2004 Supreme(Guj) 400

Gujarat High Court
Judgename :K.M.MEHTA
O.L.OF PIRAMAL FINANCIAL SERVICES LTD - Appellant
Versus
DENA BANK - Respondent
OFFICIAL LIQUDATOR REPORT56 of 2003
Decided On : 07/02/2004

Headnote:(a) Sale of Goods Act, 1930 (Central Act 3 of 1930) - Sec. 27 - Transfer of title - Principle of - Provision under the section is based upon Roman maxim, Nemo Dat Quod Non Habet which means that no one can transfer a better title to goods than he himself possesses - If one deals with the goods of another without his authority the transaction is as against that other nugatory in Law.

       Court has considered Sec. 27 of the Sale of Goods Act which is under Chapter Transfer of Title. Section 27 provides sale by person not the owner. Section 27 expresses the general proposition that no one can give what he has not got, and if one deals with the goods of another without his authority, the transaction is as against that other nugatory in law.

       [Para 6.2]

       This section is based upon the Roman maxim Nemo Dat Quod Non Habet. The aforesaid maxim has been explained by Benjamins Sale of Goods, 5th Edition, Chapter 7, para 7-001, page 321 where the learned author has observed as :

       Nemo dat quod non habet. - The general rule in English law is that no one can transfer a better title to goods than he himself possesses. This rule is often expressed in terms of the Latin maxim `nemo dat quod non habet. It is partially set out in Sec. 21(1) of the Sale of Goods Act, 1979, which provides Subject to this Act, where goods are sold by a person who is not their owner, and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had.

       [Para 6.2-A]

       (b) Reserve Bank of India Act, 1934 (Central Act 2 of 1934) - Sec. 45-A - Winding up - Report of official liquidator - Possession of premises situated at 103, Ganesh Plaza resisted by Shri D.P. Patel who alleged sale of premises by Radhe Associates in his favour - Considering rival contentions Court held that liquidator has established his right, title and interest in the disputed premises - He may, therefore, be authorised to take possession of the alleged premises - Respondent No. 9 Sri D.P. Patel be directed to handover vacant and peaceful possession and if he resists liquidator may obtain assistance of police.

       It is an admitted fact that Radhe Associates issued a letter of allotment on 10th April, 1997, and certificate of possession was also issued by Radhe Associates. The said allotment letter dated 10th April, 1997, and certificate of possession are produced at pages 5 and 6 of the paper book. It has also been stated that full and final payment has been made by Piramal Finance in this behalf. In view of the same as per the letter of allotment, Piramal Financial Services Ltd. became owner of Shop No. 103 alongwith undivided share of the unit, superstructure and other allied services to it. Once Shop No. 103 became of the ownership of Piramal Financial Services Ltd., the Radhe Estate Developers or any third party who has no right, title or interest in respect of the said Shop No. 103, can not create a security of the said shop in favour of Piramal Financial Services Ltd. as stated in the agreement.

       [Para 6.3]

       From the record it appears that Piramal Financial Services Ltd. was the owner of Shop No. 103 and further Radhe Estate Developers has no right, title or interest in respect of Shop No. 103. So far as Shop No. 103 is concerned, Radhe Estate Developers had no right, title or interest in the said property at any time whatsoever. In Court view once the ownership is created in favour of Piramal Financial Services Ltd. on 10th April, 1997, no third party can create security and that too in favour of the person, who is the owner of the property. It may be noted that everything has been done at the behest of Mr. Ashish Patel, who is concerned with all the parties, namely, Piramal Financial Services Ltd., Radhe Associates and Radhe Estate Developers. In view of the same, the subsequent agreement is not a valid agreement and does not create any security and is having no effect and it did not create any security, as is alleged by Mr. Ashish Patel.

       [Para 6.6]

       The Liquidator has established his right, title & interest in the shop No. 103 at Ganesh Plaza and respondent No. 9 has no right, title or interest in respect of said Shop No. 103 and as such liquidator may be authorised to take possession of Shop No. 103 as prayed for and respondent No. 9 be directed to hand over vacant and peaceful possession and if respondent No. 9 resists in giving possession, liquidator may be authorised to obtain police assistance for taking possession of the shop No. 103 at Ganesh Plaza from respondent No. 9.

       [Para 6.12]