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1959 DIGILAW 270 (ALL)

Messrs Govind Ratan Lal Ram Mohan Lal v. Messrs Govind Ram Srikrishna Oil Mills

1959-09-18

R.N.GURTU, S.N.DWIVEDI

body1959
JUDGMENT 1. The suit was instituted by M/s. Govind Ram Sri Krishna Oil Mills against Messrs. Ratanlal Ram Mohan Lal and others for damages for breach of contract. 2. The plaint clearly alleges that the plaintiff was a registered firm which manufactured oil and sold its own manufactured oil. It was further stated in the plaint that the defendants had entered into a contract with the plaintiffs in December, 1951 by telephone to purchase certain quantity of groundnut oil at a specified rate, and the oil was to be delivered in February and March, 1952. The defendants, however, failed to take delivery when it was made and thereby damage is alleged to have been caused to the plaintiffs. It is then asserted that the defendants were liable to make good the damage. 3. The defendants filed a written statement wherein they accepted the fact of agreement, but they alleged that the contract was in regard to ready oil and the oil was to be delivered in the end of January, 1952. It was then said in the written statement that the plaintiffs had no ready oil until January, 1952 and that, therefore, there was another agreement between the parties about the end of January, 1952 to the effect that the plaintiffs would deliver oil in the first week of February, 1952. The plaintiffs would not, however, manufacture oil (tel tayyar nahin kar saka) by the first week of February, 1952 and were unable to perform their part of the contract and that, therefore, the defendants did not commit a breach of the terms of the contract. Lastly, it was alleged that there was a statutory ban on forward contracts and the contract in suit, being a forward contract, was void and unenforceable. 4. The trial court framed a number of issues but proceeded to dispose of the suit on the issue relating to the legality of the agreement. It was of the view that the agreement was void and unenforceable because the Vegetable Oils and oilcakes (Forward Contracts Prohibition) Order, 1944 provided that no person would enter into any forward contract in the articles specified in the Schedule to the order and the Schedule specified groundnut oil as one of the articles. The trial court, therefore, dismissed the suit and the plaintiffs then appealed to the learned District Judge. 5. The trial court, therefore, dismissed the suit and the plaintiffs then appealed to the learned District Judge. 5. The learned District Judge held that the agreement was not void, because it was protected by a notification issued under clause 5 of the aforesaid Order. The learned District Judge, on this view, set aside the decree of the trial Court and remanded the case to it for decision of suit on merits. 6. The defendants, aggrieved by the decree of the learned District Judge, have preferred this second appeal. 7. Before entering into the merits of the case, it will be necessary to set out the relevant portions of the Vegetable oils and oilcakes (Forwards Contracts Prohibition) Order, 1944 and the notification issued under clause 5 of that Order. The relevant portions of the order are as follows :- "2 (i) "article to which this order applies'' means any of the vegetable oils (whether raw, refined or solidified) or oilcakes specified in the first column of the Schedule to this Order; (ii) "contract'' means a contract made, or to be performed in whole or in part, in India relating to the sale or purchase of any article to which this Order applies; (iii) "forward contract" means a contract for the delivery at some future date of any article to which this Order applies; (vi) "specified date" in relation to any article to which this order applies means the date specified against that article in the second column of the schedule to this order." "Clause 3. No person shall, after the specified date for any article to which this order applies, enter into any forward contract in that article." Clause 5. The Central Government may, by notification in the Official Gazette, exclude any contract or class of contracts from the provisions of this order. SCHEDULE Articles to which this order applies:- 1. Vegetable Oils - (1) Groundnut oil - 12th January, 1944". The notification issued under clause 5 of the aforesaid order, relevant for the purposes of this case, reads thus :- "Forward contracts for specific qualities or types of any article to which the said Order applies, and for specific delivery at a specified price, delivery orders, railway receipts or bill of lading against which contracts are not transferable to third parties". 8. 8. Learned counsel for the appellants has conceded before us that the plaintiffs are a mill which manufactures groundnut oil. The question for consideration, therefore, is whether the agreement between the parties is saved by the notification quoted above. The order strikes down "forward contracts". The notification, however, exempts certain forward contracts from the purview of the ban imposed on the aforesaid Order. If a forward contract relates to a specific quality or type of any article specified in the Schedule to the Order, clause 3 of the Order will be inapplicable to such a contract and it will not be a void contract. From the written statement of the defendants, it appears that the parties had agreed to sell and purchase groundnut oil manufactured by the plaintiffs themselves. The words "Tayyar nahin the ya nahin kar saka" occurring in the plaint clearly indicate that the intention of the parties was to enter into an agreement for supply of the groundnut oil which was manufactured by the plaintiffs themselves and not by any other mill or manufacturer. That being so, in our opinion, the groundnut oil manufactured by the plaintiffs may be said to be groundnut oil of a specific quality or type. The manufactured goods bear the impress of the personality of each manufacturer and, in the commercial world, they pass on as distinct goods of that particular manufacturer. The groundnut oil manufactured by the plaintiffs and agreed to be sold by them to the defendants would bear its own distinctive mark and identity and can popularly be said to belong to a specific quality or type of groundnut oil. The contract in question is not therefore in contravention of any law and is valid and binding. 9. For the reasons stated above, we are of opinion that there is no force in this appeal and it is hereby dismissed. Costs here and heretofore shall abide the event.