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Hot Chand Shamdas Vs. Lala Sri Ram - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtAllahabad High Court
Decided On
Case NumberCivil Revn. No. 315 of 1959
Judge
Reported inAIR1963All234
ActsVegetable Oils and Oilcakes (Forward Contracts Prohibition) Order, 1944; Essential Supplies (Temporary Powers) Ordinance, 1946; Essential Supplies (Temporary Powers) Act, 1946; General Clauses Act, 1897 - Sections 24; Oilcakes (Removal of Control) Order, 1952; Essential Supplies (Temporary Powers) (Amendment) Act, 1950 - Sections 4
AppellantHot Chand Shamdas
RespondentLala Sri Ram
Appellant AdvocateGyan Prakash, Adv.
Respondent AdvocateVijai Kumar Barman, Adv.
DispositionRevision dismissed
Excerpt:
commercial - validity of contract - vegetable oils and oilcakes (forward contracts prohibition) order,1944 - contract of forward transaction between parties - delivery of goods not made - suit for recovery of damage - whether contract was of wagering nature and the forward transaction in specified goods nave been banned by vegetables oils and oilcakes (forward contract prohibition) order - held, the contract valid as there was no notified order of the central government under section 3 of essential supplies(temporary power) act, 1946. - - -now i have no doubt that had the central government re-promulgated the order of 1944 in 1946 after the passing of either the ordinance or the act of 1946, the order would have been good......forward transactions in vegetable oil and oil cakes having been banned by the vegetable oils and oilcakes (forward contracts prohibition) order, 1944, dated 8th january 1944, the plaintiff could neither enforce the contract, nor could he claim any damages in respect of it.4. the learned judge small causes, aligarh, upheld the defendant's contention and dismissed the suit. a revision was filed by the plaintiff before the learned district judge, aligarh, who decreed the suit. it is against this order that the present revision has been filed.5. the main contention of dr. gyan prakash, the learned counsel for the petitioner, is that the vegetable oil and oilcakes (forward contracts prohibition) order, 1944, prohibiting forward contracts relating to the said two commodities was kept alive.....
Judgment:

Mithanlal, J.

1. This Civil Revision filed by the defendant arises out of a suit for recovery of Rs. 617/8/-.

2. On 26th February 1957 the defendant firm entered into a contract of forward transaction for supply of 250 bags of oil cakes at the rate of Rs. 8/5/- per maund. The delivery was to take place on 13th May 1957. No delivery of the goods was given and the plaintiff brought the suit for recovery of damages stating that he had to purchase of cakes at Rs. 9/9/- per maund. A loss was said to have been suffered by the plaintiff.

3. The main defence to the case was that the contract was of a wagering nature and that forward transactions in vegetable oil and oil cakes having been banned by the Vegetable Oils and Oilcakes (Forward Contracts Prohibition) Order, 1944, dated 8th January 1944, the plaintiff could neither enforce the contract, nor could he claim any damages in respect of it.

4. The learned Judge Small Causes, Aligarh, upheld the defendant's contention and dismissed the suit. A revision was filed by the plaintiff before the learned District Judge, Aligarh, who decreed the suit. It is against this order that the present revision has been filed.

5. The main contention of Dr. Gyan Prakash, the learned counsel for the petitioner, is that the Vegetable Oil and Oilcakes (Forward Contracts Prohibition) Order, 1944, prohibiting forward contracts relating to the said two commodities was kept alive and continued into force by the passing of the Essential, Supplies (Temporary Powers) Ordinance and thereafter an Act (Act XXIV of 1946). He has contended that even though oilcakes were not incorporated in the definition of essential commodities given in the Ordinance or the 'Act of 1946 yet it was a matter which continued in force by virtue of the provisions of Section 5 though oil cakes were not essential commodities. His further contention is that by the Amendment Act No. 52 of 1950 oil cakes were included in the definition of essential commodities and by an order of 1952 relating to the Oil Cakes Removal of Control Order the ban on forward contracts was maintained by para 6 of that Control Order. It is also submitted by him that under Section 24 of the General Clauses Act, there being nothing inconsistent in Act XXIV of 1946 and the Vegetable Oil and Oil Cakes (Forward Contracts Prohibition) Order and the same not having been superseded it continued in force.

