BHIMJI JIWANBHAI Vs. RAMKISAN CHIMNIRAM

JUDGEMENT

(1.) THIS revision application arises out of a suit by the applicant (hereinafter called plaintiff) against the non-applicant (hereinafter called defendant), which was dismissed by the third Subordinate Judge, First Class, Nagpur, exercising powers under the Small Cause Courts Act.

(2.) THE plaintiff's case is that the defendant, who was not a member of the Nagpur Chamber of Commerce, desired to enter into forward delivery contracts in yarn. As the rules of the Nagpur Chamber of Commerce permit such dealings only between its members, the defendant had to enter into an agreement with the plaintiff (who is the member of the Nagpur Chamber of Commerce) whereunder the plaintiff in consideration of receiving from the defendant adat, commission and interest undertook to act as defendant's kachha adtya (commission agent). Under the system in vogue in the local market a kachha adtya places himself in a position of an agent for an undisclosed principal in relation to the opposite party with whom forward delivery contracts are entered into for the constituent (such as the defendant was in this case), and renders himself liable to the opposite party for payment of the amounts found due on those transactions. The system of kachhi adat in vogue in Bombay, and which is not in any way different from the one in vogue at Nagpur, is explained in Fakirchand Lalchand v. Doolub Govindji (05) 7 Bom. L.R. 213 and Mukund Chand v. Sobhagmal Gianmal A.I.R. 1925 Bom. 79. In the appeal from the latter case their Lordships of the Privy Council in Sobhagmal Gianmal v. Mukundchand Balia A.I.R. 1926 P.C. 119 described the system of kachhi adat in the following words: When a Katcha Adatia enters into transactions under instructions from and on behalf of his up-country constituent with a third party in Bombay, he makes privity of contract between the third party and the constituent, so that each becomes liable to the other but also he renders himself responsible on the contract to the third party.

(3.) THE defendant's defence is one of wholesale denial. According to him he did not know the plaintiff, never entered into any agreement of kachhi adat and never entered into any forward delivery contract. He claimed the dismissal of the plaintiff's suit with compensatory costs being awarded against the plaintiff on the ground the suit was wholly false.