PETITIONER: HEMRAJ KESHAVJI Vs. RESPONDENT: SHAH HARIDAS JETHABHAI DATE OF JUDGMENT: 29/03/1963 BENCH: SHAH, J.C. BENCH: SHAH, J.C. SINHA, BHUVNESHWAR P.(CJ) AYYANGAR, N. RAJAGOPALA CITATION: 1964 AIR 1526 1964 SCR (2) 688 CITATOR INFO : RF 1972 SC 696 (7) ACT: Forward Contract-Transferability of contract-No. specific stipulations in contract-If indicates transferability whe ther other circumstances can be looked into-Saurashtra Groundnut and Groundnut Products (Forward Contracts Pro- hibition) Order, 1949. HEADNOTE: The appellant entered into contracts with the respondent (for sale of groundnuts) which were described as ready delivery contracts and were subject to the rules and regulations. of the Veraval Merchants Association. The contracts specified the price and quality of the goods and stipulated delivery at a specific price. But there was nothing in the contracts indicating whether they were transferable to third parties. The respondent claimed certain amounts of money in respect of these transactions but the appellant resisted the claim on the ground that the contracts, being forward contracts, were prohibited by the Saurashtra Groundnut and Groundnut Products (Forward Contracts Prohibition) Order, 1949, and were illegal, The appellant contended that the contracts for the delivery of groundnuts at a future date, even though they were for specific quality and for specific delivery at a specific price, must be deemed to be forward contracts unless it was expressly recited that they were not transferable to third parties. Held that the contracts were not forward contracts and were not hit by the Prohibition Order. A contract for delivery of goods at a future date, even though for a specific price and specific quality, can be excluded from the definition of forward contracts only if the contract is non-transferable. But from the mere absence of an express stipulation as to non-transferability in the contract, it cannot be deemed to be transferable and outside the exception. It is not required either by the Order or by the object of the Order that the condition regarding non-transferability should be mentioned in the contract itself before the contract can be excluded from the definition of forward contract. Absence of a specific stipulation in this regard is not conclusive. It has to be seen whether upon the 687 language of the contract interpreted in the light of surrounding circumstances it can be field that there was an agreement between the parties that the contract was not transferable. The rules and regulations of the Association to which the contracts in dispute were subject clearly showed that the contracts were not transferable. Khardah Company Ltd. v. Raymon & Co. (India) Private Ltd., [1963] 3 S.C.R. 183, applied. Firm Hansraj v. Vasanji (1948) 4 D.L.R. Bom. 7, Uma Satyanarayanamurty v. Kothamasu Sitaramayya & Co. (1950) 1 M L.J. 557. Boddu Seetharamaswami v. Bhagavathi Oil Company, I.L.R. (1951) Mad. 723, Hussain Kasam Dada v. Vijayanagaram Commercial Association, A.I.R. (1954) Mad. 528 and Vaddadi Venkataswami v. Hanura Noor Muhammad Beegum, A.I.R. (1956) Andhra 9, referred to. JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 164 of
1961.
Appeal from the judgment and decree dated December 17, 1957,
of the former Bombay High Court (Now Gujarat), in Civil
First Appeals Nos. 14 and 24 of 1956 from Original Decree.
B.R.L. Iyengar, Atiqur Rehman, J.L. Doshi and K.L. Hathi,
for the appellant.
Purshottam Tricumdas, J.B. Dadachanji, O.C. Mathur and
Ravinder Narain, for the respondent.
