Firm Ram Krishna Das Jawahar Lal and after the death of Ram Krishna Das Hari Shanker v. Firm Mutsaddi Lal Murli Dhar
1941-12-23
BRAUND, YORKE
body1941
DigiLaw.ai
JUDGMENT Braund and Yorke, JJ. - This is a case which would have been a good deal easier to try had the pleadings of the parties been better framed. In this respect we find little to choose between the pleadings of the Plaintiffs and the Defendants. 2. The Plaintiffs are a Firm, called Mutsaddi Lal Murli Dhar, which we shall hereinafter refer to as the "Plaintiff firm." They are what is known as "accaarhatis" carrying on business in the wheat market at Hapur in these provinces. It is worth while observing that the partners of the Plaintiff firm carry on business at other places also under different firm names, one of which subsidiary firms is the firm of "Bhawani Sahai Salig Ram" and a third such firm is styled "Murli Dhar Salig Ram." The former of these two branch firms carries on business also at Hapur and the latter at Ghaziabad. 3. The Defendants are a firm called "Ram Kishun Das Jawahar Lal" and for convenience we shall refer to them hereinafter as the "Defendant firm". Subject to the question, which we shall discuss later, as to whether a certain Mr. Ram Kishun Das Khanna (hereinafter called "Khanna"), whose actions are in controversy in this suit, was a partner in it, the Defendant firm consisted of a certain Lala Ram Kishun Das Tandon (hereinafter referred to as "Tandon") and Lala Jawahar Lal. 4. We think that the convenient course will be first to set out the facts by reference to pleadings. The plaint begins by alleging that between May 3, 1933 and some date in January 1934, the Defendant firm entered into a considerable number of what are called "forward" contracts with the Plaintiff firm for the sale and purchase of wheat. By Paragraph 6 it is alleged that these transactions resulted in a loss to the Defendant firm for the month of Jeth Sambat 1990, of Rs. 514 odd, for the month of Mangsar Sambat 1990, in a loss of Rs. 6,030 odd and for the month of Magh Sambat 1990 in loss of Rs. 5,239, while for the month of Bhadon Sambat 1990, there was a profit to the Defendant firm of Rs. 1,122-15-6. 5.
514 odd, for the month of Mangsar Sambat 1990, in a loss of Rs. 6,030 odd and for the month of Magh Sambat 1990 in loss of Rs. 5,239, while for the month of Bhadon Sambat 1990, there was a profit to the Defendant firm of Rs. 1,122-15-6. 5. Up to that point the plaint is quite clear and one would have expected it to be followed by a claim against the Defendant firm for these losses, after giving credit for the profit amounting to ten thousand rupees odd. Paragraph 7 of the plaint takes the matter rather further because it alleges that, in addition to the account in the name of the Defendant firm on which the abovementioned transactions took place, there were a so opened two other accounts which in reality belonged to the Defendant firm, but were actually kept in different names, namely, in the names of "Shib Charan Das" and "Ram Chandra" respectively. On these two accounts, which were also accounts in respect of forward contracts for the sale and purchase of wheat, there was a loss to the Defendant firm of Rs. 1,727 odd of which Rs. 226 remained unpaid. The plaint is clear enough up to that point. 6. We can pass over for the present paragraphs 8 to 13 of the plaint and come at once to paragraph 14, which is in these terms: The Defendants on different dates paid to the Plaintiff firm Rs. 14,686-8-0 in cash under hundis etc. and a sum of Rs. 1,122-5-6 was credited on account of profit and a sum of Rs. 21,142 4-6 on account of loss, price of grain, expenses and interest etc., was debited to the Defendant in the account hook. Now a sum of Rs. 6,332-13-0 is payable by the Defendants, which they in spite of duns and demands have not paid. 7. Finally the Plaintiff firm claims by way of relief payment of this last mentioned sum of Rs. 5,332-13-0. 8. We may say at once that we have found it extremely difficult on these pleadings to understand how this sum of Rs. 5,332-13-0 is arrived at. We could have understood a claim for ten thousand rupees odd on the balance of the outstanding "forward" accounts. But it is not easy to reconcile this with the sum claimed.
