Central National Bank Ltd vs United Industrial Bank Ltd

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 32 of 1953

Decision Date: 26 November 1953

Coram: B.K. Mukherjea, Natwarlal H. Bhagwati, B. Jagannadhadas

In the case titled Central National Bank Ltd versus United Industrial Bank Ltd, the judgment was delivered on 26 November 1953 by a bench of the Supreme Court of India consisting of Justice B.K. Mukherjea, Justice Natwarlal H. Bhagwati, and Justice B. Jagannadhadas. The petitioner in the appeal was Central National Bank Ltd and the respondent was United Industrial Bank Ltd. The citation for the decision is reported as 1954 AIR 181 and 1954 SCR 391. The judgment examined provisions of the Indian Sale of Goods Act (III of 1930), specifically section 30(2), together with sections 13 and 14 of the Indian Contract Act (IX of 1872). The core issue concerned the interpretation of the term “consent” in section 30(2) of the Sale of Goods Act and the rights of a bona-fide purchaser where possession of goods was obtained by fraud.

The Court explained that “consent” under section 30(2) means “agreeing on the same thing in the same sense,” as defined in section 13 of the Contract Act, and does not refer to “free consent” as defined in section 14. Consequently, the Court held that when a person obtains possession of goods from another who has agreed to sell them, the possession is deemed to be with the seller’s consent within the meaning of section 30(2), even if the acquisition is achieved by fraud, unless the fraud is of such a nature that it negates consent altogether. The Court further observed that the existence of a criminal offence arising from the fraud or deception does not alter the application of this principle.

In the factual background, the plaintiff bank had agreed to sell certain share certificates and accompanying blank transfer deeds to a buyer, referred to as B. The plaintiff dispatched the documents to the defendant bank with instructions to deliver them to B upon receipt of the purchase price. The defendant bank sent one of its clerks to B’s office, where the clerk placed the documents on a table for B’s inspection, but stipulated that payment must be made before B could take possession of them. B left the office, stating he would return with the money, but instead disappeared and later pledged the documents to the plaintiff. The Court held that, under these circumstances, B had obtained possession of the shares without the seller’s consent and that the plaintiff did not acquire any title against the defendant bank or the original seller.

The Court relied upon English authority, including Folkes v. King ([1923] 1 K.B. 282), Lake v. Simmons ([1926] 2 K.B. 51), Pearson v. Rose ([1950] 2 All E.R. 1027), Cahn v. Pockett’s Bristol Channel Steam Packet Co. ([1899] 1 Q.B. 643), and Oppenheimer v. Frazer ([1907] 2 K.B. 50). The judgment of the Calcutta High Court, which had been affirmed, was cited as part of the appellate record. The matter before the Supreme Court was a civil appeal, identified as Civil Appeal No. 32 of 1953, arising from a judgment and decree dated 12 March 1951 of the Calcutta High Court, which itself reversed an earlier decision of a single judge dated 21 March 1950 in Suit No. 1112 of 1946.