1963. March 29. The Judgment, of the Court was delivered
by
SHAH J.-The appellant instituted Suit No. 250 of 1950 in the
Court of the Civil judge (Senior Division), Junagadh for a
decree for Rs. 72693/11/alleging that the appellant had a
personal account with the respondent in respect of drafts,
cheques, hundis and cash, and at the foot of that account
Rs. 58,000/-as principal amount and Rs. 5,793/12/as interest
remained due and payable by the respondent, that beside the
amount due on the said
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personal account an amount of Rs. 8,899/15/3 was due to him
in respect of a transaction of sale of 1300 bags of
groundnut sent by him between January 16 to January 28,
1950, and the price of gunny bags and groundnut oil cakes
delivered to the respondent. The appellant further alleged
that forward contracts were prohibited with effect from
November 19, 1949 by the Saurashtra Groundnut and Groundnut
Products (forward Contracts Prohibition) order, and that the
said contracts being illegal the appellant was not subject
to any liability arising from adjustments of credits and
debits or differences in rates relating to forward contracts
and the respondent was not entitled nor authorised to make
credit and debit entries in the appellant’s account and that
nothing was due by him in respect thereof. The respondent
by his written statement contendedthat in the appellant’s
personal account an amountof Rs. 1,58,000/- stood
initially credited but at the foot of that account only a
sum of Rs. 18,000/- was due and this sum was credited in the
current account of the appellant in the name of Hemraj
Keshavji Oil Mills and Ginning Factory and therefore nothing
was due in the personal account, that the transaction
effected by the appellant through the commission agency of
the respondent in groundnut seed for December-January
(Samvat 2006) Settlement did not contravene the order dated
November 19, 1949, of the United States of Saurashtra and
that the respondent has not committed any breach of the
order, that all the transactions for the December-January
Settlement were in ready goods of specific quality and that
there was a condition relating to giving and taking of
delivery on fixed dates and the same were all effected at
the direction of the appellant and that the appellant was
legally responsible for all payments made in respect of
those transactions by the respondents as the appellant’s
pucca adatia. He then contended that in Samvat year 2006
the appellant had sold
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9000 bags of groundnut through the agency of the respondent
and had purchased 2300 bags through him, that the appellant
thereafter gave delivery of only 2000 bags of groundnut and
did not deliver the balance and on that account there
resulted a loss of Rs. 9,221/7/9 which the appellant was
bound to reimburse. The respondent admitted that
the appellanthad sent 1300 bags of groundnut but these
bags were delivered towards the sale of 2000 bags of
December-.January settlement and the price thereof and of
the balance of 700 bags was credited in the account of the
appellant, and that the appellant was not entitled to a
decree for any amount except the amount found due at the
foot of the account.
The trial Court decreed the claim by awarding Rs. 30,589/3/-
and interest. Against the decree of the Trial Court the
respondent as well as the appellant appealed to the High
Court of the Saurashtra. The appeals were transferred for
trail under the States Reorganization Act to the High Court
of judicature of Bombay at Rajkot. The High Court allowed
the appeal of the respondent and dismissed the appeal of the
appellant. The appellant has with certificate issued by the
High Court, appealed to this Court against the decree passed
by the High Court.
The appeal raises a dispute about the liability of the
appellant for transactions in groundnut seed effected
through the agency of the respondent after November 19,
1949, for December 1949, and January 1950, settlement. The
appellant says that these were forward transactions in
groundnut and were prohibited under the Saurashtra Groundnut
and Groundnut Products (Forward Contract Prohibition) Order,
1949, and that these transactions gave rise to no liability
which the appellant is obliged to discharge. The respondent
says that the transactions were ready delivery contracts
which were not
690
prohibited by law and in respect of the losses suffered
thereunder the appellant was bound to indemnify the
respondent and that the losses suffered in those
transactions were duly debited in the personal account of
the appellant. There is no dispute before us about the
correctness of the entries in the personal account of the
respondent. If the respondent’s case is held proved that
the transactions were ready delivery transactions, and not
prohibited by the Saurashtra order the decree passed by the
High Court must be maintained.
