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M.B. Shah, J.—In Sessions Case No. 6 of 1987 before the City Sessions Judge, Ahmedabad respondent No. 1-Nareshbhai was charged for the offences punishable u/s 366 of the Indian Penal Code and Section 380 read with Section 114 of the Indian Penal Code. Respondent No. 2-Kalpanaben, the daughter of the complainant, was charged for the offence punishable u/s 380 of the Indian Penal Code. Respondent No. 3-Ramniklal is the goldsmith who had purchased the stolen ornaments. He was not charged for any offence before the trial Court but he is joined as a party-respondent as the learned Sessions Judge has ordered that muddamal article No. 1 which is the golden ingot be handed over to him as he has purchased it bona fide by paying full market price to respondent No. 1 Naresh. By the judgment and order dated 9th February, 1987 the learned Sessions Judge had convicted the respondent No. 2 for the offence punishable u/s 380 of the Indian Penal Code but had acquitted the respondent No. 1 for the offences for which he was charged. Being aggrieved and dissatisfied by the said judgment and order the State has filed this appeal against the impugned order of the learned Judge for return of muddamal article to respondent No. 3-Ramniklal Jashraj Soni.
The learned Additional Public Prosecutor for the appellant submitted that the order passed by the learned Sessions Judge is on the face of it illegal and erroneous and without application of mind on his part inasmuch as the learned Judge has not held any enquiry u/s 452 of the Criminal Procedure Code before passing the order. He also submitted that the order passed by the learned Judge directing the return of muddamal ingot to respondent No. 3 is even otherwise illegal.
In this case it is a proved fact that respondent No. 2 committed theft of golden chain and other articles from the trunk of her mother. For the offence of committing theft respondent No. 2 is convicted by the learned Sessions Judge. However, the learned Judge has passed the order that as Soni Ramnikial has purchased the golden chain by paying full market price to respondent No. 1-Naresh, the said muddamal article should be handed over to Ramnikbhai. In our view, this order of the learned Judge is on the face of it illegal and erroneous. Once it is proved that respondent No. 3 has purchased the stolen article, then the stolen article is required to be returned to its original owner. Purchaser of the stolen article would not get any title over the property inspite of the fact that he had purchased it bona fide by paying full market price.
It is the established principle of law that no one can give what he has not got i.e. a person having no title or authority over the article cannot give better title to the purchaser. If one deals with ths goods of another without his authority, the transaction is as against that other person nugatory in law. This principle of law is embodied in Section 27 of the Sale of Goods Act, 1930 but is subject to certain exceptions such as dealing with the currency notes or negotiable instruments and certain other exceptions provided under the Sale of Goods Act.
Section 27 of the Sale of Goods Act, 1930 provides as under:
Subject to the provisions of this Act and of any other law for the time being in force, where goods are sold by a person who is not the owner there of 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, unless the owner of the goods is by his conduct precluded from denying the sellers'' authority to sell;
Provided that, where a mercantile agent is, with the consent of the owner, in possession of the goods or of a document of title to the goods, any sale made by him, when acting in the ordinary course of business of a mercantile agent, shall be as valid as if he were expressly authorised by the owner of the goods to make the same provided that the buyer acts in good faith and has not at the lime of the contract of sale notice that the seller has not authority to sell.
Apart from the proviso to Section 27, the other exception to the aforesaid principle is with regard to delivery of coins or currency notes which are taken in good faith for value and without notice. In the case of State Bank of India Vs. Rajendra Kumar Singh and Others, , the Supreme Court dealt with transfer of coins and currency notes and held that the property in coins and currency notes passes by mere delivery when the transferee of the coin or currency notes takes in good faith for value and without notice of a defect in the title of the transferor. The Court held that this was an exception to the rule Nemo dat quod non habet and held as under:
But the exception only applied if the transferee of the coin or currency notes takes in good faith for value and without notice of a defect in the tide of the transferor. The Rule is stated by Wills, J. in Whistler v. Forster (1863) 14 CBNS 248, 257. 258 as follows:
The general Rule of law is undoubted that no one can transfer a better title than he himself possesses: Nemo dat quod non habet. To this there are some exceptions; one of which arises out of the Rule of law merchant as to negotiable instruments. These, being part of the currency, are subject to the same Rule as money, and if such an instrument be transferred in good faith, for value, before it is overdue, it becomes available in the hands of the holder, notwithstanding fraud which would render it unavailable in the hands of a previous holder.
In the case of AIR 1948 249 (Nagpur) , the Nagpur High Court after taking into consideration the decision of the other High Courts arrived at the conclusion that the stolen bullock should be returned to its owner and not to the purchaser for value. In the case of Khitish Chandra Deb Roy Vs. King-Emperor, , the Calcutta High Court held that the transfer of stolen property passes no ownership to a buyer and the applications of the purchasers for return of the muddamal articles were rejected on the ground that the property in goods remained with the owner and never passed to the accused. Therefore the accused could give no title to the purchasers.
In the case of Maung Po Thaung v. Noor Mohamed AIR 1937 Rangoon 385, the Court considered the similar question and held that the fundamental principle of law is that no seller of goods can give a better title thereto the buyer than he himself has; in other words, no buyer acquires a good and valid title to the goods if he buys them from a person who is not the owner of them except from the following five classes of persons, namely:
(i) a mercantile agent provided he (buyer) acts in good faith and has not at the time of the contract of sale notice that the seller has not authority to sell;
(ii) a person who has obtained possession of the goods under a voidable contract provided the contract has not been rescinded at the time of the sale and he (buyer) acts in good faith and without notice of the seller''s defect of the title:
(iii) one of several joint owners who is in possession of the goods with the consent of the co-owners provided he (buyer) acts in good faith and has not at the time of the contract of sale notice that the seller has not authority to sell;
(iv) a person who, after having sold the goods, remains in possession thereof or documents of title there lo provided he (buyer) acts in good faith and without notice of the previous sale; and
(v) a person who after having bought or agreed to buy goods, obtains possession thereof with the consent of the seller provided he (buyer) acts in good faith and without notice of any lien or other right of the original seller.
These exceptions are based upon Sections 27, 28, 29 & 30 of the Sale of Goods Act.
Therefore, the general principle is that where goods are sold by a person who is not the owner, and who does not sell under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had. This principle is subject to certain exceptions as discussed above. But merely because a person is a bona fide purchaser for value without notice that the goods are stolen goods, would not be a ground for holding that he acquires good title over the property. Even with regard to negotiable instruments, the articles must be acquired in good faith for value, then and then the person acquires title over it. Therefore, once it is proved that the respondent No. 3 has purchased stolen golden article even for value, he would not get good title over it.
Further, before passing the order the learned Judge has not held any enquiry as contemplated u/s 452 of the Criminal Procedure Code. Therefore also the order passed by the learned Judge is on the face of it illegal.
In the result, the appeal is partly allowed. The order dated 9-2-1987 passed by the Sessions Judge, Ahmedabad City, in Sessions Case No. 6 of 1987 directing to deliver the muddamal article No. 1 golden ingot to respondent No. 3-Ramniklal Jashraj Soni is quashed. The learned Judge is directed to pass an appropriate order for disposal of the muddamal article No. 1-golden ingot after holding proper enquiry.