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Allahabad High Court
Firm Mul Chand Nandu Mal vs Kanhaiya Lal And Anr. on 3 August, 1928
Equivalent citations: 112 Ind Cas 791
Bench: Sen, Weir


1. This is an appeal by the plaintiffs from the judgment and decree of the Subordinate Judge of Meerut, dated the 17th of September, 1925, disallowing the plaintiffs’ claim for recovery of Rs. 6,801-13-6. Plaintiffs carry on business in the city of Delhi under the name and style of Firm Mulchand-Nandumal. The suit was instituted through Lala Hari Ram one of the partners of the firm.

2. The defendants are the proprietors of the Firm Kanhaiya Lal-Lukshmi Narayan situatein Mandi Qaisargunj in the city of Meerut, and their chief business is that of commission agents.

3. The plaintiffs’ firm employed the defendants to purchase 151 grain pits of wheat on their account; and the defendants purchased these grain pits between the 4th of June 1921, and the 12th of August, 1921. These grain pits were sold by the defendants, under instructions received from the plaintiffs, between the 5th of July, 1921, and the 13th of August, 1921. The plaintiffs had paid Rs. 2,030 to the defendants by way of earnest money. The plaintiffs allege that these transactions resulted in profit and they ware entitled to receive Rs. 29,422-10-6, from the defendant, that between the 10th of August, 1921, and the 2nd of September, 1921, the defendants made several payments to the plaintiffs, aggregating to Rs. 20,037-11, that on Magh Badi the 12th Satlat, 1978, corresponding to the 25th of January, 1922, the defendants sent an account slip to the plaintiffs’ firm which showed a balance of Rs. 2.430-P-3 in plaintiffs’ favour, that this amount remains unpaid and the plaintiffs claim the recovery of this sum together with interest at 9 per cent, per annum.

4. Out of the 151 khaitis (grain pits) 111 were khaitis of taiyar mat or ready goods. The contract, relating to the remaining 40 khattis was wada sowda, which term the plaintiffs interpret to mean forward contract. (The defendants assert that the contract., relating to these was of the nature of a speculation in differences). These 40 khaitis were sold on the 13th of August, 1921. The defendants had intimated to the plaintiffs that the transaction had been carried through at the rate of Rs. 8-4-6 per maund. In the final account, submitted by the defendants to the plaintiffs, there was an entry showing that the sale had been concluded at the rate of Rs. 8-2 per maund. Each of these grain pits was supposed to represent grain of the uniform weight of 400 mauuds. After deducting the commission etc. the plaintiffs were entitled to recover from the defendants Rs. 2,773-1-9 on account of the 40 grain pits. The plaintiffs claim to recover this sum in addition to Rs. 2,430-6-3 already referred to. The plaintiffs also claimed certain other items, which need not be set out in detail, because the claim, with reference to them, was not pressed before this Court.

5. As to the sum of Rs. 2,430-6 3 the contention of the defendants was two-fold. They alleged that the plaintiffs had two khaias or accounts with the defendants’ firm, one in the name of Mulchand-Nandumal of Delhi and the other in the name of Nainu-mal-TIari Rani of Hapur. The defendants credited Rs. 2,493, in the khata of Mulchand-Nandurna, on Asarh Sudi 4th bamlat, 1979, and Rs. 167-11-6 were credited in the khata or account of Nandumal Hari Ram, after deducting Rs. 18-1, the expenses relating to grain pits. Nandumal Hari Ram were indebted to a firm of the name of Umrao Singh-Kanhaiya Lal for large sums of money. The plaintiffs directed the defendants to pay the amount of both the khaias to Umrao Singh-Kanhaiya Lal. Thereupon the defendants debited Rs. 2,600-14 3 to the plaintiffs on the 28th of June, 1922, and credited the Baideum to the account of Umrao Singh Kanhaiya Lal. Thus the plaintiffs are not entitled to recover Rs. 2,430 6 3 as claimed.

6. The defendants deny having sent any account to the plaintiffs on the 25th of January, 1922. They contend that their last account was sent to the plaintiffs on the 27th of August, 1921, when, according to them, the agency was brought to a close and the relation of the parties took a new aspect, namely, that of debtors and creditors. The present suit, having been instituted on the 4th of September, 1924, was therefore, barred by Statute.