The Saurashtra Groundnut and Groundnut Products (Forward
Contract Prohibition) Order, 1949, was issued on November
19, 1949, and was extended to the whole of the United States
of Saurashtra. By cl. 2 (a) ‘contract’ was defined as
meaning “a contract made or to be performed in whole or in
part in the United States of Saurashtra relating to the sale
or purchase of groundnut whole, groundnut seeds, or
groundnut oil.” By cl. 3 forward contracts in groundnut and
groundnut products were prohibited. The clause provided
“‘No person shall henceforth enter into any forward contract
in groundnut whole, or groundnut seeds, or groundnut oil
except under and in accordance with the permission granted
by Government.” By cl. 4 all outstanding forward contracts
on the date of the publication of the order are to be closed
immediately and at such rates and in such manner as may be
fixed by the Association concerned under their respective
bye-laws or other regulations that may be applicable to such
contracts. The Trial Court held that out of the
transactions which took place on or after November 19, 1949,
only one transaction which was for delivery on January 25,
1950, was not hit by the order. The remaining transactions,
according to the Trial Court must be regarded as wagering
transactions i. e. transactions in which it was intended by
the parties that delivery of the goods contracted for could
not
691
be demanded without breach of the understanding. The Court
did not consider whether the transactions were invalid as
being in violation of the prohibition contained in the
order. The High Court held that according to the rules of
the Association, by which the contracts were governed,
delivery of the goods contracted for was invariably to be
given at the godown of the purchaser and therefore delivery
orders, railway receipts or bills of lading were not
contemplated by the parties and the contracts being for
specific quality or type of groundnut for specific delivery
and for specific price in respect of ready delivery goods
the transactions were not hit by the order.
By cl. 3 of the order all forward contracts in groundnut and
groundnut products except those in accordance with the
permission granted by the Government were prohibited. It is
not the case of the respondent that permission was obtained
from the Government in respect of those transactions, but he
contends that the transactions were not “forward contracts”
and therefore not within the prohibition of the order. The
definition of the expression ‘forward contract’ is somewhat
obscure and the precise significance of the expression
“against which contracts are not transferable to third
parties” is difficult to guage. A forward contract is in
the first instance defined as meaning “a contract for
delivery of groundnut whole, or groundnut seeds or groundnut
oil at some future date.” The contracts in dispute in the
present case were indisputably contracts for delivery of
groundnut at “some future date.” But the definition
expressly excludes certain contracts from its operation even
if they are contracts for future delivery viz. contracts for
specific qualities or types for specific delivery at
specific price, delivery orders, railway receipts or bills
of lading, against which contracts are not transferable to
third parties. Why the draftsman should in prescribing the
condition of
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non-transferability of a contract against delivery orders,
railway receipts or bills of ladnng, should have referred to
“contracts” is difficult to appreciate.
The contracts in dispute were effected according to the
rules and regulations of the Veraval Merchants Association.
A sample form of the contracts between the parties may be
set out :
“This Sauda is to be treated as subject to the
rules and regulations of the Association.
No. 143 Ready Delivery Veraval, Dt. 21-11-49
Sheth Thaker Hemraj Keshavji at Malia.
Please accept Jay Gopal from Shab Haridas
Jethabhai.
We have this day transacted the Sauda as
under, on your behalf and as per your order.
Having made a note of it and having signed the
slip below the counterpart, return it imme-
diately.
P.S. It is left to our choice whether on the
deposit being exhausted to let the Sauda
remain outstanding or not.
1. Sold-Groundnut seeds-small new crop..
ready December-january-Bags 100, one hundred
bags at Rs. 31-6.3 rupees thirty one annas six
and pies three-Standard filling 177 (1bs.)
2. Sold–Groundnut seeds-small new crop,
ready December-January Dated 25th Bags 500,
five hundred bags at Rs. 31-11-6 rupees thirty
one annas eleven and pies six-Standard filling
177 (lbs.)
3. Sold-Groundnut seeds–small new crop,
ready December–January Bags 100 one
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hundred bags-at Rs. 31-6-6 rupees thirty one,
annas six and pies six-Standard filling 177
(lbs.)
