P L D 1962 Baghdad﷓ul﷓Jadid 20 (PLP)

BASHIR AHMAD, J.--‑The Bahawalnagar Co‑operative Commis sion Shop Limited (hereinafter described as the plaintiff) brought a suit for recovery of Rs. 25,405‑13‑6 against the Firm Bahawalpur Cotton Company, Bahawalnagar (hereinafter described as the defendant), which had four partners; Sheikh Abdur Rahman, Sheikh Aziz‑ur‑Rahman, Muhammad Ali and Rehmat Ullah. The claim was decreed by the Senior Civil Judge, Bahawalpur. The present appeal is by two of the partners, Sheikh Abdur Rahman and Sheikh Aziz‑ur‑Rahman, against that decree.

2. The glaim in the spit was based oat these averments. Sheikh Abdur Rahman, the appellant, on behalf of the defendant borrowed a sum of Rs. 10,000 from the plaintiff and as asecurity for the loan pledged 500 maunds of seed cotton. At the relevant time the seed cotton lay with Sayyed Fateh Muhammad Shah, Malik Muhammad Ashiq, allottees of Nimat Rai Hans Raj Cotton Factory, Bahawalnagar (hereinafter described as stockists). The stockists, on enquiry by the plaintiff, verified the fact that 500 maunds of seed cotton belonging to the defendant was with them. They also undertook to keep the stock in their custody and not to make it over to the defendant without intimation to the plaintiff. It was on the faith of that assurance that a sum of Rs. 10,000 was advanced. Sheikh Abdur Rahman appellant, as a partner of the defendant firm, addressed another letter on the 26th of December 1951, to the Manager of the plaintiff, intimat ing that the Registrar of Co‑operative Societies, Bahawalpur, has sanctioned the grant of a loan of Rs. 30,000 to the defendant firm. The plaintiff was requested to advance that sum on the security of seed cotton belonging to the defendant. The plaintiff address ed another query to the stockists, who by their letter dated the 29th of December 1951, confirmed the fact that 1500 maunds of seed cotton belonging to the defendant was lying with them. They further undertook to retain those goods unless there was a certi ficate of clearance by the plaintiff and also that they will not deliver the goods to anyone without intimating the fact to the plaintiff. On the faith of that assurance, another sum of Rs. 20,000 was advanced to the defendant. The total liability in this manner came to Rs. 30,

000. By this time the seed cotton had been ginned into hundred cotton bales. The defendant asked for another loan of Rs. 10,000 against the ginned cotton bales. An enquiry was addressed by the plaintiff again to the stockists who affirmed the conversion of 1500 maunds of seed cotton into 100 cotton bales of 4‑F quality and also undertook not to retire the goods in favour of the defendant unless there was a clearance certificate from the plaintiffs. There was sharp fall in the price of cotton which led the plaintiff to make a demand for payment of the loan to the defendant. Sheikh Abdur Rahman appellant, partner of the defendant by a writing dated the 24th of August 1952, authorised the delivery of 100 cotton bales to the plaintiff, which were lying with the stockists and had been pledged with the plaintiff. The plaintiff was authorised to sell them and to account for the price towards the discharge of the liability of the defendant towards the plaintiff. The plaintiff went to the factory and removed 24 bales, when he was interrupted by Rahmat Ullah defendant No.

5. A breach of peace was apprehended and the Manager of the plaintiff filed a report at ‑the police station and the police directed the balance of 76 bales to remain at the factory. Sometime in December 1952, with the consent of the defendant, 100 bales were discharged and carried to Karachi for sale, where 98 bales were sold for a sum of Rs. 19,

225. There was no customer for the other two bales as the cotton ginned was of old crop. After making due allowance for the amount realized by the plaintiff a balance of Rs. 24,456‑8‑3 was claimed as still due to them. Interest was also claimed on the basis of agreement at the rate of 7 per cent. which was alleged also to be the customary rate the amount claimed included interest up to the date of the suit.

