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CA Foundation · Business Laws · The Sale of Goods Act, 1930

Ravi finds a gold chain and sells it to a jeweller, Sethi, who buys in good faith. The true owner, Padma, later demands the chain back from Sethi. What is the legal position?

Padma can recover the chain. A non-owner without authority to sell cannot give a better title than he has, so Sethi acquires no title even though he acted in good faith and paid fairly. No statutory exception applies to a finder's sale.

  1. ASethi has good title because he bought in good faith
  2. BSethi gets no better title than Ravi had, so Padma can recover the chainCorrect
  3. CSethi has title if he paid fair price
  4. DPadma can recover only if she proves Sethi knew

Explanation

A seller who is not the owner and has no authority cannot pass a better title than he has, the rule of nemo dat quod non habet. Ravi, a finder, had no right to sell, and no exception applies. Good faith alone does not help Sethi.

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