7. As to the sum of Rs. 2,773-1-9, the defendants contended that the contract with reference to the purchase and sale of the 40 khattis of Bhadon wada was a gamble in differences; that no delivery of the grain was ever intended; and that the buyers and sellers were speculating in differences, consequent upon the rise and fall of prices in the market. The defendants assert that to save the buyers and sellers from their improvidence, the dealers in grain of the Qaisergunj market held a panchayat on the 17th of August, 1921, and decided that the wada sowdas should be settled at the uniform rate of Rs. 8-2 per maund; that the plaintiffs were cognizant of this and made no protest, either when the matter was communicated to them immediately and at once by means of a telegram, or when the account was submitted to them on the 27th of August, 1921; that the plaintiffs were entitled to recover from the defendants only such sums of money as came into their hands as their commission agents on account of these 40 khattis, and that, as the defendants did not receive from the plaintiffs’ purchasers payment at a higher rate than Rs 8-2 per maund, the claim at the rate of Rs. 8-4-6, for these grain-pits was not maintainable The defendants further pleaded that the plaintiffs’ claim as regards this amount was barred by limitation.

8. The learned Subordinate Judge held that the defendants sent their last account to the plaintiffs on the 27th of August, 1921; that the defendants did not send the account dated the 25th of January, 1922, (Ex, 4); that Rs. 2,430-6-3 was paid by the defendants to Umrao Singh-Kanhaiya Lal on plaintiffs’ account on or about the 18th of June, 1922, under instructions received from the, plaintiffs; and that by the said payment the defendants’ liability to the plaintiffs was discharged; that the agency terminated on the 17th August, 1921, when the last account was sent by the defendants to the plaintiffs; and that the claim was barred under Article 90 of the Limitation Act. As to the sum of Rs. 2,773-1-9, the learned Subordinate Judge held that the deal about the 40 khattis was a mere gamble in differences; that the defendants could not enforce the contract to pay at the rate of Rs. 8-4-6 per maund, that the defendants did not recover from the purchaser at a rate higher than Rs. 8-2-0 per maund, that the plaintiffs were bound by the decision of the panches of the Qaisargunj market reducing the rate from Rs. 8 4-6 to Rs. 8 2-0 per maund, and that, assuming that the defendants were guilty of neglect or misconduct in not preparing their account upon the basis of Rs. 8-4-6 as the stipulated rate of purchase, the present suit against them was barred under Article 90 of the Indian Limitation Act. We need not reproduce the findings of the Court below on the other points, raised in the suit, as the pleas relating to them were abandoned by the learned Advocate for the appellant.

9. The learned Subordinate Judge dismissed the suit.

10. The appellants contest the findings of the Court below relating to the two principal items, namely, Rs. 2,430 6 and Rs. 2,773-1-9.

11. It has been argued that the last account sent by the defendants to the plaintiffs is the Ex. 4, dated the 2th or 25th of January, 1922. According to Nandumal plaintiff, the major portion of this document is in the handwriting of one Bhagirath, a munib of the defendants. The portions encircled with red pencil are said to be in the handwriting of Lakshmi Naraia defendant. Bhagirath is in the employ of the defendants. For sjina unexplained reason, he has not been produced. This is an instance of the irresponsible mode in which, not infrequently, cases are conducted in the Courts below by litigants and their Council. Apparently the defendants had no excuse for not producing Bhagirath. At the same time, it is amazing that the plaintiffs did not take any steps to have Bhagirath summoned and examined as to this document. It is not that the plaintiffs did not realize the importance of this document. It was a vital document; and was prominently mentioned in the plaint (vide para. 6.) The defendants emphatically denied having sent any account on the 25th of January, 1922 as alleged by the plaintiffs (vide para. 6 and 7 of the statement). The document was produced on the 3rd of November, 1924, and was not admitted by the defendants. The plaintiffs knew, therefore, that it was a document disputed or denied, and that the onus lay upon them of proving it. The only evidence in proof of this document is that of Nandumal plaintiff, who was examined on the 7th of August, 1925. He is not an expert in handwriting; but he opines that the document is in the handwriting of Bhagirath. The reason for this opinion is that he claims to have seen Bhagirath writing bahi khatas two or three times at the defendants’ firm. It is difficult to believe that this circumstance, even if true, would so indelibly stamp itself upon his memory as to enable him to identify the handwriting of Bhagirath. The plaintiff was only a casual visitor at the shopand there was no special reason for directing attention to the style and character of Bhagirath’s handwriting. In agreement with the Court below, we hold that the statement of Nandumal on this point should not be accepted. Lakshmi Narain denies that the document is in the handwriting of Bhagirath. He, as the employer of Bhagirath, was in a position to depose whether the document was or was not in the handwriting of Bhagirath. He stoutly denies that the portions enclosed with red pencil were in his handwriting. He affirms that the plaintiffs closed their transaction on the 17th of August, 1921; and that the last account was sent to the plaintiffs on Bhado Badi 9th Sambat 1978, which corresponds to 27th of August, 1921. Lakshmi Narain is not by any means a disinterested witness, and his statement has to be scanned with care and subjected to minute scrutiny. We have been taken through his statement from end to end; and we have heard the elaborate comments of the learned Advocate for the appellants; but we failed to discover any circumstance calculated to affect his credit.