In this appeal, the Court observed that the dispute arose in the ordinary original civil jurisdiction of the Calcutta High Court under Suit No. 1112 of 1946. The appellant was represented by counsel P. C. Mullick and A. K. Dutt, while the respondent was represented by counsel Sankar Banerjee together with B. Das and S. N. Mukherji. The judgment dated 26 November 1953 was delivered by Justice Mukherjee. The appeal challenged a judgment and decree issued by an appellate bench of the Calcutta High Court on 12 March 1951, which had set aside, on appeal, the decision of a single Judge of that court in the same Suit No. 1112 of 1946. The original suit had been instituted by Central National Bank Limited, the appellant, in the Original Side of the Calcutta High Court. The bank sought a declaration that it had acquired the rights of a pledgee over two blocks of shares in two companies, namely Indian Iron and Steel Company Ltd. and Steel Corporation of Bengal Ltd., and that it was therefore entitled to sell those shares in enforcement of the pledge. The suit also contained a claim for the recovery of possession of the disputed shares and for damages which the plaintiff alleged it had suffered because the defendant bank had wrongfully denied its title. The shares in question amounted to eight hundred in number and were, as admitted, the property of one Radhika Mohan Bhuiya, who was designated as defendant No. 2. In February 1946, Bhuiya entered into an agreement to sell the shares to Dwijendra Nath Mukherjee for a total purchase price of Rs. 38,562-8-0. On 14 February 1946, Bhuiya dispatched the share certificates together with the corresponding transfer deeds to the defendant bank, directing that the certificates and deeds be handed over to the purchaser only upon receipt of the full purchase price. Subsequently, on 18 February, the defendant bank issued instructions to one of its officers, Nilkrishna Paul, to meet Mukherjee at his office and to deliver the share certificates and deeds to him after obtaining from Mukherjee a pay order for Rs. 38,562-8-0, which was to be signed by the Punjab National Bank. Acting upon these instructions, Paul proceeded to Mukherjee’s office and found him in his chamber at approximately eleven o’clock in the morning.

Mukherjee requested that Paul hand over the share certificates, but Paul refused to do so unless Mukherjee produced the pay order. Mukherjee then expressed a desire to inspect the share certificates and the transfer deeds in order to verify that they were in order. In response, Paul placed the share certificates and the transfer deeds on a table for Mukherjee’s examination. Mukherjee proceeded to scrutinise each share certificate one by one. When he was about to depart from the chamber, taking with him the share certificates and the transfer deeds, Paul interposed an objection and insisted that Mukherjee should not leave without first providing the pay order. Mukherjee replied to Paul, stating: “I am going out to get the pay order; it is ready. You take your seat; I”. With those words, Mukherjee left his chamber and did not return. The record shows that Mukherjee subsequently went to the plaintiff bank and pledged the shares there, obtaining an advance of Rs. 29,000 under an agreement between the parties, but the present portion of the judgment is limited to the events described in the encounter between Mukherjee and Paul as recounted above.

After Mukherjee left his chamber stating that he would return with the pay order, he never came back and proceeded directly to the plaintiff bank where he pledged the shares and obtained an advance of twenty-nine thousand rupees under a prior agreement between them. Mukherjee opened a current account in his own name at the plaintiff bank by issuing a cheque for one hundred rupees; the bank then extended the twenty-nine thousand rupee advance to him by way of an overdraft facility on that newly opened account, and he additionally executed a promissory note in favour of the plaintiff for the same amount. Subsequently Mukherjee disappeared, and his whereabouts remain unknown.

Paul, an officer of the defendant bank, after waiting in vain for Mukherjee, returned to his own office and reported the whole incident to his senior officer, after which the defendant bank lodged a complaint with the police. The cheque that Mukherjee had given to the plaintiff bank was dishonoured when presented for payment, prompting the plaintiff to send a letter demanding immediate repayment of the loan and warning that the pledged shares would be sold in the event of default. Receiving no reply, the plaintiff bank sold the shares through a broker named Jalan, who took delivery of the shares and issued the plaintiff a cheque for sixteen thousand rupees as part payment of the purchase price.

The cheque issued by Jalan was subsequently stopped, and the police, who had already taken up the matter, seized the shares. Because Mukherjee could not be located, a criminal prosecution was instituted against an alleged associate named Shaw; that prosecution failed and Shaw was acquitted. The defendant bank, having paid the full price of the shares to Bhuiya, then filed an application before the Magistrate seeking the return of the shares on the ground that it was the owner. Upon learning of this application, the plaintiff bank instituted the present suit, contending that, as the pledgee of the shares, it was legally entitled to possession.

