BAIJULAL Vs. MATADIN
LAWS(RAJ)-1952-10-10
HIGH COURT OF RAJASTHAN
Decided on October 30,1952

BAIJULAL Appellant
VERSUS
MATADIN Respondents

JUDGEMENT

- (1.)THIS is a second appeal by the plaintiff against the judgment of the District Judge, Khetri, dated the 10th March 1948, by which the judgment of the Additional Civil Judge, Khetri, dated the 30th August 1947 dismissing the suit of the plaintiff was upheld but the defendants were allowed costs of both the courts.
(2.)BAIJULAL filed a suit against Matadin and Bishveshwardayal for Rs. 236/8/- in the court of the Civil Judge, Khetri, on the allegation that both the parties entered into an agreement about an option in foodgrain viz. , Bajra and Rs. 30/- were paid to the defendants on the date on which this agreement was entered into and subsequently on the 30th September 1942 Rs. 200/-) were further deposited with the defendants and the terms of that agreement were also written in a document executed by Matadin on behalf of Matadin Bishveshwar Dayal. According to the terms of the agreement, margin of profit was to be paid to the defendants on 500 maunds of Bajra to be computed on the basis of the difference between the rate prevailing on 21st January 1942 and the rate fixed in the agreement which was Rs- 4/- per maund. If the rate on the due date was higher than the contractual rate, the amount of the deposit was to be utilised for the payment of the amount of loss, but in the event of the rate on the due date being lower than Rs. 4/- per maund the amount deposited was to be refunded to the plaintiff with interest at 6% per annum. This agreement, it was conceded by the plaintiff, was void ab initio as it was illegal under the provisions of the Foodgrains (Future and Option) Order, 1942. But the plaintiff claimed a refund of the amount paid to the defendants. The reply of the defendants was that Matadin who had signed the document] was minor and that the agreement being illegal and punishable under the provisions of the Foodgrains (Future and Option) Order of 1942 the plaintiff was not entitled to get a refund of the amount paid to the defendants. Further, it was also stated that the rate of Bajra had been higher than the contractual rate and the amount had been credited towards the loss under the terms of the agreement.
The first court after holding a trial came to the conclusion that Matadin was not a minor at the time of the agreement and that the contract being illegal and punishable as an offence under the Foodgrains (Future and Option) Order of 1942 the plaintiff was not entitled to claim a refund of the amount deposited by him with the defendants. It was also held that sec. 65 of the Contract Act did not apply in the circumstances of this case. The first appellate court also concurred with these findings.

In this appeal, the learned counsel of the appellant has argued that even though entering into an agreement of Teji Mandi or an option or future in foodgrains may be illegal or punishable as an offence, yet the act of making a deposit with the defendants in furtherance of such an agreement was not punishable by itself and this should be taken into consideration for holding that the amount of the deposit was refundable. In support of this argument, the learned counsel has tried to distinguish between the provision relating to a future in foodgrains and that of an option in foodgrains in the meaning of sec. 3 of the Foodgrains (Future and Option) Prohibition Order, 1942. It is contended that as regards futures, acts of buying, receiving or agreeing to pay or receive any margin are made punishable by sec. 9 of the Order. Such acts have not been made punishable in connection with an option of foodgrains and on this account it is urged that the act of making a deposit in connection with an option is not punishable as an offence and the contract being void the plaintiff is entitled to get a refund of the amount deposited by him under sec. 84 of the Indian Trusts Act.

Both the courts below have held that the contract entered into between the parties was a teji contract and it was not disputed on either side that it is so. This agreement has been held by both the lower courts to be an option in food-grains. It is not-necessary here to go into the distinctions between a future in foodgrains and an option in foodgrains, under the provisions of the Foodgrains (Futures and Options Prohibition) Order, 1942. In either case the result would be the same. Under sec. 3 (b) of the Order, entering into options in foodgrains is prohibited after the commencement of the Order and contravention of sec. 3 (b) is made punishable under sec. 9. Taking this agreement to be one for option in foodgrains, it is not disputed that entering into an option amounts to an offence under this Order. The only distinction which is tried to be drawn is that making of a deposit in connection with an option in foodgrains already entered into is not the same thing as entering into an option. On this basis it is desired that the making of the deposit should not be regarded as an act which is punishable and the amount should be held to be refundable. It may be pointed out that even though making of a deposit by itself is not punishable under the law, the purpose for which this amount was deposited was certainly punishable under sec. 3 (b) of the Order. If entering into an option in foodgrains is made punishable under the provisions of the Order all acts which are in furtherance or in execution of that act should be construed to be illegal. Depositing of an amount after entering into an option for the purpose of the execution of the said option, even though by itself not punishable, it is in execution of a contract, the making of which was itself punishable. It would therefore be not proper to regard the act of making of a deposit in furtherance of an act which is an offence, differently from the offence itself, in so far as the question of refunding the amount is concerned. The purpose for which the deposit was made was not only illegal but was punishable and it would only mean rendering the law nugatory if it is held that amounts as are paid or deposited in furtherance of an act which is an offence are refundable. Both the courts below were therefore not wrong in holding that the plaintiff was not entitled to get a refund of the deposit made by him in furtherance of an act which was punishable under the terms of the Order.

This appeal, therefore, fails and is dismissed with costs. .



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