Skip to content


Bhagwandas Ichharam Panchal Vs. Royal Western India Turf Club Limited - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai High Court
Decided On
Case Number O.C.J. Suit No. 292 of 1069
Judge
Reported in(1970)72BOMLR764
AppellantBhagwandas Ichharam Panchal
RespondentRoyal Western India Turf Club Limited
Excerpt:
bombay high court rules (o.s.), rule 254--whether 'rules for jackpot' made by r.w.i.t. club 'other written document' within rule 254-contract-special term in contract as to mode of payment whether determinative of due performance of contract-rules of the supreme court, 1883 (english), order liva, rule 1.;'rules for the jackpot' made by the royal western india turf club limited as also the document exhibit a [referred to in the judgment] form the proper subject-matter for construction by the court on an originating summons under rule 254 of the original side rules of the bombay high court.;mason v. schuppisser (1899) 81 l.t.r. 147, in re nobbs. nobbs v. law reversionary interest society [1896] 2 ch. 880 ducasse v. cohen (1920) i.l.r. 48 cal. 176 and mohan chowdhury v. chief commr., tripura.....madon, j.1. this is an originating summons taken out by the plaintiff, bhagwandas ichharara panchal, under rule 254 of the original side rules of this court, for the deter determination of the following questions, namely, (1) whether under rule 8 of the 'rules for the jackpot' made by the defendants, the royal western india turf club limited, and/or under the instrument dated january 2, 1969, exh. a, the plaintiff is entitled to the payment of a sum of rs. 10,462,50 p. by cheque from the defendants, (2) whether in the circumstances and in the events that have happened the plaintiff is entitled to payment of the said sum of rs. 10,462.50 p. by cheque from the defendants, and (3) whether the plaintiff or the defendants should pay the costs in this matter.2. the facts which have given rise.....
Judgment:

Madon, J.

1. This is an originating summons taken out by the plaintiff, Bhagwandas Ichharara Panchal, under Rule 254 of the Original Side Rules of this Court, for the deter determination of the following questions, namely, (1) whether under Rule 8 of the 'Rules for the Jackpot' made by the defendants, the Royal Western India Turf Club Limited, and/or under the instrument dated January 2, 1969, exh. A, the plaintiff is entitled to the payment of a sum of Rs. 10,462,50 P. by cheque from the defendants, (2) whether in the circumstances and in the events that have happened the plaintiff is entitled to payment of the said sum of Rs. 10,462.50 P. by cheque from the defendants, and (3) whether the plaintiff or the defendants should pay the costs in this matter.

2. The facts which have given rise to this originating summons are not in dispute. The defendants are licensed under the Bombay Raee-courses Licensing Act, 1912. to hold horse races in Western India and are accordingly doing so at Bombay and Poona. The defendants have made various Rules relating to the placing of bets at such races, namely, 'Betting Rules-Rules for Betting with Bookmakers', 'Totalizator Rules-Win and Place', 'Rules for the Forecast Pool', 'Rules for Double and Treble Events Betting (Accumulators)', 'Rules for the Daily Treble Event Pool' and 'Rules for the Jackpot'. On every race-day the defendants operate a separate Win Jackpot Pool and persons making bets for this Pool are required to nominate in advance before the start of the first of the five selected races the winning horses, that is, the winners in all the selected races, in the correct sequence, scheduled to be run that day according to the Official Race Card. The Official Race Card is a card published by the defendants and sold on the day of each race meeting and it contains, amongst other information useful to those who attend races, a reproduction of the above Rules. The relevant rule of the Rules for the Jackpot, with which I am concerned in this originating summons, is Rule 8 which is as follows :

8. Dividends on the successful vouchers or slips will be paid in accordance with the provisions of Totalizator Rule No. 9.

At the request of the investors payment may be made by cheques against presentation and surrender of the successful vouchers or slips within the specified time, if the dividends arc Rs. 5,000/- and over.

3. Admittedly from February 2, 1969 a new Rule 8 has come into force. The new Rule 8 provides as follows :

Dividends on the successful vouchers or slips will be paid in accordance with the provisions of Totalizator Rule No. 9.

At the request of the investors payment may be made by cheques against presentation and surrender of the successful vouchers or slips within the specified time, if the dividends are Rs. 5,000/- and over for each successful ticket.

The Rule 8 which falls for consideration in this originating summons is, however, the Rule which was in force prior to February 2, 1969.

