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Bhagwandas Parashram Vs. Burjorji Ruttonji Bomanji - Court Judgment

LegalCrystal Citation
SubjectContract
CourtMumbai
Decided On
Judge
Reported in(1918)20BOMLR561
AppellantBhagwandas Parashram
RespondentBurjorji Ruttonji Bomanji
DispositionAppeal allowed
Excerpt:
.....equivalent to wagering-pakki adat.;speculation does not necessarily involve a contract by way of wager; to constitute such a wager a common intention to wager is essential. the mere fact that one party to a contract for sale of goods did not intend to deliver, even if known to the other party, does not vitiate the contract, unless there is a bargain or understanding between the parties that delivery is not to be called for. pakki adat dealings are well established as a legitimate mode of conducting commercial business in the bombay market.;burjorji ruttonji v. bhagwandas parshram (1913) i.l.r. 38 bom. 204 reversed. - - on the contrary, pakki adat dealings are well established as a legitimate mode of conducting commercial business in the bombay market. 13. it may well be, as suggested..........framed, and the third was in these terms:-whether the transactions mentioned in the plaint are no wagering transactions and whether the plaintiffs were not aware of the defendant's invention to deal in differences only ?2. the trial judge, sitting on the original side of the high court at bombay, found all the issues in the plaintiffs' favour, and passed a decree for the amount claimed.3. on appeal the appellate bench of the high court agreed with the findings of the trial judge on all the issues but the third. on that it held in favour of the defendant, and dismissed the suit.4. it is from that decree that this appeal has been preferred by the plaintiffs, and the only question is whether the plea that the transactions were by way of wager has been established,5. at the date of these.....
Judgment:

Lawrence Jenkins, J.

1. This appeal arises out of a suit for the recovery of money. Many defences have been pleaded, but only one need now be noticed; it is that the transactions on which the claim rests were agreements by way of wager. At the trial several issues were framed, and the third was in these terms:-

Whether the transactions mentioned in the plaint are no wagering transactions and whether the plaintiffs were not aware of the defendant's invention to deal in differences only ?

2. The Trial Judge, sitting on the original side of the High Court at Bombay, found all the issues in the plaintiffs' favour, and passed a decree for the amount claimed.

3. On appeal the appellate bench of the High Court agreed with the findings of the Trial Judge on all the issues but the third. On that it held in favour of the defendant, and dismissed the suit.

4. It is from that decree that this appeal has been preferred by the plaintiffs, and the only question is whether the plea that the transactions were by way of wager has been established,

5. At the date of these transactions the plaintiff's were a firm carrying on a large mercantile business at Bombay, and, as a branch of it, they were in the habit of acting as Pakka Adatias. The defendant, on the other hand, was a young man without any regular business, who, with the aid of winnings in a lottery, engaged in speculative transactions on the Bombay market.

6. In June and July 1910, he instructed the plaintiffs to sell for him three several lots of linseed amounting in all to 4,000 tons for September delivery.

7. On the strength of this order the plaintiff's sold linseed to this amount by separate contracts to thirty-nine buyers. Though the transactions took the form of sales by the defendant to the plaintiffs, followed by re-sales by the plaintiffs to thirty-nine buyers, the plaintiffs acted throughout as Pakka Adatiaa, and, to secure them against loss, sums amounting in the aggregate to 61,000 rupees, were deposited with them by the defendant as margin money.

8. The market went against the defendant, and at the end of August the plaintiffs asked him either to give delivery of the linseed, or to authorise them to purchase linseed on his behalf. The defendant, however, did neither the one nor the other, and so the plaintiffs, acting within their rights, discharged their obligation to the thirty-nine buyers by delivering 300 tons, and by making cross contracts, and paying differences as to the balance of the linseed. The result was, that after giving the defendant credit for the 61,000 rupees deposited as margin money, and a sum of Rs. 5,804-2-3 due to him on another account, there was due to the plaintiffs Rs. 90,763-14-6, unless the plea of wagering is an answer to their claim. To determine whether this plea is applicable, it is necessary to consider the real nature of the relations between the parties to the transactions. The case has proceeded in both the Courts on the footing that the plaintiffs were employed by the defendant, and acted as Pakka Adatias, and the description in Bhagwandas v, Kanji I.L.R. (1905) Bom. 205, 7 Bom. L.R. 611, of the customary incidents of such an employment was applicable to the circumstances of this case, though it is to be noted that the defendant was not an up-country constituent.

9. The plaintiffs, therefore, acted in conformity with the terms of their employment when they made the contracts with the thirty-nine buyers.

10. And as they made these contracts in exercise of the authority conferred upon them and became liable for their performance, they also became entitled to be indemnified by their employer, the defendant, against the consequences of the acts done by them unless those acts were unlawful. There is no suggestion that the acts of a Pakha Adatia as such are unlawful; on the contrary, Pakki Adat dealings are well established as a legitimate mode of conducting commercial business in the Bombay market.

11. No doubt the contract of a Pakka Adatia, as that of anyone else, may be by way of wager; but can it be said that the employment of the plaintiffs by the defendant was of this description ?

12. It has not been shown that there was any bargain or understanding between the parties, either express or implied, that linseed was not to be delivered, nor was it a term, of the employment that the plaintiffs should protect the defendant from liability to make delivery.

13. It may well be, as suggested in the evidence of Hargopal, that the defendant was a speculator, who never intended to give delivery, and even that the plaintiffs did not expect him to deliver; but that would not convert a contract, otherwise innocent, into a wager. Speculation does not necessarily involve a contract by way of wager, and to constiute such a contract a common intention to wager is essential.

14. No such intention has been proved.

15. Under the sales to the thirty-nine buyers it was the right of each buyer to call for delivery, but as the plaintiffs had carried through the transaction as PaKka Adatias of the defendant the rise or fall of the market was a matter of no concern to them, except so far as it might enhance the risk of recovering complete indemnity from their employer. Their rights was to their commission and to an indemnity against loss as incidents of their employment.

16. The mere fact that as to the greater part of the linseed there was no delivery, but an adjustment of claims cannot alone vitiate the transactions.

17. The learned Judges in appeal were evidently impressed by the statement ascribed to the plaintiffs' munim that the delivery of 300 tons was made for the purpose of Court proceedings and by the clause in the contracts forbidding delivery to Messrs. Narandas Rajaram and Company. Their Lordships, however, attribute no importance to either of these matters. Even if the munim's statement be regarded as proved-a point on which their Lordships are, in the circumstances, far from satisfied-it would mean no more than that the plaintiffs fancied an actual delivery would tend to allay such doubts as the Court might otherwise have as to the reality of the transactions. But this was in no sense inconsistent with this reality. At the same time the clauses forbidding delivery to Messrs. Narandas Rajaram clearly cannot be regarded as throwing any doubt on the transactions. No such suggestion seems to have been made at the trial in the Court of first instance, and it does not appear to their Lordships to be reasonably susceptible of the significance ascribed to it.

18. Their Lordships therefore hold there was no ground for setting aside the decree of the Court of first instance, and they will therefore humbly advise His Majesty to restore it and to reverse the decree of the High Court on appeal, ordering instead of it that the appeal to it be dismissed with costs. As the defendant Burjorji has died during the pendency of the appeal, and the present respondent has been appointed at the instance of the appellants to represent him for the purpose of this appeal alone, there will be no order as to the costs of this appeal.


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