John Beaumont, Kt., C.J.
1. This is an appeal against a decision of Mr. Justice Blackwell. The defendants are pakka adatiyas carrying on business in Bombay and the plaintiffs are upcountry constituents. The facts so far as material to the present appeal can be stated very briefly. The transactions between the parties began in June, 1935. On December 2, 1935, the plaintiffs wrote to the defendants instructing them to apply a double option in respect of ten bars of silver for Posh settlement, and on December 6 the defendants wired to the plaintiffs saying that they had applied nazrana, i.e. double option on ten bars at a premium of Re. 1-4-0 at the rate of Rs. 65-3-0 Posh. Subsequently the defendants denied that they were bound by that telegram and said that it was sent by mistake ; but that case was abandoned in the course of the trial. It is, therefore, established that the plaintiffs bought from the defendants teji mandi or double option on ten bars of silver at the rate of Rs. 65-3-0 for Posh settlement, and the sahi day, or day on which the option had to be exercised, was January 8, 1936. It is clear that until the plaintiffs exercised the option on the due date, the only contract which they had was a contract that they should be entitled to declare themselves either sellers or buyers on the due date, and there was no contract until the exercise of that option as to the selling or buying of the silver. It is common ground between the parties that in a case of a teji mandi transaction the constituent must exercise the option and declare himself either a seller or a buyer. In this case, as the rate had heavily fallen by January 8, it was obviously in the plaintiffs' interest to declare themselves sellers, and the agent would then have to put through a contract of purchase with the person who had given the option-and in this case the defendants being pakka adatiyas they could sell the option themselves, and enter into the requisite contract of purchase.
2. The first point argued on the appeal is that under the original contract for the sale of this option the defendants as brokers or pakka adatiyas were bound without any further instructions from the constituents to exercise the option on their behalf in the manner most in their interest having regard to the market rate on the sahi day and that they were further bound, without any specific instructions, to enter into the requisite cross-contract. No authority for that proposition has been cited. These contracts are very common in the Bombay market, and I think it would be dangerous at this date to imply terms in such contracts. It is of course open to the constituent to provide in his original contract that the option shall be exercised on his behalf on the due date toy the agent, or he can, before the due date arrives, instruct the agent, either generally in relation to all outstanding transactions, or in relation to a particular transaction, to exercise the option and enter into the requisite cross-contract. But I am not prepared to hold that there must be implied in every contract for the grant of a teji mandi an obligation on the agent without any further instructions to exercise the option and carry the transaction through on behalf of his client.
3. That question was not decided by the learned Judge. He dealt with the matter on an alternative basis which he allowed the plaintiffs to raise by an amendment of the plaint in the course of the trial. That alternative basis was this. On December 18, 1935, the plaintiffs wired to the defendants to buy ten bars of silver for the Posh settlement. As the rate of silver had fallen heavily since the option of December 6 was entered into, probably this contract of purchase would be in the nature of a hedging contract which could be set off against the contract for sale which would arise under the option. But, of course, the position was uncertain on December 18, because the market might have risen again before January 8, 1936, and the contract under the option might have been for purchase so that an intermediate contract for purchase might have been an additional contract of purchase. But as matters stood on December 18, this could be regarded as probably in the nature of a hedging contract. However, the pakka adatiyas refused to accept this order, and they did not carry out the instructions of December 18. They were at that time contending that the contract of December 6 was not binding.