4. The Totalizator Rule No. 9, referred to in the said Rule 8, is as follows :

At the conclusion of each race if the riders of the win and placed horses have passed the Scales and no objection has been lodged at the Scales against any of the horses a White Cone will be hoisted and the 'ALL RIGHT' bell rung. But whenever an objection is upheld a Green Cone ' will be hoisted and the 'ALL RIGHT' bell rung. The dividend for Win and Place will then be exhibited on the respective machines and will be paid at the Pay-Out Windows at any time upto 7 p.m. on the day of the race against presentation and surrender of the relative winning ticket.

After the Pay-Out windows have been closed, payment may be obtained up to 9 p. m. on the day of the race in Bombay at the 1st Enclosure Win Tote near the Main Entrance and in Poona at the Member's Totalizator against presentation and surrender of the relative winning ticket and thereafter on the following day of the race between 8 a. m. and 12 noon in the respective Main Totes in the 1st Enclosure.

Any winning ticket presented after this period but within three days of the race meeting on which the investment was made, will be paid at the Office of the Royal Western India Turf Club Ltd., Bombay/Poona, subject to a deduction of 10 % of the value of the dividend as service charge or a minimum of Rs. 2/- whichever is higher on each of the winning tickets presented for payment.

If a ticket is not presented and surrendered during the abovementioned period the Club shall be released of all liabilities and be discharged from all claims in respect thereof.

Investors should not destroy any Tickets or Vouchers until after the dividends have been declared.

5. According to the plaintiff, on January 1, 1069 he attended the races at Mahalaxmi and purchased several tickets for the Jackpot Pool. The Official Race Card for that day has been tendered by consent and is Exh. B. At the end of the day the plaintiff found that he held five winning tickets, or rather, in the terms of the said Rule 8, successful vouchers or slips, each for a dividend of Rs. 2,092.50p. The actual holding of the plaintiff was one card No. 85959 and four slips bearing Nos. 11/4441, 14/2276, 13/4704 and 11/4440, the dividends on which aggregate to Rs. 10,462.50 p. On the next day, that is, on January 2, 1969, the plaintiff surrendered the said five tickets to the defendants and obtained in exchange from the defendants a document bearing No. 1211, which is exh. A. This document is in the following terms :

R. W. I. T. C. LTD. No. 1211TREBLE/JACKPOT /FORECAST/POOL,Bombay/Date 2-1-69.Received from Mr. BHAGWANDAS ICHHARAM PANCHAL. Address Madhu Bhuvan, C Block Room 31,Delisle Road, Bombay-13.The following winning Tickets/Slips for payment by cheque---------------------------------------------------TICKET/SLIP No. DIVIDEND PAYABLE Dividend per TK.--------------------------------------------------- 2092 1/2Cards 85959Slips 11/4441' 14/2276' 13/4704' 11/4440---------------------------------------------------Total Rs. 10462 1/2Rupees Ten Thousand Four Hundred Sixty two and 50NP, Sd.- Sd.- Sd.-Manager Investor General Manager.

This document is signed not only by the manager and the general manager of the defendants but also by the plaintiff. This document is in a printed form in which the date, name and address of the plaintiff, the card and the slip numbers, the aggregate amount of the dividends and the dividend on each ticket are filled in by hand. Admittedly the phrase 'Dividend per TK. 2092|' stands for 'Dividend per ticket Rs. 2092.50 p.' It further appears that on January 6, 1969 the plaintiff attended at the office of the defendants to collect the cheque for Rs. 10,462.50 p. According to the plaintiff, several questions were then asked to him and he was told that he should receive payment in cash instead of by cheque which the plaintiff refused to do. By his advocate's letter dated January 11, 1969 addressed to the Secretary of the defendants the plaintiff recorded the said facts and called upon the defendants to send to him or to his advocate a cheque for the said sum of Rs. 10,462.50 p. The defendants by their reply dated January 14, 1960 stated that the plaintiff should call at their office when he would be 'paid on his successful Jackpot Pool tickets for the races held on 1st January 1969, strictly as per our Totalizator Rules in this behalf', By his advocate's letter dated January 23, 1969 the plaintiff insisted that he was entitled to receive payment by cheque in terms of the said document, exh. A, and he further set out the names of three persons to whom the defendants had made payment in respect of Jackpot Pool winning tickets by cheque. By the said letter the plaintiff also inquired from the defendants the reason why they were reluctant to pay to him the amount by cheque. By their reply of January 27, 1969 the defendants again reiterated that the plaintiff would be paid strictly as per the defendants' Totalizator Rules in that behalf. By his advocate's letter of February 15, 1969 the plaintiff inquired from the defendants whether they were willing to pay the said sum of Rs. 10,462.50 p. under the said document, exh. A, by a cheque contending that he was entitled to be so paid under Rule 8 of the Rules for the Jackpot. By their letter dated February 21, 1969 the defendants intimated to the plaintiff that they wore not willing to pay him the amount by cheque but were willing to pay the same in cash in accordance with the defendants' Totalizator Rules. The plaintiff thereupon took out this originating summons on March 11, 1969.

