Babulal vs Mangilal

This is a defendant''s second appeal against a decree for Rs. 4,117-15-0 with costs in the two Courts below.

The facts of the case-are simple, and the arguments were limited to only one point. There are forward contracts between the parties in Alsi and the present matter relates to a transaction of 1945 involving a sum of Rs. 3,643-7-0 and costs. Though there were earlier transactions between the parties, the accounts were admittedly adjusted before the last transaction was made, and no balance was due on either side. The present transaction was admittedly a forward contract. There were pleas that it was a wagering contract, but these pleas have been negatived in the Courts below and the plaintiff-firm has been awarded a decree for the amount claimed by it less some deduction in the matter of interest.

In this appeal only one argument has been raised, that the transaction was hit by the Oilseeds (Forward Contracts Prohibition) Order, 1943. The plaintiff-firm claimed an exemption by virtue of the notification issued by the Government of India, C.D. No. P. & S.C. 75 (2)/43 dated 31-5-1943, But for this exemption granted by the Government of India the matter would have stood concluded under clauses 3 and 4 of the Order, particularly clause 3, under which no person could enter into any forward contract in any oilseed after the promulgation of the Order. The defendant-firm pleaded illegality, and in answer the plaintiff averred as follows:-

That the forward contracts for the purchase and sale of Alsi were not at all in the nature of wagering contracts. The forward contract of Alsi transctions made by the defendants through the plaintiffs were of specific quality or type namely bold linseed and for specific price and for specific quantities.

The contention of the appellant (appellant-firm) is that the contract was not shown to be hot transferable and the exemption granted by the Government of India does not thus apply to this case. Reliance was placed by the learned counsel for the appellant on Hussain Kasam Dada, represented by Sakoor Dawood, agent and Another Vs. Vijayanagaram Commercial Association (Regd.) and Another, , Seetharamaswami vs. Bhagavathi Oil Co. ( ILR 1951 Mad. 723), and Firm Hansraj vs. Vasanji (1949) 4 D.L.R. Bom 7. During the course of the arguments we discovered two other cases, viz. Venkataswami vs. Noor Muhamad (A.I.R. 1956 AP 9) and 85 C.L.J. 136. No case was cited on the other side, though reliance was placed upon certain observations made in Seetharamswami vs. Bhagvathi Oil Co. (I.L.R. 1951 Mad. 723) and it was contended that the decisions given need re-consideration.

The exemption granted by the Government of India was in the following terms:-

Forward contracts for--linseed--of specific quantities or types and for specific delivery at a specified price, delivery orders, railway receipts or bills of lading against which contracts are not transferable to their parties.

The wording of this exemption is not happy and is not even grammatical. It has given a great amount of trouble to those whose task has been to interpret it. The first point to settle is whether the conjunction ''and'' is disjunctive or conjunctive. In our opinion, reading the sentence as a whole it is conjunctive; and this is also the view taken in one of the cases relied upon.

The next question is whether the condition of non-transferability applies only to the last portion where delivery orders, railway receipts, and bills of lading are mentioned or whether it applies to all transactions which are saved. In the Calcutta case the learned Judge pointed out that ''specific delivery'' indicated that atleast it should be for specific and ascertained goods. This contention was not raised to start with by the learned counsel for the appellant, but when his attention was drawn to the ruling he said it would be an additional argument in his favour. No doubt, the language in the latter part of the notification is cryptic and some words are missing. The intention, however, is clear viz. that the transactions which are saved should be for sped filed qualities and types, for specified deliveries at a specified price, with no possibility of third parties intervening. In the present case there is nothing to show that the Alsi which was to be delivered by the defendant-firm could not be ordered to be delivered to a third party. We think that any other interpretation would undo the scheme of the Order completely, and an interpretation advancing the spirit of the Order must be accepted in preference to a doubtful interpretation enlarging the exemption granted by the Government of India notification. We accept the view expressed in the Madras and Bombay cases, and we hold that in this case there was nothing to show that the delivery was only to the vendee and to any other persons. If third parties could have been assigned the benefits of the contract then the exemption can not apply. The respondent was required to show that the benefits of the contract were not assignable to others. This, the plaintiff-firm neither pleaded nor proved. In view of this, we think that the decision of the Court below must be reversed and the claim of the plaintiff should be dismissed with costs throughout. We hesitated whether or not to allow the defendant-firm its costs because it was as such in breach of the order as the plaintiff-firm; but in View of the decision in Haji Habib vs. Bhikamchand Jankilal Shop ( ILR 1954 Nag 514), we think that costs must follow the event in this case. We accordingly allow the appeal and dismiss the plaintiff''s suit with costs throughout.