The court noted that Bhuiya, having been fully compensated by the defendant bank, no longer had any interest in the litigation, rendering the dispute entirely a contest between the two banks. It was not disputed that Mukherjee never obtained legal title to the shares; there existed merely a sale agreement between Mukherjee and Bhuiya, and under the terms of that contract ownership of the shares could not pass to Mukherjee until the purchase price was paid. Consequently, the plaintiff bank was not a pledgee of the shares from the true owner, and its claim to possession rested solely upon the provisions of section thirty-two of the Indian Sale of Goods Act, which it relied upon to assert that its possession was lawful.

The Court referred to the relevant provision of the Sale of Goods Act, which reads as follows: “Where a person, having bought or agreed to buy goods, obtains, with the consent of the seller, possession of the goods or the documents of title to the goods, a later delivery to a good-faith recipient is deemed effective. The delivery is effective only if the recipient lacks notice of any lien or other right of the original seller, and it operates as if that lien never existed.” The plaintiff bank argued that it had received the shares by way of pledge from Mukherjee, who had agreed to purchase the shares from Bhuiya. It further said that the pledge was made in good faith without any notice of a defect in Mukherjee’s title. Accordingly, the plaintiff contended that the pledge should be deemed effective under section 30(2) of the Sale of Goods Act, because the transfer occurred as if the original seller’s right did not exist. The defendant bank, in contrast, maintained that Mukherjee never possessed the shares with the consent of the seller. It further argued that the plaintiff therefore could not be considered a bona fide pledgee without notice of a title defect. Consequently, the whole controversy centered on whether, based on the evidence presented, the plaintiff bank was entitled to rely upon the protection afforded by section 30(2) of the Indian Sale of Goods Act.

The trial judge, Mr Justice Sarkar of the Calcutta High Court, examined the factual matrix and decided the issue in favour of the plaintiff bank. He held that Mukherjee had obtained possession of the shares with the consent of Bhuiya, or more precisely with the consent of Bhuiya’s agent, the bank officer, which satisfied the requirement of section 30(2). He explained that the bank officer’s acceptance of the shares on behalf of the defendant bank amounted to an implied authorisation for Mukherjee to take possession. The judge further observed that it was irrelevant for the application of the subsection whether the consent had been obtained through fraud. He also held that it was immaterial whether Mukherjee’s conduct might amount to the offence of “larceny by trick” under English law. Moreover, the trial court found that the plaintiff bank had acted in good faith and had no notice of any defect in Mukherjee’s title to the shares. The trial judge rejected the defendant’s contentions that fraud or criminal intent nullified the effect of the seller’s consent under the statute. Relying on these findings, the trial judge decreed in favour of the plaintiff, granting the relief sought in the suit.

The defendant bank appealed the trial judgment before a bench consisting of Chief Justice Trevor Harries and Justice Banerjee. The appellate bench reversed the trial court’s order, holding that the defendant’s agent had never consented to Mukherjee’s acquisition of possession of the shares as a buyer. The judges concluded that there was no intention on the part of the seller to effect delivery of the shares, and that Mukherjee had taken the shares without any authorised consent. The appellate court characterised Mukherjee’s act as equivalent to theft, likening it to taking the shares out of Nilkrishna Paul’s pocket. The appellate judges based their finding on the submission that no formal delivery had taken place, and that the seller’s agent had expressly refused to authorize any transfer to Mukherjee. Consequently, they held that the plaintiff could not claim the benefit of section 30(2) because the statutory conditions were not satisfied. Accordingly, the appellate court dismissed the plaintiff’s claim for relief and restored the status quo ante. The present appeal before this Court arises against that appellate decision.

