Illuru Hanumanthiah vs Umnabad Thimmaiah and Others

Rajamannar, C.J.—Two points are raised by Mr. Kothandaramiah, learned counsel for the appellant In these two second appeals. These

second appeals arise out of two suite filed by the appellant for recovery of damages in respect of two contracts under which the deceased father of

defendants 1 to 6 agreed to supply bags of groundnut seeds. The contracts were entered into on 18-8-1945 and 19-9-1945. The delivery in

respect of these two contracts was to be made in December 1945 and in December 1945 or January 1946 respectively. Both the Courts below

have dismissed the suits mainly on the ground that the suit contracts are void as being in contravention of the provisions of ""the Oil Seeds (Forward

Contracts Prohibition) Order, 1943"".

Learned counsel wanted to escape the provisions of this Order by contending that they would not apply to these cases on two grounds. One

was that the contracts in these cases were not forward contracts within the meaning of the definition of the term in Clause (ii) of Section 2 of the

Order. The definition is as follows: "" ''Forward contract'' means a contract for the delivery of oilseeds at some future date."" The argument is that as

the contracts did not specify the dates but only mentioned generally the entire month or months there were no contracts for the delivery ""at some

future date"". I do not accept this argument, because the phrase ""at some future date"" is not the same as ""on a future date"". ""At some future date

only means at some time in future.

The second ground is that the suit contracts come within the scope of exemption granted to certain contracts by notification of the Central

Government dated 31-5-1943. According to that notification

Forward contracts for groundnut.......... etc., not transferable to third parties are excluded from the provisions of the order"".

Learned counsel conceded that there was nothing on the face of the contracts to show that they were not transferable to third parties. His

contention is that under the general law, executory contracts like the contracts in question under which there were mutual obligations to be

performed, namely, the payment of price and delivery of goods, could not be assigned. In support of this contention learned counsel was able to

cite only a decision of a single Judge of the Bombay High Court in 1892 in -- ''J. H. Tod v. Lakshmidas Purushothamadas'', 16 Bom 441 (A). In

subsequent decisions both of the Bombay High Court and the Calcutta High Court it has been held that the buyer''s right under a contract to get

goods on payment of price is capable of assignment because it comes within the definition of an actionable claim,

In -- P.L. Rangiah Chettiar Vs. Parthasarathy Iyengar, , Chandrasekhara Aiyar J. held that a contract to sell goods could be assigned by the

seller. He saw no distinction in principle between the rights of a seller and a buyer to a contract. With great respect 1 entirely agree with the

learned Judge that a contract to sell goods is assignable by a seller and equally a contract to buy goods is assignable by the buyer. I also join with

the learned Judge in mentioning the fact that contracts like the contracts in question are being assigned every day in the market. It was the frequent

assignments of forward contracts, almost amounting to gambling, that really led to the promulgation of the Oil Seeds Forward Contracts

Prohibition Order. To accept the argument of the learned counsel for the appellant would mean that every forward contract would be entitled to

the benefit of the exemption and the order itself would be rendered useless. It is true that if this be the law I should declare it to be so, but I am not

convinced that it is. The courts below were right in dismissing the suits. The second appeals are dismissed with costs in S. A. No. 1178 of 1949.

Leave refused.