[1927] EACA 41

## COURT OF APPEAL FOR EASTERN AFRICA.

## Before SIR T. S. TOMLINSON, C. J. (Zanzibar), SIR CHARLES GRIFFIN, C. J. (Uganda), PICKERING, Acting C. J. (Kenya).

## FAZAL ALLARAKHIA PADAMSI (Appellant) $\overline{\mathbf{22}}$

## ASHA BINTI FUNDI (Respondent). Cr. App. $14/1927$ .

The Indian Contract Act, 1872, section 178—right of a gratuitous bailee to make a valid pledge.

$Held:$ That if the Indian decisions are followed a gratuitous baileosis not in possession and cannot make a valid pledge.

The Judgment of the Supreme Court, Tanganyika, was delivered by Sir Alison Russell, C. J., as follows:—

This is an appeal from a decision of the Resident Magistrate at Dar es Salaam on the question of the disposal of certain ornaments which are in the possession of the Court

The matter arises in this way. Certain women of Dar es Salaam lent ornaments to one Chiku Binti Juma.

The first woman says she lent these ornaments to Chiku for eight days as she was going to ngomas.

The second woman says she lent Chiku ornaments on a Saturday and that Chiku promised to return them on the following Saturday. Chiku borrowed them as she was going to dance at ngomas.

The third woman says she lent Chiku ornaments on a Monday as she said she wanted to go to the shambas for the Chiku promised to return them on the following ngomas. Saturday.

All three women state that Chiku had frequently borrowed and returned those ornaments on previous occasions. Chiku pawned the ornaments with certain pawn-brokers in Dar es Salaam and was convicted under section 406 and sentenced to a term of imprisonment. $\mathcal{L}_{\mathcal{A}}$

There is no allegation in the proceedings that the pawnbrokers with whom the ornaments were pawned were in any way negligent.

Upon the application being made by the pawnbrokers to the Court for the return to them of the ornaments the magistrate found that the evidence was that the owners had lent these articles several times to the accused and that the accused appeared to be well known to the pawnbrokers and had pawned and redeemed various ornaments on previous occasions. The magistrate held that the owners of the ornaments in question had been negligent and must suffer. $He$ ordered the ornaments to be returned to the respective owners on payment to the pawnbrokers concerned of the amounts of the loans.

The question is whether the owners of the ornaments or the pawnbrokers are to suffer the loss caused by the fraud of Chiku.

This is governed by section 178 of the Indian Contract Act which provides that a person who is in possession of any goods, etc., may make a valid pledge of such goods: Provided that the pawnee acts in good faith and under circumstances which are not such as to raise a reasonable presumption that the pawner is acting improperly. Provided also that such goods, etc., have not been obtained from the lawful owner by means of an offence or fraud

The most recent authority which I have been able to discover is a decision by the Appeal Court of Madras-Katta Ramasami Gupta v. Kamalammal, 45 Madras, 173. In that case the plaintiff lent certain jewels to one Amal for the purpose, as the plaintiff said, of decking Amal's daughter for a prospective bridegroom. Amal took the jewels and pledged them and the defendant after redeeming the jewels from the pledgee bought them from Amal. The plaintiff brought the suit against the defendant to recover the value of the jewels. $It$ was held that section 178 of the Contract Act did not protect the defendant though he had acted in good faith since Amal had only qualified possession, and possession, as the Court found on the evidence, for a specific purpose, namely, that of decking her daughter for a bridegroom.

Again, in Shamker Murlidkar v. Mahonlal Jaduram, 11 I. L. R. Bombay, 704, it was held where detention is allowed for a limited purpose the possession remains constructively with the owner.

I hold, following the decision of the Madras Appellate Court in Gupta v. Kamalammal that since Chiku had only qualified possession, and possession for a specific purpose, that of decking herself for ngomas, and as the possession was for a brief specific time, the pawnees are not protected by section 178 of the Contract Act and cannot resist the claim of the owners to the property in question.

Further, I hold on the facts that Chiku, when she borrowed the ornaments, intended to pawn them and accordingly obtained the ornaments from the owners by a fraud.

Accordingly, I order the ornaments to be returned to the The respondents to pay the costs of this appeal. owners.

The appellant appealed on the following grounds:-

1. The learned Chief Justice erred in law in holding that the said Chiku binti Juma had not such possession of the ornaments lent to her as to enable her to make a valid pledge of such ornaments.

The learned Chief Justice eired in law in holding $\mathbf{2}^$ that the said Chiku binti Juma had obtained the ornaments pledged with the appellant by a fraud.

Warren Wright for appellant.

Respondent not represented.

JUDGMENT.—The respondent, a native woman Asha, lent certain ornaments to another woman named Chiku to wear at some native dances. Instead of returning the ornaments Chiku pawned them with the appellant who is a pawnbroker. Chiku was prosecuted before the Resident Magistrate in Dar es Salaam. convicted under section 406 of the Penal Code and sentenced to a term of imprisonment.

The Magistrate subsequently made an order under section 517 of the Criminal Procedure Code against which an appeal was lodged before the High Court. That appeal came for hearing before the learned Chief Justice who made an order for the return of the ornaments to Asha the original owner and against this order the appellant has, by leave, preferred an appeal to this Court. We may at this point observe that there is nothing to suggest that the appellant acted otherwise than in good faith and that in our opinion there is no evidence that Chiku obtained the ornaments from Asha by fraud.

Orders under section 517 are, of course, discretionary but are open to correction when the discretion has been exercised in violation of accepted judicial principles (in re Pandharinath, 40 $B.$ 186).

In considering therefore the order passed by the learned Chief Justice we have to enquire whether or not he had violated any such principles. When making the order the learned Chief Justice considered the question as to whether the pledge made by Chiku to the appellant was valid or otherwise and he quite rightly regarded this as being determined by the true construction to be placed on section 178 of the Indian Contract Act.

Under this section the validity of the pledge depends upon the further question as to whether Chiku was in possession of the ornaments within the meaning of the Act. What amounts to possession within the meaning of the Act has been the subject

of several decisions in the Courts in India the latest of which is reported in 45 Mad. 173 and was referred to by the Chief Justice. We feel that if the Indian decisions are followed a gratuitous bailee is not in possession and cannot make a valid pledge. Some doubt has been felt as to whether in the event of the point coming up for decision in a civil suit this Court would be prepared to follow the Indian decision, but until the contrarv has been decided we are of opinion that the Chief Justice was fully justified in following the Indian decisions and coming to the conclusion that he did.

It would not, we feel, be appropriate that we should in an appeal such as this in which one side was not represented express an opinion on a point which would have such far-reaching consequences as would be involved in differing from the Indian decisions nor, in our view, is it necessary for us to do so for the disposal of this appeal.

In these circumstances it is apparent that the learned Chief Justice in making the order appealed against exercised the discretion given to him by section 517 with due care and the appeal will accordingly be dismissed.