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Motichand Magandas Vs. Keshav Appaji Kulkarni - Court Judgment

LegalCrystal Citation
SubjectContract
CourtMumbai
Decided On
Case Number Second Appeal No. 58 of 1918
Judge
Reported in(1920)22BOMLR406; 57Ind.Cas.129
AppellantMotichand Magandas
RespondentKeshav Appaji Kulkarni
DispositionAppeal dismissed
Excerpt:
.....wagering contracts, they cannot gain validity by the mere fact that the other contracts which the pakka adatia has entered into with third parties to cover the first-named contracts have not been shown to be wagering contracts. - - burjorji shows that on an appreciation of the evidence in that case their lordships were not satisfied as to the common intention of the parties; the remarks of the lower appellate court, relied upon as disclosing an error of law when read with reference to the context, mean in effect that the common intention of the parties is clearly disclosed by their uniform course of conduct and that the fact of the plaintiffs having entered into contracts with third parties does not matter under the circumstances......the defendants appealed to the district court and that court held on the evidence that the common intention of the parties (the plaintiffs and the defendants) was to deal in differences only and to wager, and that it was a matter of indifference whether with a view to avoid the risk of certain contracts with the defendants the plaintiffs entered into contracts with third parties. the lower appellate court disallowed the plaintiffs' claim as regards all the contracts with the defendants.3. the plaintiffs have appealed to this court and it is urged on their behalf that the plaintiffs are pakka, adatias, that the contracts were entered into on the pakki adat system, and that in such a case where the plaintiffs enter into contracts with third parties to cover contracts entered into.....
Judgment:

Shah, J.

1. This second appeal arises out of a suit, which is in form a suit to recover money due on a Khata, but in substance a suit to recover the amount due in respect of certain contracts entered into between the plaintiffs and the defendants.

2. The trial Court found that the contracts between the plaintiffs and the defendants were wagering contracts, and that certain contracts which the plaintiffs had entered into with third parties to cover some of the contracts between themselves and the defendants were not shown to be wagering contracts. It accordingly decreed the plaintiffs' claim in respect of such contracts. The defendants appealed to the District Court and that Court held on the evidence that the common intention of the parties (the plaintiffs and the defendants) was to deal in differences only and to wager, and that it was a matter of indifference whether with a view to avoid the risk of certain contracts with the defendants the plaintiffs entered into contracts with third parties. The lower appellate Court disallowed the plaintiffs' claim as regards all the contracts with the defendants.

3. The plaintiffs have appealed to this Court and it is urged on their behalf that the plaintiffs are Pakka, Adatias, that the contracts were entered into on the Pakki Adat system, and that in such a case where the plaintiffs enter into contracts with third parties to cover contracts entered into by them with the defendants, the intention of those third parties must be shown to be the same as the intention of the defendants to deal in differences only and to wager, and that it is not sufficient to show that the common intention of the plaintiffs and the defendants was to wager. In support of this contention Diwan Bahadur Rao has particularly relied upon the judgment in Bhagwandas v. Burjorji (1918) L.R. 45 IndAp 29 : 20 Bom. L.R. 561 Several other cases also were referred to in the argument. On behalf of the respondent it is urged that it is found as a fact that the common intention of the parties was to wager, that as a matter of law it is not essential to prove that the intention of the parties with -whom the plaintiffs entered into contracts also was to wager, and that the observation of the lower appellate Court as to the contracts between the plaintiffs and the third parties means nothing more than this that if there is satisfactory evidence to show the common intention of the ' parties, the intention of the third parties who entered into contracts with the plaintiffs with which the defendants have nothing! to do directly, would not matter under the circumstances. In short Mr. Shingne contends that it is a finding of fact which ought to be accepted in second appeal.

4. Both parties have argued the appeal before us on the footing that the plaintiffs are pakka adatias and that the contracts between the parties were entered into according to the Pakki Adat system. The incidents of the Pakki Adat system have been mentioned in Bhagwandas v. Kanji ILR (1905) 30 Bom. 205 : 7 Bom. L.R. 611 and the arguments before us have proceeded on the assumption that the contracts in question are subject to the same incidents. The lower appellate Court has dealt with the case on the same basis. I desire to make this clear, as the plaintiffs carry on their business at Amalner, and not in Bombay as was. the case in Bhagwandas v. Kanji which was decided on the evidence as to the custom of the Bombay market and as the trial Court has described the plaintiffs as jokhami adatiax in the judgment and has not apparently referred to the incidents of the pakki adat system. It may be that under certain circumstances a jokhami adatia may be nothing more than a delcredere agent: but it is sufficient to point out that it is common ground before UH that the plaintiff's are pakka adatias and have done business with the defendants as such.

5. In appreciating the rival contentions of the parties it is important to remember that both the lower Courts have found that the common intention of the plaintiffs and the defendants was to deal in differences only. The lower appellate Court observes with reference to the transactions between the parties in grain and cotton that they were all forward transactions, no delivery was ever asked or given on either side during the three years and that the settlement between the parties was always entered in the plaintiffs' accounts by differences. It has considered the evidence and held, that they were not commercial transactions but wagers on the rise and fall of the market. This finding is based upon evidence and unless. there is any error of law we are bound by it in second appeal. All the reported cases that have been referred to in the arguments were cases, in which the Courts concerned dealt with the. evidence in the case and had to find the common intention of the parties on the evidence. The limitation which applies to a second appeal did not apply to ,those cases.

6. The only error of law suggested is that it is necessary for the defendants to establish that the third parties, with whom the plaintiffs entered into contracts to cover their contracts with the . defendants, had the same common intention. If the plaintiffs are Pakka Adatias, they enter into contracts with the defendants, and the defendants have nothing to do with the contracts of the plaintiffs with third parties, The position of a Pakka Adatia differs in this respect from that of an ordinary commission agent as pointed out in Bhagwandas v. Kanji. I do not see how it could be said as a matter of law that the common intention of the third parties to wager must be proved. All that could be said is that the common intention of the two contracting parties (i. e. the plaintiff's and defendants) must be proved, and that in determining that fact on evidence the Court ought to take into account as a piece of evidence the circumstance that the Pakka Adatias have entered into contracts with third parties which are not wagering contracts to cover their contracts with the defendants, and that if the Pakka Adatia's contracts with the third parties represent genuine business transactions and not wagers, it may be said he had similar intention in entering into contracts with the defendants. But it would not be conclusive on the question of the common intention of the parties. The judgment of their Lordships of the Privy Council in Bhagwandas v. Burjorji shows that on an appreciation of the evidence in that case their Lordships were not satisfied as to the common intention of the parties; and in dealing with the evidence the circumstance that the third parties were entitled to call for delivery was taken into account. But the question that is considered is whether the parties had the common intention to wager. I do not think that this judgment shows that as a matter of law it is essential to prove not only that the Pakka Adatia and his constituent had the common intention of wagering but that even the third parties with whom the Pakka Adatia entered into contracts had the same intention, in order to establish that the contracts between the Pakka Adatia and his constituent are Wagers. In the present case it seems to me that on the evidence. the common intention of both the parties is found and that there is no error of law which can vitiate it. The remarks of the lower appellate Court, relied upon as disclosing an error of law when read with reference to the context, mean in effect that the common intention of the parties is clearly disclosed by their uniform course of conduct and that the fact of the plaintiffs having entered into contracts with third parties does not matter under the circumstances.

7. I would, therefore, confirm the decree of the lower appellate Court and dismiss the appeal with costs.

Crump, J.

8. I concur.


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