BABULAL AGARWALA Vs. VIJAYA STORES FIRM

JUDGEMENT

(1.) This appeal raises a question of some public importance. By an agreement, Ext. 1, dated 17-9-1843, the plaintiff-appellant entered into a contract with the defendant-firm of Messrs. Vijaya Stores, to supply paddy to the latter who was admittedly the purchasing Agent on behalf of the Government of Orissa. In pursuance of this agreement the plaintiff supplied 3346 maunds (1673 bags) of rice and 26 maunds (13 bags) of paddy between 30-9-1943 and 8-10-1943, though the contract was for the supply of at least 40,000 maunds of rice by 8-101943. The plaintiff also deposited a sum of Rs. 5000/-as security for the performance of the contract. The plaintiff revoked the contract by a letter Exhibit 3 (a) dated 4-10-1943, on the ground that the agreement became impossible of performance owing to the failure of the defendant to obtain a license for the plaintiff. There was an exchange of some registered correspondence between the parties, and eventually the suit giving rise to this appeal was instituted in January, 1944 for the recovery of the price of rice and paddy supplied to the defendants estimated at Rs. 47,026/-, for refund of the sum of Rs. 5,000/- deposited as security, and for certain other miscellaneous claims, the total amount claimed being Rs. 59,962/-. The defendant raised several pleas in answer to the plaintiff's claim and denied his liability for breach of contract or for compensation for failure to perform the contract. He made a counter-claim for damages on the ground that the plaintiff was wholly responsible for the non-performance of the contract. He also pleaded that the agreement, Ext. 1, was void 'ab initio' as the plaintiff was not a licensed dealer and that the agreement, being in the nature of a dealing "in futures in foodgrains" was prohibited under the provisions of the Food-grains Control Order, 1942.

(2.) The learned Subordinate Judge found that the plaintiff had supplied to the defendant 3346 maunds of rice and 26 maunds of paddy and that he was entitled to claim Rs. 47,026/- being the value thereof. But he was of the view that the plaintiff was not entitled to a decree as the agreement to sell was void. He also rejected the defendant's counter-claim to be reimbursed for the loss sustained by him on the ground that the contract was illegal and void. The plaintiff was given a decree for Rs. 6106/- only with corresponding costs, and the rest of his claim was dismissed. It is against this judgment of the learned Subordinate Judge, that the plaintiff has come up in appeal.

(3.) The findings of the learned Subordinate Judge, except on the issue of the illegality of the agreement, Ext. 1, are not contested before us. We are, thus, concerned only with the issue relating to the legality of Ext. 1 in this appeal.