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Ram Gopal Vs. Govind Das - Court Judgment

LegalCrystal Citation
SubjectContract
CourtAllahabad
Decided On
Reported inAIR1944All196
AppellantRam Gopal
RespondentGovind Das
Excerpt:
.....party to make delivery of the goods and an intention on the part of the other party to accept that delivery, they clearly bring themselves out of its mischief. the learned counsel for the applicant has placed very strong reliance upon the case in bankey lal v. in this view of the case, i am of opinion that the claim preferred by firm kunji lal ram gopal must fail and i accordingly dismiss this civil revision, but under the circumstances of the case i direct both parties to bear their own costs. it is no doubt true that the firm failed by reason of the fact that the contract was a wagering contract, but in adjudicating upon the present claim, the conduct of govind das must also be considered......in bombay named parshotam kunwarji. about april or may 1938 the bombay firm made an inquiry from firm kunji lal ram gopal as to whether delivery was to be made and if so when. firm kunji lal ram gopal, in their turn, inquired from govind das if he would make the necessary purchase and take the necessary delivery. the reply of govind das, according to firm kunji lal ram gopal, was that govind das was not prepared to take delivery, but that the sale could be made in the market and the gain or the loss adjusted according to the conditions of the market. this was done, with the result that firm kunji lal ram gopal suffered a loss of rs. 753-12-0. govind das had made a deposit of rs. 482 with the firm and after deducting that amount, the claim which has given rise to the present civil revn......
Judgment:
ORDER

Sinha, J.

1. These two are cross-cases and their facts are necessarily the same. I shall first take up Civil Revn. No. 445 of 1943. Firm Kunji Lal Ram Gopal was a firm of commission agents in Jhansi. In August 1937 Govind Das contracted to purchase 30 bales of cotton through the above firm, in Bombay. They were so purchased by Kunji Lal from a firm in Bombay named Parshotam Kunwarji. About April or May 1938 the Bombay firm made an inquiry from firm Kunji Lal Ram Gopal as to whether delivery was to be made and if so when. Firm Kunji Lal Ram Gopal, in their turn, inquired from Govind Das if he would make the necessary purchase and take the necessary delivery. The reply of Govind Das, according to firm Kunji Lal Ram Gopal, was that Govind Das was not prepared to take delivery, but that the sale could be made in the market and the gain or the loss adjusted according to the conditions of the market. This was done, with the result that firm Kunji Lal Ram Gopal suffered a loss of Rs. 753-12-0. Govind Das had made a deposit of Rs. 482 with the firm and after deducting that amount, the claim which has given rise to the present Civil Revn. No. 445 of 1943 was made for a sum of Rs. 381-2-9. The defence of Govind Das, in substance, was that the contract was in the nature of a wagering contract and it was agreed at the very inception, that no delivery was to be made. The learned Small Cause Court Judge dismissed the suit on the finding that there was no intention to take delivery and that the plaintiffs were not merely agents, but they were pukka arhatias, that is, they were doing business in their own name. Against this order the present civil revision has been preferred by the firm. It has been strenuously contended by the learned Counsel for the applicant that the judgment of the Court below proceeds upon a wrong conception of the law. In the first place, he argues that it has not been established that the plaintiffs were pukka arhatias and, assuming that they were so, no reason has been, made out in law to refuse the plaintiffs the relief sought. The true test of deciding whether a contract is a wagering contract has been laid down by their Lordships of the Privy Council in Kong Yee Lone & Co. v. Lowjee Nanjee ('02) 29 Cal 461 (p.C.) at p. 467. Say their Lordships:

Two parties may enter into a formal contract for the sale and purchase of goods at a given price, and for their delivery at a given time. But, if the circumstances are such as to warrant the legal inference that they never intended any actual transfer of goods at all, but only to pay or receive money between one another according as the market price of the goods should vary from the contract price at the given time, that is not a commercial transaction, but a wager on the rise or fall of the market. The question is, of which nature were the dealings which formed the consideration for the notes sued on? Were they foe genuine purchases o rice or only for payment of money by one or the other according to the changes and chances of the market?