4. Now it is said that there was a course of dealing between the parties which compelled the pakka adatiyas to accept this order of December 18, 1935, and having accepted it, to exercise the option of December 6 on the due date, viz. January 8, 1936, and thereupon to set off against each other the contract, which would result under the option, and the contract of December 18. The learned Judge held that that was the course of dealing between the parties, and that the agents were bound to accept the order of December 18, but I am unable to agree with him in that conclusion. Evidence was given of five previous transactions which took place during the preceding months in which there was a teji mandi or double option open, and during the period in which it was so open, instructions were given by the constituents to the agents to enter into forward contracts similar in character to that which would have resulted from accepting the instructions of December 18. The agents did enter into forward contracts in those cases, and on the due dates they did, in fact, exercise the option on behalf of their clients without any further instructions and made the necessary adjustments between the contracts. It seems to me that the highest the obligations of the defendants can be put from the course of dealing between the parties as established by the evidence is that where there is an option open and the defendants accept instructions to put through a forward contract, they are then bound to carry the matter through on the due date. But there is, in my opinion, no justification for holding that the dealings between the parties compelled the defendants to accept an order for a forward contract merely because an option was outstanding. Prima facie, an agent may accept or refuse business which is offered to him. The fact that he has accepted business on five previous occasions cannot involve him in law in an obligation to accept fresh business in future. In my opinion, it is not established that the agents in this case were bound to accept the order of December 18, 1935, and as they did not accept it, and as admittedly no instructions were given to them as to the exercise of the option of December 6, and as in my view there was no implied obligation on them to exercise the option for their client without instructions, I think the claim of the plaintiffs in respect of silver arising under the contract of December 6 fails.
5. There were also cotton transactions between the parties, and it appears from the plaint that at the relevant date there were outstanding a teji mandi contract in respect of fifty bales and two mandi contracts, i.e. single option contracts, in respect of three hundred bales each, i.e. six hundred bales in all, and on March 30, 1936, the plaintiffs sent a telegram to the agents asking them to make the best bargain by settling all their May-Broach transactions such as double options, mandies purchases of February 25, 26 and 28 by selling or purchasing. It is argued on behalf of the plaintiffs that that telegram amounts to express instructions to the agents to exercise the necessary options and enter into the requisite cross-contracts. But I do not think that the telegram does amount to that because the purchases' of February 25, 26 and 28 referred to were orders for forward business which had not been carried out by the agents. So that exactly the same question arises in relation to them as arose in relation to the order of December 18 with regard to silver, and I think it is not established that the agents were bound to enter into these forward contracts.
6. In the result, therefore, the appeal succeeds.
7. The respondents are upcountry merchants. The appellants carry on business in Bombay as pakka adatiyas and as such had entered into certain silver and cotton transactions with the respondents. The suit, out of which this appeal arises, was brought by the respondents to recover two sums of money alleged to be due to them in respect of these transactions, which were in the nature of what are called teji mandi transactions.
8. The dealings between the parties commenced in June, 1935, and about November, 1935, a sum of Rs. 600 odd was admittedly due by the respondents to the appellants in respect of earlier transactions, and there was an outstanding ordinary forward contract in silver of November 14, 1935. On December 2, 1935, the respondents sent a letter to the appellants asking them to apply a double option on ten bars of silver for the Posh vaida at a premium of about Re. 1-4-0. On December 6, the appellants sent a telegram informing the respondents that they had applied nazrana, that is premium, on ten bars of silver for the Posh vaida at Re. 1-4-0 on the rate of Rs. 65-3-0. On the next day the appellants sent another telegram informing the respondents that they had applied nazrana on ten bars of silver for the Posh vaida at a premium of Re. 1-3-6 on the rate of Rs. 65-4-0. On the same day the appellants confirmed one of these telegrams by their letter of that date and also sent a contract. There is no dispute about this latter transaction between the parties. On December 9, 1935, correspondence ensued between the parties, in the course of which the appellants alleged that the first telegram of December 6 was sent to the respondents by mistake and that no such transaction was entered into by them. The respondents repudiated these allegations and contended that they had instructed the appellants to enter into the transaction and that the appellants had in fact carried it out. It is common ground that this particular transaction was not put through. In the suit, however, the appellants maintained that the first telegram was sent by mistake, but at the hearing, after some evidence was led, the appellants gave up that contention and accepted the position that the transaction, referred to in their telegram of December 6, was binding on them. So that, the question arises as to what were the rights and liabilities of the parties with regard to this teji mandi transaction! of December 6. On December 18, the respondents sent a telegram to the appellants asking them to buy ten bars of silver for the Posh vaida, in default of which they intimated that they would hold the appellants responsible for the consequences at the rate prevailing on that day. The sahi day in respect of the teji mandi transactions of December, 1935, was January 8, 1936, and the due date of delivery commenced on January 12 and went on till January 17, 1936.