3. The defendant‑firm and its partners, Sheikh Abdur Rahman and Sheikh Aziz‑ur‑Rahman, defendants Nos. 2 and 3, controverted the pleas. The receipt of the amount was admitted, but it was claimed that the goods had been in the possession of the plaintiff who had the option to sell them. The loss sustained by the plaintiff was attributed to his negligence to sell the goods at the right time, which would have satisfied the entire liability and may even have left a surplus for the defendant. The defen dants disclaimed responsibility for any obstruction alleged to have been caused by Rahmat Ullah defendant, when they had done all that they were required to do under the law. Defendants Nos. 4 and 5, Sheikh Rahmat Ullah and Muhammad All, put in separate written statements. The goods claimed by the plaintiff as pledges, according to them, were pledged with the Bahawalpur Bank, and were never pledged with the plaintiff. The amount lent by the plaintiff to Sheikh' Abdur Rahman defendant was according to them contributed by him as his share of the capital in the partnership. The liability of the firm as also their own to pay the aforesaid amount was denied. The removal of 24 bales of cotton was described as unauthorised act for which the plaintiff was liable. The price fetched by the cotton bales at Karachi was claimed to be much below the market price. In the state ment of the counsel for the plaintiff before the issues, the goods were claimed as pledged with the plaintiff with possession against advance of Rs. 40,000 by him to the defendant. On the pleadings, the counsel for the defendants Nos. i to 3 also made a statement to the effect that in the face of letter dated the 24th of August 1952, by Abdur Rahman defendant, authorising the sale of the bales by the plaintiff, the defendants were entitled to charge the rates operative on that date and if the goods were sold later the responsibility is that of the plaintiff. The defendant reiterated, through their counsel, that the denial to pay was bona fide and the counsel for defendants Nos. 4 and 5 reiterated what he had said in the written statement.

4. On the pleadings of the parties, the following issues were struck :‑ (1) Is defendant No. 1 an unnecessary party to the case and that it was essential to strike off his name from the list of defendants ? (O. P. on defendants 4 and 5). (2) Is defendant No. 4 a sleeping partner who had no know ledge of the facts stated in the plaint, and what effect these facts had on the suit ? (O. P. on defendants 4 and 5). (3) Did defendant No. 2 take a loan of Rs. 40,000 from the plaintiff in his individual capacity and the other partners, namely, defendants Nos. 3 and 5, were not liable for this amount, the liability being solely of defendant No. 2 ? (O. P. on defendants 4 and 5). (4) Did defendant No. 5 obstruct in good faith the removal of 76 bales of cotton ? (O. P. on defendant No. 5). (5) Was the obstruction by defendant No. 5 in his individual capacity and any loss suffered by the firm on that account was an individual responsibility of the defendant No. 5 as owner ? (O. P. on defendants 2 and 3). (6) Were 100 bales of cotton despatched to Karachi for sale on the 16th of December 1952, with the consent of all the partners ? (O. P. on the plaintiff). (7) Was there a regular market for the sale of cotton at Bahawalnagar ? (O. P. on defendants 2 and 3) (8) Has the plaintiff caused loss to the defendant‑firm by his failure to sell 24 bales of cotton in time ? (O. P. D.). (9) Have the ninety‑eight bales of cotton been sold for less than the market‑price ? (O. P. on defendants 4 and 5). (10) Is the plaintiff entitled to claim interest at the rate of 7JY. per annum of the ioan ? (O. P. P.). (11) To what relief is the plaintiff entitled ? (O. P. P.).

5. The trial Judge found all the issues in favour of the plain tiff. Defendants 4 and 5 have not challenged by appeal the decree which makes them equally liable. The Court also found that Abdur Rahman defendant alone was not liable for the sum of Rs. 40,000, which was, in fact, advanced to the firm. There is no challenge to this finding by the other partners and there is no further dispute about the finding on this issue. Issue No. 4 has been found against Rahmat Ullah defendant, finding of the Court being that he had no right to obstruct the removal of cotton bales. This plea has not been challenged by any of the defendants by appeal.