12. There are certain facts, which render it highly improbable that the sending of the account should have been delayed till the 25th of January, 1922.

13. We have already seen that, out of 151 khattis (grain pits), the contract relating to pits was of laiyarmal or ready goods. Of these 25 were sold on the 5th of July, 1921, and an account was sent by the defendants to the plaintiffs (Ex. j), which shows that the balance to the credit of the plaintiffs on account of these 25 khattis was Rs. 5,245-10. According to the plaintiffs, this document was only a memorandum of account, which the plaintiffs call a katcha parcha as distinguished from a pucca parcha or final and complete account. The terms kateha and pucca parcha have been explained by Nandumal as follows: “In katcha parcha only the name of the purchaser and the transaction are entered, but the pucca parcha includes the whole expenses and the money received and spent”. We shall presently examine the undisputed parchas to see whether they come within the definition of a kateha parcha as given by the plaintiffs.

14. Forty-one khattis were sold on the 8th of August, 1921, and 45 khattis on or about the 13th of August, 1921. Exhibit 3 is an account relating to two out of 86 khattis which was admittedly received by the plaintiffs. This is dated the 14th of August, 1921, and closes with following entry: “Balance due to you carried over to another account Rs. 462-9-9”.

15. Nandumal plaintiff admits having received a parcha of the purchase and sale of 84 khattis in the end of Sawan or beginning of Bhadon, The defendants allege that the last account relating to the 84 khattis was sent by them to the plaintiffs on the 27th of August, 1921. This statement is supported by the sworn testimony of Lakshmi Narain. As already stated, (he plaintiffs have received a third account slip of 81 khattis; but the plaintiffs state that this was merely a katcha parcha. This was a very material document, which the plaintiffs ought to have produced in evidence; but appear to have studiously withheld. If it was a katcha parcha, and not the final account, that fact could be ascertained, easily and at once, by reference to the document itself. Apart from the question of onus of proof, it lies upon a party to the suit, whether he be plaintiff or defendant, to produce in Court all such material documents relating to the suit as may be in his possession, even though no application has been made for its production by the other party. The non-observance of this saluary principle must be strongly deprecated. In Murugesam Pillai v. Manickavasaka Desika Gnana Sambanda Pandara Sannadhi 59 Ind. Cas. 659 : 15 A.L.J. 281 at p. 285 : 21 M.L.T. 288 : 32 M.L.J. 269 : 1 P.L.W. 457 : 5 L.W. 759 : 21 C.W.N. 761 : 40 M 402 : 19 Bom. L.R. 456 : 25 C.L.J. 589 : (1917) M.W.N. 487 : 44 I.A. 98 (P.C.), the Judicial Committee make the following observation: ” A practice has grown up in Indian procedure of those in possession of important documents or information lying by, trusting to the abstract doctrine of the onus of proof, and failing accordingly to furnish to the Courts the best materials for its decision. With regard to third parties, this may be right enough; they have no responsibility for the conduct of the suit; but with regard to the parties to the suit it is, in their Lordships’ opinion, an inversion of sound practice for those desiring to rely upon a certain state of facts to withhold from the Court the written evidence in their possession which would throw light upon the proposition”. The form of advocacy, which produces such untoward result ought to be discouraged by the Courts below; and where a lapse or omission of this kind is brought to our notice in the course of an appeal, we may deprive the party of costs as mark of our censure even where the party succeeds on other grounds.

