HARCHARAN DAS SOMPARKASH Vs. JAI JAI RAM

JUDGEMENT

(1.) The plaintiff, a firm, instituted a suit against the defendant in the Court of Small Causes at Moradabad to recover a sum of money. The defence was that the contract on the basis of which the plaintiff sued was a wagering contract. This defence has been upheld by the learned Judge of the Court below and the suit has been dismissed. The plaintiff firm has come up in revision before this Court. The defendant firm carries on business as commission agents at Moradabad, while the plaintiff firm are grain dealers at Meerut. In February a March, 1934, the defendant firm purchased grain from the plaintiff. In connexion with those purchases the plaintiff claimed to recover profits together with interest. The important question which requires consideration in this case is whether or not the contract set up by the plaintiff was a wagering contract. The rule laid down by their Lordships of the Privy Council in Sukdev Doss Ram Prasad V/s. Govind Doss Chaturbhuja Doss & Co. (1928) 15 AIR PC 30 is that the mere fact that the contracts are highly speculative is insufficient in itself to render them void as wagering contracts; to produce that result there must be proof that the contracts were entered into upon the terms that the performance of the contracts should not be demanded but that differences should only become payable. Our own High Court in Ramdin Hazari Lal V/s. Mansa Rarn Murli Dhar held that the true test in cases of this type was whether or not the parties to the contract had agreed that there was to be no delivery. If there was an agreement that there was to be no delivery then the contract would be a wagering one. The question has to be decided with reference to the terms of the contract and the evidence produced in each particular case. If in a case two parties enter into an agreement and it is mutually agreed that there is to be no delivery, then the contract is void under the provisions of Section 30, Contract Act.

(2.) In cases of this kind the question of importance is as to who are the parties to the contract. I would divide cases of this description into two classes. One class relates to cases in which contracts are made through the agency of kachcha arhtiyas. The other class of cases are those in which the contracts are made with pakka arhtiyas. The position of a kachcha arhtiya is that he acts as an agent with personal liability on himself, so far as the third party is concerned. His remuneration consists solely of commission and he is in no way interested in the profit or loss made by his constituents on the contracts entered into by him on his constituent's behalf: see Fakir Chand Lal Chand V/s. Doolub Govindji (1905) 7 Bom LR 213 at pp. 215 and 216. The position of a pakka arhtiya is totally different. Where there is a contract between a pakka arhtiya and a constituent, the pakka arhtiya is himself responsible to his constituent. The fact that he did or did not enter into a contract with a third party in pursuance of the order of his constituent makes no difference. For all practical purposes, the pakka arhtiya himself and his constituent act as principal parties. In case of a kachcha arhtiya if he does not enter into a contract with a third party in pursuance of the instructions given by his constituent then the order of the client remains unexecuted order. But, as already stated, a contract between a pakka arhtiya on one side and his constituent on the other is a contract between them as principals and the pakka arhtiya does not act, in such cases, as an agent of his constituent. In the case before me we have a contract between a pakka arhtiya on one side and his constituent, the defendant, on the other. There is no question of agency in such cases. It is true that in para. 1 of the contract between the parties the plaintiffs style themselves as agent. But that does not make any difference because in the same paragraph it is stated that the plaintiffs are pakka arhtiya. In para. 2 of the agreement it is stated:

(3.) Pakka arhtiya ko akhtiyar ho ga ki woh sauda karne wale ke sauda ki bakat delivery mal ki chahe woh kahin se ai ho, kar de,lekin sauda karne wale ko arhti se delivery mangne ka akhtiyar na hoga.