5,332-13-0. 8. We may say at once that we have found it extremely difficult on these pleadings to understand how this sum of Rs. 5,332-13-0 is arrived at. We could have understood a claim for ten thousand rupees odd on the balance of the outstanding "forward" accounts. But it is not easy to reconcile this with the sum claimed. The truth of the matter appears to be that, after pleading the forward transactions in the earlier paragraphs of the plaint, the Plaintiff firm suddenly jumps by paragraph 14 to a general account between it and the Defendant firm of which the forward transactions form only part. The balance of Rs. 5,332-13-0, which the Plaintiff firm claim is in reality the balance of the general account and has no relation to the "forward" transactions alone. The result is that, while the pleadings are in form directed to a cause of action relating to the 'forward" transactions only, the relief is directed to the recovery of a balance on a larger general account of which the "forward" transactions only form part. We point this out, because, notwithstanding the pleadings, it appears to us that the suit has been tried as if it were a suit relating to the "forward" transactions only and this appeal has certainly been argued before us upon that footing. We think that the proper way for the Plaintiff firm to have framed its plaint, if it had desired to recover the balance due on a general account, was to ask for a declaration that it was entitled to the credits referred to in paragraphs 6 and 7, after allowing for the sum of Rs. 1,122-15-6, mentioned in paragraph 6 and to have gone on to ask for an account to be taken in respect of the general account on that footing and for payment of what might be found due. 9. The material paragraph of the written statement is paragraph 20. The written statement seems to treat the suit as if it were a suit relating to the "forward" contracts alone and Paragraph 20 of the additional pleas denies these contracts in every possible form.
9. The material paragraph of the written statement is paragraph 20. The written statement seems to treat the suit as if it were a suit relating to the "forward" contracts alone and Paragraph 20 of the additional pleas denies these contracts in every possible form. It is not content with formally denying them and putting the Plaintiff firm to proof of them, but it goes out of its way, in addition to denying that there were any "forward" contracts, to deny that, if there were any, they were entered into on any authority given by the Defendant firm and moreover, that anybody on behalf of the Defendant had any authority to enter into any "forward" transactions on the Defendant firm's behalf. That was plainly pleading by anticipation a want of authority on the part of the person, whoever it was, who had purported on the Defendant firm's behalf to enter into any such contract with the Plaintiff firm. It is, we think, unfortunate that the Defendant firm did not ask for particulars of the contracts pleaded in paragraphs 3 and 4 of the plaint and of how they were made and it is still more unfortunate that the Plaintiff delivered no reply. In fact, nine-tenths of the conflict in this case has raged round the question whether Khanna, who, as we have said before, was associated with the Defendant firm, had any authority, either as a partner or as an agent, to enter into the "forward" contracts in question. Though we concede that the pleadings are not happy and which we Could have wished that the learned Judge who tried the case had insisted on their being improved before he embarked on it, we are not prepared at this stage to dismiss the suit, as we have been invited by the Appellants to do, on the ground only of the defects in the pleadings. We have come to this conclusion because it is quite evident that throughout the course of trial, which took place over seven years ago, there was no misunderstanding in the minds of the parties as to what the issues really were and moreover, there were certain proceedings by way of "oral pleadings" which did, in fact, serve to clarify the issues before the trial started.
It is not, we think, possible to say that either party was at any substantial disadvantage by reason of the imperfections of the pleadings. 10. The "forward" contracts in controversy are those contained in Schedule (A) of the plaint. It appears that the Defendant firm was a firm carrying on business as dealers in grain at Moradabad. There has never been any question, as we have already said, but that Tandon and Lala Jawahar Lal were partners in the firm. They resided, so it appears, at Moradabad and they have a nephew whose name was Stub Charan who appears to have occupied himself in the firm's business as well. Hapur, which is a grain market, lies a little less than a hundred miles from Moradabad and there the two "branches"--we use that expression as a matter of convenience--of the Plaintiff firm, namely the Plaintiff firm itself and the firm of Bhawani Sahai Salig Ram, carried on business as "pacca arhatis'. It should be said that Hapur possessed a Chamber of Commerce under the rules of which grain dealings were carried on. 11. There is no doubt that the contacts referred to in Schedule (A) of the plaint were, in fact, entered into. Many of the contract notes have been exhibited and Exhibit 7(2) page 55 of our paper book, is an example of one. These contracts seem to have all been detached from a book maintained by the Plaintiff firm and were all headed "Book of forward transactions". They begin with a contract note giving the names of the parties, the commodity dealt in, the bulk, the "forward" date and the rate. They then contain certain conditions, among which is a condition incorporating the Rules of Hapur Chamber of Commerce. We shall have to refer to these conditions at a later stage. We agree with the learned Judge in thinking that these transactions did take place and indeed, it has not been seriously contended before us that they did not. We are also satisfied that they were all "forward" transactions in the sense that they were, or purported to be purchases of wheat at fixed prices by the Defendant firm from the Plaintiff firm at future dates and (with one possible exception) they were balanced, by corresponding sales at or before the due dates by the Defendant firm to the Plaintiff firm.