6. The contention of Sri V.K. Herman, learned counsel for the other side, is that the Vegetable Oils and Oilcakes (Forward Contracts Prohibition) Order lapsed by efflux of time on 3oth September 1946. With effect from 1st October 1946, an Ordinance No. 18 of 1946 was promulgated which was replaced by Act XXIV of 1946, that is, the Essential Supplies (Temporary Powers) Act. Under the latter Act Oil cakes was not an essential commodity and as the existing Orders were made to continue only in respect of the matters specified in Section 3, the prohibition of foward contract no more continued. It is also his contention that though an amendment was made by Act 52 of 1950 in Act XXIV of 1946 by adding cattle fodder in essential commodities yet no order having been made in exercise of the powers under Section 3 by the Central Government there was no question either of the continuance of the prohibition under the Order of 1944 nor any question of revival of the old Order nor any question of issuing any fresh order. The contract entered into was thus valid and enforceable in law.

7. Before going into the respective arguments of the learned counsel for the parties it seems necessary to note the various enactments referred to by them in their arguments. There is no dispute that the Vegetable Oil and Oilcakes (Forward Contracts Prohibition) Order, 1944, was issued by the Central Government and that it expired on 30th September 1946. There is also no dispute that the present transaction was entered into was a forward contract and if the aforesaid Order of 1944 continued it would have been invalid under Clause 3 of that Order.

8. The Central Government promulgated Essential Supplies (Temporary Powers) Ordinance, 1946 (No. XVIII of 1946) which came into force from 1st October 1946. Section 2(a) defines essential commodity as any of the following given thereunder. It is not disputed that under this Ordinance oil cakes were not included in the definition of essential commodity. Section 3 of the said Ordinance gave power to the Central Government to control production, supply and distribution of essential commodities, but for the exercise of those powers it was necessary that there should be a notified Order in that behalf. 'Notified Order' has also been defined under Section 2 (d) as 'the Order notified in the Official Gazette.' Section 5 lays down that:

'Until other provisions are made under this Ordinance, any order, whether notified or not, made by whatever authority under Rule 8o-B, or sub-rule (2) or sub-rule (3) of Rule 81 of the Defence of India Rules in respect of any matter specified in Section 3, which was in force immediately before the commencement of this Ordinance shall, notwithstanding the expiration of the said rules, continue in force so far as consistent with this Ordinance and be deemed to be an order made under Section 3;........'

9. It is also not disputed that by an Amendment Act, No 52 of 1950, cattle fodder was included in the definition of essential commodities given in the Essential Supplies (Temporary Powers) Act and an Order styled as the Oil-cakes Removal of Control Order of 1952 was issued. It was provided in para 6 of that Order that 'notwithstanding anything hereintofore contained the Vegetable Oil and Oilcakes (Forward Contracts Prohibition) Order 1944 shall continue to be in force.'

10. The questions which require consideration in this case are: (1) Whether Vegetable Oil and Oilcakes (Forward Contracts Prohibition) Order 1944 continued to remain in force by the provisions of Section 5 read with Section 3 of the Essential Supplies (Temporary Powers) Ordinance (thereafter Act of 1946) or by virtue of Section 24 of the General Clauses Act. (2) Whether the amendment of Section 2 by the Amendment Act 52 of 1950 of the Essential Supplies Act had a retrospective effect so as to continue the prohibition on the forward contracts of oil cakes or had it the effect of reviving the Prohibition Order of 1944.

11. It has been contended by Dr. Gyan Prakash that though oil cakes may not have been included in the definition of essential commodities yet the Vegetable Oils and Oil Cakes (Forward Contracts Prohibition) Order, 1944 is one in respect of any matter specified in Section 3 and such a matter being in force immediately before the commencement of the Ordinance the Order continued to be in force notwithstanding its expiration on 3oth September. This contention of Ihe learned counsel cannot be accepted.

