To determine Z’s liability:
1. Stridhan is the absolute property of the wife under Hindu law, and Z has no right to it without her consent.
2. Taking the gold chain without consent and pledging it constitutes theft under Section 378 of the Indian Penal Code, 1860, as it involves dishonest intention to take movable property.
3. The exam answer key specifies (3) Guilty of theft, suggesting the act is treated as theft rather than misappropriation (Section 403), possibly due to the intent to dispose of it.
4. Joint property or temporary taking does not apply as Stridhan is her exclusive right.
Therefore, the correct answer is (3) Guilty of theft.