9. The respondents' case, at the hearing, was that if the rate on the sahi day was in their favour, they were entitled automatically to the benefit of it, although they had not in fact declared themselves to be either the seller or the purchaser as the case may be ; in other words, it was the duty of the appellants as their agents to exercise the option on their behalf, without any instructions from the respondents in that behalf and to declare that the appellants had become purchasers on the sahi day as the rate had fallen to Rs. 52, and on that footing the appellants were accountable to them. In the course of the hearing, after the respondents had closed their case and a witness on behalf of the appellants was being cross-examined, an application was made by the respondents to the learned Judge for leave to amend the plaint. The application was opposed by the appellants but granted by the learned Judge, and the respondents were allowed to amend their plaint.
10. By the amendment the respondents alleged that in pursuance of the course of dealings between the parties the appellants exercised the option and closed the resulting transaction by a corresponding sale or purchase, as the case may be, without any instructions from the respondents in that behalf. They further alleged that the course of dealings was that, if instructed by them, the appellants had to put through on behalf of the respondents a forward transaction for the sale or purchase for the corresponding settlement of the like quantity and to set it off, without any instructions in that behalf from the respondents, against the transaction resulting from the exercise of the option by the appellants on the sahi day. A similar course of dealings was put forward in the case of a mandi or a teji transaction, and a reference was made to the telegram of December 18, 1935, of which till then no mention had been made either in the plaint or in the evidence of the witness on behalf of the respondents. On this footing the respondents claimed a sum of Rs. 1,386-4-0 and put in amended particulars showing how the sum was arrived at. In the alternative, they claimed the sum which they had originally claimed, namely, the sum of Rs. 3,311-4-0, as the result of these two transactions,-one of December 6 land the other of December 18.
11. The appellants pleaded that they were not bound to exercise any option on behalf of the respondents and that no instructions had been given by the respondents in that respect as to the teji mandi transaction of December 6. They further denied the alleged course of dealings by their amended written statement and contended that in no event were they liable to put through an intervening transaction like the one referred to in the telegram of December 18, 1935.
12. Mr. Justice Blackwell held that there was a course of dealings between the parties which raised an implied agreement between the parties to the effect that the appellants were bound, as the agents of the respondents, to exercise the option on the sahi day in a manner which would be to the benefit of their constituents, the respondents, and as they had failed to do so they were liable in damages on the footing of the difference between the unit price in the teji mandi contract and the rate prevailing on the day on which the appellants ought to have put through the intervening transaction of December 18.
13. The main question, therefore, which arises in this case is : whether there was such a course of dealings between the parties as would give rise to an implied agreement between them to the effect that the appellants as pakka adatiyas were bound, without any instructions from the respondents, to exercise the option on the sahi day, even though the latter had made no election or given no instructions in that behalf to them. The other question, which arises is : whether, when there is an outstanding teji mandi transaction and the constituent thereafter, but! before the sahi day, instructs his agent to put through a forward transaction of sale or purchase, obviously with the intention of protecting himself against the fluctuations of the market, the latter is bound to carry out the instructions in that respect and put through the transaction in the market. This is the position with regard to the silver transactions.
14. With regard to the cotton transactions, the position is that on February 1, 1936, there were outstanding one mandi transaction of fifty bales and two mandi transactions of three hundred bales each. As to these the respondents' case was that on February 25, 26 and 28 they instructed the appellants to enter into cross-contracts, and on March 30, 1936, which was the sahi day in respect of the cotton transactions, they sent a telegram to the appellants asking them to settle all the outstanding transactions, including single option transactions as well as forward transactions, as instructed in the telegrams of February 25, 26 and 28. The position with regard to the cotton transactions is, as far as I can see, exactly the same as the position with regard to the silver transactions. There also are intervening transactions, and the questions, which arise in regard to the silver transactions, necessarily arise in! regard to the cotton transactions.
