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Surajmal and ors. Vs. Doongarmal and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial;Contract
CourtRajasthan High Court
Decided On
Case NumberFirst Appeal No. 32 of 1954
Judge
Reported inAIR1959Raj27
ActsContract Act, 1872 - Sections 30; Evidence Act, 1872 - Sections 101 to 104; Mewar Contract Act, 1942 - Sections 20A and 30B
AppellantSurajmal and ors.
RespondentDoongarmal and ors.
Appellant Advocate B.N. Chanda, Adv.
Respondent Advocate Sumerchand Bhandari, Adv.
DispositionAppeal dismissed
Cases Referred(D) and Chimanlal v. Nyamatrai
Excerpt:
- industrial disputes act, 1947. section 2(s): [m.s. shah, sharad d. dave & k.s. jhaveri,jj] workman part time employees held, part time employees are not excluded from the definition of workman in section 2(s) merely on the ground that they are part time employees. the ex abundante cautela use of the words either whole time or part time by the legislature in the definition of working journalist in the working journalists and other newspaper employees (conditions of service and miscellaneous provisions) act, 1955, does not mean that the definition of workman in the prior act i.e. industrial disputes act, 1947 intended to exclude part-time employees from the definition of workman. the expression part time has nothing to do with the nature of appointment, but it only regulates the.....i.n. modi, j.1. this is a first appeal by the defendants suraj-mal and others against the judgment and decree of the civil judge merta dated 26-10-1953, by which he decreed the plaintiff's suit with costs and future interest.2. the facts leading up to this appeal may shortly be stated as follows. the plaintiffs doon-garmal, chunnilal and vasudep, and defendants nos. 4 to 7 laxminarain, lalchand, bhanwarilal and madanlal carried on business as commission agents for the sale and purchase of cotton at gulab-pura and bhilwara under the name and style of chunnilal chandanmal.according to the plaintiffs defendant no. 1 surajmal and defendants nos. 2 and 3 shankerlal and malchand, who are his sons, constituted a joint hindu family, and carried on business in two names: the one being surajmal.....
Judgment:

I.N. Modi, J.

1. This is a first appeal by the defendants Suraj-mal and others against the judgment and decree of the Civil Judge Merta dated 26-10-1953, by which he decreed the plaintiff's suit with costs and future interest.

2. The facts leading up to this appeal may shortly be stated as follows. The plaintiffs Doon-garmal, Chunnilal and Vasudep, and defendants Nos. 4 to 7 Laxminarain, Lalchand, Bhanwarilal and Madanlal carried on business as commission agents for the sale and purchase of cotton at Gulab-pura and Bhilwara under the name and style of Chunnilal Chandanmal.

According to the plaintiffs defendant No. 1 Surajmal and defendants Nos. 2 and 3 Shankerlal and Malchand, who are his sons, constituted a joint Hindu family, and carried on business in two names: the one being Surajmal Shanker Lal and the other Malchand Somani, and both Surajmal and Shanker-lal carried on business of the joint Hindu family firm though Surajmal was the Karta of the joint Hindu family. Malchand was stated to be a minor at the relevant time.

The case of the plaintiffs was that the aforesaid joint Hindu family firm commenced transacting business under the commission agency of the plaintiffs' firm on Posh Sudi 7 Smt. 2003. Before proceeding further, it would be convenient to mention that it is admitted between the parties that defendant No. 5 Lalchand is the own brother of defendant Surajmal, and defendant No. 6 Bhanwarilal is his nephew on the paternal side and defendant No. 7 Madanlal is the nephew of Surajmal by his sister.

The plaintiffs' case is that these three persons along with Laxminarain defendant No. 4 were in working charge of the firm at Gulabpura and Bhilwara, and that the plaintiffs themselves remained at Jaswantgarh their place of residence and were the financing partners. Reverting to the business allged to have been done by the joint Hindu family firm Surajmal Shankerlal under the commission agency of the plaintiff's firm, it is alleged that the following business was done at Gulabpura with the result mentioned against each of the items :

S. N.

Vaida

Businessdone for

Numberof bales purchased and sold.

Loss orprofits if any.

Commissionagency and other incidental charges.

Totalamount due.

1.

FalgunSudi 15 (S. 2003) Valda

Surajmalhanker Lal

225 (AS per Sch. A annexed tothe plaint.)

