YELESWARAPU LAKSHMI SURYANARAYANA Vs. KUDARAVALLI VENKATARATNAM

JUDGEMENT

(1.) THE suit in the lower Court was for a sum of money due on three contract. Under these contracts, sums of money were advanced by the plaintiff to the defendant; and the defendant undertook to deliver in descharge of the loan and the interest certain quantities of paddy. This paddy was not given in accordance with the contract; and so the plaintiff now sues for the value of the paddy. We are now concerned only with one contract, Ex. P -I, dated the 12th July, 1942; and the chief question that the lower Court had to consider was whether that contract was enforceable in view of the provisions of Clause 3 of the Food Grains Control Order. The lower Court held that it did not contravene those provisions. CLAUSE 3 (1) of the Food Grains Control Order says : No person shall engage in any undertaking which involves the purchase, sale, or storage for sale, in wholesale uantities of any food grain except under and in accordance with a licence. Sub -clause (d) of Clause 2 says : sale in wholesale quantities means sale in quantities exceeding 20 maunds in any one transaction.

(2.) THE learned Subordinate Judge's argument was that the sum of money advanced was a loan and that the paddy was to be given in discharge of the loan. It was not therefore, he argued, a transaction of sale. It is easy to see how the Food Graims Control could be circumvented by framing a sale so as to make it appear that the money paid was an advance and that the grain was merely a repayment of the loan ' but even if the transaction was what it purports to be, then it still seems to me that when a person advances money and another person undertakes to pay grain for it at some future date, that transaction is a sale, even though the person who provides the grain has the use of the money for some time before he has to fulfil the contract.

(3.) ANOTHER argument is that the transaction cannot be said to be in contracention of the order; because the parties may have intended to procure a licence from the Provincial Government. There is however no evidence that they intended to do so ' and the wording of Clause 3 (1) suggests that the licence has to be obtained before a contract can legally be entered into, because the contract has to be under and in accordance with the licence. A contract can hardly be said to be under and in accordance with a licence that has not been issued.