In this case the Court had to consider whether the view adopted by the appellate bench of the High Court was correct. Counsel Mullick, who presented the appellant’s case with fairness and skill, submitted that, based on the facts, the appellate court should have concluded that the plaintiff had acquired the rights of a pledgee in respect of the disputed shares pursuant to section 30(2) of the Sale of Goods Act. He emphasized that there was no dispute that a valid contract of sale existed between Bhuiya, who was the true owner of the shares, and Mukherjee, and that the trial judge had found that the plaintiff was a bona-fide pledgee of Mukherjee without knowledge of any other claim to title; that finding, he noted, was not overturned on appeal. According to Mullick, the only further element required to allow the plaintiff to rely on the protection of section 30(2) is proof that Mukherjee obtained possession of the shares with the consent of the seller or of the seller’s agent, and it is on that point alone that the lower courts reached opposite conclusions. The learned counsel argued that the term “possession” in the statutory provision means merely physical custody, and that the question of whether the owner’s consent was present must be examined in light of the definition of “consent” contained in section 13 of the Indian Contract Act. He further submitted that, if consent existed in fact, it is irrelevant that it was obtained by fraud or misrepresentation, and that no principle of criminal law, let alone the technicalities of English criminal law, should be imported to decide the issue. On the facts, the counsel maintained that the defendant’s agent actually consented to surrender possession of the shares to Mukherjee, even though the agent was misled by a false promise that Mukherjee never intended to fulfil. The propriety of the legal propositions advanced on behalf of the appellants was, for the most part, not contested by counsel Banerjee, who appeared for the defendant-respondent. Consequently, the real dispute, as will be seen, centres on whether, given the factual matrix, it can be said that Mukherjee obtained possession of the shares with the consent of the defendant’s agent. Since the points of law have already been examined in the judgments of the lower courts and the learned judges have referred to several English decisions involving similar statutory language, the Court considered it appropriate to briefly set out its own view on the matter, solely for the purpose of removing any doubt about the meaning and effect of the word “consent” as employed in section 30(2) of the Sale of Goods Act. The two principal

In this case the Court set out two principal issues that required resolution. The first issue was whether the consent required by section 30(2) of the Sale of Goods Act must be a free consent, that is, consent that is not influenced by fraud or false representation. The second issue was whether such consent was, as a matter of law, automatically negated when a person falling within the description of the section obtained possession of the goods from the owner by trick or other deceitful means that would render the act punishable as a crime. The Court observed that no High Court in India had decided either of these questions, and therefore it turned to a number of decisions of English courts in which similar questions arose under section 25(2) of the English Sale of Goods Act and section 2(1) of the Factors Act, provisions that employ language almost identical to that of section 30(2). The Court stated that it was neither necessary nor desirable to conduct an exhaustive discussion of all the English authorities cited, but it would consider, where needed, the essential principles upon which the leading English judgments were based and examine whether those principles shed any light on the issues before it. The Court agreed with counsel for both parties that the word “consent” in section 30(2) should be understood as “agreeing on the same thing in the same sense,” a meaning given in section 13 of the Indian Contract Act. Although the Sale of Goods Act itself does not define “consent,” section 2(15) of that Act provides that any expression not defined therein but defined in the Contract Act shall have the meaning assigned in the latter. Section 14 of the Contract Act defines “free consent” and explains that consent is not free when it is caused by coercion, undue influence, fraud, misrepresentation or mistake. The Court noted that consent obtained through false representation may not be free, yet it can still be real, and that fraud or misrepresentation ordinarily renders a transaction voidable rather than void. Accordingly, when an innocent purchaser or pledgee receives goods from a possessor whose title is merely defeasible on the ground of fraud but has not yet been defeated at the time of the transaction, there is no reason to deny protection to the innocent party. The possessor’s right is determinable, but until it is actually determined, it is sufficient to enable that possessor to create a title in favour of an innocent transferee who gives value without notice. The Court observed that this proposition is well recognised in English law and appears to be firmly grounded on established legal principles.