6. It is the plaintiff's case that under the said Rule 8 of the Rules for the Jackpot in cases where dividends are of Rs. 5,000 and over, the defendants have an option, when a request is made to them by the investor, to make payment by cheque against presentation and surrender of the successful vouchers or slips and that by the said document, exh. A, the defendants have exercised such option and have agreed to make payment to the plaintiff of the said sum of Rs. 10,462.50 p. by cheque and that having once exercised the option given to them by the said Rule 8 the defendants are not thereafter entitled to go back on the exercise thereof and to insist that they would make payment in cash. By their written statement the defendants have taken two preliminary objections, namely, (1) that this originating summons does not fall within the scope of Rule 254 of the Original Side Rules as neither the Rules for the Jackpot nor the document, exh. A, can be said to be a 'written instrument' within the meaning of the said Rule 254, and (2) that in the facts and circumstances of this case the Court in the exercise of its discretion under Rule 255 of the Original Side Rules ought to exercise it against the plaintiff and should not determine the question of construction raised by the plaintiff, as it is not a fit case to be determined on an originating summons. On the merits, the defendants have pleaded that the document, exh. A, is merely an acknowledgment that the winning tickets described therein have been received by the defendants and that, on a true and proper construction of the said Rule 8 the defendants are at liberty to make payment in cash or by cheque and that a successful investor is not entitled and cannot insist on payment by cheque but can merely make a request for payment by cheque when the dividend on each ticket is Rs. 5,000 or over, that in the present case each of the winning tickets held by the plaintiff had earned a dividend of Rs. 2092.50 p. only and had not earned a dividend of Rs. 5,000 or over and, therefore, in any event the plaintiff is not entitled to receive payment in respect of the said card and the said four vouchers by cheque and the said Rule 8 had, therefore, no application to the facts of the present case. It is further alleged in the written statement, that it had been brought to the notice of the defendants that occasionally persons who claimed the 'Jackpot' dividends purchased winning tickets or slips from successful punters in order to claim the aggregate amount by cheque for revenue purposes and that the defendants did not want to encourage such practice. There is, however, no allegation that the plaintiff was one of the persons who had purchased winning tickets or slips from a. successful punter.

7. I will deal first with the preliminary objections taken by the defendants. So far as the first objection is concerned, Rule 254 of the Original Side Rules of this Court is as follows :

Persons Any person claiming to be interested under a deed, will, or other written

interested under instrument, may apply in Chambers by originating summons for the deter-

deed, etc., may determination of any question of construction arising under the instrument,

take out such and for a declaration of the rights of the person interested.

summons.

Under Rule 254 only three classes of documents can be construed by the Court on an originating summons, namely, (1) a deed, (2) a will, and (3) other written instrument, that is, a written instrument other than a deed or will. Rule 254 cannot be invoked unless a document falls in one of these three classes. Admittedly, neither the Rules for the Jackpot nor the document, exh. A, is a deed or a will. The question is whether both documents or either of them fall in the third class and can be said to be a 'written instrument'. Rule 254 is substantially the same as the old English Rule 1 of Order LIVA of the Rules of the Supreme Court, 1883, which provided as follows :

In any Division of the High Court, any person claiming to be interested under a deed, will, or other written instrument, may apply by originating summons for the deter determination of any question of construction arising under the instrument, and for a declaration of the rights of the persons interested.