6. The challenge by the appellant to the findings of the trial Judge on the remaining issues rests on the following grounds. It is urged that the plaintiff pawnee was in possession of the goods and was under an obligation both statutory and contractual to sell the goods when the security because of the decline in prices became insecure. The goods, and this is not denied by the parties, if sold on or soon after the 24th of August 1952, when Sheikh Abdur Rahman defendant authorised the sale, would have fetched a price sufficient to wipe off the liability. The obstruction to the removal of goods by Rahmat Ullah, one of the partners‑defendant, it was claimed was not in the normal course of business of the firm and would render him alone Individually liable for any loss suffered by the plaintiff on that account. The firm, under the law, could not be liable for the tortious act which was not done in the ordinary course of business of the firm or with the authority of the other partners. The appellants also deny their liability to pay any interest as under the contract no Interest was to be paid. As against this, the plaintiff has filed cross‑objections in this Court, claiming interest also for the period from the date of the decree till the realization of the amount. In order to deal with these objections, it will be necessary to ascertain, with exactitude, the contractual obligations of the parties. It is not denied that the contract between the parties was reduced into writing. The parties are also agreed that the plaintiff failed to produce the documents embodying the terms of the contract although he was specifically asked by the defendant to produce them. The learned counsel for the plaintiff expressed, half heartedly, a desire to produce the documents at this stage, but it would have had the result of reopening the matter which had already gone on for well‑nigh ten years and we found little justification, at this late stage, for acceding to that prayer. The failure of the plaintiff to produce the documents will, however, raise a very strong presumption against him and also entitle the defendants to establish the terms of the contract by secondary evidence.

7. It is with this background that we proceed to consider the documentary evidence placed on the record which will be helpful In the determination of the contract between the parties. The stockists wrote a letter Exh. D. B. B. to the manager of the plaintiff on the 28th of November 1951, to the effect that they held in their custody 500 maunds of seed cotton belonging to the defen dant and contained an undertaking to hold the stock In their custody till they heard from the plaintiff. The plaintiff wrote a letter to the stockists on the 28th of December 1951 (Exh. D. D.) to the effect that the defendant was negotiating with the plaintiff for a further loan of Rs. 20,000 on the pledge of 1,000 maunds of seed cotton which was stated to be with the stockists over and above the five hundred maunds of seed cotton already pledged with him. A query was addressed to the stockists whether they would accept full responsibility to retain the goods after they were insured against fire when alone a loan could be advanced to the defendant. The stockists' reply to the letter is contained In Exh. D. C., dated the 29th of December 1951, certifying 1500 maunds of seed cotton fully insured against fire belong to the defendants to be with them and they also undertook to inform the plaintiff before the defendant was permitted to remove these goods. It also contained an assurance accepting responsibility for withholding the delivery of the goods to the defendant without a clearance certificate from the plaintiff. The receipt by the defen dant of a sum of Rs. 40,000 as a loan from the plaintiff is not disputed. These documents constitute evidence of the pledge for at the relevant time these goods were with the stokists who held them as a bailee on behalf of the defendant. It was on the faith of the assurance by the stockists at the instance of the defendant that the plaintiff advanced the loan to the defendant. Bearing on the same subject is the testimony of Sheikh Abdur Rahman, who has appeared as his own witness. According to him, towards the end of November 1951, 500 maunds of seed cotton 4‑F was pledged by the defendant‑firm with the plaintiff for a sum of Rs. 10,

000. Later, In December 1951, another sum of Rs. 20,000 was received as a loan by the defendant‑firm from the plaintiff on a pledge of 1,000 maunds of seed cotton. In February 1952, the seed cotton was ginned into 100 bales of cotton and on the security of these bales a further sum of Rs. 10,000 was advanced as a loan rendering the total liability of the defendant to a sum of Rs. 40,

000. The loan, according to the witness, was advancer on the condition that whenever the plaintiff considered the prices to have gone down to an extent that the security became insecure he had the right of serving upon the firm seven days clear notice to sell the stock for the discharge of the loan. No payment of interest for the loan was stipulated. The transactions, according to him, were duly recorded in two or three written deeds on stamp paper which also contained the conditions for the repayment of the loan. It was in August 1952, that the witness, for the first time, learnt from the stockists that the cotton bales had not, by then, been disposed of. It would, thus, appear that the stockists were holding possession of the bales on behalf of the defendant. The defendant took loan and pledged the goods lying with the stockists as security for the loan advanced to them. The version of the defendant, in the absence of the documents erroneously 6 withheld by the plaintiff, which are primary evidence of the con tract between the parties, will have to be accepted. The documents placed on the record make out a contract somewhat on these lines. The stockists were to be the custodian of the goods who undertook not to part with the goods unless the plaintiff gave a clearance certificate or, in other words, the goods were to be detained till the loan, for which the goods were a security, was discharged and a clearance certificate to that effect issued by the plaintiff. In any event, the stockists were to send an intimation to the plaintiff before permitting the defendant to, remove the goods.

