1970 Supreme(Raj) 211

RAJASTHAN HIGH COURT
S.N.Modi, J.
The Bank Of Rajasthan - Appellant
Versus
The State Of Rajasthan And Ors. - Respondent
D.B. Civil First Appeal No. 76 of 1960.
Decided On : 10-03-1970

The 'Tak Pattis' and 'Marfati Chithis' issued in the present case were 'documents of title to the goods' within the meaning of Clause 4 of Section 2 of the Sale of Goods Act, 1930, and the defendants were liable for the delivery of the goods mentioned therein.

Headnote:

SALE OF GOODS ACT, 1930 - SECTION 2(4) - DOCUMENTS OF TITLE TO GOODS - INTERPRETATION - MARFATI SYSTEM - LIABILITY OF FACTORY AND STATE FOR DELIVERY OF GOODS - TAK PATTIS AND MARFATI CHITHIS AS DOCUMENTS OF TITLE - LIABILITY FOR ILLEGAL DETENTION OF GOODS.

Fact of the Case:

The plaintiff, a bank, advanced money to a cotton dealer, Uttamchand, under a cash credit account on the security of goods endorsed in its favor under 'Marfati Chithis' issued by the Government Ginning and Pressing Factory, Kapasin. The plaintiff presented the 'Tak Pattis' and 'Marfati Chithis' and demanded the goods from the factory manager, but he did not deliver them. The plaintiff sued the State of Rajasthan, the factory manager, and Uttamchand for the recovery of the loan amount or, alternatively, for the delivery of the goods.

Finding of the Court:

The court held that 'Tak Patti' Ex.13 and its 'Marfati Chithi' Ex 12 were not genuine and were not issued by the factory. The court also found that the defendants failed to prove that 92 bales were delivered to the plaintiff and Uttamchand. The court further held that the 'Tak Pattis' and 'Marfati Chithis' issued in the present case were 'documents of title to the goods' within the meaning of Clause 4 of Section 2 of the Sale of Goods Act, 1930.

Issues: 1. Whether 'Tak Patti' Ex.13 and its 'Marfati Chithi' Ex 12 were genuine and issued by the factory? 2. Whether the defendants proved that 92 bales were delivered to the plaintiff and Uttamchand? 3. Whether the 'Tak Pattis' and 'Marfati Chithis' issued in the present case were 'documents of title to the goods' within the meaning of Clause 4 of Section 2 of the Sale of Goods Act, 1930?

Ratio Decidendi: 1. The court held that 'Tak Patti' Ex.13 and its 'Marfati Chithi' Ex 12 were not genuine and were not issued by the factory based on the following reasons: (i) Pressing numbers mentioned in 'Tak Patti' Ex.13 were not reached by the date of the 'Tak Patti'. (ii) Another 'Tak Patti' (Ex.130) with some common pressing numbers was issued to Uttamchand on the same day, raising suspicion of forgery. (iii) There was an unexplained delay of more than a month between the date of 'Tak Patti' Ex.13 and the date of endorsement of the goods in favor of the plaintiff. (iv) Form No. 91, on which 'Tak Patti' Ex.13 was prepared, was missing from the 'Tak Patti' book, and the signatures of the factory clerk on Ex.12 and Ex.13 were not genuine. 2. The court held that the defendants failed to prove that 92 bales were delivered to the plaintiff and Uttamchand based on the following reasons: (i) Gate passes produced by the defendants did not show that the bales pertaining to the disputed 'Tak Pattis' were taken out of the factory. (ii) The plaintiff possessed the original 'Tak Pattis', which would not have been the case if the bales had been delivered. 3. The court held that the 'Tak Pattis' and 'Marfati Chithis' issued in the present case were 'documents of title to the goods' within the meaning of Clause 4 of Section 2 of the Sale of Goods Act, 1930, based on the following reasons: (i) The documents were used in the ordinary course of business as proof of possession of the goods. (ii) The 'Marfati Chithis' authorized the 'Marfatis' to receive the goods mentioned therein.

Final Decision: The court allowed the appeal in part, set aside the decree passed by the lower court, and passed a decree against the State of Rajasthan and the Manager of the factory for the return of 96 bales of cotton or their value prevailing at 'Kapasin', the place of delivery, on the date of the decree of this court. The value of the goods was to be determined by the executing court.