The scope of Order LIVA, Rule 1, came to be canvassed in Mason v. Schuppisser (1899) 81 L.T.R. 147. In that case Sterling J., while construing the meaning of the expression 'written instrument' in Order LIVA, Rule 1, opined (p. 148):.It seems to me that the word 'Instrument' was meant to receive a wide construction, and that, it would apply to any written document under which any right or liability, whether legal or equitable, exists. I have no doubt that it was intended to extend, and it has in fact, I believe, been applied, to the construction of such mercantile instruments as bills of lading and charter-parties. In my judgment, the written contract for the sale of the lease is an instrument within the meaning of the rule.

In a later part of the judgment dealing with the argument that the rule applied only in cases where an action could be brought in respect of the instrument, Sterling J. observed (p. 148) :.Then a suggestion was made that the rule or order could only be applied in cases where an action might be brought in respect of the instrument. I think that that is not well founded. The order is directed towards obtaining a decision on the question of construction by the court towards, for example, deeds by which legal estates are created. The cases in which an action at law might be brought in respect of it are few in number, and it would very much limit the application of the rule if it were held to be confined to cases only in which an action at law can be brought.

Sterling J. also referred to the judgment of Kekewieh, J., in In re Nobbs. Nobbs v. Law Reversionary Interest Society [1896] 2 Ch. 830, in which it was held that a mortgagor might apply on an originating summons for the deter determination of a question of construction arising under a mortgage deed without offering to redeem, although it was a well-established rule of the Chancery Courts that a mortgagor in bringing an action against the mortgagee in Chancery could not do so without offering to redeem. In Ducasse v. Cohen I.L.R. (1920) Cal. 176, Ghose J. had to construe Rule 0 of Chapter XIII of the Rules of the Calcutta High Court on its Original Side. That Rule provided as follows:

Any person claiming to be interested under a will, or other written instrument, may apply in Chambers by originating summons, for the deter determination of any question of construction arising under the declaration, and for a declaration of the rights of the person interested.

The originating summons in question was taken out by the plaintiff Ducasse for the deter determination of the question whether, upon a true construction of an indenture of lease relating to certain premises in the town of Calcutta known as the Grand Opera House, and in the circumstances mentioned in the plaint, the plaintiff was entitled to assign the remainder of the term under the said lease without the consent of the defendant. At the hearing of the summons an objection was raised on behalf of the defendant to the Court determining the question on an originating summons and it was urged that the plaintiff should be directed to proceed by means of a regular suit. Disposing of that contention the learned Judge observed (p. 181) :

I think the procedure which has been adopted by the plaintiff in the present instance is entirely correct. Under the rules of this Court (see Chapter XIII) any person claiming to be interested under a deed or other written instrument may apply by originating summons for the deter determination of any question of construction arising under the instrument and for a declaration of the rights of the persons interested. The corresponding rule in England is H. S.C. Order XIII, rule 1. Among matters dealt with from time to time under the last-mentioned rule, have been questions as to whether an effective notice to determine a lease had been given (Viola's Indenture of Lease, In re. Humphrey v. Stenbury [1909] 1 Ch. 244), whether a license to assign had been unreasonably withheld (Young v. Ashley Gardens Properties, Limited [1903] 2 Ch. 112, Spark's Lease, In re. Berger v. Jenkinson [1905] 1 Ch. 456, Evans v. Levy [1910] 1 Ch. 452), whether upon the true construction of a covenant in a lease, the costs of new drainage works were payable by the tenant (Farlow v. Stevenson [1900] 1 Ch. 128) and whether letters which had passed between parties amounted to an agreement for the renewal of a lease (Bossert v. Jones (1904) 48 Sol. Jour. 636, and the like. Of course, it is not the proper mode of procedure when the litigation involves anything beyond questions of construction or where the question of construction will not necessarily put an end to the litigation (see Lewis v. Green (1920) 36 T.L.R. 513). The procedure adopted in this case was also, it may be noticed, adopted in the recent case of Mills v. Cannon Brewery Company Ld.

I do not doubt, therefore, as I have said already the correctness of the procedure in this case.

