Passing of property in imported goods depends on ascertainment and appropriation; bank arrangements alone do not transfer ownership.

Property in imported goods does not pass under a contract for part of an unseparated consignment unless the goods are ascertained and appropriated to the contract under the Sale of Goods Act, 1930. Delivery to a future destination and banking or guarantee arrangements in the buyer's favour do not by themselves transfer ownership. On these terms, the customs authorities' assumption that title had already passed was legally erroneous, so the confiscation and personal penalties could not stand.

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Issues: Whether property in the imported goods had passed to the buyer before importation was complete, and whether the confiscation and penalties imposed by the customs authorities were valid.

Analysis: The dispute turned on the Sale of Goods Act, 1930, particularly the rules governing when property in goods passes under a contract. The contract was for part of a larger consignment, delivery was to be made at the buyer's godown in Bombay, and the goods had not yet been separated or appropriated to the contract when the agreement was made. The financial guarantee and banking arrangements in favour of the buyer did not by themselves establish that ownership had passed at the time of the contract. On the facts and terms of the contract, the goods were not specific goods in a deliverable state so as to attract immediate transfer of property. The customs order, which proceeded on the contrary assumption, therefore involved a manifest error of law.

Conclusion: Property in the goods had not passed to the buyer at the time of the forward sale contract; the confiscation orders and personal penalties were invalid and liable to be quashed.

Final Conclusion: The customs action could not be sustained because the import remained covered by the valid licence and no unauthorised importation by the buyer was established on the true legal position as to ownership.

Ratio Decidendi: Where goods are part of an unseparated consignment and the contract contemplates delivery at a future place and time, property does not pass at the date of the agreement unless the goods are ascertained and appropriated to the contract in accordance with the Sale of Goods Act, 1930.

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