A pawnee is not bound to sell the pledged goods within a reasonable time after the expiry of the period mentioned in the notice of sale.

Kapur, J.

1. This is a defendants appeal against a judgment and decree of Mr. Mohindar Singh, Subordinate Judge 1st Class, Delhi, dated 18-6-1050 decree-ing the plaintiffs suit for the recovery of RS. 9,000/- with costs.

2. The plaintiff had a cash credit account with the Bharat Bank, Limited, at Rawalpindi prior to the year 1947. He had pledged as security 988 shares of the Rawalpindi Electric Supply Company Limited. On 11-8-1947 the Bank gave notice to the plaintiff demanding payment of the debt due from the plaintiff by 18-8-1947 and if the amount was not paid, the shares would be sold without any reference to the debtor and at his risk and responsibility. This is Ex. P-1 at p. 43 of the paper book, but it is not clear when it reached the plaintiff. No reply was sent to this letter of demand. On 20-8-1948 the shares were soldi at Rs. 10/- per share which is evidenced by the document Ex D-1 at p. 66 of the paper book. The plaintiff on 31-1-1949 gave a lawyers notice to the defendant Bank claiming Rs. 9,000/- on account of the surplus which would have accrued had the shares been sold by the middle of September 1947 when the price was Rs. 19/12/- per share and the Bank replied on 8-2-1949 saying that they were not bound to sell the shares in September 1947 and could sell them at any time after the expiration of the period mentioned in the notice sent by them in August 1947. The Bank also claimed Rs. 2,172/12/6 after giving credit for the sale proceeds of the shares and called upon the plaintiff to pay that amount.

3. On 9-3-1949 the plaintiff filed a suit for the recovery of Rs. 9,000/- being the surplus after deducting the amount due from the plaintiff to the defendant in the cash credit account calculated at the value of the shares pledged at Rs. 10/12/-. He also alleged that the Bank was bound to sell and must be deemed to have sold the shares on or about 18-8-1947, and if due to the want of diligence on the part of the defendant Bank to sell the shares on 18-8-1947, there was any fall in the price of the shares, the liability was of the Bank. The material pleas of the defendant Bank were that the Bank could not function after August 1947 due to disturbances, that the Bank could not bring its records to India due to restrictions imposed by the Pakistan Government and that before the shares could be sold the Bank had to get the sanction of the Custodian of Eva-cuee Property. The Bank also pleaded that it was not bound to sell on 18-8-1947 or within a reasonable time thereafter and that after giving credit for the price of the shares which amounted to Bs. 9,880/-at the rate of Rs. 10/- per share a sum of Bs. 2,322/12/6- was due from the plaintiff for which a separate suit could be brought.

The Court stated the following issues- 1.Whether the defendant was entitled to sell the shares on the day and at the rate which he has actually sold them?

2.What was the price of the shares on 18-8-1947 or thereabout?

3.Whether the plaintiff is entitled to recover the difference in the price? If, so, how much?

4.Relief.

and held that as a pawnee the Bank should have sold the shares within a reasonable time of 18-8-1947 and they were not entitled to sell in August 1948 even though they gave a subsequent notice in the newspapers calling upon the plaintiff to pay within fifteen days in default of which the pledged shares would be sold. It was also held that the price in August 1947 was Rs. 19/8/- per share which was also the price in September 1947 and therefore the shares should have been sold at that price and therefore the plaintiff was entitled to recover the surplus after paying off his debt to the Bank.

4. The defendant Bank has come up in appeal to this Court and has submitted that there was no obligation on the defendant to sell either in August 1947 or within a reasonable time thereafter. The right of a pawnee in case of default of payment by the pawnor is given in Section 178, Contract Act which provides that on a default bei