15. I think the result of this case must depend upon the view which is to be taken on the facts of the case in the light of the principles which are applicable to teji mandi transactions and the position between an upcountry merchant and his pakka adatiya in Bombay in regard to such transactions. It is, therefore, necessary to understand the real nature of a teji mandi transaction. That has been explained in a good many cases in this Court ; but, perhaps, the best exposition of the nature of a teji mandi transaction is that which is given by Mr. Justice Broadway in Pirthi Singh v. Matu Ram air Lah. 356, and I cannot resist the temptation of quoting the very words of that learned Judge, as I think the answers to the questions, which arise in this case, are to be found in the observations of the learned Judge with regard to the true scope and nature of a teji mandi transaction and the relation between a pakka adatiya and his constituent. The observations of the learned Judge at pp. 357-358 are as follows:
It was said that these contracts were exactly the same as tezi-mandi contracts which were dealt with in Manilal Dharamsi v Allibhai Chagla A. I. R. 1922 Bom. 408 : 68 Ind.Cas. 481 : 47 Bom. 263 where it was held that such contracts were not necessarily wagering ones. The plaintiff in his cross-examination described these contracts in the following words:
A man comes to me and asks for such a contract of gold for a month or two hence. We inquire the rate of nazrana current at that time. The rate usually varies from As. 3 to Rs. 2 per tola. At that rate we strike a bargain for that man with some other person. We pay the latter nazrana at the ascertained rate. He then fixes the rate. This means that he on the due date would be liable at our option either to supply or to accept the specified quantity of gold at the specified rate whatever be the market rate. The option will be with us whether to compel him to accept or to compel him to supply the gold, irrespective of the maket rate. We would exercise this option against that third person in accordance with our dealer's instructions.
It would appear that what happens in a contract of this nature is that one party pays a premium to the other party thus acquiring an option to buy or to sell, as he decides, a certain quantity of !gold at a certain rate on a certain date. Either on or some date prior to that date the purchaser decides whether he will buy or sell. According to his decision, communicated to his broker, the broker enters into a contract with some third person in order to meet the situation. On the due date the parties can either take or give delivery of the stipulated) quantity of gold or settle on the difference.
16. This, then, being the true nature of a teji mandi transaction. I find it difficult to accept the argument of the learned Counsel on behalf of the respondents that a contract of sale or purchase comes into existence the moment a teji mandi contract is entered into or, at any rate, automatically comes into existence when the sahi day arrives and the rate is ascertained, or that it is the agent's duty to exercise the option on behalf of the principal. It seems to me that when there is a teji mandi contract, the contract is merely between two parties as principals, in the first instance, and the contract is that one party tells the other that he wants to buy the right to declare himself either a purchaser or a seller, as the case may be, on the due date of the particular vaida, and the other party agrees to sell him that right for a premium on a rate, which is fixed not by the so-called agent nor by the constituent but fixed generally in the market by a third party with whom the agent also enters into a nazrana, or an option contract to cover the first contract of nazrana between himself and his constituent. It is the third party, with whom the agent enters into a corresponding option contract, who fixes the rate. That rate, which is called the price of the unit, is then given to the original constituent, and the nazrana so arrived at is stated to him, and then he pays the nazrana or is liable to pay it to his agent. Therefore, the contract, in the first instance, is a simple; contract to buy the right of exercising an option, and nothing more. If, therefore, nothing further happens, then the constituent merely forfeits the nazrana which he has paid or which he is liable to pay to his agent, and that is all. If, however, either on the due date or before, the constituent exercises the right, which he has bought, by stating to the agent that he is going to be either a seller or a buyer according to the tendency of the market, then a resulting transaction of either sale or purchase of the goods according to the rate in the market would come into existence, and it may be that at that stage the position between the parties would be that of principal and agent. But it is difficult to hold that at any earlier stage the relation between the parties is that of principal and agent and that the latter is bound to exercise the election on behalf of his constituent. It seems to me that, on principle, it is the right and the duty of the constituent to exercise the option, and it is only then that the adatiya would come to know if he has to give or take delivery of the goods as the case may be. It is open to the constituent, once he declares his option to enter into a corresponding transaction of sale or purchase, or to square up and close the transaction against any subsisting ordinary forward contract, in which case the differences are paid or received as the case may be. Of course, in this respect, parties may enter into any agreement, and then the agent would be bound to carry it out and exercise the option in the best way possible in the interests of his principal, or, as contended in this case, there may be an implied agreement in that behalf. Short of that, on principle, it seems to me difficult to accept the contention that a commission agent is bound to exercise the election and become either the seller or the buyer of certain goods or commodities on the sahi day, if the market is in favour of his constituent, automatically, without any instructions from the latter in that behalf. In this litigation the case of an express agreement was given up. No custom was set up, and therefore, the only question is whether the evidence establishes the case that there was an implied agreement between the parties, having regard to the course of dealings under which the appellants were bound to exercise the option and account to the respondents on the footing that the latter had become sellers.
