Tuesday, June 23, 2009

Practical Problems_Sales of Goods Act_7

‘A’ raised a loan by pledging a Railway Receipt of goods in transit, as security, with a money lender ‘X’. ‘A’ got the Railway Receipt back from ‘X’ in order to get the goods released from the Railways. Instead, ‘A’ pledged the same Railway Receipt with another lender ‘Y’, to raise another loan. In a suit for recovery filed by ‘X’, ‘Y’ pleads estoppels against ‘X’ for not endorsing the Receipt “Under Lien Pledge” and thus, representing that the said receipt is free from lien, which facilitated ‘A’ to raise a second loan against the receipt. Decide, if estoppel is rightly invoked by ‘Y’ against ‘X’?