As to one transaction, or series of transactions, dated Mangsar Sudi 8, it appears that 625 tons were bought in by the Plaintiff firm against the Defendant firm on account of the failure by the latter to provide "cover" during the period the contract was opened and in one other case--that of Mangsar Badi 14--there appears possibly to have been an actual delivery of 50 tons of wheat. The gross amount in tons of the aggregate of these "forward" transactions come over, a period from May to November, to close on 3,000 tens, which represented many lacs of rupees. 12. Khanna appears to have been something of a rolling stone, who came to be associated with the Defendant firm not long before May 1933. He it was who actually engaged in the contracts and we find that all of them are actually entered into over his signature, purporting to act on behalf of the Defendant firm. The fact is that Khanna "represented" the Defendant firm at Hapur and transacted their business affairs there either by personal visits to that place or by telephone conversation, from Moradabad. Neither Tandon nor Lala Jawahar Lal appear to have been present themselves at any time at Hapur and in whatever capacity he may have acted, business was actually transacted by Khanna. There is one other matter which is to be found as a fact, namely, that undoubtedly, as between Khanna, acting on behalf of the Defendant firm and the other branch of the Plaintiff firm at Hapur, namely Bhawani Sahai Salig Ram, there were a considerable number of wheat contracts for actual delivery. In fact, it appears to be certain and this again is not, we think, seriously disputed--that the name of Bhawani Sahai Salig Ram was maintained for the purpose of carrying through actual delivery business, while the name of Mutsaddi Lal Murli Dhar, which is the Plaintiff's firm name, was kept for the purpose of carrying through "forward" business. 13. In these circumstances, therefore, we can start upon the firm ground that the contracts in question were entered into by Khanna, either representing or purporting to represent the Defendant firm. The first contention raised by the Defendant firm at the trial was that Khanna was not a partner in the Defendant firm.
13. In these circumstances, therefore, we can start upon the firm ground that the contracts in question were entered into by Khanna, either representing or purporting to represent the Defendant firm. The first contention raised by the Defendant firm at the trial was that Khanna was not a partner in the Defendant firm. This issue, although, as we have said, not raised by the formal pleadings, was raised by the oral pleadings on July 24, 1934, long before the trial. In this appeal, however, the question whether Khanna was really a partner has not been pressed although it is noticeable that Khanna himself in his evidence (which incidentally, he has given on behalf of the Plaintiff firm) still maintains that he was a partner. The learned Judge at the trial, however, treated it as an issue and came to the conclusion that he was not a partner and we entirely agree with his finding in that respect. Mr. Agarwala has in fact frankly said in this appeal that he cannot maintain Khanna's position as a partner and indeed, there is no evidence beyond his own bare statement that he ever was one. Apart from anything else we are inclined to regard the notice sent by Khanna to the Plaintiff firm on the 25th of November, 1933 Ex. F as conclusive on this point, because in this document Khanna himself refers to the Defendant firm as "his master". Apart, however, from this had it been true that Khanna was really a partner in the Defendant firm that circumstance would have been very easy to prove from the books of the Defendant firm showing some division of profits and losses between them. It is, nevertheless, a singular circumstance of the case that not a single book of the Defendant firm has from first to last been produced. We entertain no doubt that the learned Judge was right in dismissing Khanna's claim to be a partner. That, however, Ly no means disposes of the case because the Plaintiff firm then falls back on the plea that, if Khanna was not a partner, he was, at any rate, an agent.