16. Upon comparing the contents of Exs. 1 and 3 which are alleged to be katcha parehas with those of the disputed document Ex. 4, we do not find any structural differences or what is more important any difference in the entries of the details. The accounts have been shown in both sets of documents in two columns, representing the credit and the debit side, with details of the weight of the grains in the pits sold, the prices received, the commission charged, the dues paid to the weighman, the brokerage paid and amounts debited under the heads of charity, goshala and ticket. It is impossible to contend that the Exs. 1 and 3 are katcha. parchas any more than the disputed document is a katcha parcha. Exhibits 1 and 3 completely satisfy the definition of a pueca parcha, as given by Nandumal himself. We hold that the distinction between the katcha and pucca parcha is a baseless invention.

17. The plaintiffs’ firm had been receiving money from the defendants firm with regularity and at short intervals. They received Rs. 6,000-15-0 on the 10th of August, 1921, Rs. 5,000 on the 11th of August, 1921, Rs. 10,000 on the 20th of August, 192, Rs. 5,000 on the 3rd of September, 1921, and Rs. 33-12-0 on the 20th of September, 1931. The letter dated Bliadon Badi 1st Sambat, 1978, corresponding to 19th of August, 1921, shows that they were making demands for money. It does not stand to reason that, if any money was due to them, they would have allowed their account to stand over till the 25th of January, 1922.

18. Exhibit C states that money and account were to be sent shortly. Paragraph 2 of the plaint shows that Rs. 10,000 were sent on the 20th of August, 1921.

19. Purchase and gale was closed on the 13th of August, 1921. Why should the plaintiffs have waited for the bought and sold notes for 81 grain pits up till the 25th of January, 1922? As we have already noticed, the plaintiffs admitted having received an account relating to the 81 khattis in the end of Sawan or the beginning of Bhadon.

20. The sum of Rs. 402-9 0 should have been carried over from Ex. 3. The plaint shows that Rs. 5,245 had already been received by the plaintiffs. It was not till the 18th of August, 1922, that the accounts were finally entered up in the plaintiffs’ books. It is plain that these books were not kept in a regular course of business.

21. The balance shown in the last account is Rs. 2,600 14 3. This amount is conclusively proved to have been paid to Kanhaiya Lal-Umrao Singh on the 18th of June, 1922. There are entries in the account books of that firm and also the entries in the defendants’ firm dated the 28th of June, 1922, to bear this out. There is overwhelming evidence on the record to establish that Mulchand-Nandumal of Dehli had continuous dealings with Umrao Singh Kanhaiya Lal of Hapur, and that Nandumal-Hari Ram of Hapur wore almost their second self.

22. We have not any ground for imputing dishonesty to the defendants in respect of a relatively small sum of money, when admittedly they paid over to the plaintiffs mere than Rs. 26,000. The plaintiffs deny that Nandumal-Hari Ram of Hapur were indebted to Kanhaiya Lal Umrao Singh. On the other hand they allege that Kanhaiya Lal-Umrao Singh owed them over a lakh of rupees. The account books of Nandumal-Hari Ram have not been produced on the pretext that they had a partner of the name of Lakhimal, who turned dishonest and said that the account books had been stolen. The story is a pure invention. If Kanhaiya Lal-Umrao Singh owed them a large sum of money, these account books were of the greatest value to the plaintiffs; and they would not submit to being robbed by Lakhimal so easily. The plea is too transparent to require any further criticism. We hold on the evidence that Rs. 2,600-14-3 was paid to Kanhaiya Lal Umrao Singh at the plaintiffs’ instance because they owed them the said sum of money.

23. On these findings the plaintiffs’ claim as regards Rs. 2,430-6-3 was clearly not maintainable. The plaintiffs have already received this amount through Kanhaiya Lal-Umrao Singh.

24. No question of limitation, therefore, arises with regard to this amount and -it is not necessary to consider the question whether the agency continues after the work entrusted to the agent has been substantially completed and accounts rendered but the amount due to the principal had not been paid. The learned Subordinate Judge has preferred to follow the case of Venkatachalam Chetty v. Narayanan Chetty 26 Ind. Cas. 740 : 39 M. at pp. 378, 379 : 8 M. L.J. 140, in preference to a direct authority of this Court in Babu Ram v. Ram Dayal 12 A. 541 : A.W.N. (1890) 99. It is not merely a matter of judicial etiquette but one of principle that the Courts of Law subordinate to this Court must implicitly and without question follow the decisions of this Court so long as the same has not been overruled either by this Court or by a superior Court. The interpretation of a Statute is not intended merely to be the law in the particular case; but has this further useful purpose in view; that it is intended to dispel all doubts and difficulties attending the construction of the Statute concerned, and to serve as a guide to the subordinate judiciary. We are not called on to pronounce any opinion as regards the correctness or otherwise of the decision of this Court already referred to, As a Division Bench we are bound to follow that ruling. But as we have already” said, in view of our decision on the merits, the question of limitation does not arise.

