JETHMAL MADANLAL JOKOTIA Vs. NEVATIA AND CO

JUDGEMENT

(1.) Defendants 1 to 4 are the appellants. The plaintiffs brought the suit to recover from the assets of the first defendant-firm and from defendants 2 to 4 personally, a sum of Rs. 28,991 out of which Rs. 27,742-12-6 was the prinicipal and the balance of Rs. 1,248-3-6 was the interest thereon at 6 per cent per annum from 1st July, 1950, to the date of plaint. The sum was claimed as due on dealings betessn the parties, in respect of which the plaintiffs had sent statements of accounts to the defendants on various dates between 7th December, 1949 and 9th November, 1950, and sent also a notice of demand on 16th January, 1951. The plaintiffs' firm was doing business at Adoni, as merchants and commission agents in repsect of groundnut seeds, groundnut oil and other commodities. Defendants 2 to 4 are brothers, who were carrying on a similar business at Vijayawada in the firm name of the first defendant. The plaintiffs' case is that they acted as pakka adatias for the defendants and carried out a number of orders placed with them by the defendants between December, 1949 and June, 1950, for forward purchases and sales of groundnut seeds and groundnut oil. The orders were given by the defendants either on the telephone or by telegrams or by letters. The plaintiffs, after carrying out each order, intimated the fact by letters to the defendants. As the purchases and sales turned out to be of equal quantities each month, the contracts were settled for the differences in the prices.

(2.) The items in the accounts consisted of these differences together with the agreed commission, brokerage and incidental expenses and the payments made by one party or the other from time to time. There is now no dispute as to the correctness of the figures in the accounts. The defence, so far as it is material to the appeal, was firstly that the transactions were wagering contracts and as such were void under section 30 of the Indian Contract Act ; and secondly that the transactions were forward contracts, which were illegal and unenforceable, by reason of the Oil Seeds (Forward Contracts Prohibition) Order, 1943 and the Vegetable Oils and Oil-cakes (Forward Contracts Prohibition) Order, 1944. On both these issues, the learned Subordinate Judge held against the defendants. He found that the contracts entered into between the parties were not wagering contracts, as it was not their intention that there should be no actual delivery of the goods. He also found that the contracts came within the exemptions notified under the provisions of the two Prohibition Orders, because the concerned delivery orders, railway receipts or bills of lading were not transferable. A dispute was raised before him with regard to the interest claimed. He found that the rate of 6 per cent was not unreasonable and that as the principal amount had fallen due by 1st July, 1950, the defendants were liable to pay the interest. As a result of these findings, he decreed the suit in its entirety. The correctness of the findings is assailed in the appeal.

(3.) The first question that falls for our consideration is whether the contracts for purchases and sales, on which the suit claim is based, were of a wagering character, hit by section 30 of the Indian Contract Act. The relevant portion of section 30 runs as follows :-