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CSEET · Business Laws and Management · Elements of Law relating to Sale of Goods

Mohan sold a machine to Nitin but kept possession. Later Mohan sold and delivered the same machine to Omkar, who took it in good faith and without notice of the earlier sale. Which statement is correct?

Omkar's receipt has the same effect as if Mohan were expressly authorised by the owner. Under Section 30(1), a seller left in possession who delivers to a later good-faith buyer without notice of the earlier sale passes an effective title to that buyer.

  1. AOmkar gets no title since Mohan had already sold the machine
  2. BOmkar's receipt has the same effect as if Mohan were expressly authorised by the owner to deliver itCorrect
  3. CNitin remains owner and may recover the machine from Omkar
  4. DThe second sale is void because the machine was not Mohan's

Explanation

Section 30(1) provides that where a seller continues in possession after sale, a delivery under any sale, pledge or other disposition to a person receiving it in good faith and without notice of the earlier sale has the same effect as if authorised by the owner. Omkar fits this. Options A, C and D ignore that provision.

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