25. The second item of the claim related to a sum of Rs. 2,773-1-9 concerning the 40 khattis of Bhadon wada. Theue khattis were sold on the 13th of August, 1921, at the rate of Rs. 8-4-6 per maund (vidz Ex. 5).

26. There appears to be a sort of a trade guild in the city of Meerut, and powers have been assigned to the panehayat to regulate the rates of wada khattis. It is proved that a meeting of the panchayat was held on the 17th of August, 1921, and the panches settled the rate at Rs. 8-2-0 per maund. It was contended by the defendants that there was a custom prevailing in the Qaisargunj Mundi of Meerut which authorised the panches to regulate the rate of the wad a khattis. The evidence as to this custom rests upon the statement of Ghasi Ram, who was one of the panches, Lachmi Narain, defendant, Babu Ram and Bisheshar Nath and also Jainti Prasad one of the plaintiffs’ witnesses. We consider this evidence to be too meagre and scanty to support the finding of the Court below in favour of the custom.

27. Immediately after the panchayat the defendants sent a telegram to the plaintiffs that the rate settled by the panchayat was Rs. 8-2-0 per maund. The account books of the defendants show that a telegram was sent and a receipt of the Post Office has been produced to support the entry in the account book. The plaintiffs deny having received any such telegram; but the plaintiffs have told so many falsehoods in this case, that their denial in the present instance is not calculated to inspire us with confidence. We hold that the matter was communicated to the plaintiffs by wire, and the plaintiffs never protested about the rates till they instituted the present suit.

28. There is, however, another aspect of the case which is decisive. The contract relating to these 40 khattis was not a commercial transaction. No earnest money was paid. It is significant that the weight of the khattis is uniformly 400 maunds the remaining 111 khattis, forming in this respect a striking contrast-because the weights of these latter khaitis vary to a great extent. It is proved by overwhelming evidence that the intention of the parties was to settle differences in the rates according to the fluctuations of the market; and that neither party contemplated actual delivery of the goods. Out of these 40 khattis, 7 were sold to one Bisheshar Nath, the remaining 33 khattis were sold by the plaintiffs to the defendants, Bisheshar Nath pledges his oath that the khattis purchased by him were cancelled by the edict of the panchayat, and that he did not pay anything to the defendants on account of the 7 khattis. The defendants’ bahis do not show that they realised any sum by way of profit for the 33 khattis purchased by them. Where the parties, by common consent, agree to speculate only in differences, according to the rise and fall of the prices in the market, and the delivery of the goods is not in the contemplation of either, the transaction is of the nature of a wager or gamble; and a contract relating to the same, although not illegal, is not enforceable under Section 30 of the Indian Contract Act. If the plaintiffs were to institute a suit for recovery of differences at the rate of Rs. 8-4-6 per maund their claim would be bound to fail. If the defendants, as the commission agents of the plaintiffs, were to launch a suit against the purchasers with the same object, the suit would be in fructuous. In transactions like these, where speculators are conscious of the weakness of their cause, one can very well understand that they should be ready to avoid going to a Court of Law but to have their differences settled by the decision of a domestic tribunal. The defendants appear to have done this in the interests of the plaintiffs and this was the very best thing that they could have done to safeguard the interest of their principal. In any case the defendants are not proved to have received from any customers any amount of difference at a higher rate than Rs. 8-2-0 per maund. This, they have accounted for; and the plaintiffs admit having received, the profits at the rate of Rs. 8-2-0 per maund. Under the circumstances, the claim for recovery of Rs. 2,773-1-9 is absolutely misconceived. The claim was unenforceable in law and the plaintiffs are not entitled to recover the amount. In view of this decision, it is not necessary to consider the question of limitation as regards this amount. The result is that this appeal is dismissed with costs, as entirely devoid of merits.

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