BINANI COMMERCIAL COMPANY LIMITED Vs. RAMANLAL MAGANLAL MEHTA

JUDGEMENT

(1.) This appeal arises from a suit filed by M/s Binani Commercial Co. Ltd., on the Original Side of the Bombay High Court against the respondent Ramanlal Maganlal Mehta. In its suit the appellant sought to recover from the respondent a sum of Rs. 93,053-3-0 which represented the loss suffered by it in the transaction in question or in the alternative damages for Rs. 88,229-3-0 for breach of the contract in respect of the said transaction.

(2.) The appellant is a Limited Company and it carries on business in Bombay as metal merchants, bankers and commission agents. The respondent also carries on business in Bombay under the name and style of M/s. Balasinor Export and Import Co., and also as M/s. Ramanlal and Sons. In January 1952 the appellant agreed to sell to the respondent 300 tons of Electrolitic Zinc at the rate of Rs. 171 per cwt. against delivery orders issued under the regulations of the Metal Traders Association, Ltd., for Posh Sudi 15 delivery (January 12, 1952). The respondent promised to pay for the said goods by January 21, 1952 and to take delivery thereafter. The respondent paid to the appellant several sums aggregating Rs. 1,56,000 as a deposit for the price of the said goods. The appellant tendered the said goods to the respondent whereupon he arranged to take delivery of only 160 tons and made payments on account. The appellant then tendered the balance of 140 tons to the respondent but the respondent failed and neglected to take delivery of the said balance and to pay for it. As a result of the respondent's default in taking delivery the appellant had to sell the balance in the falling market at Rs. 81 per cwt., and that had resulted in the loss to the appellant. That in brief is the nature of the claim made by the appellant against the respondent.

(3.) This claim was resisted by the respondent on several grounds. The principal ground urged by him, however, was that the transaction in suit for the sale of 300 tons of Electrolitic Zinc was in contravention of the provisions of Supply and Prices of Goods Act, 1950 (Act 70 of 1950) and Cl. (b) of the Government of India Notification No. 1 (4)-32 (17) 50 issued on September 2, 1950. According to the respondent the said transaction was void and illegal and therefore the appellant's claim was not maintainable in law. The respondent also raised other contentions on the merits without prejudice to his principal contention about the illegality of the contract.