1415A

IN THE HONOURABLE SUPREME COURT OF INDIA

AT NEW DELHI

SPECIAL LEAVE OF APPLICATION________/2016

FILED UNDER ARTICLE 136 OF THE CONSTITUTION OF INDIA, 1950 READ WITH

ORDER XIX OF SUPREME COURT RULES , 2013

IN THE MATTER OF

MR. SHYAMLAL.................................................................................................APPELLANT

MR. DEENDAYAL& MR. AMRITLAL........................................................RESPONDENTS

MEMORIAL on behalf of APELLANT

 TABLE OF CONTENTS

INDEX OF AUTHORITIES......................................................................................................3

STATEMENT OF FACTS..........................................................................................................4

STATEMENT OF JURISDICTION...........................................................................................5

ISSUES FOR CONSIDERATION.............................................................................................6

1. Whether the High Court was not justified in finding that the first respondent had

delivered the said goods to the appellant and the said goods therefore remained in his

custody?..................................................................................................................................6

2. Arguendo whether even if the goods were delivered to the appellant the appellant

could under section 176 of the Contract Act still maintain his suit on the said promissory

note and recover the amount due there under?.......................................................................6

SUMMARY OF ARGUMENTS................................................................................................7

ARGUMENTS ADVANCED....................................................................................................8

PRAYER...................................................................................................................................11

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 INDEX OF AUTHORITIES

Cases

Madras Official Assignee v. Mercantile Bank of India Ltd........................................................8

S.K. engineering works v. New bank of India...........................................................................10

Sunil Kumar Gupta v. Punjab and Sindh Bank..........................................................................8

Statutes

Section 149, Indian Contracts Act, 1872....................................................................................8

Section 176, Indian Conctracts Act,1872...................................................................................9

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 STATEMENT OF FACTS

I. On January 10, 2015 the appellant Shyamlal advanced Rs. 20,000/- to the first

respondent Deendayal against a promissory note and a receipt. The first respondent

also executed an agreement whereby he agreed to pledge as security for the debt the

said aero scraps and to deliver them at the appellant's house and keep them there in

his custody.
II. However, the first respondent failed to deliver the said goods to him, stored them in a

plot adjacent to the aerodrome at Varanasi. Hence the appellants in the present case

claimed that there was no Contract for pledge, therefore, he was entitled to recover the

amount advanced by him in the suit based on the said promissory note and the said

receipt.

III. In a suit instituted in The Trial Court, it was held that there was no completed
contract of pledge as the first respondent had failed to deliver the said goods, that
the second respondent Amrital, who is the father of first respondent had agreed to
become a surety for repayment of the said loan and that thereupon the appellant did
not insist on possession of the said goods being given to him and that therefore he
was entitled to maintain the suit and recover the said monies.

IV. On an appeal by the respondents, the High Court disagreed with the said findings and

set aside the said decree and dismissed the appellant's suit with costs.
V. An appeal was filed in The Supreme Court of India regarding the same by the

appellants.

Hence the present case before the Honourable Court.

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 STATEMENT OF JURISDICTION

The appellants have approached the Honourable Supreme Court of India under Article 136 of

Constitution of India read with Order XIX of the Supreme Court Rules, 2013 to admit and

adjudicate the present matter.

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 ISSUES FOR CONSIDERATION

1. WHETHER THE HIGH COURT WAS NOT JUSTIFIED IN FINDING THAT THE FIRST

RESPONDENT HAD DELIVERED THE SAID GOODS TO THE APPELLANT AND THE SAID

GOODS THEREFORE REMAINED IN HIS CUSTODY?

2. ARGUENDO WHETHER EVEN IF THE GOODS WERE DELIVERED TO THE APPELLANT

THE APPELLANT COULD UNDER SECTION 176 OF THE CONTRACT ACT STILL

MAINTAIN HIS SUIT ON THE SAID PROMISSORY NOTE AND RECOVER THE AMOUNT

DUE THERE UNDER?

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 SUMMARY OF ARGUMENTS

1. THE RESPONDENT FAILED TO DELIVER GOODS TO THE APPELLANTS

AS PER THE AGREEMENT.

i) The claim by the respondents about the Constructive delivery of goods is

flawed.
In the present case, the respondents failed to deliver goods both actually and

constructively. Requisites of Constructive Delivery not fulfilled.

ii) Clause The appellant depended upon the claim from the surety and hence did

not insist upon the actual delivery of goods for claiming amount of the loan.
The 2nd respondent who was the surety in the said contract was laible to pay in

case of default by the 1st respondent based on which the appellant did not insist

for delivery of goods for collecting the loan amount.