LOSS 4670-3-6

134-7-0

4804-10-6

2.

Baisakh Sudi 15 (S. 2004) Vaida

Do

225 (as per Sch. B annexed to the plaint.)

4457-15-3

109-4-9

4567-4-0

3.

Asad Sudi 15 (S.2004) Vaida

Do

1590 (as per Sch. C annexed to the plaint.)

4188-8-6

654-4-9

4842-13-3

14214-11-9

4.

Balsakh Sudt 15 (S. 2002) Vaida

M:>olchandSomani

75 (Asper Sch. D annexed to the plaint.)

973-12.0

113-9-6

1026-0-9

5.

Asad Sudi 15 (S. 2004) Vaida

Do

15 (Asper Sch. E annexed to the plaint.)

PROFIT 61-3-9

(Theactual total comes to Rs. 1026-1-9 but by some error this lias baen shown 1026-0-9in the plaint.)

TOTALLOSS of all the five Valdas.

Rs. 15240-12-6

3. To the aforesaid total amount of Rs. 15240/ 12/6, the plaintiffs added some small items of expenditure incurred on account of their having sent telegrams to the contesting defendants amounting Rs. 10/4/-, and they further added a sum of Rs. 809/ 11/3 by way of interest from Chait Badi 9 Smt. 2004 to Bhadwa Sudi 15 Smt. 2005 and in this way made up their claim for Rs. 16060/11/9. As against this amount, the plaintiffs gave credit to the said defendants for Rs. 5000/- which had been re-ceived by them on Asad Sudi 2 Smt. 2004, and in this manner they stated that a sum of Rs. 11060/11/ 9 was due to them.

The plaintiffs further stated that they had demanded the money many a time from these defendants but without any result, and so they filed the present suit on 10-10-1950, by adding a sum of Rs. 1462/11/6 as interest to the aforesaid amount of Rs. 11060/11/9, the total thus amounting to Rs. 12523/7/3. The plaintiffs further stated that as the other partners of the plaintiff's firm namely defendants Nos. 4 to 7 were not prepared to take any interest in realising the outstandings due from the contesting defendants, they were compelled to im-plead them as defendants in this suit.

4. Defendants Nos. 4 to 7 did not file any written statement and allowed the suit to proceed without appearing in spite of notice. The remaining defendants contested the suit, and filed a single Jawabdava. They raised all possible pleas. They contended that the firm Chunnilal Chandanmal was not constituted as alleged by the plaintiffs, but that its proprietors were only two in number : one being Jeewanmal son of Shivchand Rai (This Jeewan Mal is the brother of plaintiff No. 1 Doongarmal) and the other partner being Surajmal son of Jagan-nath and that they had no knowledge whatsoever that the plaintiffs' Nos. 1 to 3 and defendants Nos. 4 to 7 were at all partners of the firm Chunnilal Chandanmal or that they ever did business in that name.

It was also contended in this connection that as the plaintiffs were not partners of the firm Chunnilal Chandanmal, they had no locus standi to bring the present suit. A further contention which was raised in the same connection was that this firm was not registered, and on that ground also the suit was not maintainable. The defendants also contended that they did not constitute a joint Hindu family, and that defendant No. 2 Shankerlal had separated from the family some years ago and that he alone did business in the name of Surajmal Shankerlal, and that defendant Surajmal never did any business with the firm Chunnilal Chandanmal.

As regards the business, alleged to have been done by the plaintiffs firm with these defendants, it was admitted that Shankerlal alone in the name of Malchand Somani had once done a business of 25 bales of cotton with the firm Chunnilal Chandanmal on Falgun Sudi 14 'Smt. 2004, and that that was settled on Falgun Sudi 15 Smt. 2004, and that the only other business that he did with the plaintiffs' firm was when he purchased 500 bales of cotton in the month of Asad Section 200 (Vide Schedule C) and that he had also asked the firm to lay a double option in connection with that transaction.

Leaving aside the above mentioned items, the defendants totallv denied the rest of the items contained in Schedules A, B, C, D and E annexed to the plaint. The defendants, however, admitted that they had given a sum of Rs. 5000/- to the plaintiffs' firm as security, but their case was that certain differences arose between them and the plaintiffs as regards the business of 500 bales of cotton and that they had asked for return of the deposit of Rs. 5000/- in one of their letters addressed to the plaintiffs about June, 1947, and it was on that account that the plaintiffs had come forward with a false and manufactured claim against them.

