Yeleswarapu Lakshmi Suryanarayana vs Kudaravalli Venkataratnam

Horwill, J.—The suit in the lower Court was for a sum of money due on three contract. Under these contracts, sums of money were

advanced by the plaintiff to the defendant; and the defendant undertook to deliver in descharge of the loan and the interest certain quantities of

paddy. This paddy was not given in accordance with the contract; and so the plaintiff now sues for the value of the paddy. We are now concerned

only with one contract, Ex. P-I, dated the 12th July, 1942; and the chief question that the lower Court had to consider was whether that contract

was enforceable in view of the provisions of Clause 3 of the Food Grains Control Order. The lower Court held that it did not contravene those

provisions.

Clause 3 (1) of the Food Grains Control Order says :

No person shall engage in any undertaking which involves the purchase, sale, or storage for sale, in wholesale uantities of any food grain except

under and in accordance with a licence.

Sub-clause (d) of Clause 2 says :

sale in wholesale quantities means sale in quantities exceeding 20 maunds in any one transaction.

The learned Subordinate Judge''s argument was that the sum of money advanced was a loan and that the paddy was to be given in discharge of the

loan. It was not therefore, he argued, a transaction of sale. It is easy to see how the Food Graims Control could be circumvented by framing a sale

so as to make it appear that the money paid was an advance and that the grain was merely a repayment of the loan '' but even if the transaction

was what it purports to be, then it still seems to me that when a person advances money and another person undertakes to pay grain for it at some

future date, that transaction is a sale, even though the person who provides the grain has the use of the money for some time before he has to fulfil

the contract.

Another argument is that the transaction cannot be said to be in contracention of the order; because the parties may have intended to procure a

licence from the Provincial Government. There is however no evidence that they intended to do so '' and the wording of Clause 3 (1) suggests that

the licence has to be obtained before a contract can legally be entered into, because the contract has to be under and in accordance with the

licence. A contract can hardly be said to be under and in accordance with a licence that has not been issued.

It was finally argued that the quantity of grain involved was less than 20 maunds. If that were so, then the plaintiff had an obvious and complete

answer to the defendant''s plea. The fact that he did not put it forward in the lower Court is very good evidence that this contention raised in this

Court for the first time is without substance.

The suit can however be treated as one for the return of the money advanced. No interest could then, however, be granted, except from the

date of the suit.

The petition is therefore allowed and the decree of the lower Court modified, as far as this par ticular transaction is concerned, by making it one

for Rs. 200 with interest at six per cent, from the date of the suit. The lower Court''s decree with regard to the other two transactions is affirmed,

as the petition has not been pressed with regard to them.

Both parties will bear their own costs in both the Courts.