Turning now to the documents in question, in view of the above authorities and the various English authorities which have been referred to in the Calcutta case, I fail to see why the Rules for the Jackpot as also the document, exh. A, cannot be said to be a 'written instrument' within the meaning of Rule 254. It is not disputed that when a person is admitted to the race-course, for which purpose he is required to purchase an admission ticket, he enters in response to an invitation by the defendants to attend the race-course and bet on the horses which would be running in various races on that particular day subject to the rules and regulations framed by the defendants. It is also not disputed that when a race-goer purchases a ticket, there is a contract between the person purchasing the ticket and the defendants and that the rights, liabilities and obligations of the parties flowing from the contract evidenced by the said ticket would be governed by the rules and regulations of the defendants. Thus the rules framed by the defendants form the terms and conditions of the contract between a race-goer purchasing a ticket and the defendants who hold and conduct the said race. When a person purchases a ticket for the Jackpot Pool, the terms and conditions of the contract arrived at between such person and the defendants are contained in the Rules for the Jackpot and in the Rules of Racing and the General Rules of the Totalizator of the Club, for the Rules for the Jackpot are expressly made subject to the Rules of Racing and the General Rules of the Totalizator of the defendant Club. The question of construction of these Rules, forming as they do the terms and conditions of the contract between the parties, would, in my opinion, be a proper subject-matter for the construction by the Court under Rule 254 of the Original Side Rules. So far as the document, exh. A, is concerned, as I will presently show while dealing with the merits of the matter, it is not possible to hold or construe this document as merely an acknowledgment that the winning tickets or slips described therein have been received by the defendants. In my opinion, for reasons which I will presently set out in a later part of this judgment, this document constitutes an agreement between the parties under which the defendants received the winning tickets or card and slips on the strength of the assurance given and promise made by them to the plaintiff that they would make payment of the dividends in respect of such winning tickets by cheque. An agreement between the parties as contained in the said Rules and in the document, exh. A, would, in my opinion, form the proper subject-matter for -construction by the Court on an originating summons under Rule 254.

8. Mr. Desai, learned Counsel for the defendants, in support of his submission that the Rules for the Jackpot and the document, Exh. A, cannot be said to be a 'written instrument' within the meaning of that expression in Rule 254, relied upon a decision of the Supreme Court in Mohan Chowdhury v. Chief Commr., Tripura : 1964CriLJ132 . In that case the questions which the Supreme Court had to determine were, whether the provisions of Section 8(1) of the General Clauses Act, 1897, were applicable to the construction of the Order issued by the President on November 3, 1962 suspending the right to move any Court for the enforcement of the fundamental rights conferred by Articles 21 and 22 of the Constitution, and whether the President's said Order was an 'instrument' within the meaning of the said section. Under Section 8 of the General Clauses Act where any Central Act or Regulation made after the commencement of that Act, repeals and re-enacts, with or without modification, any provision of a former enactment, then references in any other enactment or in any instrument to the provision so repealed is, unless a different intention appears, to be construed as references to the provision so re-enacted. The passage relied upon in the judgment by Mr. Desai, learned Counsel for the defendants, is (p. 178):

Is the President's Order in question an 'instrument' within the meaning of the section? The General Clauses Act does not define the expression 'instrument'. Therefore, the expression must be taken to have been used in the sense in which it is generally understood in legal parlance. In Stroud's Judicial Dictionary of Words and Phrases (Third Edition, Volume 2, page, 1472), 'instrument' is described as follows :-

'An instrument' is a writing, and generally imports a document of a formal legal kind. Semblc, the word may include an Act of Parliament...

(2) (Conveyancing Act, 1881 (44 & 45 Viet., c. 41), Section 2. (xiii),) 'instrument' includes deed, will, inclosure, award, and Act of Parliament',....The expression is also used to signify a deed inter parts or a charter or a record or other writing of a formal nature. But in the context of the General Clauses Act, it has to be understood as including reference to a formal legal writing like an order made under a statute or subordinate legislation or any document of a formal character made under constitutional or statutory authority. We have no doubt in our mind that the expression 'instrument' in S. 8 was meant to include reference to the Order made by the President in exercise of his constitutional powers. So construed, the President's Order would, even after the repeal of the Ordinance aforesaid, continue to govern cases of detention made under It. 30 aforesaid under the Ordinances.