8. We proceed now to consider the points taken by the learn ed counsel in the stated order. To have no doubt that the relation ship between the plaintiff and the defendant was that of a pawner and a pawnee. The learned counsel for the plaintiff, in our view, very properly conceded this fact in his statement before the striking of the issues. An examination of the relevant provisions of the law also produces the same result. Section 148, Contract Act, defines 'bailment' as the delivery of the goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise dis posed of according to the directions of the person delivering them. The person delivering the goods is called the "bailor". The person to whom they are delivered is called "bailee". An expla nation attached to the section clearly brings out that if a person already in possession of the goods of another contracts to hold them as a bailee, he thereby becomes the bailee, and the owner becomes the bailor, of such goods although they may not have been delivered by way of bailment. There is a further eloboration of this principle in the statement of the law in section 149 to the effect that the delivery to the bailee may be made by doing anything which has the effect of putting the goods in the possession of the intended bailee or of any person autho rised to hold them on his behalf. The two sections material for the purposes of the present case are sections 161 and 176 of the Contract Act, which may be usefully reproduced :‑ Section 161."If, by the default of the ballee, the goods are not returned, delivered or tendered at the proper time, he is responsible to the bailor for any destruction or deterioration of the goods from that time." Section 176."If the pawner makes default in payment of the debt or performance, at the stipulated time, of the promise in respect of which the goods were pledged, the pawnee may bring a suit against the pawner upon the debt or promise and retain the goods pledged as a collateral security, or he may sell the thing pledged, on giving the pawner reasonable notice of the sale. If the proceeds of such sale or less than the amount due in respect of the debt or promise, the pawner is still liable to pay the balance. If the proceeds of the sale are greater than the amount so due, the pawnee shall pay over the surplus to the pawner." The law in England Is pari materia with the law in our country. The legal incidence which flows from the relationship of a pawner and a pawnee is stated by Chitty on Contracts. "The general property in the goods pledged", according to the learned author, "remains In the pledgor, but a special property in them passes to the pledgee in order that he may be able to sell the pledge if his right to sell arises. This special property is such that if a bailee accepts, as security for goods brought, an object of value the fraudulent retaking of the object by the bailor is larceny". On the question of possession, in para. 130 of the book, the statement of law is to the effect that delivery, either actual or constructive, of the articles pledged In consideration of the debt or advance is essential to the contract. Constructive delivery is where it is practically impossible to give physical possession, or where the pledge remains in the possession of the pledgor for a special purpose and the pledge is legally delivered though it does not actually pass from the hands of the pledgor to those of the pledgee. Delivery of a key of a warehouse in which goods are stored, or of a delivery order directing a warehouseman to deliver goods to the pledgee, is sufficient in law to form constructive delivery. It is not essential that the advance and the delivery should be contemporaneous. It is sufficient if possession be deli vered within a reasonable time of the advance, in pursuance of the contract to pledge. The obligations of the pledgor and the pledgee inter se are stated in paras. 134 and 136 of the same book, and it will be useful to reproduce the statement of the law by the learned author. "

134. By the bailment of goods by a debtor to his creditor in pledge, or as a security for a debt, the pledgee impliedly undertakes to deliver back the property to the pledgor, when the sum for which it was pledged is paid, and the pledgor impliedly undertakes that the property pledged is his own and may be safely returned to him . . . . . . . . "136. . . . If the pledgor makes default In payment at the stipulated time, the pledgee may sell the pledge, even although there be not any express agreement to that effect, or he may sue the pledgor for his debt, retaining the pledge as a security. But if a time for payment has not been agreed upon, or if the time agreed upon has been extended indefinitely, the pledgee cannot sell the pledge until after demand and notice . . . . ." In the Re‑statement of Law of Security by the American Law Insti tute in Article 8 the principle is stated with precision in these words:‑ "Where the chattel is in the possession of a third person a pledge may be created by assent of the pledgor and notification by either pledgor or pledgee, to the third person, that the chattel has been pledged to the pledgee."