We entertain no doubt that the learned Judge was right in dismissing Khanna's claim to be a partner. That, however, Ly no means disposes of the case because the Plaintiff firm then falls back on the plea that, if Khanna was not a partner, he was, at any rate, an agent. It is, we again point out, unfortunate that there is no such specific pleading, but so far as the trial was concerned, it was clearly understood between them that this was one of the two real issues and therefore, we are content to decide it, notwithstanding the pleadings, We think, however, that we need not deal with it at any great length in view of the conclusion which we have arrived at on the other part of the case which we shall deal with presently. We shall, therefore, content ourselves with setting out briefly the reasons why we think that the learned Judge was again right in coming to the conclusion that Khanna, whether as a mere servant or in some other capacity, was a duly authorised agent of the Defendant firm for the purpose of entering into these "forward" contracts. It has been the case of the Defendant firm and indeed, it has had to be, that they knew nothing of what was going on. That we are utterly unable to believe. The suggestion made by the Defendant firm has been that the "forward" transactions were in reality private and personal speculations made by Khanna with the connivance of and perhaps in partnership with, the nephew, Shib Charan and that they were entered into behind the back of the Defendant firm and were not the Defendant firm's transactions at all. We think that this is hardly more than a suggestion. A good deal of play has been made by Mr. Banerji on behalf of the Defendant firm with a private pocket book belonging to Shib Charan which is said to have fallen by accident into the possession of Khanna and was produced by him at the trial. This note book contains entries of one or two of these "forward" transactions in Shib Charan's handwriting and we have been asked to deduce from them that they were the private transactions of Khanna and Shib Charan and were not the transactions of the firm.
This note book contains entries of one or two of these "forward" transactions in Shib Charan's handwriting and we have been asked to deduce from them that they were the private transactions of Khanna and Shib Charan and were not the transactions of the firm. It is said that it is inconceivable that they should not have been entered in the firm's regular books and that it is significant that two or three of them should be found in Shib Charan's private note book. Apart from the curious circumstances in which this note book is said to have got into Khanna's possession, this argument really begs the whole question, because if this business was not the business of the Defendant firm, it is just as curious that the Defendant firm did not produce their books at the trial as that the production of these books was not demanded by the Plaintiff firm. We are, in fact, left in complete ignorance whether the transactions were really entered in the Defendant firm's books or not. In our view, the note bock which is Ex. 9(1) does not really help one way or the other. 14. It is certain that Khanna was employed by the Defendant firm in some capacity or the other and it is equally certain that he did transact business on their behalf, at Hapur, because we have a long series of transactions of a "ready" character with the branch firm of Bhawani Sahai Salig Ram. We start from this, therefore, that Khanna was an employee of the Defendant firm. The only question is whether he had an authority to do "forward" business at Hapur. We recognise that there is a considerable difference between "forward" business and "ready" business and that it does not necessarily follow that a firm which does the former also transacts business in the latter. At the same time, we have to bear in mind the very well known principle of the law of agency that, where an ostensible authority exists, a person dealing with the agent will not be affected with notice of a private limitation of the ostensible authority as between the principal and the agent themselves. We have been at a disadvantage throughout because the books of the Defendant firm have not been produced and we have been unable to see precisely what the character of its business was.
We have been at a disadvantage throughout because the books of the Defendant firm have not been produced and we have been unable to see precisely what the character of its business was. But it appears clearly in evidence that in some cases, at any rate, the Defendant firm did do, "forward" business. In the evidence of Raghunath Pd, its munio, he admits at page 29, line 33 of the record two cases in which the firm entered into "forward" delivery contracts and it is significant that, in the case of one of them (Jhandu Mal Banwari Lal) that business was done through Khanna We observe too that even by paragraph 20 of their written statement the Defendant firm do not deny that they ever did any "forward"' business. In the evidence of Jawahar Lal at page 34 of the record, line 8, it appears to us that he impliedly admits that the Defendant firm did "forward" business by pointing out that while Khanna was permitted to transact business in ready goods, he had no express permission "for forward contracts". That would have been a very curious way of putting it if the facts really were that the Defendant firm never transacted any forward business at all. Surely Jawahar Lal would have said so in plain language in his explanation. The munio of another firm, Ganeshi Lal Mangat Rai, has been produced to show that the Defendant firm did do, "forward" business with it and that that business was settled by a cash payment to the Defendant firm itself. In the same way there is the evidence of Murari Lal, the munib of the firm Mina Mai Balkishan Das and Harikishan Das Ram Kishan Das that the Defendant firm did "forward" business and received and paid profits or losses as the case might be. We have the evidence of Gokul Chand, who was the munio of the Krishna Oil Flour Mills at Moradabad--a firm also belonging to Tandon--in which he admits that the Defendant firm did do "forward" business. 15.