Alternatively, the defendants contended that if the plaintiffs succeeded in proving that the former had transacted the entire business with the plaintiffs' firm as per Schedules A to E mentioned above they pleaded that how even one of the transactions in suit was a wagering transaction inasmuch as the plaintiffs did not possess the necessary finances to make all the purchases when they are stated to have been made and further that there was never any intention to give or take delivery of the bales purchased or sold, and no delivery was ever given or taken. Finally, the defendants pleaded limitation also, though they did not say how the suit was barred by time.

5. It is remarkable that though the defendants raised numerous pleas in their Jawabdava, they did not directly controvert the allegation contained in the plaint that the plaintiffs' firm had acted as commission agents for the defendants.

6. On these pleadings, the learned Civil Judge framed 13 issues, and after recording the evidence of the parties, decreed the plaintiffs' suit tor Rs. 11060/11/9 with future interest disallowing the sum of Rs. 1462/11/6 which the plaintiffs claimed as interest : vide paragraph 21 of the plaint. The contesting defendants have now come up in appeal to this Court.

7. Before we deal with the contentions raised before us by learned Counsel on their behalf, we may state at once that the findings of the Court below, namely, that the plaintiffs were the partners of the firm Chunnilal Chandanmal (issue No. 1), and that there was a trade usage in the market at Gulabpura to charge interest at the rate of '6 per cent, per annum, and Adat and Dharmada and Dalali and certain other incidental charges as mentioned in the plaint (issue No. 7), and that the suit was not barred by limitation (issue No. 8) and that the defendants were the members of a joint Hindu family firm consisting of Surajmal and his two sons Shankerlal and Malchand (issue No. 11) and that Vasudeo one of the plaintiffs was a major at the time of the commencement of the partnership business vide Ex. P-1 (issue No. 12) were not challenged before us. All that we need say in this connection, therefore, is that the findings of the Court below on the aforesaid points must be accepted as correct.

8. The first contention which was raised in this Court was that the learned trial Judge had fallen into error in coming to the conclusion that the defendants had (through the commission agency of the plaintiffs' firm) entered into the various transactions relating to the sale and purchase of cotton bales mentioned in Schedules A, B, C, D, and E annexed to the plaint. The plaintiffs have filed copies of the relevant entries from their books namely the Sauda Bahi, Sauda Khata Bahi, Nakal Bahi, Khata Bahi as also Rokar to prove these transactions.

They have also produced P.W. 4 Deokaran, a Munim who worked at the firm's place of business at Gulabpura, and P.W. 6 Laxminarain, one of the partners of the plaintiffs' firm to prove these items. Doongarmal plaintiff No. 1 also came into the witness-box but lie has no personal knowledge of the various transactions made from time to time, because he never went to the firm's place of business and remained at Jaswantgarh throughout the rele-vant period, viz., Posh of Smt. 2003 to Asad or Sa-wan of Smt. 2004.

The other two plaintiffs Chunnilal and Vasudeo were not examined, but their position was just the same as that of Doongarmal inasmuch as they also had never been to Gulabpura, and, therefore, could not have any personal knowledge of the various transactions in suit. The learned trial Judge having dealt with the entire evidence relating to the transactions mentioned in Schedules A, B, C, D, and E, and on a detailed discussion of the various entries relating to each Schedule, came to the conclusion that the entries had been correctly made and were duly corroborated and that there was no reason to doubt their authenticity.

We do not propose, to cover the same ground, as, in our opinion, it would be useless to do so, and would instead deal with this aspect of the case from a slightly different angle. Let us turn to the evidence now of the plaintiffs' witnesses Deokaran and Laxminarain.

9. (After discussing the evidence his Lordship reached the conclusions--

(1) that the finding of the learned Civil Judge that the various transactions which were recorded in the books of the firm had been entered into as and when they had happened on behalf of the defendant was correct, and

(2) that the plaintiffs' firm did business on behalf of the defendants' as mentioned in Schedules A to E and that these transactions resulted in losses as mentioned in their books).

