CHHOGMAL BALKISONDAS Vs. JAINARAYAN KANAIYALAL

JUDGEMENT

(1.) This is an appeal from a decree of Mr. Justice Macleod dismissing a suit brought by the plaintiffs, who carry on business as Shroffs, Pakka Adatyas and commission agents in Bombay, to recover Rs. 48,045-15 as a balance of account payable by the defendant on transactions in which the plaintiffs acted as the defendant s Pakka Adatyas. The balance appearing against the defendant is attributable to losses on forward contracts for the sale or purchase of silver, Bengal cotton, Broach cotton and linseed. All these losses occurred on contracts under which in fact no delivery was given or taken and all the contracts were entered into with the plaintiffs by Mangalchand, the Munim of the defendant s Cawnpore branch. The defendant disputes the authority of Mangalchand to enter into forward contracts on his behalf and upon this contention arises the first point in the appeal.

(2.) Mangalchand was the sole Munim of the defendant at Cawnpore from 1897 to 1911 his remuneration being a share of six annas in the profits of the Cawnpore business.

(3.) There is no doubt that it is common for Marwari firms in the mofussil and their Marwari Adatyas in Bombay to enter into forward contracts for the purchase or sale of silver, cotton and seeds. The evidence of Jwaladas shows that the defendant s Cawnpore books record forward transactions of this description in 1958 (1900-01), 1959 (1901 02), 1962 (1905-06), and 1964 (1907-08). The books for 1961 and 1963 were not forthcoming at the time of Jwaladas investigation and they have not been produced in this Court. The evidence establishes that the defendant visited Cawnpore from time to time but never himself examined the books. Business relations between the plaintiff and the defendant s Cawnpore branch went on from 1901 to 1911 and it is not disputed that an adjustment arrived at in 1908 when Rs. 81 was found due to the defendant embraced accounts of forward transactions entered into by Mangalchand in the name of the defendant, It is, however, the fact that between 1908 and 1910 the transactions between the plaintiffs and the defendant s pore firm related solely to that of the forward transactions entered into in 1910 and 1911 no trace is to be Scott found in the defendant s Cawnpore books. It is probable that Mangalchand did not wish the defendant to know of the forward contracts he was entering into during that period with the plaintiffs but it is not contended that the latter received any intimation that Mangalchand s apparent authority to enter into forward contracts had ever been revoked. On the 1st of April 1911 the defendant writes to the plaintiffs: " After having copied our account up to this day please write u information about any goods which may have been bought and sold through you." This information was supplied at once but it is not till after the 22nd of April when the plaintiffs solicitors wrote that at least Rs. 40,000 would be required as margin on the forward transactions that the defendant by his pleader s letter of the 5th May informed the plaintiffs solicitors that Mangalchand had no authority to enter into forward transactions.