Judgement

Appeal (No. 26 of 1924) from a decree of the High Court in its appellate jurisdiction (March 15, 1923) reversing a decree of that Court in its original jurisdiction.

The appellants brought the present suit in the High Court against one Gora and the respondents (defendants 2 and 3). Against Gora they claimed the return of certificates and blank transfers in

Law Rep. 53 Ind. App. 92 ( 1925- 1926) Maneckji Pestonji Bharucha V. Wadilal Sarabhai and Company

respect of 129 shares in Alcock, Ashdown & Co., Ld., or Rs. 1,54,800, the contract price; against the respondents, Wadilal Sarabhai & Co. and Gora, they claimed delivery of the certificates and transfers, and payment of damages by Gora.

The facts appear from the judgment of the Judicial Committee. The trial judge (Kajiji J.) made a decree, the effect of which was as follows Gora was ordered to deliver to the plaintiffs 129 shares or to pay Rs. 1,54,800 ; defendants 2 and 3 were declared to be in possession of 104 shares and were ordered to deliver them, to pay Rs. 71,500 damages, and to account for all dividends received.

The defendants 2 and 3 filed separate appeals, which were tried together, and allowed. The reasons of the learned judges (Macleod C.J. and Crump J.) appear from the present judgment.

1925. Nov. 17, 19, 20. Clauson K.C., E. B. Raikes and H. Johnston for the appellants. Upon the default in payment the appellants were entitled to rescind the contract and call for the return of the certificates and transfers. A stipulation was to be implied in the contract that the seller could rescind upon default in payment. Time was of the essence of his contract to pay In re Schwabachen. (( 1908) 98 L. T. 127, 129.) That was especially so if the Bombay Stock Exchange rules applied. In

s. 121 of the Indian Contract Act, 1872, the proviso as to a stipulation to the contrary includes an implied stipulation. But s. 121 does not apply, because the subject of the sale was a chose in action, not " goods." There was no delivery, since the name of the transferee had not been put upon the register.

Sir John Simon K.C., Sir George Lowndes K.C. and Dube for the first respondents. Having regard to

s. 76 and the illustration to s. 88 of the Indian Contract Act, 1872, and s. 2, sub-s. 6, of the General Clauses Act, 1868, the subject of the contract was " goods " within the former Act. The sellers had no right to rescind. The stipulation referred to in the proviso to s. 121 of the Act of 1872 is an express stipulation. Rule C. of the Bombay Stock Exchange was not shown to have been incorporated with the contract; the rules were not pleaded. There was a complete delivery in the only way in which delivery of the subject of the contract could be made Hibblewhite v. MMorine (( 1839) 5

M. & W. 462.); Pollock and Wright on Possession, p. 6.

Clauson K.C. in reply. Time being of the essence of the contract, the seller had a right to rescind under s. 55 of the Indian Contract Act even if the property had passed Buldeo Doss v. Howe. (( 1880) I. L. R. 5 C. 64.) Gora was bound by the rule of the Bombay Stock Exchange to return the shares, and the appellants were in no better position. The subject matter of the contract was not " goods," but a chose in action ; the Court will apply equitable principles. Until the shares were placed in the transferees name on the register the seller had an equitable lien in respect of the price ; the buyer was in the position of a trustee In re Stuckley ([ 1906] 1 Ch. 67.); Fry on Specific Performance, 6th ed., pp. 549, 550. The subject of transfers of choses in action is dealt with in the Transfer of Property Act, 1882, ss. 130 et seq., but s. 157 excludes stocks and shares. A contract for the sale of shares is enforceable by specific performance Paine v. Hutchinson (( 1868) L. R. 3 Ch. 388.); Fry on Specific Performance, 6th ed., p. 678 ; the law in India is the same Specific Relief Act, 1877, ss. 12, 35.

Sir John Simon K.C. in rejoinder on new contention in rep