10. It was next strenuously contended for the defendant that even if our conclusion was that the transactions as alleged by the plaintiffs were proved to have taken place with the resultant losses, we should still dismiss the plaintiifs suit on the ground that everyone of those transactions was of a wagering character, and, therefore, incapable of enforcement in a Court of law. Our attention in this con-nection was specially invited to Sections 20A and 30B of the Mewar Contract Act (XV of 1942). These sections read as follows :

'20A. All contracts, whether by speaking, writing or otherwise knowingly made, to further or assist the entering into, effecting and carrying out agreements by way of gaming or wagering and all contracts by way of security or guarantee for the performance of such agreements or contracts shall be null and void, and no suit shall be allowed in any Court of justice for recovering any sum of money paid or payable in respect of any such contract or contracts or any such agreement or agreements as aforesaid.'

'30B. No suit shall be allowed in any Court of justice for recovering any commission, brokerage fee, or reward in respect of the knowingly effecting or carrying out or of the knowingly aiding in effecting or in carrying out or otherwise claimed or claimable in respect of such agreements by way of gaming or wagering or any such contract as aforesaid, whether the plaintiff in such suit be or be not a party to such last mentioned agreement or contract or for recovering any sum of money knowingly paid or payable on account of any persons by way of commission, brokerage fee, or reward in respect of any such agreement by way of gaming or wagering or contract as aforesaid.'

The contention on behalf of the defendants was that no delivery was ever given or taken by the parties in connection with the suit transactions, and that this was evident from the evidence of the plaintiffs' own witnesses P.Ws. 8 to 20 produced to prove that the plaintiffs firm had purchased cotton bales from or sold the same to them from time to time in connection with the various Vaidas and that their ac-counts had been settled and nothing was due to them from the said firm.

It was further submitted in this connection that the evidence of Shankerlal was that when he had commenced these transactions with the plaintiffs' firm, his intention was merely to deal in differences only, and that the same was the intention of the plaintiffs' firm. Now, we may state at once that it does appear to us that no actual deliveries of bales of cotton appear to have been given or taken by the plaintiffs' firm with respect to the various transactions entered into by them on behalf of the defendants with third parties, That, however, in our opinion, would not be enough to hold that the transactions in question were of a wagering character.

The law is indeed well settled that in order to establish the plea of wager, the party raising the plea must prove that the common intention of both the parties at the time of the commencement of the business was to deal in differences only and under no circumstances to give or take delivery. Reference may be made in support of this proposition to three Privy Council cases.

11. In Bhagwandas v. Burjorji, AIR 1917 PC 101 (A) the plaintiffs as 'pakka adatias' for the defendant and under instructions from him sold 4,000 tons of linseed for future delivery. The transactions took the form of sales by the defendant to the plaintiffs followed by resales by the plaintiffs to number of buyers and the defendant also deposited Rs. 61,000/-with the plaintiffs to secure them against loss.

The plaintiffs delivered merely 300 tons to some of the defendants,, and as for the balance they made cross-contracts and paid differences. The trial Court decreed the suit but on appeal an appellate bench of the High Court dismissed the suit holding that the transactions were of a wagering character. On further appeal to the Privy Council, the trial Judge's decree was restored. What their Lordships said was this :

'No doubt the contract of a Pakka Adatia as that of anyone else, may be by way of wager, but can it be said that the employment of the plaintiffs by the defendant was of this description?

It has not been shown that there was any bargain or understanding between the parties either express or implied that linseed was not to be delivered, nor was it a term of the employment that the plaintiffs should protect the defendant from liability to make delivery,

It may well, be, as suggested in the evidence of Hargopal, that the defendant was a speculator, who never intended to give delivery, and even that the plaintiffs did not expect him to deliver; but that would not convert a contract, otherwise innocent into a wager, speculation does not necessarily involve a contract by way of wager, and to constitute such a contract a common intention to wager is essential.

No such intention has been proved.

Under the sales to the thirty-nine buyers it was the right of each buyer to call for delivery, but as the plaintiffs had carried through the transaction as Pakka Adatias of the defendant, the rise or fall of the market was a matter of no concern to them, except so far as it might enhance the risk of recovering complete indemnity from their employer, Their right was to their commission and to an indemnity against loss as incidents of their employment.

The mere fact that as to the greater part of the linseed there was no delivery, but an adjustment of claims, cannot alone vitiate the transactions.'

