of the owner himself.   As  has been said already, Bhuiya sent the shares  to  the defendant  bank on the 14th of February, 1946.   The  letter written  by him to the defendant on that date  concludes  as follows :     "I shall be highly obliged if you kindly realise the sum of  Rs. 38,562-8-0 as per the enclosed bill from Mr.  D.  N. Mukherjee  and  deliver  the shares to him  and  credit  the realised sum to my account No. 1 and oblige."     On  the  next day, that is to say on  the  15th,  Bhuiya wrote  to Mukherjee informing him that he had  deposited  in the Barabazar branch of the United Industrial Bank, 300 iron and 500 Steel Corporation shares and Mukherjee was requested to take delivery of the shares against payment  immediately. On  the 18th of February following, Nilkrishna Paul, an  old employee  in the cash department of the defendant bank,  was directed by the head cashier to see Mukherjee at his  office for  the  purpose  of  collecting the  money  from  him  and delivering  over the shares.  Sachindra Sen, an  officer  of the defendant under whose advice Paul was sent to Mukherjee, says  in his deposition, that he definitely instructed  Paul not  to deliver the shares unless he received  payment.   As regards the mode of payment, Sen says that it was already                          405 arranged  between him and Mukherjee that instead  of  paying the  money in cash, he would give a pay order of the  Punjab National  Bank, where he had an account, upon the  defendant bank.  Sen told Paul to examine the pay order carefully  and to  part with the shares only if he was satisfied about  it; otherwise,  he  should  come back with  the  shares  to  the office.   Paul,  who is the principal witness on  behalf  of the’ defendant, says in his deposition that the  instruction which  he  received  was  to deliver  the  shares  after  he obtained  the pay order.  Paul saw Mukherjee at  his  office chamber  at  about 1 1 a.m, on the 18th and on  his  telling Mukherjee  that he had come from the United Industrial  Bank to deliver over the shares, Mukherjee asked him to take  his seat.   Mukherjee then asked for the shares.  Paul told  him that he could not deliver the shares unless he was given the

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pay order.  Mukherjee then said "I just want to have a  look at  the shares and the papers only to see whether  they  are all right  or not." Upon this, Paul placed the shares on the table.  What happened afterwards is thus narrated by him  in his deposition :      "Then  he was looking at the shares one after  another. When  Mukherjee was about to leave the chamber, I  told  him not to go away but to give me the pay order.  He told me  ’I am  going out, to get the pay order, it is ready,  you  take your seat, I am coming.’ Then he went out of the chamber."     It  is  quite  clear that when  Paul  placed  the  share certificates  upon  the  table  and  allowed  Mukherjee   to scrutinise  them, he did not part with the possession of  or control over the shares.  It is true that Mukherjee  handled the  papers, but he did so in the presence -of Paul who  was sitting  by  his side in front of the same  table.   At  the most,  Mukherjee could be said to have the  barest  physical custody  for  the  purpose of  examining  the  papers.  When Mukherjee went out of the room with the shares in his  hand, he  undoubtedly  got possession of the shares ; but  on  the evidence on the record, we do not think it possible to  hold that  he  got  possession with the  consent  of  Paul.   The evidence shows that Paul actually protested and objected to 4-93 S. C. India/59. 406 his  going away with the shares without making any  payment. It  is true that Mukherjee told Paul that he was  going  out for  getting  the  pay  order,  and  would  be  coming  back immediately; but we cannot agree with Mr. Mullick that  Paul consented to Mukherjee’s taking away the papers, relying  on the  latter’s  promise  to come back  with  the  pay  order. Mukherjee gave Paul no opportunity whatsoever to express his assent  or  dissent  in this matter.   In  spite  of  Paul’s protest,  lie  bolted away with the papers  asking  Paul  to wait.  Paul says in his deposition that he waited for 2 or 3 minutes,  and  when Mukherjee did not come back,  he  became anxious  and  went out of the chamber  towards  the  counter where he found an old gentleman sitting.  The gentleman told him  that  Mukherjee was nowhere in the office.  This  shows that  Paul  did  not  really  rely  upon  the  assurance  of Mukherjee  , and did not allow Mukherjee to have  possession of  the  shares  upon that assurance.  It  was  against  his express  desire that Mukherjee took the shares and left  the chamber with them and he had to wait for a minute or two  as he  could not think of any other alternative open to him  at that  juncture.   Taking the evidence as a whole,  we  think that  the decision of the appellate bench of the High  Court is  correct and that on the facts and circumstances of  this case it cannot be held that Mukherjee got possession of  the shares with the consent of Paul.  The result, therefore,  is that the appeal is dismissed and the judgment of the  appeal court is affirmed.  As both the plaintiff and the  defendant were innocent persons, who suffered on account of the  fraud of  a  third party, we direct that the  parties  shall  bear their own costs in all the courts.                     Appeal dismissed. Agent for the appellant: Sukumar Ghose. Agent for the respondent: B. N. Ghose.  407