17. Now, what was the course of dealings between the parties? The course of dealings between the parties was that in the month of June and between June, 1935, and January, 1936, there were only four or five transactions. In my opinion, it would be dangerous to hold that, because in four or five transactions the pakka adatiyas had exercised the option on behalf of their constituents and in their interests without any instructions from the latter, therefore, a term must be implied in the teji mandi agreement between the parties that the former are bound to exercise that option in every case, apart from the fact, as pointed out by the Advocate General, that in every one of these four or five transactions there always was an intervening subsisting forward transaction between the parties.
18. I am, therefore, unable to accept Sir Jamshedji Kanga's argument that on the sahi day the relation between the parties was that of a vendor and purchaser. It is, therefore, unnecessary to consider the further argument that the claim made by the respondents was on the footing of a claim by a vendor against his purchaser. It was argued by the Advocate General that, assuming that the relation between the parties was that of a vendor and a purchaser, the respondents had not alleged in the plaint that they were ready and willing to carry out their contract. To this it was replied that as the contract was repudiated by the appellants, it was not necessary to aver the readiness and willingness on the part of the respondents. It is unnecessary, in my opinion, to examine these contentions.
19. The learned Counsel for the respondents has further argued that even supposing the appellants were not, as a rule, bound to exercise the option on behalf of the respondents, they were bound to do so in this particular case, because of the intervening transaction of December 18. I have yet to come across an authority which imposes an obligation on a pakka adatiya in Bombay to carry out any order which is sent to him by an upcountry constituent without anything more. If that were so, all that would be necessary for an upcountry merchant is to send a wire to a pakka adatiya in Bombay and hold him liable if he did not act upon it. The obligation will arise and the relationship between the parties as that of principal and agent will come into force only if the pakka adatiya chooses to accept the order and carries out the instructions. But, until then, it is difficult to hold that, merely bemuse instructions in this case were sent by the respondents to the appellants on December 18, therefore, the appellants were bound to carry out the instructions. No authority for this proposition is forthcoming. The case of Kanji v. Bhagvandas (1904) 7 Bom. L.R. 57, which was relied upon,- somewhat faintly, in the trial Court and seems to have been accepted by the learned Judge, has nothing to do with the question which arises in this case. That was the case of an ordinary forward transaction, and all that was held in that case was that there is a forward transaction outstanding, and the constituent instructs his agent to put through a cross-transaction in order to set off one against the other on the due date, the latter is bound to put it through, unless he can show that there were circumstances under which he was not bound to do so, such as, for instance, he could not have done so without loss or profit to him. That, of course, is no authority for the contention advanced in this case, which is a case of outstanding option contracts and instructions for a forward contract before the due date.
