Gulzari Lal vs Karam Chand on 1 January, 1800

Jammu High Court
Gulzari Lal vs Karam Chand on 1 January, 1800
Equivalent citations: AIR 1951 J K 17
Author: Kilam
Bench: J N Wazir, J L Kilam


Kilam, J.

1. This deft’s, first appeal involves the following two prayers. That the decree of Rs. 3700 passed against; him in favour of the plff. be set aside & a decree for a sum of Rs. 3664-10-6 be passed in his favour againat the plff. The appeal arises out of the following facts as alleged by the plff.

2. The deft. entered into an agreement with the plff. whereby he undertook to supply 8,000 bamboo sticks at Rs. 1-8-0 per stick, & in pursuance thereof he received a sum of Rs. 1000 at the time the agreement was executed. It is further alleged by the plff., which is not denied by the deffc , that the deffc. in all received Rs. 16916 5-6 from the plff. against which the deft, supplied bamboo sticks on different dates to the extent of 8140, the price of which at the rate fixed came to Rs. 12210. Deducting this amount from the amount advanced i. e. 16915.5-6, there was a balance of Rs. 3705-5-6 left with the deft. in favour of the. plff. out of which the plff. relinquished his claim to Rs. 5-5-6 & brought a suit for Rs. 8700 only.

3. The deft. has admitted his having entered into an agreement for the supply of bamboo sticks & has also admitted the correctness of the terms laid therein. He has also admitted the receipt of Rs. 15015-5-6. The only point at which he is at variance with the plff. is with regard to the number of sticks supplied. The deffc. says that he had supplied 12980 bamboo sticks, the price whereof at the rate fixed came to Rs. 19470, out of which while deducting Rs. 15915-5-6, he claims Rs. 3564-10-6 from the plff.

4. The main issue in the case was as to whether the deft. had supplied 12980 bamboo sticks to the plff. The first point taken in this appeal was that the suit was triable by a Debfc Conciliation Board & that the trial Courfc, in spite of an application having been made to it to this effect, had refused to send over the case to the Board.

5. It may be stated here that the deffc. had made an application to the Debt Conciliation Board as well praying that a notice be issued to the trial Courfc that the case be transferred to the Board for decision. The Board gave its decision on the application on 28-8-2007 & held that the debt involved in the suit was not a debt as defined in the Distressed Debtors’ Relief Act. The Board, therefore, refused to issue a notice fco the Courfc as was prayed by the deft, in his application. The Board having held fchafc the debt involved was one wifch regard fco which an adjudication by the Board was not provided by law, the trial Court refused to send the case to the Board. In this Court the argument; advanced in this behalf has assumed more or less a different complexion. It is argued that the advance made is of the nature of a debt & as it is of a value of less than Rs. 5,000, the case should have been sent to the Debt Conciliation Board for decision. As against this, it is argued on behalf of the respondent; that the debt was incurred by the appellant for purposes of trade & as such it does not fall within the definition of debt as given in the Distressed Debtors’ Relief Act which runs as follows :

“Debt means a liability of a debtor in easo or kind payable under a decree or order of a civil Court or otherwise but shall not include.


(iv) “debts incurred by a trader for purposes of trade.”

The word ‘trade’ has not been defined in the Distressed Debtors’ .Relief Act. The only course open for us therefore is fco go to the dictionary meaning of the word ‘trade’. In Webster’s dictionary we find the following meaning has been given fco the word “trade” :

“Act or business or exchanging commodities by barter, or by buying & selling for money; commerce, traffic, Trade, in this sense comprehends every species of exchange or dealing either in the produce of land, in manufacture, in bills or in money, but it in chiefly used to denoto the barter or purchase & sale of goods wares, & merchandise, either by wholesale or retail.”

Further on, the same dictionary gives the meaning of the word ”trade” as a “bargain, a purchase & sale.” In Oxford Concise Dictionary the meaning, of the word “trade” has been given as “exchange of commodities for money or other commodities.” Chambers’ Twentieth Century Dictionary gives the meaning of the word “trade” as “baying A selling.”

6. Now bearing the meaning of the word “trade” in mind, we have no hesitation in holding that the advance in this case was made for purposes of fcrade. The deffc. entered into an agreement for supply of bamboo sticks & received advances of money for this purpose. The distinction between a loan & advance has been made out in Mt. Ummatul Hahman v. Sri Ram, A. I. R. (32) 1945 ALL. 277 wherein the learned Judge has enunciated the law in the following words :

“An advance payment of the price of commodity sold cannot be a loan within the meaning of the Act, There is a very narrow distinction between a loan & an advance payment of the purchase price of a commodity. Whether any particular advance is a loan or part payment must, depend upon the construction of the agreement between the parties. If the money wag advanced by way of financing a party who had promised in consideration of the advance eventually to sell a commodity, the transaction would be a loan. But if there was a definite agreement to sell & a definite understanding that money paid was part of the purchase price, the transaction could not possibly be a loan.”

A reference to the agreement in this case would show that there was a definite promise to sell & a definite understanding that the money advanced was a part of the purchase money, we, therefore, hold that the advances made were not of the nature of a loan or debt & as such the case was triable by the trial Court.

7. As regards the main plea advanced by the deft. that he had supplied bamboo sticks in excess of those admitted by the plff., the deft, has produced a number of witnesses. Before discussing their evidence it may be mentioned here that the deft, has executed receipts for every pie that he had. received from the plff. But he has not produced any receipt for the supplies made by him. He simply says that no receipts were given to him by the plff. There is no reason as to why the deft. should not have insisted on getting receipts for the supplies that were made by him, more so when he had on his part executed receipts for the payments received by him. [After discussing the evidence, the judgment proceeds as follows :–

8. All this is enough to show the vague & indefinite character of the statements of the deft.’s witnesses. Under these circumstances we do not find any force in this appeal which is therefore rejected with costs.

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