In the case of Cahn v. Pockett’s Bristol Channel Steam Packet Company, Collins L.J. famously observed that however fraudulent a person may be in acquiring possession—provided the conduct does not amount to larceny by trick and however grossly he may betray the confidence placed in him or violate the authority under which he obtained possession—he can nevertheless, by disposing of the goods, pass good title to a purchaser. The commentary on the so-called “larceny by trick” exception that followed this passage has attracted both supportive and critical remarks in subsequent decisions; however, the principal proposition articulated by Collins L.J. has never been contested. The principle was later summarised by Denning L.J. in Pearson v. Rose, wherein he stated that the effect of fraud is, as a rule, merely to render the transaction voidable and not void, and consequently an innocent purchaser who acquires the goods before the original owner rescinds the transaction retains good title. He illustrated this by describing a mercantile agent who, by presenting a worthless cheque or by falsely portraying a far larger business than actually existed, induces the owner to transfer property; the owner, once the fraud is avoided, cannot recover the goods from an innocent purchaser who bought them in good faith. Denning further noted that fraud-induced consent, until avoided, operates as a valid consent under the Factors Act. Accordingly, the acquisition of possession through false pretences does not defeat the operation of the Factors Act in England and, in the Court’s view, does not preclude the operation of section 30(2) of the Indian Sale of Goods Act. The situation differs, however, where the fraud is of such a nature that the owner never actually consents to give possession to the fraudster. For example, if A obtains possession by falsely representing himself to be B, the owner’s consent is not genuine but a void agreement, and the transaction is void ab initio. Lord Haldane expressed a similar view in Lake v. Simmons, explaining that the appellant believed he was dealing with a different person—the wife of Van der Borgh—and therefore never intended to contract with the woman who ultimately obtained the goods; the deception regarding identity meant there was no meeting of minds, and consequently no valid contract could arise.

In the case discussed, the Court observed that the woman obtained possession of the goods through deliberate fraud and trickery, and that there was no agreement of mind between her and the seller that could establish any contractual right. The seller had been completely deceived about the identity of the person with whom he was dealing, and therefore, in the Court’s view, there was no “consensus ad idem.” Consequently, the Court held that when the transfer of possession is voidable merely because it was induced by fraud that the owner may rescind, the consent that follows a false representation is nevertheless a sufficient consent within the meaning of section 30(2) of the Sale of Goods Act. By contrast, if the fraud creates an error concerning the identity of the person to whom possession is given, or concerning the property in respect of which possession is granted, the transaction is void and there is no consent in the sense of an agreement of two parties on the same thing in the same sense. The Court then considered whether the character of the fraud—specifically, whether it amounted to a criminal offence—would affect the application of these principles. It concluded that the presence of a criminal element did not change the analysis, although the issue was complicated by certain technical rules of English criminal law. The Court restated that section 30(2) of the Sale of Goods Act required that a buyer, who had not yet obtained title to the goods, must obtain possession with the seller’s consent before he could transfer title to an innocent purchaser or pledgee. The Court emphasized that the owner’s state of mind was the sole factor in determining consent, not the receiver’s state of mind. Even if the owner was induced to part with the goods by fraudulent misrepresentation, the owner’s consent to give possession remained valid; the receiver’s dishonest intent or pre-planned design to steal or misappropriate the goods could render the receiver criminally liable, but it did not invalidate the owner’s consent. For criminal punishment, the decisive element was the receiver’s dishonest intention, but, as noted by a preceding judgment in Folkes v. King, that intention was immaterial for deciding whether the owner had actually consented under the Sale of Goods Act.

The Court observed that the two considerations under the Factors Act must be kept entirely separate, noting that allowing one consideration to defeat the other would, in its view, erode much of the protection the Act was meant to provide. The same principle, the Court held, also applies to the provisions of the Sale of Goods Act. It reiterated that obtaining goods by false pretences does not negate the owner’s consent, as stated in the case reported at [1923] 1 K.B. 282 at 297. Moreover, English decisions indicate that even larceny by a bailee does not eliminate the owner’s consent. Consequently, if an owner permits an agent to have goods on hire or for repair and the agent later decides to steal or misappropriate them and sell them to a third party, the agent may be guilty of larceny as a bailee, yet the owner’s consent to possession remains unaffected.

