Pestonji Jehangirji vs Jaisingdas Hansraj

The appellants are the heirs and executors of Jehangirji-Hormasji, a merchant in Bombay. Jehangirji had certain transactions with the respondents, who are a firm of merchants trading at Khamgaon; and on 23rd March 1892 he sued the respondents the Court of the Civil Judge at Akola for Rs. 24, 600-1-6 as the balance due to him on those transactions. The respondents brought into Court Rs. 2,571, which they admitted to be due, and they denied liability for the rest. The Civil Judge at Akola, on 30th April 1897, gave decree for Rs. 13, 421. On appeal, the Judicial Commissioner of the Hyderabad Assigned Districts on. 29th November 1899, reversed this decree, holding that the respondents were liable for no more than the sum brought into Court. The question in the present appeal is, which of those judgments is right.? 2. On the face of the documents the contracts now in dispute were sales of cotton by Jehangirji to the amount of 2,800 bojas and, although in each case the sale purports to be to a third party, yet it is common ground that by registering the sale-note the respondents, to whom it was transmitted, made themselves liable, as the agents of Jehangirji, to the purchaser. It is also common ground that delivery of the 2,800, bojas not having taken place, the appellants must be debited with some sum representing those undelivered bojas, and the whole question is, with what sum? The case of the respondents is that it was an imped term of the contract and that the rate payable for cotton not delivered should be fixed by a certain Committee of Khamgaon merchants dealing in cotton; that this body, called? panchayat, has fixed the sum at Rs. 57-14-0 per boja, and that this is conclusive of the controversy. The case of Jehangirji, as stated in his plaint, was that, "If the plaintiff failed to deliver the goods, both parties should calculate the price of the goods not so delivered at the rate of ready goods of the Sutta description prevailing in the Khamgaon market on 13th March 1892." 3. From the post ion thus assumed by Jehangirji, of ignoring the panchayat, he was dislodged at the trial of his own evidence. He first said, " If I did not make delivery, the rule in the printed contract; Exhibit D-XIV applied. On looking at Exhibit D-XI I find no such rule as referred to by me above." He then said:"The rule which was to apply was that the rates were to be settled by rates ruling on the day of, delivery." But he went on, "These rates ware to be settled by certain Shrofls appointed by the Sutta Shrofls at Khamga on; and the profits and losses were to be determined by these rates if the rates settled were fair and true. This the Shroffs do in accordance to the practice of the Suite trade at Khamgaon... I knew of this system of appointing a panchayat and settlement of rate by them and settlement of profits and, losses to be determined accordingly, if the rates are fair and true, since it is a practice that prevails all oyer Berar and in other places." This admission, is, qualified, as will be observed, by the words "if the rates were fair and true" and the case of the appellants ultimately consisted of an impeachment of the rate fixed by the panchayat as not having been "fair and true." 4. This being the condition of the argument it is manifest that the appellants can only get behind the decision of the body to whom the question of rate stoodreferred. by making out a strong and clear case. Their theory was that the duty of the panchayat was simply to find out at what rate sales of this class of cotton had been made on 13th March 1892, and they say that, as a matter of fact, the rate ruling on that day was not Rs. 57-14-0 but Rs. 50. The matter, however, is a great deal less simple than this contention assumes it to be. 5. The truth is, that the transactions in which Jehangirji was engaged were of the nature of speculations on the rise and fall of the cotton market, and did not deal with extant goods required for purposes of commerce. On the contrary, the amount of cotton named in the contracts now in question far transcended the amount of cotton in the market on the dates when performance of those contracts purported to be due.

On any of the dates in question, says one of the appellants own witnesses, Mr. Maclntyre, "2800 boja of cotton of any description were not available in the Khamgaon market. There were not 2800 bajas of cotton in the aggregate available on any particular day. I think on any of these dates 100 or 200 bojas of cotton of the Sutta description could have been purchased per day. Under ordinary circumstances I do not think more than 200 bojas of Sutta description of cotton could have been available in Khamgaon on any of those days. 6. It is obvious that in these conditions the problem to be solved was something much more complicated than that suggested by the appellant; and it is perhaps not surprising, that the Khamgaon speculators should have set up a skilled Committee of their number to settle such questions. For it is to be borne in mind that, in order to take part in those speculations in cotton, the Bombay merchant required to employ as his agent, one of the Khamgaon Shroffs in whose hands the dealing was, a nd to submit to the conventions governing the trade, such as it was. The highly artificial operation of fixing the prices which would have to be paid, in imaginary purchases, in order to procure non-existent goods, is one not to be controlled by the appellant''s rule of thumb, and it necessarily involves more arbitrary methods. Accordingly, the mere fact that on 13th March 1892 certain comparatively small parcels of cotton were sold at Rs. 50 per baja, does not prove the appellant''s case, or convict the panchayat even of error. Very much more than error, however, would be required to upset the decision of an expert tribunal voluntarily set up for the decision of matters of skill. 7. In their attack on the panchayat the appellants have entirely failed to prove fraud, either in the inception or the proceedings of that body. The panchayat was set up in the usual way. Its raison d''e re, of course, was that its members, as well as the persons coming before them, were engaged in speculating in cotton. Some of its members were "bull" operators and some "bears", some were interested to have a high figure fixed, some to have a low one; some had nd interest one way or the other. There is nothing to suggest that they treated this matter of the appellant''s otherwise than in the ordinary course of business. The exposition in the witness-box, by these gentlemen, of their rationes decidendi is certainly not lucid; but this is not inconsistent, with the honesty and validity of their conclusion. Their Lordships find in the judgment of the Judicial Commissioner an adequate and intelligent defence of that conclusion. 8. Their Lordships will humbly advice His Majesty that the appeal ought to be dismissed. The application to the High Court for leave to appeal to His Majesty in Council appears from the record to have been presented by all the appellants, and leave to appeal was apparently granted to them all But in the petition of appeal which has been referred to their Lordships by His Majesty, the first appellant appears as the sole petitioner, and their Lordships are informed that he is infant the sole surviving executor at present entitled to act either in British India or the Hyderabad Assigned Districts. In these circumstances, their Lordships will order the first appellant to pay the respondents'' costs of the appeal.