Sd. Chhaganlal for Shah Haridas jethabhai 1st
Shukla Margashirsh, St. 2006, Monday.”
At the foot of the contract is the acknowledg-
ment as under :-
“Shah Haridas jethabhai, at Veraval.
We have received your Sauda nondh Chitti No..
143 and have noted accordingly.
2nd Shukla Margashirsh,
St. 2006,Dt. 21-11-49 Sd. Kalidas Bhagwanji
for Sheth Hemraj Keshavji.”
The contract is described as a ready delivery contract and
is made subject to the rules and regulations of the
Association. The price of the goods and the quality of the
goods are specified and delivery at a specific price is also
stipulated. There is nothing in the contract indicating
whether it was transferable to third parties. But the
appellant submits that where the contract is silent as to
whether it is transferable against delivery orders, railway
receipts or bills of lading, it must be deemed capable of
being transferred to third parties and so for the purpose of
the order, be deemed to be a forward contract. The
694
argument in substance -is that a contract for delivery of
groundnut at a future date even for specific quality and for
specific delivery at a specific price would not be excluded
from the definition of forward contract, unless it is
expressly recited in the contract that it is not
transferable to third parties against delivery orders,
railway receipts or bills of lading. This, it is urged, is
so because it was the object of the order to prohibit
speculation in groundnut and groundnut products, and to
achieve that purpose it sought to prohibit forward
transactions which were transferable to third parties. By
insisting upon completion of the contract between ‘the
parties thereto, it is urged it was intended to prevent
speculation in essential commodities. Reliance in this
behalf was sought to be placed upon several decisions of the
Bombay, Madras and Andhra Pradesh High Courts dealing with
the interpretation of clauses similar to the definition of
forward contract in the Saurashtra order, in which it was
held that exclusion from the prohibition against forward
contracts can be regarded as effective only if the
stipulation about non-transferability is expressly mentioned
in the contract, and silence of the contract imported
transferability even in respect of contracts for specific
quality for specific delivery at specific price. The
earliest decision of this clause was a decision of a single
judge of the Bombay High Court in Firm Hansraj v. Vasanji
(1). In that case the contract was for spot delivery i.e.
where no delivery order or railway receipt or bill of lading
would ordinarily be issued. But the learned judge held that
such a contract in the absence of an express stipulation
prohibiting transfer would not fall within the Notification
granting exclusion from the prohibition of forward
contracts, because the condition regarding non-
transferability would not be fulfilled. It was observed by
Mr. justice M. V. Desai : “The only classes of cases of
forward contracts which were exempted were those which
contained in them the guarantee against speculation by
reason of a provision
(1) (1948) 4 D.L.R, Bom. 7.
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that the Delivery Orders, Railway Receipts, or Bills of
Lading (which were contemplated by the contracts and would
be issued) should not be transferable to third
parties…………………… and he recorded his
conclusion as follows :
“‘In my opinion, if Delivery Orders were con. templated
under these contracts, they were illegal, as the Delivery
Orders were not made non-transferable. If Delivery Orders,
Railway Receipts or Bills of Lading were not contemplated
under the contracts, then the exemption (which deals with
cases where Delivery Orders, Railway Receipts or Bills of
Lading are issued) has no application.”
This decision was approved in Uma Satyanarayanamurty v.
Kothamasu Sitaramayya & Co. (1), where in considering
whether a disputed contract was a ,forward contract’ within
the meaning of the Vegetable Oils and Oilcakes (Forward Con-
tract Prohibition) Order, 1944, Rajamannar, C. J., held that
the intention underlying the notification being to grant
exemption only to cases of forward contracts in respect of
which there could be some guarantee that they would not be
subject to speculation, exclusion from the prohibition
imposed by the notification may be established only if one
of the terms of the contract is that the delivery order or
railway receipt or bill of lading relating thereto is not
transferable. It is not enough that such documents are not
contemplated, because it cannot be said that they are
prohibited. This view was followed in Bodhu Seetharamaswami
v. Bhagavathi Oil Company (2), Hussain Kasam Dada v.