English law, however, distinguishes between larceny by a bailee and larceny by trick. If, in the situation described, the agent possessed the dishonest intention to steal at the moment of taking possession, the agent is guilty of “larceny by trick,” and the law treats the possession as still belonging to the owner, deeming the agent’s act as “taking” without the owner’s consent. This creates a legal fiction: although the owner physically delivers the goods to the accused, the owner is deemed to retain legal possession because of the trick, and the accused is liable for larceny for taking possession against the owner’s will.

The Court explained that, under English law, larceny by trick can arise in two manners. First, when the owner, deceived by a trick, voluntarily relinquishes possession to the accused without intending to transfer ownership, and the accused possesses the animus furandi. Second, when the accused obtains possession by falsely representing himself as another person or by misleading the owner into believing he was delivering different goods. In the latter scenario, genuine consent from the owner is absent, and established English precedent holds that the Factors Act does not apply. The Court affirmed that Indian law follows the same principles. While the first category of cases shows some inconsistency among English judgments, the Court noted that earlier authorities, such as Whitehorn v. Davison [1911] 1 K.B. 463 at 479, have addressed these issues, and the decisions of English courts are not uniformly aligned concerning the first category.

In the case of Cahn v. Pockett’s Bristol Channel etc. (1), the Court observed that even when a person obtained possession of goods by fraud, provided the conduct did not constitute larceny by trick, the person could, by disposing of the goods, pass a good title. Although this observation concerning the exception for larceny by trick was only obiter, it was later accepted as good law by the Court of Appeal in England in Oppenheimer v. Frazer (2). By contrast, the judgment of Bankes L.J. and Scrutton L.J. in Folkes v. King (3) held that when the owner actually gave consent to the transfer of the goods, the fact that the recipient was guilty of larceny by trick was immaterial, a view that was affirmed by the majority of the Court of Appeal in Lake v. Simmons (4) although Atkin L.J. issued a dissenting opinion. The House of Lords reversed the decision in Lake v. Simmons (5), but the reversal was based not on a technical criminal-law doctrine but on the broader principle that a fatal mistake invalidated any notion of a consenting mind. The stance adopted in Folkes v. King (3) was subsequently endorsed in the more recent decision of Pearson v. Rose (6). Lord Sumner’s language, quoted in Lake v. Simmons (5) at 510, reflected the existence of a “signal and indecisive conflict of authoritative opinion on this point” (7). The Court expressed the opinion that the approach taken in Folkes v. King (3) represented the correct view; furthermore, if, as Scrutton L.J. had argued in that case, Parliament could not have intended to apply artificial criminal-law distinctions to a commercial transaction governed by the Factors Act, then there was even less justification for importing a highly technical rule of English criminal law—originating from a legal fiction designed to punish a thief who might otherwise escape conviction—into the provisions of the Indian Sale of Goods Act. The existence of consent must be established as a factual matter in accordance with contract-law principles, and once such consent is proved, its validity cannot be nullified by the application of any criminal-law rule. Guided by these principles, the Court proceeded to examine the facts of the present dispute. The central issue was whether Mukherjee obtained possession of the shares with the seller’s consent, and it was not contested that the consent of the defendant’s clerk, acting as the owner’s agent, would be as effective as the consent of the owner herself.

On 14 February 1946, Bhuiya dispatched the share certificates to the defendant bank. In a letter addressed to the bank on the same day, he wrote that he would be grateful if the bank would realize the sum of Rs 38,562-8-0 in accordance with the bill enclosed from Mr D N Mukherjee, deliver the shares to Mukherjee and credit the realized amount to his account No 1. The following day, that is on 15 February, Bhuiya sent a separate communication to Mukherjee informing him that he had deposited, at the Barabazar branch of United Industrial Bank, the shares of 300 Iron and 500 Steel Corporation. Bhuiya requested that Mukherjee take delivery of those shares immediately upon payment.