2. ARGUDENO EVEN IF THE GOODS WERE IN FACT DELIVERED, THE

APPELLANTS DECREE IS STILL VALID BASED ON SECTION 176, ICA

1872.

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 ARGUMENTS ADVANCED

1. THE RESPONDENT FAILED TO DELIVER GOODS TO THE APPELLANTS AS

PER THE AGREEMENT.

As per the factsheet, it is clearly evident that the parties agreed that goods had to be delivered

to Mr. Shyamlal house but the respondents delivered the goods to an aerodrome near Varanasi

and not the pre-contracted place. This the appellant claims is a Breach of terms of the

Contract.

As held in the case of Sunil Kumar Gupta v. Punjab and Sindh Bank 1, delivery of the goods is

a primary requisite of pawn. Goods pledged with the creditor remaining in the custody of the

debtor, could not be said to be pledged, delivery of possession is necessary.

Now, delivery can be actual or Constructive as well as defined in Section 149. 2 Or delivery of

goods can be by Attornment. Delivery by attornement as defined in the case of Madras

Official Assignee v. Mercantile Bank of India Ltd 3., as When the goods are in the possession

of a third party who, on the direction of the pledger , consents to hold them on pledgees

behalf.

Here the counsel submits the opinion of J. Mudholkar and J. Ramaswami in the case of

Morvi Mercantile Bank Ltd. v. Union of India, where they said that effective change in

possession is necessary in the case of pledge. If the goods are in the physical possession of a

1 Sunil Kumar Gupta v. Punjab and Sindh Bank, AIR 2006 UTT 26

2Section 149, Indian Contracts Act, 1872

3 Madras Official Assignee v. Mercantile Bank of India Ltd, 1935 AC 53

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 third person ,pledge should be effected by a notification to the custodian who should

acknowledge to hold goods for the bailee.

However the counsel argues that in the present case none of these condition were in fact

followed.

First the respondents act of delivering goods somewhere else other than the agreed place

amounted to the breach of contract.

Secondly to answer the question as to why the appellant did not insist upon the delivery to

agreed place was that the appellant depended u[on the position of 2 nd respondent as the surety

for payment of Loan money in case of default by the 1st Respondent.

2. ARGUDENO EVEN IF THE GOODS WERE IN FACT DELIVERED, THE

APPELLANTS DECREE IS STILL VALID BASED ON SECTION 176, ICA 1872.

As defined under Section 1764:

Pawnees right where pawnor makes default.

If the pawnor makes default in payment of the debt, or performance; at the stipulated time or

the promise, in respect of which the goods were pledged,

the Pawnee may bring a suit against the pawnor upon the debt or promise, and retain the

goods pledged as a collateral security;

If the proceeds of such sale are less than the amount due in respect of the debt or promise, the

pawnor 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 pawnor.

4 Section 176, Indian Conctracts Act,1872

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As held in the case of S.K. engineering works v. New bank of India 5,upon a default made by

the pawnor,the Pawnee has a right to retain the goods so pawned as collateral security for

release of the loan money.

In the present even if it is assumed; for the sake of the argument, that the goods were in fact

constructively delivered to the appellant, it is still clear from the facts that the loan money

has still not been paid back by the respondents. Hence forth the appellants can in fact retain

the goods until the loan money is paid back.

For this it is also asserted that the receipt of sale so submitted by the respondents is false and

forged as the appellant was never in the possession of the goods in the first place.

5 S.K. engineering works v. New bank of India, AIR 1987 P and H 90

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 PRAYER

Wherefore, in the light of facts stated, issues raised, arguments advanced and authorities cited, it

is most humbly prayed before this Honourable Supreme Court of India that it may be pleased to:

1) Hold the decree from the Learned High Court in favour of the appellant as valid
2) Order the respondents in the case to pay the loan money
And pass any other order in favour of the Petitioner which this Court may deem fit in the

ends of justice, equity and good conscience.

All of which is most humbly and respectfully submitted.

Date: 20th March 2017 Counsel for Respondents

1415A

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