We have the evidence of Gokul Chand, who was the munio of the Krishna Oil Flour Mills at Moradabad--a firm also belonging to Tandon--in which he admits that the Defendant firm did do "forward" business. 15. We have set this evidence out briefly but, coupled with the long series of transactions over several months, we are quite satisfied that it points to one reasonable conclusion only, namely that the Defendant firm did habitually transact "forward" delivery business and was perfectly well aware that this business was being carried on (sic) its behalf at Hapur by their servant or agent Khanna. We regret that we have not seen the books of the Defendant firm and we blame the Plaintiff firm for not having taken the proper steps to procure them. While we appreciate that the onus lies in the circumstances on the Plaintiff firm to prove the authority of Khanna to enter into these transactions on behalf of the Defendant firm, we have very little doubt that it has successfully done so. We have not mentioned that throughout this period hundis were from time to time being drawn by the Plaintiff firm on the Defendant firm and accepted by Khanna on the Defendant firm's behalf. All this was passed through the general outstanding account between the two firms and it is impossible for us to believe that the drawing of these hundis was not perfectly well-known to the Defendant firm. An actual acknowledgment of one of these hundis by Raghunath Prasad, the (sic) of the Defendant firm, has even been traced and forms Ex. 8(1) at page 83 of the record. It is in the handwriting of Raghunath Prasad as appears from Khanna's evidence at page 17 and acknowledges an acceptance by the Defendant firm of a hundi for a thousand rupees. We have only to add on this part of the case that we do not attack any great importance to Ex. 2(7) an which considerable reliance has been placed. We do not find it necessary to do so. It is a document dated as late as November 1933, in the handwriting of Shib Charan purporting to give Khanna a plenary authority to deal with the branch firm of Bhawani Sahai Salig Ram. It is by its terms a colourless document and its date precludes it from being of any great assistance to us in the present circumstances. 16.
It is a document dated as late as November 1933, in the handwriting of Shib Charan purporting to give Khanna a plenary authority to deal with the branch firm of Bhawani Sahai Salig Ram. It is by its terms a colourless document and its date precludes it from being of any great assistance to us in the present circumstances. 16. We have come to the conclusion on this part of the case that the learned Judge was in effect, right when he said-- In my opinion these are acts of more than a servant and are acts of an agent where not merely instructions but one's own discretion and judgment was also used in the course of business dealings. 17. To this we will only add that we are satisfied that the business dealings of the Defendant firm did include "forward" business. 18. That brings us to the other part of the case, upon which we shall, in fact, dispose of it. The other issue throughout has been whether these contracts were wagering contracts. We have already dealt at some length with their history and have pointed out that they have been continuous and regular over several months. We shall have now to look at the terms of the contract itself. 19. These contracts were more or less uniform and they all contained practically identical conditions. The form used was, in fact, a printed form, Paragraph 1 of the terms incorporates the conditions of the Hapur Chamber of Commerce. Paragraphs 2, 3 and 4 are the material ones and we set them out: 2. 'Pucca arhti' shall be competent to give delivery of the goods relating to the transaction entered into by the party, no matter from what source he gets those goods; but the person entering into the transaction shall not have authority to demand delivery (of the goods) from the 'arhati'. He can demand delivery only through the 'arhati' upto 12 o'clock from the 1st to the 12th of the second fortnight of the month to which the transaction relate after depositing the earnest money. The 'arhati' can also pass on the person entering into the transaction his (arhati's) own forward transaction and he can also give delivery of the goods. The person entering into the transaction shall not have any objection to that. 3.
