SITARAM BINDRABAN Vs. CHIRANJILAL BRIJLAL

JUDGEMENT

(1.) THIS appeal arises out of the suit instituted by the plaintiff, a partnership firm, for recovery of damages from the respondents for breach of contract to deliver 790 bales of jarila cotton on 14-9-1948. The undisputed facts are as follows:

(2.) SEVERAL individuals and firms doing the business of forward delivery transactions in cotton formed an association known as the Cotton Dealers Association of Khamgaon. All the members of the Association had subscribed to the Memorandum of Association which, among other things, provided that the parties to a forward delivery transaction will pay and receive clearing money in respect of that transaction. These clearing rates were to be fixed by the Appeal Committee of the Association consisting of five members. On several dates between 3-6-1948 and 27-8-1948 clearing rates were declared by this Committee in pursuance of which mutual adjustments between the parties to the appeal took place on 27-8-1948. As a result of these adjustments, the respondents were liable to sell 790 bales of the agreed variety of jarila cotton to the appellant at Rs. 630 per khandi. The date of the delivery of these goods was 14-9-1948. During the period between 3-6-1948 and 27-8-1948 the appellant had paid to the respondents by way of clearing money a total sum of Rs. 10,428/12/0.

(3.) THE appellant's case in the Courts below was as follows: The rules of the Association did not govern the contracts in suit, that they Were merely enabling rules, and that it depended upon the will of the party whether to abide by all or any of the rules or otherwise. Even clearings were effected not in pursuance of the rules but under agreements between the parties. The cotton agreed to be sold was a local variety of a superior type of jarila having 14 annas' staple. This, it was said, was superior to the standard jarila of the East India Cotton Association Limited. Bombay, by 25 per cent. This variety was agreed upon between the parties as per Rule 11 (1) of the Association and its sample was kept in the office of the Association.