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G. Chinna Konda Reddy and anr. Vs. East Asiatic Company (India) Ltd. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtAndhra Pradesh High Court
Decided On
Case NumberSecond Appeal No. 902 of 1950
Judge
Reported inAIR1955AP79
ActsOil Seeds Forward Contracts Prohibition Order, 1923 - Sections 2
AppellantG. Chinna Konda Reddy and anr.
RespondentEast Asiatic Company (India) Ltd.
Appellant AdvocateP.V. Chelapati Rao, Adv.
Respondent AdvocateM.S. Ramachandra Rao and ;M. Krishna Rao, Advs.
Excerpt:
.....for contracts to be hit by section 2 delivery of goods should be made in future - in present case date of delivery was contemplated on day of contract itself - extension of time was given to defendants to get over transport difficulties - held, contract not hit by section 2 and thus appeal cannot be allowed. - motor vehicles act (59 of 1988)section 149 (2): [v. gopala gowda & jawad rahim, jj] insurers entitlement to defend the action joint appeal by insured and insurer - held, the language employed in enacting sub-section (2) of section 149 appears to be plain and simple and there is no ambiguity in it. it shows that when an insurer is impleaded and has been given notice of the case, it is entitled to defend the action only on grounds enumerated in sub-section (2) of section 149 of..........the said order. it says :'forward contract means a contract for the delivery of oil-sees at some future date.'rajamannar c. j. in -- 'hanumanthiah v. thimmiah', : air1954mad87 (a) explained the words 'at some future time' to mean 'at some time in future '. in that case, the contracts were entered into on 18.8.1945 and on 19.8.1945 and delivery in respect of these two contracts were to be made in december 1945 and in december 1945 or january 1946 respectively. it was, therefore, obvious that under the said two contracts, delivery was agreed to be made only at some time in future. can it be said in the present case that delivery was agreed to be made at some time in future the groundnut crop was full harvested and was in the market. there was diffculty in securing wagon accommodation......
Judgment:

(1) The question in this Second Appeal is whether the contract dated 14.5.1945 and 18.5.1945 for the sale of groundnut kernel are hit at by the provisions of the Oil-sees Forward Contracts Prohibition Order 1943. The facts either admitted or found may be briefly narrated. The defenants are a firm of merchants doing business to groundnut at Nandyal under the name and style of Messrs. G. Chinna Konda Reddy & G. P. Venkata Reddi. The plaintiff is the East Asiatic Company (India) Limited. Madras. The defendant's entered into two contracts with the plaintiff on 14.5.1945 and on 18.5.1945 for the sale of groundjut kernel. The first contract was for the sale of 318 bags of groundnut kernel. The second contract also was for the sale of 318 bags of groundnut kernel. By the dates of the contracts the groundnut crop was fully harvested and was in the market. It is also in evidence that at the time the suit contracts were made, there was considerable difficulty in securing wagon accommodation. Because of that fact, in regard to the first contract, it was agreed that the delivery was to be completed from the 14th of May and before 30.6.1945. In respect of the second contract, delivery was agreed to be made from the 18th of May and before 30.6.1945. The defendants failed to supply 16 bags of kernel under the first contract and the entire quantity under the second contract. The suit was filed by the plaintiff for recovery of damages from the defendants.

(2) The defedants, inter alia, contended that the suit contracts were void being forward contracts under the provisions of the Oil-Seeds Forward Contracts Prohibition Order, 1943. They also pleaded that the Provincial Government of Madras imposed a ban on the export of groundnut kernel to places outside the Madras Presidency and therefore the contracts became impossible of performance. Both the Courts negatived the said plea, and gave a decree to the plaintiff. The defendants preferred the above appeal.

(3) Before me, the learned counsel for the appellants raised two contentions which his clients have unsuccessfully pleaded before the lower Courts. The first question is whether the contracts were void under the Oil-Seeds Forward Contracts Prohibition Order 1943. A forward contract is defined in Cl. (ii) of S. 2 of the said Order. It says :

'Forward Contract means a contract for the delivery of oil-sees at some future date.'

Rajamannar C. J. in -- 'Hanumanthiah v. Thimmiah', : AIR1954Mad87 (A) explained the words 'at some future time' to mean 'at some time in future '. In that case, the contracts were entered into on 18.8.1945 and on 19.8.1945 and delivery in respect of these two contracts were to be made in December 1945 and in December 1945 or January 1946 respectively. It was, therefore, obvious that under the said two contracts, delivery was agreed to be made only at some time in future. Can it be said in the present case that delivery was agreed to be made at some time in future The groundnut crop was full harvested and was in the market. There was diffculty in securing wagon accommodation. Under the contracts, the parties clearly contemplated delivery on the dates of the contracts. If the defendants insisted upon delivering the groundnut on 14.5.1945 and on 18.5.1945 the plaintiff could not have legally refused them. Reasonable time was given to complete delivery of the entire goods only because of the transport difficulties.

(4) It was contended that, as the defendants were permitted and had a right to deliver the goods at a future date, the contracts were forward contracts. But to be a forward contract, the parties must agree to deliver the goods at a future date. Under the present contracts the parties contemplated delivery of goods on the dates of the contracts. The parties did not agree for the delivery of the goods at a future date. They agreed for delivery immediately, though extention of time was given for the convenience of the defendants to get over the transport difficulties.

(5) The learned could for the appellants relied upon an unreported judgment of Govindarajachari J. in -- 'C. R. P. Nos. 1032 to 1034 of 1946 (Mad) (B). There the contract was dated 31.1.1945 in respect of the sale of groundnut kernal and the due date of delivery was given as before the end of January. The learned Judge held that if delivery under the contract can be given and is permitted to be given under its stipulations on a date later than the date on which the contract is entered into, it would be a forward contract within the meaning of that Order. But it will be seen from the facts of that case that unlike in the present case, the parties did not contemplate delivery on the date of the contract itself. This decision, therefore, does not govern the present case. I would, therefore, hold agreeing with the Court below that the suit contracts were not forward contracts and therefore they were valid and enforceable.

(6) There is no force in the second contention for the contracts themselves specifically provided for the contingency of the Government imposing a ban on the export of groundnut kernel. Clause 10 says:

'Under no circumstances including prohibition of export from any particular district or native or foreign territory can sellers claim impossibility of performance of this contract.'

In view of that specific term, this argument has not been pressed.

(7) In the result, the appeal fails and is dismissed with costs.

(8) Appeal dismissed.


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