12. In Sukdevdoss v. Govindoss Chaturbhuja-doss and Co., AIR 1928 PC 30 (B) the facts were that there were several merchants in the Madras market, who bought and sold certain goods among themselves but no delivery of the goods was made, and they were sold and resold by various purchasers until the goods were repurchased by the appellants who claimed the full price for the goods sold and delivered.

These sales took place on the strength of certain delivery orders which were passed from one purchaser to another. Evidence was led to show that once Patta Patti was made, the buyer had no right to demand the goods themselves nor was the seller obliged to deliver them and the matter was to be settled by the payment and acceptance of the difference resulting from the sale and resale of the goods. In these circumstances, the plea that such contracts were of a wagering nature was upheld by the High Court.

On appeal, their Lordships o the Privy Council, however, repelled the contention and held that though such contracts were highly speculative in character, they were themselves insufficient to render them void as wagering contracts. Their Lordships further held that in order that such contracts be con-demnable as wagering contracts, there must he proof that the contracts were entered into upon the terms that performance of the contracts would not be demanded but that differences only would become payable, arid as no definite agreement or understanding was proved to the aforesaid effect, their Lordships held that the contracts relied on were not bad on the ground of wager.

13. Again it has been held in Ismail Lebbe v. Birtleet and Co., AIR 1942 PC 19 (C) that

'Where the documents show an ordinary commercial transaction, and, in conformity with them, one of the parties incurs personal obligation on a genuine transaction with third parties so that he himself is not a winner or loser by the alteration of price, but can only benefit by his commission, the inference of betting is irresistibly destroyed. In such cases the fact that no delivery is required or tendered is of practically no value.'

The correct legal position may, therefore, be enunciated somewhat like this.

14. In order that a contract be of a wagering character in law, it should be satisfactorily established that both contracting parties at the time of entering into the contracts had agreed under no circumstances to call for or give delivery from or to each other but to deal in differences and differences only.

To produce such a result, it is not sufficient that an intention to deal in differences exists on the part of only one of the contracting parties. There must be a common intention to wager between both contracting parties. It may be accepted that in order to determine whether such was the intention of both the contracting parties, the Court may and should look at the surrounding circumstances relative to the impugned transactions -- and that it would be open to it to ascertain the real intention by tearing through the outword form of the contracts and going behind a written provision of the contract to judge whether such provision was inserted into the contract to conceal its real character.

But be that as it may, where the modus operand of the business is for the defendant to put through such transactions through a broker or a commission agent in his own name and the third parties did not know his (defendants) name at all, the understanding being that the defendant would pay the broker or the agent commission charges or brokerage and would indemnify the latter, then a strong inference arises against the existence of a common intention to wager, though again such a presumption can be rebutted in a particular case.

In this last mentioned class of cases where the business is done through a commission agent, it may be said possibly that the defendant's intention was to gamble nevertheless the contracts cannot be condemned as being violative of Section 30 for the reason that evidence would be lacking as to the original intention of such third parties because the principals have never been brought into contact with each other.

In such a case, the mere circumstances that the contracts were settled by payment of differences with the third parties on the day of settlement is no good proof of the original intention of the parties, because in the first place their minds never met and converged to produce the intended result, and secondly the want of delivery and payment of differences may bo merely a matter of subsequent arrangement as suiting the convenience of both of them.

It is true that such transactions are of a highly speculative character and are Sutta transactions as characterised in common parlance; but even so they cannot be struck down as being of a wagering character within the meaning of Section 30 of the Contract Act.

Again, generally speaking, and in the absence of special law, the position as respects suits brought by an agent or a broker to recover his brokerage or commission in respect of transactions entered into by him in his capacity as a broker or a commission agent is that such suits can be successfully maintain-ed, even though contracts in respect of which such claims are claimed are contracts by way of wager on the principle that agreements collateral to wagering agreements do not fall within the mischief of the section and can be enforced in a Court of law, unless of course it is established that the contracts which the commission agent or the broker entered into with third parties on behalf of his constituent are wagering contracts as between the plaintiff and those third parties. Let us apply these principles to the present case.