9. It would thus appear that the goods in the custody of the stockists were charged with a liability to discharge the debt which the defendants owed to the plaintiff. An effective control over the goods in favour of the plaintiff was created by that contract, and the relationship of the parties was regulated by sections 161 and 176 of the Contract Act. On behalf of the appellants it is contended that it was the duty of the plaintiff when authorised by the defendant to proceed to sell the goods in August 1952. This the plaintiff failed to do, and notwithstanding any obstruction from Rahmat Ullah defendant it remained according to them an obligation of the plaintiff to have carried out the mandate which would have, as is agreed, discharged liability of the defendant. The plaintiff it is claimed, should be non‑suited on that short ground The deterioration it is urged, contemplated by section 161 of the Contract Act to extend to the loss occasioned by the failure of the plaintiff to sell the goods when they could have fetched a better price. In support of that proposition the learned counsel has referred to Indian Law Reports 21 Mad.

172. The citation is not strictly relevant to the facts of the present case. In that case the plaintiff, who was a tailor, delivered a sewing machine and some clothes to the carrier to be conveyed to a place where a special festival was being held. The conditions on which the goods were despatched exonerated the defendant‑carrier for any loss or damage to any goods whatsoever by reason of accidental or unavoidable delay in transit, or otherwise. The goods reached the destination when the festival was over and the tailor sued the carrier for compensation in damages. The Court held the tailor bound by the conditions which were found valid under section 72 of Railways Act. There Is, however, a passage at page 177, on which the appellants rely, which is to the effect :‑ "In the present case there was no loss or destruction of goods‑nor was there any change in the absolute condition of the goods, but the word `deterioration' is wide enough to cover a falling off in the value of the goods due to their not having been delivered In time to enable the plaintiff to take advantage of the special market which would have been available during the festival at Karamadal if they had been delivered in due time." The plea in that case was not given effect to as time was not the essence of the contract and the plaintiff was held bound by the terms of the contract. The failure of the plaintiff to sell the goods when the prices were sharply on the decline at Rahimyar khan, which had a market for it, when the defendant had authorized its sale it is claimed has resulted in the deterioration of the goods. The question can however, be truly answered only after the obligation of the plaintiff who is in possession of the goods is determined under the provisions of the Contract Act. Section 161 of the Contract Act, on which the appellant relies, would come Into play only if the defendant have called upon the plaintiff for the return, delivery or tender of the goods at a specified time volunteering to discharge the liability for which they were pledged and the plaintiff had failed to carry out the directive. In terms, therefore, the section is not attracted to the facts of the present case.

10. Sheikh Abdur Rahman In his letter, dated the 24th of August 1952, had merely authorized the sale of the goods by the plaintiff. It is not disputed that the plaintiff has been making a demand for the discharge of the liability. It was the demand which led Sheikh Abdur Rahman to write on behalf of the firm authorizing the sale of the goods. Section 176 of the Contract Act on the failure of the pawner to discharge the liability no doubt confers upon the pawnee the power to sell the goods, or to retain the goods, pledged as a collateral security and sue on the debt. The course to be pursued is left to his diecretion and does not place him under an obligation. There is nothing in the section to support the contention that the plaintiff was under a statutory obligation to sell the goods after the receipt of that letter. In this view, there has been no default by the plaintiff. If the plaintiff had brought a suit retaining the goods as a security, the value of the goods would nave fluctuated according to the state of the market during the progress of the suit. If instead of bringing a suit he chose to accomodate the defendants, ostensibly for the reason that another partner was causing the obstruction, it will be difficult to hold that there has been any default by the plaintiff for which he could be held liable under the law. We, have, therefore, no hesita tion in holding that there is no substance in the plea. But It is claimed that the failure to sell the goods by the plaintiff in the present context was due to an obstruction by Sheikh Rahmat Ullah one of the partners, and the loss, if any, suffered by the plaintiff was due to that obstruction. It is not the plaintiff's case it Is urged that the defendant ever cancelled the letter of authorisa tion. There was, thus, no impediment in the way of the plaintiff to sell the goods except the one raised by Sheikh Rahmat Ullah, a partner of the firm. In these circumstances, the defendant did all that it was under an obligation under the law to do and the resultant loss could fall only on Sheikh Rahmat Ullah in his individual capacity and not the defendant‑firm or its other partners.