20. This is the view which I took in a somewhat similar case, Sakarbhai v. Ramniklal (1931) 34 Bom. L.R. 709. It may be that my observations in that case were, as the learned Counsel for the respondents stated, based upon the facts in that case. But, after having carefully considered the somewhat elaborate argument addressed to us on this part of the case, I see no reason why I should depart from the view which I took in that case. In my opinion, a commission agent is not bound to put through a forward transaction, even though a teji mandi transaction between him and his constituent is then outstanding. I have also said in that decision that he is entitled to demand margin, and I have referred to the case of Kanji v. Bhagvandas as an authority for that proposition. It is true that that authority does not expressly lay down that proposition, but a careful perusal of the evidence in that case and the judgment of both Mr. Justice Chandavarkar and of Sir Lawrence Jenkins seems to show that that right is inherent in a commission agent. But all doubts on that point are now set at rest by a decision of Sir Amberson Marten in Devshi v. Bhihamchand (1926) 29 Bom. L.R. 147, where it is distinctly laid down, that a pakka adatiya is always entitled to demand margin before entering into any new or covering transaction on behalf of his constituent. The relationship between a seller and a purchaser of a double option has been above adverted to. Until the exercise of the option either on the due date or before it, the relation is that between principal and principal. Until A chooses to constitute himself as agent for B, A is not bound by any order given by B.A pakka adatiya in Bombay is, as the cases show, in a much stronger position. Even if a transaction has been put through by a pakka adatiya on behalf of his up-country constituent, he is not bound to put through another, unless margin is paid to him. Of course, if such an incident or obligation is implicit in the pakki adat system as attaching thereto by the custom of the trade, then the position may be different. I am not aware of any such custom, and what little evidence there was before me in Sakarbhai v. Ramnikla was against it. In any case, no such custom is pleaded in this case. It is difficult, therefore, to hold that the appellants were bound to act upon the telegram of December 18, merely because there was, then, outstanding a teji mandi transaction between them and the respondents. Of course, as I have pointed out, the position would be different if there is an intervening subsisting contract between the parties, as to which different considerations apply and different results may follow.
21. Apart from anything else, it is difficult to accept the respondents' case based on the amendment of the plaint. They first say, there, that there was an implied agreement under which the appellants exercised the option on their behalf without any instructions from them. Then they say that in the meantime if so instructed the appellants put through on their behalf a transaction for sale or purchase for the corresponding settlement of the like quantity and set it off,-again without instructions-against a transaction resulting from the exercise of the option, and they therefore contend that the appellants ought to have put through the transaction mentioned in the telegram of December 18, 1935. But how can the appellants assume that the respondents would be either sellers or buyers on January 8, 1936, Until the option is exercised and there is a resulting transaction, how can profit or loss be ascertained? The respondents wanted the appellants by their telegram to purchase forward and to set it off against their liability which in fact according to the rate on January 8, 1936, arose on that day. But nobody on December 18, 1935, could say what the rate would be on the sahi day, or whether the rate would be in favour of or against the respondents, and how could then the appellants, unless they chose to do so, enter into a forward contract of purchase on December 18?
22. For these reasons, I am respectfully unable to agree with my brother Blackwell that the respondents were entitled to succeed on the claim regarding the silver transactions.
23. The position in regard to the cotton transactions, as I have said, is similar to that in regard to silver transactions. There the case of the respondents was that three mandi transactions-one of fifty bales and the other two of three hundred bales each-were outstanding at the end of December, 1935. In the middle of January, 1936, the appellants called upon the respondents to send them the amount which was due by them up to that date in respect of the transactions already put through. They followed it up by their telegram of February 1, 1936, and intimated that in default they would settle these outstanding transactions in cotton. To that a reply was sent by the respondents stating that somebody on their behalf was going to Bombay to attend to this matter. But, as the man did not arrive by the date by which he was expected, the appellants sent another telegram calling upon the respondents to send the amount and intimated that otherwise they would settle the outstanding transactions. The respondents' man arrived in Bombay, and, instead of paying the amount to the appellants, promptly went to a solicitor and got him to write a letter on February 5, 1936, contending that the transactions could not be closed, as alleged by the appellants, and that they must be kept outstanding. The appellants replied that the transactions were already closed and they were not bound to do anything more in the matter. It is true that at the hearing the appellants gave up this case and admitted that the transactions were not closed. The position, therefore, is that by the end of February these mandi transactions1 of six hundred bales odd were outstanding, and the question is : what exactly were the rights of the appellants against the respondents in respect of these outstanding transactions? After this correspondence, the respondents, treating the contracts on the footing that they were outstanding and had not been closed, sent telegrams,- one on February 25, another on February 26 and a third on February 28,-asking the appellants to enter into forward transactions against these outstanding transactions. The appellants declined to do so, and thereupon, on March 30, 1936, which, as I have said, was the sahi day for! the cotton transactions, they sent a telegram asking the appellants to settle the mandi transactions as well as the new transactions for which instructions had been given on February 25, 26 and 28 in the best manner possible either by, selling or by purchasing, and they intimated that in default the appellants would be held responsible.