Vijayanagaram Commercial Association (3) and Vaddadi
Venkataswami v. Hanura Noor Muhammad Beegum (4). The
phraseology of the notifications and the definitions of
forward contract were not in terms identical, in each of
these cases; but these cases lay down that before a contract
(1) (1950) 1 M. L. J. 557.
(3) A.I.R. (1954) Mad. 528.
(2) 1. L R. (1951) Mad. 723. A.I.R. (1956) Andhra 9.
696
for delivery of a commodity at a future date could be
regarded as excluded from the definition of forward
contract, even if the contract was for a specific price or
specific quality, it must be stipulated that the contracts
were not transferable to third parties by expressly
prohibiting the transfer of delivery orders, railway
receipts or bills of lading.
We are unable to hold that a contract for delivery of goods
at a future date would fall within the exception in the
definition of forward contract if other conditions are
fulfilled only if there is an express stipulation recorded
in the contract prohibiting the transfer of delivery orders,
railway receipts or bills of lading against the contract
thereof. The order issued by the Saurashtra Government
excluded from the definition of forward contract all
contracts for specific qualities or types of groundnut whole
or groundnut seeds or groundnut oil and for specific
delivery at a specific price, delivery orders, railway
receipts or bills of lading against which contracts, were
not transferable to third parties. But the Legislature did
not impose the condition that the contracts for delivery of
goods at some future date must recite that the contracts
were not to be transferable, and there is no indication of
such an implication. Nor is the object of the order
sufficient to -justify an overriding reason for implying
that condition. In a recent case Khardah Company Ltd. v.
Raymon -it- Company (India) Private Ltd. (1), this Court had
to adjudicate upon the validity of a forward contract
relating to jute. By cl. (2) of s. 17 of the Forward
Contracts Regulations Act 74 of 1952 forward contracts in
contravention of the provisions of sub-s. (1) of s. 17 were
declared illegal, but the Notification did not apply to non-
transferable specific delivery contracts for the sale or
purchase of any goods. In a dispute relating to non-
delivery of jute, which was one of the commodities to which
the Act was made applicable,
(1) [1963] 3 S.C.R. 183.
697
the Bengal Chamber of Commerce made an award. In a petition
to set aside the award it was urged that in the absence of a
specific clause prohibiting transfer in the contract itself,
the plea that the contract is not transferable is not open
to the party supporting the contract and that evidence
aliunde is not admissible to establish the condition, and in
Support of that argument Seetharamaswani v. Bhagwathi Oil
Co. (1), Hanumanthah v. U. Thimmaiah (2) and Hussain Kasam
Dada v. Vijananagaram Commercial Association (3) were cited.
Venkatarama Aiyar, J, observed in dealing with this
contention:
“x x x that when a contract has been reduced
to writing, we must look only to that writing
for ascertaining the terms of the agreement
between the parties, but it does not
follow from this that it is only what is set
out expressly and in so many words in the
document that can constitute a term of the
contract between the parties. If on a reading
of the document as a whole, it can fairly be
deduced from the words actually used therein
that the parties had agreed on a particular
term, there is nothing in law which prevents
them from setting up that term. The terms of
a contract can be express or implied from what
has been expressed. x x x x on the question
whether there was an agreement between the
parties that the contract was to be
nontransferrable, the absence of a specific
clause forbidding transfer is not conclusive.
What has to be seen is whether it could be
held on a reasonable interpretation of the
contract, aided by such considerations as can
legitimately be taken into account that the
agree. ment of the parties was that it was not
to be transferred. When once a conclusion is
reached that such was the understanding of the
parties,
(1) (1951) 1 M.L.J. 147. (1) A.I.R. (1954) Mad. 87.
