Under S. 176 of the Contract Act, a pawnee can sue for the debt while retaining the pledged goods as collateral security, but if the goods were delivered and in the appellant's custody, he could not obtain a decree against the promissory note and retain the goods.

Judgement

SHELAT, J. : This appeal by certificate is directed against the judgment and degree passed by the High Court of Allahabad reversing the judgment and decree passed by the Civil Judge, Allahabad, directing the respondents to pay to the appellant Rs. 18,142 and costs.

2. Two questions arise in this appeal : viz., (1) whether the first respondents pledged certain quantity of aeroscrapes purchased by him from military authorities at Bamrauli Depot, Allahabad, and delivered possession thereof to the appellant under an agreement of pledge entered into between them, and (2) whether the appellant was entitled to any relief when his case was that the first respondent never delivered to him the said goods and the said agreement never ripened into a pledge.

3. On January 10, 1946 the appellant advanced us. 20,000 to the first respondent against a promissory note and a receipt. The first respondent also executed an agreement whereby he agreed to pledge as security for the debt the said aeroscrapes and to deliver them at the appellant s house and keep them there in his custody. The appellant s case, however, was that the first respondent failed deliver the said goods to him, stored them a plot adjacent to the aerodrome at Allahabad and, therefore, the said agreement did not ripen into a pledge. Consequently, he was entitled to recover the amount advanced by him in the suit based on the said promissory note and the said receipt. In is written statement the first respondent admitted the said loan but alleged that in pursuance of the said agreement he delivered 147 tons of aeroscrapes of the value of Rs. 35,000 to the appellant. He claimed that the appellant was not entitled to obtain a decree unless he was ready and willing to redeliver the said goods pledged with him.

4. In the Trial Court the appellant besides examining himself also led the evidence of other witnesses. The respondents in their turn led both documentary and oral evidence and relied in particular on certain notices served upon them by the appellant as also certain receipts issued by the appellant in respect of payments made to the appellant against sales by him of part of the said goods.

5. The Trial Judge, however, rejected the respondents case and held that there was no completed contract of pledge as the first respondent had failed to deliver the said goods, that the second respondent had agreed to become a surety for repayment of the said loan, that thereupon the appellant did not insist on possession of the said goods being given to him and that, therefore, he was entitled to maintain the suit and recover the said monies. On an appeal by the respondents, the High Court held that the said decree. The High Court held that the said goods were delivered to the appellant, that the said agreement to pledge but ripened into a pledge and that the appellant was not entitled to any relief in view of his stand that the said goods were never pledged with him and were, therefore, not in his possession. In the result, the High Court dismissed the appellant s suit with costs.

6. Mr. Rana, for the appellant, challenged both the findings of the High Court and contended (1) that the High Court was not justified in finding that the first respondent had delivered the said goods to the appellant and the said goods, therefore, remained in his custody, and (2) that even if the goods were delivered to the appellant the appellant could under S. 176 of the Contract Act still maintain his suit on the said promissory note and recover the amount due thereunder.

7. As the High Court s judgment is one of reversal Mr. Rana took us through the relevant portion of the evidence the findings of the High Court cannot be sustained.

8. The first question is question whether the first respondent after obtaining the aeroscrapes from the military authorities delivered them to the appellant. Before, however, we proceed to consider this question we may first set out certain undisputed facts. There is no disput