11. Dealing with the question of the liability of a partner for the acts which are unauthorised, or known so to be, the o relevant provisions of the Partnership Act will require some notice. Under section 9 of the Partnership Act the partners are bound to carry on business of the firm to the greatest common advantage, the mutual rights and duties of the partners being the subject of section

11. Section 12 deals with the rights of the partners which, in the first Instance, are regulated by contract and under clause (c) in case of any difference as to ordinary matters connected with the business, the decision is to be by a majority of the partners. The relations of partners to third parties form the subject‑matter of Chapter IV of the Act. Each partner is an agent of the firm for the purposes of the business of the firm. Section 19 provides that subject to the provisions of section 22 the act of a partner which is done to carry on in the usual way, business of the kind carried on by the firm binds the firm. The authority of a partner to bind the firm is, under the statute, his implied authority. Section 22 provides that In order to bind a firm, an act or instrument done or executed by a partner or other person on behalf of the firm shall be done or executed in the firm name, or in any other manner express ing or implying an intention to bind the firm. The burden of section 25 of the Act is that every partner is liable, jointly with all the other partners and also severally, for all acts of the firm done while he is a partner. Section 26 is material and holds the firm liable to the same extent as the partner where the wrongful act or omission of partner acting in the ordinary course of business of a firm, or with the authority of his partners, loss or injury is caused to any third party, or any penalty is Incurred. The same principles are clearly stated by Lord Lindley in his book on partnership in the following terms :‑ (1) "That if an act is done by one partner on behalf of the firm, and it was done for carrying on the partnership business in the ordinary way, the firm will prima facie be liable, although in point of fact the act was not authorised by the other partners. (2) That if an act is done by one partner on behalf of the firm, and it was not done for carrying on the partnership business in the ordinary way, the firm will prima facie be not liable." At page 235 of the same book there is a lucid statement to the following effect :‑ "A firm can only be made liable for what is done by one of its members on the supposition that the act in question was authorised by the other members. Now, as by law they are held pirma facie to authorise all acts done in carrying on the business of the firm in the usual way, they cannot escape liability for any act of this character unless they can show that the apparent authority to do it did not exist, and was known not to exist. But when it is sought to make the firm liable for some act not prima facie authorised by It, an actual authority by it must be shown ; and if this cannot be done, no case is made out against the firm, however, ignorant the person seeking to charge it may have been of what was authorised and what was not. In the case now supposed the firm did not mislead him ; and if he was misled by the representations of the partner with whom he dealt, his remedy is against that partner ; just as when an agent untruly repre sents his authority, a person, dealing with him acquires no right against the principal but must look to the agent for indemnity."

12. It is urged on behalf of the appellant that they could have been made liable only under section 26 of the Partnership Act. The case, it is submitted on their behalf, does not fall within the purview of that section. In adopting the obstruc tionist attitude Sheikh Rahmat Ullah was not acting in the ordi nary course of business of the firm or with the authority of the partners and the loss suffered by the third party by his unlawful activities will make him personally liable. There is a patent fallacy in this argument. The defendants were personally liable for the debt to the plaintiff. The goods were merely a collateral security for the discharge of that liability, and were, at all the relevant times, the property of the defendant. The price of the goods fetched was to go towards the reduction of that liability and unless it could be predicated about the sale that there has been some neglect in the discharge of his statutory duty by the plaintiff which had resulted in the diminution of the price the plaintiff could not be held responsible for the shortage in the price fetched by the sale of goods. The personal liability of the debtors remains wholly unaffected by the collateral security and at all times they remain under an obligation to watch their own interests and proceed to sell if the transaction turns out to be disadvantageous to them. It is no doubt true that the firm has suffered a loss which would safely be attributed to the neglect of Sheikh Rahmat Ullab, but It has never been the loss of the plaintiff. In describing the short price fetched by the goods as loss of the plaintiff the defendants have failed to appreciate the correct legal position. The contract of pledge is regulated by section 176 of the Contract Act and is wholly unconcerned with the provisions of section 26 of the Partnership Act, which cover only such cases where loss had been sustained by a third party by an act of the partner and the question for determination 1s whether the liability to compensate for the loss rests on the partnership or the defaulting partner. As already observed by us, it is difficult to hold, on the terms of the contract that the shortage in the price that the goods fetched could ever be the loss of anyone other than the owner of the goods.