(3)A.I.R. (1954) Mad, 528.
698
there is nothing in law which prevents effect
from being given to it.”
In our view this principle applies to the interpretation of
the Saurashtra Groundnut and Groundnut Products (Forward
Contract Prohibition) Order, 1949. From the absence of a
clause expressly prohibiting transfer of the contract
against delivery orders, railway receipts or bills of lading
it cannot be inferred that the contract is transferable.
The question whether an impugned contract is transferable
must depend upon the language of the contract interpreted in
the light of surrounding circumstances, and silence of the
contract cannot be regarded as an indication of
transferability-much less would it justify an inference that
it is transferable.
We must then consider having regard to the surrounding
circumstances if such a term can be implied. The contracts
are made subject to the rules and regulations of the Veraval
Merchants’ Association. These rules are designated “‘Rules
and Regulations of groundnuts ready delivery”. Rule 5
provides that the buyer has to supply empty bags to the
seller and he has to supply a Bardan Chitti within 48 hours
from the receipt of the letter of the seller to the buyer
asking for empty bags. In the event of failure to supply a
Bardan Chitti within 48 hours a penalty of Rs. 2/- per 100
bags is to be paid to the seller for every 24 hours. Rule 6
deals with delivery. The seller has to give delivery at the
godown of the buyer and the seller is to unload the carts at
his own cost. The buyer has, on presentation of the receipt
of the commodity at his godown to pay 90% of the invoice
price, and 10% may be retained against defects or shortage
discovered in weighment (Rule7). Weighment has to be made
at the godown of the buyer, at the earliest moment
according, to the convenience of the seller and the buyer,
after the commodity has reached the buyer’s godown. A
sample has to be preserved, if
699
the seller so chooses, at the buyer’s place. At the con-
venience of both the buyer and the seller and at the
earliest opportunity the sample should be analyzed at the
buyer’s place but after weighment of the commodity, cleaning
of sample should not take more than 6 days and if a person
makes any delay he would be liable to pay a penalty of -/8/-
eight annas for every 24 hours per every lot of 100 bags.
Rule 9 deals with shortages and provides for reimbusement of
loss to the buyer. Rule 10 deals with payment of price. On
taking delivery of the commodity, the person receiving the
commodity, having obtained a kutcha receipt,, is to make 90%
payment to the person giving delivery immediately . If the
person giving delivery of a commodity so desires, the person
‘taking delivery has to furnish surety for the value of
commodity and acceptable to the Association. After
weighment and shortages are settled and on receiving the
invoice, the buyer must pay in full the balance of 10%
within 96 hours. The buyer paying after 96 hours must pay
interest at the rate of -/12/- twelve annas per centum per
mensem. Rule II provides for “survey of disputes” arising
between the members at the time of delivery of “‘weighed
commodity.” The application may be made both by the buyer
and the seller. Rule 15 provides for steps to be taken if
the seller or the buyer be “unable to meet amount” found due
at the settlement regarding the commodity. The Managing
Committee, after hearing the seller and buyer, may grant
extension of time on receipt of an application to the
Association from such buyer or seller, or the Association
may determine and fix a reasonable rate after considering
the rates as well as circumstances in the local as well as
other centres of Saurashtra between seller and the buyer and
that the transactions between the buyer and the seller have
to be settled at the rate so fixed.
The transactions for purchase and sale are to be carried
through between two members of the
700
Association and under the rules and regulations of the
Association. Delivery has to be given at the warehouse of
the purchaser and detailed rules about sampling, surveying,
payment of price etc., are made. Prima facie, these rules
apply to the persons named as the seller and the buyer in
the transactions of sale and purchase. But Mr. Ayyanger
appearing on behalf of the appellant contended that the
expression ,buyer’ would include a purchaser from the buyer
because under the general law of contracts the benefit of a
contract to purchase goods can be assigned and therefore the
rights of the buyer would be enforceable by the transferee
of the buyer. But the scheme of the rules indicates that
the entire transaction has to be carried through between the
parties to the transaction and not between the seller and a
transferee of the rights of the buyer. In carrying out the
transactions under the rules, diverse obligations are
imposed upon the buyers, and it is settled law that without
the consent of the seller, the burden of a contract cannot
be assigned. The rules provide, as we have already pointed
out, that the empty bags are to be supplied by the buyer.