2. If the plaintiff's case falls within the mischief of the dictum laid down by their Lordships of the Privy Council, they are not entitled to any relief. If, on the other hand, they can establish that, although the contract had the appearance of a wagering contract, nevertheless there was an intention on the part of one party to make delivery of the goods and an intention on the part of the other party to accept that delivery, they clearly bring themselves out of its mischief. The learned Counsel for the applicant has placed very strong reliance upon the case in Bankey Lal v. Bhagirath Mal : AIR1940All95 Iqbal Ahmad J., as his Lordship then was, , defined the legal position in these terms : 'These cases are authorities for the proposition that though a wagering contract is, in view of the provisions of Section 30, Contract Act, void a contract collateral to such a contract is not necessarily unenforceable.... To constitute a wagering contract an intention to wager by both parties is essential. It may be assumed, as has been found by the Court below, that Bhagirath Mai, defendant, did intend to and did as a matter of fact, enter into wagering contracts for the purchase and sale of wheat, but if those contracts were entered into by him not directly with the plaintiff, but through the plaintiff's agency, the plaintiff would undoubtedly be entitled to recover the losses on those contracts, provided the plaintiff proves that either he paid those losses to the persons with whom those contracts were entered into or to their assignees....' With this enunciation of the law I respectfully agree. If the only feature of the case were the wagering character of the contract, I would have granted relief to the plaintiff., But there is a further finding by the learned Small Cause Court Judge that there was, from the very inception, no intention on the part of the parties to give or accept delivery. The learned Counsel for the applicant has placed before me the evidence of Ram Gopal one of the partners of the firm, in order to prove that the finding of the learned Judge is wrong. I have gone carefully through that statement but I cannot say that the learned Counsel has succeeded in establishing that' the finding of the learned Judge of the Court below is necessarily wrong. Far from it; I agree with him in holding that the evidence of Ram Gopal does mean that there was, from the very inception, no intention to deliver. In this view of the case, I am of opinion that the claim preferred by firm Kunji Lal Ram Gopal must fail and I accordingly dismiss this civil revision, but under the circumstances of the case I direct both parties to bear their own costs. I will now deal with Civil Revn. No. 207 of 1943. The facts necessary for this case have already been set forth above in connexion with Civil Revn. No. 445 of 1943. Govind Das brought the present suit for recovery of the deposit. Between August 1937 and October 1937 a deposit of Rs. 485 was made with the firm Kunji Lal Ram Gopal. Govind Das has brought a suit for recovery of this amount.

3. I have in the connected revision, assigned my reason for dismissing the claim of firm Kunji Lal Ram Gopal. It is no doubt true that the firm failed by reason of the fact that the contract was a wagering contract, but in adjudicating upon the present claim, the conduct of Govind Das must also be considered. If there was from the very inception of the contract, an understanding between both the parties that there would be no delivery of the goods, both parties were pari delicto and it is impossible to grant any relief to Govind Das. The Court below has relied upon the case in Venkataraju v. G. Ramanujam ('18) 5 A.I.R. 1918 Mad. 163 as authority for the proposition that Govind Das must, in the circumstances of the present case, be given back the money which he had deposited with firm Kunji Lal Ram Gopal. This Court has, however, held just the reverse. In Chhanga Mal v. Sheo Prasad ('20) 7 A.I.R. 1920 All. 167 Rafiq J. refused all relief to the plaintiff who occupied the same position there as Govind Das occupies in this case today. The learned Counsel for Govind Das contends that I should not disturb the order of the Court below once it has passed a decree in his favour. The learned Small Cause Court Judge had granted a decree to the plaintiff in the Allahabad case too who virtually was in the same position as Govind Das in the present case, but the learned Judge of this Court set aside the decree and dismissed the suit. The authority of this Court is binding upon me and it is not necessary for me to discuss or criticise the principles which form the basis of the decision in the case reported in Venkataraju v. G. Ramanujam ('18) 5 A.I.R. 1918 Mad. 163 particularly when I am, if I may say, so with great respect, myself in agreement with Rafiq J. I, therefore, set aside the order of the learned Judge of the Court below in Suit No. 115 of 1940 and dismiss the plaintiff's suit. Under the circumstances of the case I direct both parties to bear their own costs. The result: of my judgment is that whereas Civil Revision No. 445 of 1943 is dismissed, Civil Revision No. 207 of 1943 is allowed. In both cases the parties are directed to bear their own costs in both the Courts.


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