The 'arhati' can also pass on the person entering into the transaction his (arhati's) own forward transaction and he can also give delivery of the goods. The person entering into the transaction shall not have any objection to that. 3. If the delivery of the goods is not effected by the stipulated date, the rate fixed by the Hapur Chamber of Commerce as the rate prevailing on that date shall be accepted by (shall be binding on) the party entering into the transaction. 4. The 'pucca arhti' shall be liable to pay the amount of profit and entitled to realise the amount of loss; he shall not be bound to disclose the names of the particular parties to whom he paid the amount of loss. 20. As it seems to us, Clause 2 gives the "pucca arhati" an option to give actual delivery if he wishes whether from stock or from some other source. But it deprives the other party of the right to claim actual delivery from the 'pucca arhati' at any time. It seems, however, that the 'arhati' can also satisfy his obligation by passing on a forward transaction of his own. The effect of the three clauses taken together, put in its simplest form, seems to be that the 'pucca arhati' was to be in a position to choose whether he delivered or not and was if he so liked to be able to settle the matter by paying or receiving, as the case might be, a mere difference. 22. It is, we concede, not impossible, nor even intrinsically unlikely, that such a form of contract might be used for a genuine "ready" transaction. But it is also impossible to deny that this form of contract is equally capable of use as the vehicle of a mere gambling transaction. It seems to us, therefore, that, standing by itself, the contract does not help us very much one way or the other, except that, as we see it, it is a document under the terms of which mere gambling could conveniently be carried on.
It seems to us, therefore, that, standing by itself, the contract does not help us very much one way or the other, except that, as we see it, it is a document under the terms of which mere gambling could conveniently be carried on. The real question to our minds in this case is to ascertain what, as between these parties, was the real intention when they entered into the contracts in question, in the sense of asking ourselves whether it was ever within their contemplation that grain should be delivered or whether their real intention was only to pay a difference on or after the due date. 23. Before dealing with this question we should like to consider one or two authorities In the Universal Stock Exchange, Limited v. David Strachan (1896) AC 166, the House of Lords in England considered the law relating to such transactions as these in relation to stocks and shares on the stock exchange. The value of this case is that it shows that, in England at least the mere circumstance that an opportunity is left open to the parties to complete their contract by actual delivery, will not be allowed to deprive the Court of the power to consider whether that was their real intention. This is made clear from the speech of Lord Herschell who says: The proposition amounts to this that parties who intended to gamble with one another, but wanted to have the security against one another of being able in a Court of Justice to recover their debts, could compel a Court of Justice to adjudicate and secure to them their bets by a judgment if only, they inserted in their contract a provision which might in certain events become operative to compel the goods to be delivered and received, although neither of them anticipated such a contingency; the purpose of inserting the provision creating an obligation being only to cloak the fact that it was a gambling transaction and enable them to sue one another for gambling debts. The proposition contended for by the Learned Counsel for the Appellants would really lead to that result and I should require much consideration before gave my assent to a proposition involving such consequences. 24. We think that we must bear that in mind in applying Section 30 of the Indian Contract Act.
The proposition contended for by the Learned Counsel for the Appellants would really lead to that result and I should require much consideration before gave my assent to a proposition involving such consequences. 24. We think that we must bear that in mind in applying Section 30 of the Indian Contract Act. And again in the case of In re (sic) (1899) 1 QB 794 it is made equally clear by the English Court of Appeal that a contract may none-the-less be a contract by way of gaming or wagering because it gives the buyer or seller an option to demand delivery or acceptance, as the case may be, of the subject matter of the contract. In short, the parties will not be al owed to "camouflage"--if we may make use of that expression--their transaction by getting it up as a "delivery" transaction when, in fact, it was never their intention that it should be. 25. The latest authoritative case is one in Privy Council of Sukhdevdoss Ram Prasad Firm v. Govindoss Chathurbhujadoss and Company (1927) 55 IA 32 : AIR 1928 PC 30 . In that case Lord Darling on behalf of the Board, after considering the two cases to which we have already referred, states the law in a form which is, of course, binding on us in these words: "....The authorities cited show that to produce that result" i.e., the result of avoiding the contract there must be proof that the contracts were entered into upon the terms that performance of the contracts should not be demanded, but that differences only should become payable. 26. On the facts of that case before the Judicial Committee it was held that the transactions in question were not merely gambling transactions and were not therefore void. The facts, however, there were different from the facts before us. There were, we think, only three transactions in question and even so, there was some actual genuine delivery business as part and parcel of the same contracts. The facts were wholly different from ours and there were, indeed, no conditions of the contract to throw any light on the matter. It was a simple case, as we read it, of a sale followed by a purchase instead of completion. 27.