15. Now the defendant would indeed have us accept that his intention was to deal in differences only, and that was also the intention of the plaintiffs' firm. We should have been willing to place some reliance on Shankerlal's sworn testimony; but unfortunately he has been found to be lying thick and fast in this case on vital matters. Shankerlal's case was that he had separated from his father some years ago, and that he was not a member of the joint Hindu-family consisting of his father and himself and his brother, and that a deed of partition had been executed between them affecting the partition some seven years ago before he came to give his evidence.

He, however, never produced the deed, and, therefore, his version has been held to be wrong. Shankerlal's case further was that he had made only two transactions with the plaintiffs' firm, and that the rest of the transactions had no connection whatsoever with him and were entirely unauthorised.

This version, again, has been found to go completely false on the strength of certain letters written by him as well as by his father Surajmal. Again, Shankerlal's case was that the plaintiffs had no right of suit because they had nothing to do with the membership of the firm Chunnilal Chandanmal, and that the real owners of the firm were Jeewanmal, brother of plaintiff Doongarmal and one other person. This story has also been held to be unfounded and rightly.

Again, Shankerlal's case was that the letters Exs. P-2 to 6 were not in his father's handwriting and so also Exs. P-78 to 81 were not in his own, on which point also he has been adjudged by the court below to have lied and that conclusion was not assailed before us at all, nor could it be. We have no desire to multiply instances of the falsehoods of Shankerlal. Consequently, we feel that it will be extremely risky to accept his version as gospel truth on this point alone.

Even taking his testimoney for what it is worth, his evidence is that it was his intention to deal in differences only. That may be so because he may justifiably testify to what his own intention was without much fear of contradiction. Where we have to test his evidence, however, is when he says that that was also the intention of the plaintiffs' firm at the time when he had commenced his business with it. Now this business was commenced, according to the plaintiffs, about the end of Posh of Section 2003.

There is nothing to show on this record that the defendants and any of the plaintiff partners had met together then and fixed up that common intention. We may also refer in this connection to paragraph 29 of the written statement wherein the defendant's plea as to wager is contained.

In that paragraph he does not say anything either about his own intention or about the intention of the firm with respect to the transaction in question. Instead the defendant made general al-legation that the entire business carried on at the plaintiffs' shop was 'Sutta,' that the plaintiffs did not have the necessary finances to take delivery of the bales purchased by them and that no de-livery was ever given or taken.

Now so far as the last mentioned statement is concerned, it does appear to be true with respect to the business done by the plaintiffs for the defendants but no proof has been brought on this record to show that the plaintiffs did not possess the necessary means to purchase the bales on the Vaida dates, or that the entire business done at the plaintiffs' firm was to deal in differences and differences only and in no circumstances to give or take delivery.

Indeed, no question was even put to Laxmi-narain P. W. 6 when he came into the witness box as to what was the intention of the firm in the making of these transactions, or that there was ever an agreement between the parties to deal in differences only. We may again point out in this connection that it would be going too far to hold that simply because delivery was not taken in connection with the suit transactions and that differences were only given or taken, these transactions were of a wagering character.

We should like to add that the burden to prove this issue lay heavily on the defendants who were also merchants, and we are clearly of opinion that this burden they have failed to discharge. In these circumstances, we agree with the conclusion of the learned trial Judge that there is no satisfactory proof of the fact that there was a common intention to deal in differences and differences only and in no circumstances to give or take delivery.

16. There is yet another answer to the plea of wager which leads us to the same Conclusion. The case of the plaintiffs was that they were trading as commission agents under the name and style of Chunnilal Chandan Mal and that throughout their transactions with the defendants they acted merely as commission agents.

The defendants in spite of the fact that they raised every possible plea had not the courage to deny this fact specifically in their written statement. P. W. 6 Laxminarain when he came into the witness-box stated in answer to a question put to him in his cross-examination that the firm worked as ordinary commission agents or what is usually called 'Kacha Adatias.'

Again, this fact was not denied by the defendant Shankerlal when he came to give testimony. Now, it seems to us reasonable to hold that where transactions conducted through commission agents may be held to be vitiated on the ground of wager, the common intention to wager to be established must be with respect to such third parties also,

The plaintiffs produced a large number of witnesses in this connection to prove the various transactions that they had made on behalf of the defendants and practically every witness admitted that he had settled the deals' by giving or accepting differences. But it is important to point out that most of these witnesses clearly stated that if one of the parties to the deal insisted on taking delivery that would have to be given.