Now, if we look at the definition of the word 'instrument' as given in Stroud's Judicial Dictionary, Third Ed. Vol. 2, at pp. 1472-1474, we find that the word 'instrument' bears different meanings in different contexts and that it is defined variously in several statutes. The general meaning of the word 'instrument' as given in the passage from Stroud's Judicial Dictionary quoted in the judgment is 'a writing'. What their Lordships of the Supreme Court had to construe in the case of Mohan Chowdhury v. Chief Commr., Tripura was the meaning of the word 'instrument' in the context of the General Clauses Act. That meaning cannot, however, be attributed to the word 'instrument' occurring in all other contexts and in Rule 254 of the Original Side Rules. Rule 254 and other identical Rules have been the subject-matter of construction both in England and in India as pointed out above, in which a much wider construction has been placed on the words 'written instrument' than when used in the context of the General Clauses Act. The words 'written instrument' in Rule 254 of the Original Side Rules must be construed in the context of the Rules governing and relating to originating summonses in our Original Side Rules and not in the context of Section 8(1) of the General Clauses Act. In this connection, the discussion under the word 'instrument' in Jowitt's Dictionary of English Law, Vol. 2, at pp. 984, 985, is also useful to show that the word 'instrument' ordinarily does not bear so narrow a meaning as canvassed by Mr. Desai. It is stated in Jowitt :

Instrument [Instrumentum; instrucre, to prepare or provide], a formal legal writing, e.g., a record, charter, deed of transfer, or agreement. By the Law of Property Act, 1925, Section 205(1)(viii), 'instrument' for the purposes of the Act does not include a statute, unless the statute creates a settlement. See also Settled Land Act, 1925, Section 117. Sec TRUST INSTRUMENT; VESTING INSTRUMENT,

An instrument is a writing, and generally means a writing of a formal nature. But where there is a power to appoint by 'any deed or instrument or by will', any writing, such as a letter, which refers to the power, or which can have effect only by operating on the fund (such as a cheque or other order of payment), is an instrument. A telegram is an instrument within the meaning of the Forgery Act, 1013, Section 7, (replacing the Forgery Act, 1861, Section 38), and so is an envelope with a postmark falsified for the purposes of a betting fraud.

9. So far as the second preliminary objection is concerned, Rule 255 of the Original Side Rules provides as follows :

Court, not bound to The Court or u Judge shall not be bound to determine any such

determine questions question of construction if in its or his opinion, it ought not

of construction. to be determined on originating summons.

The cases in which the Court exercises its discretion under Rule 255 against deciding a question of construction on an originating summons are also well-settled. In Vithaldas v. Dulsukhbhai : AIR1919Bom29 , following English cases, Pratt J. held that an originating summons was not the proper procedure to be adopted where there were disputed facts of such complexity as to involve a considerable amount of oral evidence. Similarly, in Mason v. Schuppisser, at p. 149 (2), referred to earlier, Sterling J. observed that one class of cases to which an originating summons has been held not appropriate is where there is a disputed question of fact. In Lewis v. Green Warrington J. refused to hear an originating summons on the ground that even if the question of construction was decided in favour of the plaintiff, there were several defences on facts raised by the defendant which would still remain to be determined and that the question of construction was not such as would necessarily put an end to the litigation. The case before me involves a pure question of construction of the Rules for the Jackpot and the document, exh. A. There are no disputed questions of fact, all the facts being admitted either in the pleadings or at the hearing of the summons, and I see no reason why I should not exercise my jurisdiction to determine the questions raised by this originating summons on the summons itself instead of referring the plaintiff to a separate regular suit, particularly when the liability on the part of the defendants to make payment is admitted and the only dispute between the parties is as to the mode of payment, the decision of which depends only upon the construction of the Rules for the Jackpot and the document exh. A.

10. Turning now to the merits of the case, the construction of Rule 8 of the Rules for the Jackpot presents no difficulty. Rule 8 starts by providing that dividends on the successful vouchers or slips will be paid in accordance with the Totalizator Rule 9. Rule 9 provides for payment of dividends in cash. The mode of payment is by presentation and surrender of the winning ticket either upto 7 p.m. on any race day at the Pay-Out Windows or thereafter upto 9 p.m., in Bombay at the 1st Enclosure Win Tote near the Main Entrance of the Bombay Race Course and in Poona at the Members' Totalizator, and thereafter on the following day between 8 a.m. and 12 noon in the respective Main Totes in the 1st Enclosure of the Race Course. This Rule further permits a winning ticket to be presented after the aforesaid period but within three days of the race meeting on which the investment was made at the office of the defendants in Bombay or Poona, as the case may be. In such a case, however, the payment of the dividends is subject to a deduction of 10 per cent of the value of the dividend as service charge or a minimum of Rs. 2 whichever is higher on each of the winning tickets presented for payment. It is further provided by Rule 9 of the Totalizator Rules that if a ticket is not presented and surrendered during the abovementioned period, the defendants will be released of all liabilities and discharged from all claims in respect, thereof. Thus, in order to obtain payment in cash by presentation and surrender of the winning ticket, the holder of the winning ticket must present and surrender it in the manner provided, latest within three days of the race meeting in question. Rule 8 of the Rules for the Jackpot, however, proceeds to confer an additional right upon the investor. He may, if he so desires, instead of receiving payment in cash request the defendants to make payment of the amount of the dividends on the successful vouchers, or slips by cheque, provided the dividends are Rs. 5,000 and over. On such a request being made, it is open to the defendants to accede to it and to make payment by cheque against surrender of the successful vouchers or tickets within the specified period, that is, within the period specified in Rule 9 of the Totalizator Rules. This right to make a request, however, does not confer on the investor any right to receive payment by cheque. The option is of the defendants and the successful investor cannot compel the defendants to make payment by cheque unless the defendants are willing and agreeable so to do. Under Rule 8 of the Rules for the Jackpot the plaintiff has, therefore, no right to receive payment by cheque of the dividends in respect of his successful card and slips.