The facts were wholly different from ours and there were, indeed, no conditions of the contract to throw any light on the matter. It was a simple case, as we read it, of a sale followed by a purchase instead of completion. 27. There is only one other case to which we desire to refer and that is a case in this Court itself decided by Mr. Justice Rachhpal Singh Harcharan Das Som Prakash v. Jai Jai Ran 1940 AWR (HC) 63 : ALJ 48. It is an interesting case from our point of view because it arises out of precisely the same form of contract as the one with which we are dealing. It also concerns a contract made at Moradabad. The learned Judge attaches great significance to Clause 4 of the Contract, as, indeed, with great respect do we. We have already set out Clause 4 above. We attach no less significance than did the learned Judge in that case to the circumstances that the 'pucca arhati' was in no circumstances to be bound to disclose the name of any other person to whom he might have incurred a loss in respect of the transaction in question, nor, indeed, whether he had incurred a loss at all. That is an ideal provision, if the transaction is to be a mere gamble. The learned Judge says: The terms of the contract in the case before me clearly show that the Plaintiff and the Defendant were entering into a contract as principals. The terms of the contract show that there was a mutual understanding that there was to be no delivery and that only differences would be paid by one party to the other. Paragraph 2 clearly provides that the Defendant will have no right to call for delivery. Paragraph 4 of the contract provides that the Defendant will have no right whatsoever even to enquire from the Plaintiff his 'pucca arhati' as to whom he had to pay any losses in respect of the transaction in question....alter a consideration of all the circumstances of the case...." "I hold that there was no intention to give delivery and the parties mutually agreed to pay the differences only. 28. It comes, we think, therefore to a question of fact--what is their real intention? That brings us back to the circumstances of the present case.
28. It comes, we think, therefore to a question of fact--what is their real intention? That brings us back to the circumstances of the present case. There was a long series of very substantial contracts over a period of seven months, in not one of which was there any genuine delivery of goods, except conceivably, in one small case. These cot-tracts were all based upon terms which were as we have shown singularly appropriate to mere gambling transactions. Indeed, the contracts were themselves headed as "forward" contracts. We think that we are entitled if not bound, to regard the course of dealings between the parties as a reliable indication of what their real intentions were and that we should not be deflected from a common sense view of the matter either by the fact that one of the parties might have given delivery and he so elected, or by the fact that in one small case delivery either was, or may have been, given. We bear in mind that the books of the Defendant firm have not been produced, because we think, it suited neither side to produce them. It did not suit the Plaintiff to call for their production because, if he had, they might well have shown that these were merely gaming transactions. It did not suit the Defendant to produce them because, if he had, they might have shown conclusively that Khanna was their agent. 29. The transaction of Mangsar Badi 14 on which there is said to have been a delivery of 50 tons would not alter our view, even if we were satisfied that there was really such a delivery. At the best we point out that this was a contract which see ns to have been entered into with the Plaintiff branch firm of Bhawani Sahai Salig Ram and not with the Plaintiff firm in the first place. 30. For all these reasons, we have come to the conclusion that the contracts between the Plaintiff firm and the Defendant firm which are sued upon were wagering contracts and cannot be enforced in view of the provisions of Section 30 of the Indian Contract Act, In that respect we disagree with the learned Judge, who does not seem to have had the advantage of considering the authorities. 31.
31. We must, therefore, allow this appeal, set aside the decree of the Court below and substitute for it a decree of our own dismissing the suit with costs. We think that, notwithstanding that the Appellants have failed in one of their contentions in this Court they are nevertheless entitled to their costs of this appeal. 32. We should perhaps add that, had we been able to agree with both the findings of the learned Judge, we should have still to consider carefully what form of relief the Plaintiff would have been entitled to.