12. Section 5 of the Ordinance and thereafter of the Act kept alive the Prohibition Order of 1944 in respect of those commodities only which were included in the definition of essential commodities. The word 'matter' in Section 5 is also qualified by the expression 'specified in Section 3'. Accordingly the Ordinance kept alive only those matters which were specified in Section 3, that is the commodities which were defined as essential commodities under the Ordinance. The very preamble of the Ordinance shows that the purpose of the Ordinance was to control the production, supply and distribution of food stuffs and certain other articles mentioned therein. Section 2 defines an essential commodity and as the definition does not include oil-cakes within its purview Section 5 read with Section 3 of the Essential Supplies (Temporary Powers) Ordinance could not keep alive the Vegetable Oils and Oil-cakes (Forward Contracts Prohibition) Order of 1944.

This is further clear from a reading of Sub-section (1) of Section 3 which only relates to maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices. Whether we look to the provisions of Section 5 or Section 3 or the definition of the essential commodity the only inference which can be drawn is that while promulgating the Ordinance it was not the intention to keep alive the Vegetable Oils and Oil-cakes (Forward Contracts Prohibition) Order of 1944.

13. The subsequent passing of the Act of 1946 replacing the Ordinance did not make any difference in the matter because the same provisions continued and so whether we look to the provisions of the Ordinance or the Act none of them saved the Vegetable Oils and Oil-cakes (Forward Contracts Prohibition) Order of 1944. Another argument which was advanced in this connection related to the words of Section 24 of the Central General Clauses Act and it was contended that there being nothing otherwise expressly provided in the Ordinance nor there being any provision superseding the Vegetable Oils and Oilcakes (Forward Contracts Prohibition) Order of 1944 nor there being any provision inconsistent with the Prohibition Order the Vegetable Oils and Oil-cakes (Forward Contracts Prohibition) Order of 1944 should be deemed to have continued. This contention of the learned counsel is a little misconceived. The Vegetable Oils and Oil-cakes (Forward Contracts Prohibition) Order of 1944 died its natural death by expiration on 30th September. ' The consequences which follow from the repeal and re-enactment or the arguments of supersessl or inconsistency which would have perhaps be applicable in a case of repeal have no application as the Vegetable Oils and Oil Cakes (Forward Contracts Prohibition) Order of 1944 lapsed by efflux of time on 30th September, 1946. The provisions of Section 24 of the General Clauses Act could not apply to such a case. The learned counsel for the appellant has not been able to cite any authority in support of his contention that where an earlier Act lapsed by efflux of time the provisions of Section 24 of the General Clauses Act would apply. A fruitful reference may be made to the authority of State of Madhya Pradesh v. A. K. Jain, AIR 1958 Madh Pra 162. That was a case of repealing an old Act and substituting it by a new Act with certain modifications. Under the new Act no express saving was made with respect to the rules and regulations enforced under the old Act. It was held that Section 24 of the General Clauses Act must be read along with the new Act in order to determine whether the old rules and regulations were kept alive. It has already been stated that the consequences of repeal do not apply to the case of temporary Acts which expire by efflux of time and so this authority, which is based on different considerations, has no application.

14. The next point which arises in the case is whether the Amendment Act of 1952 by which oil cakes were included in the definition of essential commodity in Essential Supplies (Temporary Powers) Act could be given retrospective effect and whether the Oilcakes (Removal of Control) Order, 1952, kept in force the Vegetable Oils and Oil-cakes (Forward Contracts Prohibition) Order of 1944. It would appear that by Section 4 of the Amendment Act 52 of 1950 an amendment was incorporated in Section 2 of the Act of 1946 and now cattle fodder including oil-cakes for the first time was included as an essential commodity. This came into force on 16th August 1950. This amendment of the Act of 1946 was not given any retrospective effect. The Central Government could exercise its powers under Section 3 by issuing a notified order and it has been contended that such a power was exercised while issuing the Oil-cakes (Removal of Control) Order of 1952. Reliance has been placed on Clause (6) of that Order which reads:

'Notwithstanding anything hereintofore contained the Vegetable Oils and Oilcakes (Forward Contracts Prohibition) Order, 1944 shall continue to be in force.'

