HANSRAJ GUPTA Vs. N P ASTHANA

JUDGEMENT

(1.) In this appeal, and in another appeal (No. 86 of 1930), in which the same parties are concerned, the relevant facts cover much common ground, and they were accordingly heard together. Lala Raghu Mal (who will be referred to as the testator) was a shareholder in a company (herein called the company) named the Dehra- Dun Mussoorie Electric Tramway Co., Ltd., which was incorporated under the Companies Act 1913, on 23 August 1921. He carried on business under the style of Madharam-Hardeo Das at Calcutta and under the style of Madho Ram Bud Singh at Delhi. On 23 February 1922, he entered into a contract in writing with the company (modified in some respects at a later date) by which he agreed to supply large quantities of tramway construction material to the company. Cl. 16 of the Contract was in the following terms : "The company shall pay to the contractors by way of advance when the contractors have placed the orders in accordance with the terms of para. 6 above, 25 per cent of the value of such materials for which firm orders shall have been placed as aforesaid by the contractors. Any amount of advance or advances so paid shall be deducted from the final payments for the respective materials as in para. 13 above,"

(2.) On the same date a sum of Rs. 27,000 was paid to the testator, and a letter was written to him, signed by one Beltie Shah, as managing agent on behalf of the company, in which it was stated that : "We have today paid you Rs. 27,000 (rupees twenty-seven thousand) by way of an advance and this amount will be deducted from your bill for the second shipment. Your receipt for the above amount will be understood to have been given on acceptance of these terms."

(3.) A receipt dated 23 February 1922, was given on behalf of the testator for this sum of Rs. 27,000 : "being the amount of advance for the order for rails placed with us by them in terms of their letter .... dated 23 February 1922. This amount is to be adjusted hereafter from our bills for supply of rails."