Such an obligation cannot be transferred by the buyer.
Again diverse rules provide liability for payment of
penalty. If a buyer connot transfer the Obligations under a
contract which is made subject to the rules and regulations
of the Association, ail the obligations prescribed by the
rules being made part of the contract, a very curious result
would ensue in that whereas an assignee of the buyer would
be entitled to demand delivery at his own godown at the rate
fixed, for his default the buyer would remain liable for the
diverse obligations including liability to pay penalty for
default of his assignee under the rules. Again the seller
by Rule 6 has to deliver the goods at the warehouse of the
buyer, and if the benefit of the contract is transferable,
it would imply an obligation to deliver at the warehouse of
the buyer’s assignee, wherever the warehouse of the assignee
may be. The
701
warehouse of the assignee of the buyer may be in Veraval or
at any other place, but the seller having entered into a
contract at a rate which would include normal expenses for
delivery at the buyer’s godown maybe required to undertake
an intolerable burden of meeting all the charges for
transporting the goods to the warehouse of the buyer’s
assignee wherever such godown may be situate. Such an
obligation could never have been under contemplation of the
rule-making body.
Mr. Ayyanger contended that the assignee of the buyer
contemplated by the rules would of necessity have to be a
member of the Association and therefore resident in Veraval.
But the rules to which our attention has been invited do
not, if the buyer is to include the assignee of the benefit
of the contract, seem to impose any such restriction. If
the general law relating to assignment of benefit under a
contract is to be superimposed upon the rules,
notwithstanding the scheme which prima facie contemplates
performance between the parties, there is no reason why any
such reservation should be made. It was alternatively urged
by Mr. Ayyangar that the rules of the Association use two
expressions buyer’ and ‘Persons’-and wherever the expression
Person’ is used it would include an assignee of the buyer.
This argument, in our judgment, is without force. The rules
have not been drawn up with any precision, and there is
nothing to indicate that by using the expression ‘person’ a
larger category was intended. for instance in rule 5, the
obligation to supply empty bags is imposed upon the ‘buyer’
and the penalty for failing to carry out that obligation is
imposed upon the ‘person.’ Similarly in rule 10 when
delivery is taken by the ‘buyer’ the ‘person’ receiving the
commodity has to make payment of 90% of the price to the
person giving delivery. There arc a large number of other
rules which deal with the rights of the “buyers’ and the
obligations
702
simultaneously imposed upon persons which in the context may
mean only the buyers. The use of the expression “Person’
does not, in our judgment, indicate that he- was to be any
one other than the buyer or his representative.
On a careful review of the rules we are of the view that
under the rules and regulations of the Veraval Merchants’
Association pursuant to which the contracts are made, the
contracts were not transferable. The contracts were
undoubtedly for delivery of groundnut at a future date, but
they were contracts for specific quality for specific price,
and for specific delivery under the rules of the Association
under which they were made. The contracts were, for reasons
already mentioned, also not transferable to third parties,
and could not be regarded as forward contracts within the
meaning of the order. It is unnecessary therefore to
consider whether the respondent who claimed to have acted as
Pucca Adatia and therefore as Commission Agent was entitled
to claim reimbursement for any amount alleged to have been
paid by him on behalf of the appellant for losses suffered
in the transactions in dispute.
We are therefore of the view that the High Court was right
in modifying the decree passed by the Trial Court and in
dismissing the appellant’s suit. The appeal is dismissed
with costs.
Appeal dismissed.
703