11. On a request under Rule 8 of the Rules for the Jackpot being made to them and on their acceding to it, the defendants may, instead of immediately making payment by cheque, agree to make payment by cheque. When the defendants so agree they, of course, do so for their own convenience. When, while agreeing to make payment by cheque, no time for giving the cheque is specified, the cheque will have to be given within a reasonable time. The question here is whether the defendants have agreed to make payment to the plaintiff by cheque. The deter determination of this question depends upon the true construction of the document, exh. A. This document, though ostensibly in the form of a receipt, is signed not only by the manager and the general manager of the defendants but also by the investor, in this case, the plaintiff. It is in printed form and specifically mentions that the ticket and slips whose numbers have been specified in that document have been received from the plaintiff 'for payment by cheque'. This document on a proper construction thereof constitutes an exercise by the defendants of the liberty or the option reserved to thorn under the second part of Rule 8 of the Rules for the Jackpot. Under it the defendants have received the successful card and slips in exchange for their promise to make payment of the amount of dividends earned thereon by cheque. This document thus constitutes an agreement between the plaintiff and the defendants, under the terms of which the plaintiff had surrendered the winning card and slips and had in return thereof received an assurance or promise from the defendants that the defendants will make payment of the aggregate amount of the dividends earned by the defendants by cheque. It is, however, the contention of the defendants that this document merely reserves to the defendants an option or liberty to make payment either by cheque or in cash, and this contention now falls to be examined. In support of this contention Mr. Desai, learned Counsel for the defendants, has submitted that a debtor is bound to make payment in the legal currency of the land in order to obtain a discharge of his liability under the contract and unless payment is tendered in the legal currency of the land, there can be no proper tender under Section 38 of the Indian Contract Act, 1872. Mr. Desai has further invited my attention to Section 13(1)(a) of the Indian Coinage Act, 1906, and to Section 26(1) of the Reserve Bank of India Act, 1934, under which payment may be made respectively either in rupee coins or in bank notes issued by the Reserve Bank. Mr. Desai has further invited my attention to various passages in well-known text books on the Law of Contracts in support of his submission and has also referred me to a judgment of Tek Chand J. in Kali Charan v. Ravi Datt I.L.R. (1957) P&H; 1286 where various English authorities on the subject of legal tender have been referred to. Mr. Desai has also invited my attention to the definitions of a bill of exchange and a cheque given in the Negotiable Instrument Act, 1881, and has urged that a cheque is merely a bill of exchange drawn on a banker and that upon such cheque being presented to the banker, the banker would be bound to pay the drawee in tender which is recognised in law as legal tender, namely, in the coin of the land or the bank notes issued by the Reserve Bank and that what the plaintiff was demanding by insisting upon a cheque was that instead of the defendants, a third party, namely, the banker, should make payment to him in cash. Strictly speaking, on the facts, this is not correct, for, it is conceded by Mr. Desai, learned Counsel for the defendants, that all cheques in respect of winning tickets which have been issued by the defendants are crossed and order cheques and that if the defendants make payment of the amount of the dividends in question to the plaintiff by cheque, such payment would also be made by a crossed and order cheque. Thus, on presentment of the cheque to the Bank, the plaintiff would not be entitled to receive cash across the counter but he must put it in his bank account' and the amount of the cheque would then be credited by the Bank to his bank account after the cheque has been cleared. I do not think it necessary to discuss any of the cases on the subject of legal tender because, in my opinion, no question of legal tender arises in this case. It is sufficient only to refer to the statement of law as given in Anson's Principles of the English Law of Contract, 22nd Ed,, p. 435, where it is stated :

Tender of payment, to be a valid performance to this extent, must observe exactly any special terms which the contract may contain as to time, place, and mode of payment.

