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A delivers a gold necklace to B on ‘sale (or) return’ basis. It is agreed between A and B
that property is not to pass to ‘B’ till he has paid price of the Necklace wth out paying
the price.
‘B’ sells the necklace to C. Does ‘C’ get a good title to the necklace?
Most Upvoted Answer
A delivers a gold necklace to B on ‘sale (or) return’ basis. It is agr...
A delivers a gold necklace to B on a 'sale or return' basis, meaning that the necklace is given to B with the option to purchase it or return it. It is agreed between A and B that the property of the necklace will not pass to B until he has paid the price for it.

B then sells the necklace to C. The key question here is whether C obtains good title to the necklace, meaning whether C becomes the legal owner of the necklace.

No Valid Title for C:
In this case, C does not obtain a good title to the necklace. This is because the property of the necklace has not passed from A to B, as agreed between them. As a result, B does not have valid title to transfer to C. In general, a person cannot transfer a greater title than they themselves possess. Since B does not have ownership of the necklace, he cannot pass on ownership to C.

Exception: Bona Fide Purchase for Value:
There is an exception to this rule, known as the doctrine of 'bona fide purchase for value without notice'. This doctrine applies when a person purchases an item in good faith, for value, and without notice of any defect in the seller's title.

If C can prove that he purchased the necklace in good faith, for value, and without notice that B did not have valid title, then C may obtain good title to the necklace. However, in this case, it is clear that C was aware of the arrangement between A and B, as B sold the necklace without paying the price. Therefore, C cannot claim to have purchased the necklace without notice of any defect in B's title.

Conclusion:
In conclusion, C does not obtain good title to the gold necklace. The property of the necklace did not pass from A to B as agreed, and B sold the necklace without paying the price. Therefore, C cannot claim ownership of the necklace and A can seek legal remedies to recover the necklace from C.
Community Answer
A delivers a gold necklace to B on ‘sale (or) return’ basis. It is agr...
YES
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A delivers a gold necklace to B on ‘sale (or) return’ basis. It is agreed between A and B that property is not to pass to ‘B’ till he has paid price of the Necklace wth out paying the price.‘B’ sells the necklace to C. Does ‘C’ get a good title to the necklace?
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A delivers a gold necklace to B on ‘sale (or) return’ basis. It is agreed between A and B that property is not to pass to ‘B’ till he has paid price of the Necklace wth out paying the price.‘B’ sells the necklace to C. Does ‘C’ get a good title to the necklace? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A delivers a gold necklace to B on ‘sale (or) return’ basis. It is agreed between A and B that property is not to pass to ‘B’ till he has paid price of the Necklace wth out paying the price.‘B’ sells the necklace to C. Does ‘C’ get a good title to the necklace? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A delivers a gold necklace to B on ‘sale (or) return’ basis. It is agreed between A and B that property is not to pass to ‘B’ till he has paid price of the Necklace wth out paying the price.‘B’ sells the necklace to C. Does ‘C’ get a good title to the necklace?.
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