24. The question, therefore, is : whether the appellants were responsible for carrying out these transactions, and as these transactions were not put through, whether the claim of the plaintiffs for Rs. 4,000 odd is substantiated, as has been held by Mr. Justice Blackwell.
25. It is true that at one time the contention of the appellants in regard to these cotton transactions was that they were not bound to carry out these transactions, as the respondents had made default in payment of the deposit and premium due to them in respect of the outstanding mandi transactions. That defence, however, was given up. The question, therefore, seems to me, first, a question of law, and, secondly, whether an implied agreement can be raised from the course of dealings between the parties. Here, again, no authority is cited for the proposition that a commission agent is bound to put through a forward transaction, merely because an option transaction is outstanding; and what I have said with regard to the silver transactions applies with equal force to this part of the argument on behalf of the respondents.
26. Neither on March 30, which was the sahi day, nor before it the respondents gave any instructions to the appellants about the exercise of option or themselves exercised the option. That being so, the appellants were not, for the reasons given whilst discussing the silver transactions, bound to exercise any option on their behalf. If the respondents failed to give instructions declaring themselves either buyers or sellers according to the state of the market, the appellants were not bound to do anything. That is the evidence of Ghasiram on behalf of the appellants, and there is no evidence to the contrary. Then, again, the claim on this part of the case is on the footing of the difference between the contract rates and the rates prevailing in the market on February 25, 26 and 28, and it is clearly unsustainable on any assumption. Ghasiram's evidence is that if the respondents failed to declare themselves either a buyer or a seller, the appellants were not bound to do anything, because if the appellants declared the respondents a seller and the market went up, there would be loss. He further stated as follows:
Supposing the defendants purchase to-day on behalf of a constituent a double option for a particular vaida and before the date for exercise of that option that constituent tells the defendants to purchase against the option, the defendants are not bound to carry out those instructions.
The reason why, according to me, the defendants would not be bound to accept those instructions is that the date for the exercise of the option is yet to come, and if the market went up the liability of the constituent would be increased and he would have to declare himself a purchaser under the option as well as having instructed us to purchase against it.
There was no evidence to the contrary. The position was that towards the end of February, 1936, these mandi transactions were outstanding. Then the respondents by the three telegrams of February 25, 26 and 28 asked the appellants to put through three purchase transactions against the outstanding mandi transactions. That is all. No option was exercised, and for the reasons given whilst dealing with the silver transactions, it is difficult to hold that the appellants were bound to put through the three orders contained in the three telegrams. There were no subsisting intervening transactions between the parties on March 30, 1936, and, therefore, there was nothing to settle. If the appellants chose to carry out the three new purchases, that was another matter, but it was their option to do so or not, and short of any evidence as to custom, of which there is none in the case, it is difficult to hold that they were under any legal liability to act on the telegram of the 30th, nor am I able to see any evidence of any course of dealings between the parties raising an implied agreement by which they were bound to do so.
27. That being so, I think the appeal must be allowed.
28. Per Curiam. Appeal allowed with costs. Plaintiffs' suit dismissed. Each party to bear their own costs in the Court below. Rs. 5,000 deposited by the appellants to be returned to them.