CALCUTTA HIGH COURT
Macpherson, J.
Kartick Churn Setty - Appellant
Versus
Gopalkisto Paulit & Anr. - Respondent
Decided On : 06-08-1877
Pledge - Jewellery - Indian Contract Act, 1872 - Section 178 - A pledge of goods obtained by fraud is invalid - The pawnee is liable to the true owner - The Court has jurisdiction to entertain the suit even if the pledge was made outside the jurisdiction of the Court - The plaintiff is entitled to recover the jewellery or its value from the pawnee.
Fact of the Case:
The defendant Gopalkisto Paulit obtained jewellery from the plaintiff on the pretext of inspection for ten days with a view to purchase. He then immediately pledged the jewellery to the defendant Kally Kissen Roy for 6,000 rupees. The plaintiff sued to recover the jewellery or its value from both defendants.
Finding of the Court:
The Court found that Gopalkisto Paulit had obtained the jewellery from the plaintiff by fraud. The Court also found that the defendant Kally Kissen Roy had acted in good faith but was still liable to the plaintiff as the pledge was invalid under Section 178 of the Indian Contract Act, 1872. The Court held that it had jurisdiction to entertain the suit even though the pledge was made outside the jurisdiction of the Court.
Issues: Whether the pledge of the jewellery to the defendant Kally Kissen Roy was valid under Section 178 of the Indian Contract Act, 1872. Whether the Court had jurisdiction to entertain the suit against the defendant Kally Kissen Roy.
Ratio Decidendi: Section 178 of the Indian Contract Act, 1872, provides that a person in possession of goods may make a valid pledge of them, provided the pawnee acts in good faith. However, the section also contains a proviso that no such pledge is valid if the goods have been obtained from their lawful owner by means of an offence or fraud. The Court held that the pledge in this case was invalid because the goods had been obtained by fraud. The Court also held that it had jurisdiction to entertain the suit because the fraud occurred within the jurisdiction of the Court.
Final Decision: The plaintiff was entitled to a decree against both defendants for the jewellery or its value. The decree against Kally Kissen Roy was for the jewels produced in Court or Rs. 6,250. The decree against Gopalkisto was for all the jewels or Rs. 6,250.
JUDGMENT
Macpherson, J. - In this case the facts, which I find to be proved, are, that the defendant Gopalkisto Paulit came to the plaintiff's place of business in Calcutta, and there got from him the jewellery, which is the subject of this suit, taking it away and giving for it a receipt in which the prices of the articles were mentioned, and it was stated that they were taken on ten days inspection. He said, he was taking the jewels on inspection, and would purchase if he did not return within the ten days. But I do not consider it proved that he ever said he would send them up to Moorshedabad or to Baboo Poolinbehari Sen.
2. I believe that the plaintiff allowed him to take away the jewellery, because he said he wished to take it with a view to purchase on ten days' inspection, and would buy if he did not return within that time, because he deposited two thousand rupees, and because Koylash Chunder Sircar, a cashier in the employment of Moharaja Jotindro Mohun Tagore, said, that he was a respectable man, and good for twelve thousand rupees. Gopalkisto Paulit, having thus obtained the jewellery, immediately took the articles to the defendant Kally Kissen Roy at his house, which is just outside the limits of the town of Calcutta, and there and then pledged them for 6,000 rupees.
3. The present suit is brought to recover the jewellery or its value either from Gopalkisto Paulit or from Kally Kissen Roy. Gopalkisto not being now forthcoming, the suit is in truth chiefly brought in order to establish the liability of the defendant Kally Kissen Roy, with whom all the articles were pledged, with the exception of one ring, which in the receipt is stated to be worth Rs. 250.
4. The plaintiff's suit is based upon the 178th section of the Contract Act, which declares that the person in possession of goods may make a valid pledge of them, provided the pawnee acts in good faith, and under circumstances which are not such as to raise a reasonable presumption that the pawnor is acting improperly; but adds a proviso, the effect of which is, that no such pledge is valid if the goods have been obtained from their lawful owner by means of an offence or fraud.
5. The plaintiff's case is, that the pledge of these articles to the defendant Kally Kissen Roy was not a valid pledge, even if he acted in good faith, because Gopalkisto Paulit had obtained them from the plaintiff' by means of an offence or fraud.
6. The defendant Kally Kissen Roy's principal defence is, that the transaction in which alone he is concerned having taken place at his house, which is beyond the limits of the ordinary jurisdiction of this Court, the suit will not lie, this Court not having jurisdiction in the matter so far as ha is concerned.
7. I was at first much inclined to think that the defence was good. But, on further consideration, I think that this Court has jurisdiction. The plaintiff's cause of action is really this, that although the defendant Gopalkisto Paulit was in possession of these articles at the time he pledged them with the defendant Kally Kissen Roy, still Gopalkisto Paulit had obtained them from their lawful owner by means of an offence of fraud; and therefore the plaintiff, as such lawful owner, is entitled to recover them or their value from the pawnee. There is no doubt the plaintiff could not prove his case against Kally Kissen Roy without showing the circumstances under which Gopalkisto Paulit got possession of the goods; and. as all these circumstances occurred within the town of Calcutta, I think that a part of the plaintiff's cause of action did arise in Calcutta. The offence or fraud by means of which Gopalkisto obtained possession took place in Calcutta, and that offence or fraud is certainly part of the plaintiff's cause of action.
8. On the issue as to whether the goods were obtained from the plaintiff by fraud, I think (my opinion on this point also being somewhat contrary to my first impression), that the plaintiff made out a prima facie case when
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