13. A point was also made of the fact that the sale by the plaintiff of the goods was an unauthorised act without any notice to the defendant. The goods, it is claimed, had disappeared without their authority and since the plaintiffs were unable to tender the goods against the liability which the defendants had to discharge, the suit brought by them merited dismissal. In support of this proposition the learned counsel referred to a case of the House of Lords reported in Trustees of the Property of Ellis & Company v. Dixon Johnson (L R 1925 A C 489). In this case the defen dant had pledged various bonds and shares, including certain rubber shares with a firm of stockbrokers as security for any debit balance which might from time to time be owing by him on that account. The firm without the knowledge or autho rity of the defendant, sold the rubber shares in 1920. The firm was adjudicated insolvent on the 16th of February 1922, and the trustee in bankruptcy rendered a debit account to the defendant showing a balance due from him. The trustee in bankruptcy sued the defendant. The decision In the case was that since the shares were sold without the permission or knowledge of the defendant and the trustee in bankruptcy was unable to deliver the shares against payment, he had no higher right than the firm whom he represented ; and since the trustee was unable to return the shares in specie, he could not claim any amount from the defendant. Viscount Cave, Lord Justice, in his speech stated the law to be :‑ "I have always understood the rule in equity to be that, if a creditor holding security sues for his debt, he is under an obligation on payment of the debt to band over the security ; and if, having improperly made away with the security, be Is unable to return it to his debtor, he cannot have judgment for the debt." This authority has been cited in support of the plea that since the goods were sold without the permission of the appellant on the assumption that the sanction given in August 1952, could not extend to the period of the sale of the goods, the plaintiff was not in a position to return the goods pledged with him and could be non‑suited on that short ground alone. The principle was adopted as sound in a case reported as Official Assignee v. M. C. Harikrishana (A I R 1935 Rang. 201). In order to dispose of this point it will be sufficient to state that in spite of demand by the plaintiff the defendants bad failed to discharge their liability. It was on the demand of the plaintiff that Sheikh Abdur Rahman issued the letter of authority and even asked the plaintiff to seek release of the goods from the stockists. In a letter (Exh. P. B.) to his younger brother Aziz‑ur‑Rahman defendant Sheikh Abdur Rabman had asked the former to assist the plaintiff in securing possession of the goods and a similar letter (Exh. P. A.) was addressed by Sheikh Abdur Rehman to Malik Muhammad Ashiq. It would be futile on these premises to argue, as has been done, that the sale was without notice, as contemplated by section 176 of the Contract Act. We are unable to accede to that contention. The defendants had never withdrawn the authority which the letter of the 24th of August 1952, confer red, and if the letter was still operative the sale by the plaintiff' was with the authority of the defendants and could not be construed as without notice to them. In fact, the stage for notice had long passed. The demands for the discharge of the liability by the plaintiff have been too pronounced to be missed and, as already observed by us, actually led to the letter oil authority written by Sheikh Abdur Rahman. The sale of the goods being with authority no question arises of the failure of the pawnee to produce the goods when the pawner was willing to discharge his liability. The plea, therefore, fails and is repelled.

14. We are left now to consider the question whether any interest up to the date of the decree by the trial Judge should have been allowed, or whether it should have extended to the date of the realisation of the amount which forms the subject matter of the cross‑objection filed by the plaintiff. As already observed by us, the transactions were duly Incorporated in deeds on stamped papers which the plaintiff had withheld. The defendant denied that there was any agreement to pay interest. In fact, their case is that no interest was to be paid. The best evidence were the contract deeds and, In their absence, we are left with no alternative than to fall back upon what the defendants accept as the contractual relation established by those deeds. It is not the plaintiff's case that the deeds did not contain a clause bearing on interest, for according to him interest was stipulated in those deeds. In a situation such as this the plaintiff has to thank himself if we give effect to the plea raised by the defendant and disallow interest awarded by the trial Judge. This will dispose of the cross‑objections too in which interest is claimed from the date of the decree till the date of the realisation. In recording this conclusion, we have been influenced to a large extent by the consideration that any other course may amount to substituting a contract different from the one actually concluded between the parties. The safest course which appears to us, in the circumstances, is to disallow interest on the transaction. The appeal is allowed to the extent of the interest allowed in the decree of the trial Judge but is, otherwise, dismissed. The cross‑objections also fail and are dismissed. In view of the partial success of the parties, we leave the parties to bear their own costs of this appeal. K. B. A. Appeal partly accepted.