(The italics are mine.)

Here, under Rule 8 of the Rules for the Jackpot the defendants reserved to themselves a liberty or option to make payment by cheque in certain cases where a request in that behalf was made to them by the investor. By the document, exh. A, the defendants exercised such liberty and option, received the winning card and slips from the plaintiff and on their part in return agreed to make payment of the amount of dividends by cheque. This, therefore, constituted an agreement between the parties for the defendants to make payment of the amount by cheque and would be a special term as to the mode of payment,

12. Mr. Desai, learned Counsel for the defendants, next expressed surprise why the plaintiff should desire payment by cheque when the law requires a debtor to make payment in cash and under the law the creditor is bound to accept payment in cash. As pointed out above, this will, however, be the position only where by the terms of the contract a special mode of payment is not provided for. There are a number of contracts, particularly foreign collaboration contracts, where payment is deferred and spread over a number of years and in order to secure payment promissory notes guaranteed by a bank or bills of exchange drawn upon a bank are given by the promisor to the promisee. In modern business and commercial practice the general rule is for payment to be made by cheque and today even under a contract, in which no special mode of payment is provided, if the debtor insists upon making payment in cash or the creditor on receiving payment in cash, particularly where the amount is a large one, though such payment would be legal tender and such party would be within his strict legal rights in so insisting, such party would be considered unreasonable in business circles. In Sir Dinshah Mulla's Commentary on the Indian Contract Act, 8th Ed., at pp. 285 and 286, it is stated :

There are hardly any recent English cases on tender of money debts, and the habits of modern business appear to have greatly diminished the importance of the subject.

The defendants are not concerned with the reasons which have prompted the plaintiff to insist on payment by cheque. The only question for consideration is whether the plaintiff is entitled to receive payment by cheque and the answer to that question depends upon the special term of the contract between the parties with respect to the mode of payment. In the present case there exists such a special term which is contained in the document, exh. A, and the plaintiff is entitled to insist that the contract should be performed in accordance with its terms.

13. It was next argued that even if a contract contains such special term with regard to mode of payment, it is inoperative in law and cannot be enforced because the promisor may not have a bank account or he may give a cheque which will not be honoured when presented. There is no substance in this argument. Such a special term contains an implied obligation undertaken by the promisor that he has a bank account which has sufficient funds or sufficient credit to meet the amount of the cheque when duly presented. In case of breach of such obligation, the promisor becomes liable to pay damages to the promisee which would normally be the amount for which the cheque was given. Such payment would not constitute performance of the contract according to its terms but payment of damages for its breach,

14. The last contention of the defendants is that Rule 8 of the Rules for the Jackpot has no application to the facts of the present case, as the dividend earned on each winning ticket was less than Rs. 5,000. It is not possible to accept this contention. The words of the relevant portion of Rule 8 are that 'payment may be made by cheques against presentation and surrender of the successful vouchers or slips... if the dividends are Rs. 5,000 and more.' Rule 8 refers to an investor holding more than one successful voucher or slip, the aggregate amount of which is Rs. 5,000 or more. Rule 8 does not require that each voucher or each slip should have earned a dividend of Rs. 5,000 or more. In this connection, it may be noticed that on and from February 2,1909 the new Rule 8, which I have reproduced earlier, came into force under which each successful ticket should have earned a dividend of Rs. 5,000 and over. This, however, was not the case under the old Rule 8 with which I am concerned.

15. I, therefore, answer the questions set out in the originating summons as follows:-

So far as the first question is concerned, I hold that the plaintiff is not entitled to the payment of the amount of dividend of Rs. 10,462.50 p. by cheque from the defendants under Rule 8 of the Rules for the Jackpot but that the plaintiff is entitled to payment of the amount of such dividends by cheque from the defendants under Rule 8 of the Rules for the Jackpot read with the said document, exh. A. I answer the second question in the affirmative,

16. The defendants will pay to the plaintiff the costs of this originating summons which I quantify at Rs. 600.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //