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4. The main question which would have arisen for determination would have been whether or not the four lakh units had been sold to the third respondent or whether it was merely a sub-pledge as indirectly alleged by the second respondent. This would be a question of fact to be determined, if necessary, on evidence. However, on behalf of the petitioners, it has been contended that even if there was a sale, the third respondent would still get no right, title or interest, equitable or legal, in these four lakh units. This is on the footing that the third respondent could only get such title as the second respondent had. It is contended that admittedly the second respondent were mere pledgees. It is contended that as such pledgees they could transfer no better title to the third respondent. This raises a legal question as to whether a person who has purchased shares with blank transfer forms, from a person who had no right or authority to sell the shares, derives any right which would enable him to defeat the claim of the real owner. This question has been argued by the parties on the assumption, for the sake of argument, that there is a sale in favour of the third respondent. The question of fact as to whether or not there is a sale is for the present left open to be determined only if the court comes to the conclusion that such a sale would create in favour of the bona fide purchaser, i.e., the third respondent, a right, title or interest which he can enforce even against the true owner.

15. Section 179 of the Indian Contract Act provides that where a person pledges goods in which he has only a limited interest, the pledge is valid only to the extent of that interest.

16. Thus, on a plain reading of the provisions set out above, it is clear that so far as the law in India is concerned, shares are movable property. In India shares are goods within the meaning of the Sale of Goods Act. The provisions of the Sale of Goods Act and the Indian Contract Act would apply to a transaction of sale of shares also. Even in respect of transactions of sale of shares the doctrine of nemo dat quid non habet applies, subject to the exceptions laid down in Section 27 of the Sale of Goods Act. Also the provisions regarding pledge of goods under the Indian Contract Act would apply even to a pledge of shares. Under Section 176 of the Indian Contract Act the only right of a pawnee is to retain the goods or to sell them after giving to the pawnor notice. The right to sell arises only if there is default in payment or performance. Any sale, in cases where there is no default or. without notice would be void. Under Section 179 of the Indian Contract Act, the pawnee may create a sub-pledge. But in such cases the only right of the sub-pawnee would be to step into the shoes of the pawnee. Now, let us see whether the authorities cited across the Bar lay down anything different.

18. On behalf of the petitioners, reliance was also placed upon the authority in the case of Belgaum Pioneer Urban Co-operative Credit Bank Ltd. v. Sripadangalavaru Swamiji, AIR 1962 Mys. 48. In this case, it was held that the pledgee has got only a right to retain possession of the goods pledged till the money borrowed is repaid. It is held that the pledgee is not a transferee of the goods pledged and that the moment tbat money is repaid, the pawncr is entitled to the return of the goods pledged. In this case, it is held that it is immaterial in whose hands the goods pledged are on the date when the money borrowed is fully discharged. It is held that throughout the entire period of the pledge, the pawnor continues to be the owner of the goods pledged and the juridical possession also continues to be with him. It is held that the pawnee merely retains the physical possession of the goods or in other words, he is merely in custody of the goods. In this case, it is held that even though there may be sub-pledge, once the amounts are repaid the sub-pawnee loses all rights in the property pledged because the title of the sub-pawnee is a precarious title which is dependent on the title of the pawnee.