It is the contention of the learned counsel for the appellant that the expression 'shall continue to be in force' was intended to mean that the Vegetable Oils and Oilcakes (Forward Contracts Prohibition) Order of 1944 continued in force and in any case this should be treated to be a notified order within the meaining of Section 3 regulating and prohibiting the distribution of oilcakes. Both these contentions of the learned counsel have no force.

15. So far as the continuance of the Vegetable Oils and Oilcakes (Forward Contracts Prohibition) Order of 1944 goes it has already been stated that that order lapsed on 30th September. It was not saved by the provisions of the Ordinance or the Essential Supplies (Temporary Powers) Act of 1946. Till this amendment was made on i6th August 1950 the oilcakes was not an essential commodity and so there was no question of continuing any Prohibition Order in respect of such a commodity. After the Essential Commodities Act was passed the Central Government had to issue a notified order regulating or prohibiting the production, supply and distribution of this commodity, but no notified order was issued and the only order which was issued was the Oilcakes (Removal of Control) Order, 1952 which was published in the Gazette of zoth October, 1952. This order cannot be deemed to be a notified order within the definition of Section 2(d) of the Essential Supplies Act.

Clause (6) referred to above only speaks of continuance in force when the Vegetable Oils and Oilcakes (Forward Contracts Prohibition) Order of 1944 was not at all in force. It could not continue to be in force unless a proper notified order regulating or prohibiting the production, supply and distribution of oilcakes had been issued earlier. It cannot be accepted that because the expression 'shall continue to be in force' was used it meant that the Oilcakes Prohibition Order of 1944 was in force and continued to be in force. It had already expired on 30th September and was not revived and it could not continue to be in force. Clause (6) of the said Order cannot also be taken to be a new notified Order imposing any ban on forward contracts of oilcakes with effect from that date because of the language used in the Order itself. The Central Government, if it had so chosen, could have issued a new notified order imposing a ban on the forward contracts as was in existence upto 30th September, but it not having done so the Order stating about continuance of a dead order could not be taken to mean a notified order as contemplated by Section a(d) of the Essential Supplies Act.

This view finds support from the observations of the Supreme Court in the case of State of Bombay v. Virkumar Gulabchand, AIR 1952 SC 335 at p. 339. In that case the question was whether turmeric was a food stuff. It was found by the Supreme Court that it was so within the meaning of Act XXIV of 1946 and as such the orders were issued and the Defence of India Rules were continued to be in force. In the present case oilcakes was not at all included in the definition of essential commodity either in the Ordinance or the Act. Unless oilcakes could be brought within the definition of the essential commodity there was no question of continuance of the Prohibition order of 1944. Their Lordships observed: -

'Now I have no doubt that had the Central Government re-promulgated the Order of 1944 in 1946 after the passing of either the Ordinance or the Act of 1946, the Order would have been good.'

16. In the present case it was not so done and so it cannot be taken that the Prohibition Order of 1944 either continued in force or was notified under the aforesaid Oilcakes Order of 1952.

17. In a similar case the Kerala High Court in the case of Ahamed Koya v. E. Murugesa Mudaliar Son and Co., AIR 1958 Kerala 195 held that the Vegetable Oils and Oilcakes (Forward Contracts Prohibition) Order of 1944 was not continued or kept in force by virtue of Section 5 of the Central Ordinance No. 18 of 1946 so far as oilcakes were concerned nor does Section 17 read with Section 3 of the Central Act XXIV of 1946 keep alive or continue in force the Order of 1944 regarding oilcakes. The Kerala case was almost similar and the view expressed by that Court was that the Prohibition Order of 1944 was neither kept alive nor it was notified nor the Amending Act of 1950 had any retrospective effect. In the present case the contract was entered into on 26th February, 1957 and there being no notified order of the Central Government under Section 3 of the Essential Supplies (Temporary Powers) Act the contract was valid. The learned District Judge was right in decreeing the plaintiff's suit and in holding that the contract was valid.

18. The revision, therefore, fails and is hereby dismissed with costs.

19. Let the record of the case be sent back to the Court below as early as possible.


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