G. China Konda Reddi (Deft. ) v. The East Asiatic Co. (India) Ltd. by power of attorney holder Ijjala Nagi Setti (Plaintiff).
1954-08-05
K.SUBBA RAO
body1954
DigiLaw.ai
Judgment: The question in this second appeal is whether the contracts dated 14th May, 1945 and 18th May, 1945, for the sale of groundnut kernel are hit at by the provisions of the Oilseeds (Forward Contracts) Prohibition Order, 1943. The facts either admitted or found may be briefly narrated. The defendants are a firm of merchants doing business in groundnut at Nandyal under the name and style of Messrs. G. China Konda Reddi and G. P. Venkata Reddi. The plaintiff is the East Asiatic Company (India) Ltd., Madras. The defendants entered into two contracts with the plaintiff on 14th May, 1945 and on 18th May, 1945, for the sale of groundnut kernel. The first contract was for sale of 318 bags of groundnut kernel. The second contract also was for the sale of 318 bags of groundnut kernel. By the dates of the contracts the groundnut crop was fully harvested and was in the market. It is also in evidence that at the time the suit contracts were made, there was considerable difficulty in securing wagon accommodation. Because of that fact in regard to the first contract, it was agreed that delivery was to be completed from the 14th of May and before 30th June, 1945. In respect of the second contract, delivery was agreed to be made from the 18th of May and before the 30th June, 1945. The defendants failed to supply 16 bags of kernel, under the first contract and the entire quantity under the second contract. The suit was filed by the plaintiff for recovery of damages from the defendants. The defendants, inter alia, contended that the suit contracts were void being forward contracts, under the provisions of the Oilseeds (Forward Contracts) Prohibition Order, 1943. They also pleaded that the Provincial Government of Madras imposed a ban on the export of groundnut kernel to places outside the Madras Presidency and, therefore, the contracts became impossible of performance. Both the Courts negatived the said pleas and gave a decree to the plaintiff. The defendants preferred the above appeal. Before me, the learned counsel for the appellants raised two contentions, which his clients have unsuccessfully pleaded before the lower Courts. The first question is whether the contracts were void under the Oilseeds (Forward Contracts) Prohibition Order. A forward contract is defined in clause(ii) of section 2 of the said order.
The defendants preferred the above appeal. Before me, the learned counsel for the appellants raised two contentions, which his clients have unsuccessfully pleaded before the lower Courts. The first question is whether the contracts were void under the Oilseeds (Forward Contracts) Prohibition Order. A forward contract is defined in clause(ii) of section 2 of the said order. It says: “Forward contract means a contract for the delivery of oilseeds on some future date.” Rajamannar, C.J., in Hanumanthiah v. Thimmiah1, explained the words “at some future time” to mean “at some time in future”. In that case, the contracts were entered into on the 18th of August, 1945 and on the 19th of August and delivery in respect of those two contracts was agreed to be made in December, 1945 and in December, 1945 or January, 1946, respectively. It was, therefore, obvious that under the said two contracts, delivery was agreed to be made only at some time in future. Can it be said in the present case that delivery was agreed to be made at some time in future ? The ground nut crop was fully harvested and was in the market. There was difficulty in securing wagon accommodation. Under the contracts, the parties clearly contemplated delivery on the dates of the contracts. If the defendants ins1sted upon delivering the groundnut on 14th May, 1945 and on 18th May, 1945, the plaintiff could not have legally refused them. Reasonable time was given to complete delivery of the entire goods only because of the transport difficulties. It was contended that, as the defendants were permitted and had a right to deliver the goods at a future date, the contracts were forward contracts. But to be a forward contract, the parties must agree to deliver the goods at a future date. Under the present contracts, the parties contemplated delivery of goods on the dates of the contracts. The parties did not agree for the delivery of the goods at a future date. They agreed for delivery immediately, though extension of time was given for the convenience of the defendants to get over the transport difficulties. The learned counsel for the appellants relied upon an unreported judgment of Govindarajachari, J., in C.R.P. Nos. 1032 to 1034 of 1946.
The parties did not agree for the delivery of the goods at a future date. They agreed for delivery immediately, though extension of time was given for the convenience of the defendants to get over the transport difficulties. The learned counsel for the appellants relied upon an unreported judgment of Govindarajachari, J., in C.R.P. Nos. 1032 to 1034 of 1946. There the contract was dated, 31st January, 1945, in respect of the sale of groundnut kernel and the due date of delivery was given as before the end of January. The learned Judge held that if delivery under the contract can be given and is permitted to be given under its stipulations on a date later than the date on which the contract is entered into, it would be a forward contract within the meaning of that Order. But it will be seen from the facts of that case that, unlike in the present case, the parties did not contemplate delivery on the date of the contract itself. This decision, therefore, does not govern the present case.I would, therefore, hold agreeing with the Courts below that the suit contracts were not forward contracts and therefore, they were valid and enforceable. There is no force in the second contention for the contracts themselves specially provide for the contingency of the Government imposing a ban on the export of groundnut kernel. Clause 10 says: “Under no circumstances including prohibition of export from any particular District or native or foreign territory can sellers claim impossibility of performance of this contract.” In view of that specific term, this argument has not been pressed. In the result, the appeal fails and is dismissed with costs. No leave. D.L.N. ----- Appeal dismissed.