On 18 February, Nilkrishna Paul, who had been a long-time employee in the cash department of the defendant bank, received instructions from the head cashier to meet Mukherjee at his office in order to collect the money from him and to hand over the share certificates. According to the deposition of Sachindra Sen, an officer of the defendant bank under whose advice Paul was sent, Sen expressly instructed Paul not to deliver the shares unless he received payment. Sen further explained that the mode of payment had already been arranged between him and Mukherjee: instead of paying in cash, Mukherjee would furnish a pay order drawn on Punjab National Bank, where Sen held an account with the defendant bank. Sen directed Paul to examine the pay order carefully and to hand over the shares only if he was satisfied that the pay order was valid; otherwise, Paul was to return the shares to the bank’s office.

Paul, who is the principal witness for the defendant, testified that his instruction was to deliver the shares only after he had obtained the pay order. He recounted that on the morning of 18 February, at about 11 a.m., he visited Mukherjee’s office chamber. When Paul announced that he had come from United Industrial Bank to deliver the shares, Mukherjee asked him to take a seat and then asked for the shares. Paul replied that he could not hand over the shares until Mukherjee produced the pay order. Mukherjee responded that he only wished to examine the shares and the accompanying papers to verify that they were in order. Consequently, Paul placed the share certificates on the table for Mukherjee’s inspection.

Paul further described what occurred thereafter. Mukherjee examined the shares one by one. As Mukherjee was preparing to leave the chamber, Paul intervened and said that he should not depart without giving him the pay order. Mukherjee replied that he was going out to obtain the pay order, which was ready, and that Paul should take his seat while he returned shortly. Mukherjee then left the chamber. Throughout this interaction, Paul maintained that he had placed the share certificates on the table and had not relinquished possession or control of them. He emphasized that he remained present at the table while Mukherjee handled the papers, and that he only intended to transfer the shares after receiving the agreed pay order.

In the circumstances described, when Paul placed the share certificates on the table and permitted Mukherjee to examine them, Paul did not relinquish possession or control of the shares. It is accurate that Mukherjee handled the documents, but he did so while Paul remained seated beside him at the same table, so Mukherjee’s custody was limited to the minimal physical handling necessary for examination. When Mukherjee subsequently left the room holding the certificates, he unquestionably acquired possession of them; however, the record does not support a finding that he obtained such possession with Paul’s consent. The evidence demonstrates that Paul explicitly protested and objected to Mukherjee’s departure with the shares without receiving payment, as reflected in the reference to 4-93 S. C. India/59. Although Mukherjee informed Paul that he was leaving only to obtain the pay order and would return immediately, the Court could not accept Mr. Mullick’s view that Paul consented to the removal of the papers based on Mukherjee’s promise. Mukherjee gave Paul no opportunity to express assent or dissent. Despite Paul’s protest, Mukherjee bolted away with the papers, asking Paul to wait. Paul’s deposition states that he waited two or three minutes; when Mukherjee did not return, Paul grew anxious, left the chamber, and approached a counter where an elderly gentleman informed him that Mukherjee was not in the office. This indicates that Paul did not rely upon Mukherjee’s assurance and did not permit Mukherjee to retain possession of the shares on that basis. Mukherjee’s taking the shares and leaving the chamber occurred against Paul’s expressed desire, and Paul was forced to wait briefly because no alternative was available at that moment. Considering the evidence in its entirety, the Court upheld the decision of the appellate bench of the High Court, concluding that, given the facts and circumstances, Mukherjee did not obtain possession of the shares with Paul’s consent. Accordingly, the appeal was dismissed and the judgment of the appellate court was affirmed. As both plaintiff and defendant were innocent parties suffering from a third-party fraud, each party was ordered to bear its own costs in all courts. The appeal was dismissed. Agent for the appellant was Sukumar Ghose, and agent for the respondent was B. N. Ghose.