See the evidence of P. W. 8 Madanlal, P. W. 9 Mohanlal P. W. 11 Chunnilal, P. W. 12 Amlok Chand, P. W. 13 Nathulal, P. W. 14 Ganesh Ram and P. W, 15 Kanakmal and P. W. 19 Harakchand in this connection. In this view of the matter also we are of opinion that a common intention of wager has not been established in this case, and, therefore, the suit transactions cannot be struck down as bad on account of they being of a wagering nature.

17. So far as the argument based on Sections 20A and 30B of the Mewar Contract Act (No. XV of 1942) is concerned, they likewise afford no defence to this suit. We would point out that these sections are obviously modelled after Bombay Act No. IV of 1865 & it has been held in a number of cases decided under that Act that before these provisions can be called into operation, the principal transactions in respect of which the brokerage, commission or losses etc. are claimed must be proved as wagering contracts. See Sassoon v. Tokersey, ILR 28 Bom 616 (D) and Chimanlal v. Nyamatrai, AIR 1938 Bom 44 (E).

We entirely agree with this view. The true legal position, therefore, is that where the trans-actions are proved to be of a wagering character, and special provisions like those contained in the Mewar or the Bombay Act are in force, then even contracts collateral to wagering transactions would become bad though otherwise they would not be so.

But where the principal contracts have themselves not been established to be of a wagering nature, we have no hesitation in saying that there can be no question of the collateral contracts whether of indemnity or otherwise being bad because the principal contracts are not of wagering nature at all. We, therefore, reject this contention also.

18. We now proceed briefly to dispose of two other contentions which were raised before us. One of these contentions was that the plaintiffs' firm could not maintain the present suit as it was not registered, by virtue of Section 69 of the Partnership Act. It was contended that the Marwar Partnership Act was in Force at the time agreement Ex. P1 had been brought into being at Jaswantgarh, a place in what was then the State of Marwar and that that Act contained Section 69 which was on the same lines as Section 69 of the Indian Act.

On a careful consideration of this argument, we are of opinion that there is no force in it. A complete answer is provided to this contention by sub- Section (4) of Section 69 of the Marwar Partnership Act. This sub-section provides that Section 69 shall not apply to firms or partners in firms which have no place of business in Marwar.

Admittedly, the plaintiffs' firm had no place of business in the State of Marwar as it then was, and its sole business was in Bhilwara or Gulabpura which places were in the former Mewar State. It has not been shown to us that there was anything corresponding to Section 69 in the last mentioned State where the partnership business went on in this case. We, therefore, overrule this contention also.

19. In the last resort, learned counsel for the defendants raised the contention that all forward contracts in cotton were forbidden in the former State of Mewar at the material times, that is, from 30-12-1946 to 6-7-1947, by virtue of the Cotton (Forward Contracts and Options Prohibition) Order, 1943 which was brought into force in Mewar in exercise of the powers conferred by Sub-rule (2) of Rule 81 of of Defence of Mewar Rules, and, therefore, the plaintiffs' suit should be dismissed.

As it appeared to us to be a point of law at first sight, we allowed learned counsel to argue it but as the argument proceeded, we felt that the point was not a simple one, and it was a serious point for investigation as to whether this Order was in force in Gulabpura where the suit business was carried on in 1947, and learned counsel himself felt that he would require an adjournment to establish this contention of his. So far as this ground is concerned, we desire to point out that this was not raised in the defendants' written statement nor was an issue raised about it in the trial court nor was this point raised at any stage in that court whatever. Not only that.

This point was not taken even in the grounds of appeal which were filed in this Court on 5-4-1954. We should further like to add that even when we asked learned counsel to indicate to us as to which points he wished to raise in this appeal, he did not mention this even at that stage. In any case, this point appeared to us to need a thorough investigation and was in the nature of a complete surprise.

Having regard to the circumstance that this appeal was filed in 1954 more than four years ago, we were not prepared to view favourably the request of learned counsel for an adjournment in order to enable him to make the necessary research to establish this point. Learned counsel, in our opinion had ample time to do so during the period this appeal has remained pending in this Court. In these circumstances, we refuse to permit this point to be argued and there the matter rests so far as this aspect of the case is concerned.

20. For the reasons mentioned above, we holdthat there is no force in this appeal. We accordingly dismiss it with one set of costs to the contestingrespondents.


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