(1.) The main point in this case is whether the plaintiff's firm of Khemchand Keshavlal were entitled, in the events which happened, to call for margin from their constituents the first defendants and to close the contract in default of that margin being provided. The learned Judge found that the plaintiff's firm acted as pacca adatias in this transaction, and we see no reason to disturb his finding on that point. That being so, it is admitted that, in accordance with the ordinary practice in Bombay, the pacca adatias would be entitled to call for margin, if the rise or fall in the market justified a demand for margin,. The defendants have set up a special agreement not to charge margin, but, in my opinion, that agreement is not made out. In this connection it is material to observe that this special agreement is nowhere alleged in the correspondence before suit, nor is it expressly pleaded. And the defendant's evidence that the moneys were to be paid "at the end of the time ", viz., the vaida, even if believed, would not necessarily negative the right of the pacca adatia to call for margin. For that expression might merely indicate what would be the normal course of business, viz., payment at the vaida.
(2.) But although in my judgment the firm had the right, under proper circumstances, to call for margin, the onus clearly lies on them to establish that circumstances arose which justified the exercise of their powers. The decision in Diwanchand V/s. Weld & Go. (1925) 28 Bom. L.R. 1488, P.C. shows that even where the contract purports to give an agent an absolute discretion as to calling for margin, it is yet incumbent on him to show that circumstances exist for the reasonable exercise of that discretion. Now in the present case the plaintiff's evidence is strangely deficient in this respect. The contract sued on was made on October 21, 1921, for the purchase by the first defendants of one hundred bales of Broach cotton for April-May 1922 delivery at Rs. 533 per candy. It is alleged that the market went down, and by a telegram of November 14, 1921, Exh. M, the defendants called for Rs. 5,925 for margin at the rate of Rs. 415 to be paid by November 16, in default of which the transaction would be closed on November 18. In fact the contract was purported to be closed on November 28 at Rs. 435, and, according to the particulars, Exh. B to the plaint, there was a loss of Rs. 5,018 in that respect.
(3.) The only evidence on behalf of the plaintiff's firm is the plaintiff himself, who states that the market was falling after the purchase. But he gives no evidence as to the period during which the market was falling, nor what rate it fell to, if at all, at the material dates on November 14, 16, 18 and 28. This omission is all the more strange in view of the allegations in paras. 8 and 9 of the written statement denying that the market was going down and pleading that on the due date for delivery the price was higher than that on the day of the contract. By the due date I take it the pleading refers to April-May 1922.