Decided on December 05,1955



- (1.)The plaintiff, a registered partnership carrying on business at Arnaravathi in Guntur district is the appellant in this second appeal. The 1st defendant is a firm carrying on business at Bezwada and originally consisted of the 2nd defendant and the 9th defendant as partners. The 2nd defendant is dead and his legal representatives are defendants 3 to 8. The suit was filed for the recovery of Rs. 1,635/- from the defendants on foot of a contract for the sale of 636 bags of groundnut kernel, Exhibit A-1 dated 5-10-1944. Under this contract the 'first defendant agreed to sell to the plaintiff 636 bags of groundnut kernel at Rs. 18-4-0 per bag, delivery to be effected before 31-12-1944. This contract was therefore a forward contract as defined in section 2 Clause (2) of the Oil Seeds (forward contracts prohibition) Orders 1943. Before the due date for delivery had arrived, the parties settled and under Exhibit A-2 dated 18-12-1944 the plaintiff agreed to sell to the 1st defendant 636 bags of groundnut kernel at Rs. 20-2-0 per bag. The difference between the rates under the two contracts is Rs. 1-14-0 per bag and the plaintiff claims a sum of Rs. 1,192-8-0 in respect of 636 bags at Rs. 1-14-0 per bag. A sum of Rs. 442-8-0 is claimed as interest upon the principal sum of Rs. 1,192-8-0. The defendants pleaded that the contract between the parties was a wagering contract and therefore incapable of being enforced. Secondly, the defendants pleaded that the contract was void under section 3 of the Oil Seeds (forward contracts prohibition) Order, 1943.
(2.)The trial court overruled the defences and decreed the suit of the plaintiff. Though a ground of appeal was raised before the lower Appellate Court that the contract was a wagering contract and therefore unenforceable in law, the point does not appear to have been argued or maintained in appeal, and it is not urged before me, here. The point on which the Courts below differed was whether the contract was within the exemption contained in the notification by the Central Government No. 1161 dated 16-2-1944. Under the terms of the notification (omitting those that are not now relevant) forward contracts for groundnut not transferable to third parties are excluded from the provisions of the Oil Seeds (forward contracts prohibition) Order, 1943. It has been held in the decisions of rhe Madras High Court followed by a learned Judge of this court that in order to attract the exemption contained in the notification above referred to, non-transferability should be a tefm of the contract. If it could not be gathered from the express language of the documents or by necessary implication from the terms in which the contract is embodied that the Contract should be non-transferable, then the exemption contained in tile notification 'would' riot be attracted. The question is whether on the language of Exhibits A-1 and A-2, it is possible to say that the contract was not transferable. The words " swantha chalamani" which occur in Exhibits A-l and A-2 are not usually inserted in mercantile contracts and they have been introduced into Exhibits A-i and A-2 obviously with some specific purposes or object. The Oil Seeds (forward contracts prohibition) Order 1943 came into force on 29-5-1943 and must have come to the knowledge of merchants trading in groundnuts in this locality before 5-10-1944, when the contract Exhibit A-1 was entered into. The introduction of the words " swantha chalamani " in Exhibit A-l was evidently intended to attract the provisions of the notification No. 1161 dated 16-2-1944 to the suit contract and exempt it from the operation of Section 3 of the Oil Seeds (forward contracts prohibition) Order, 1943.
(3.)The word " chalamani " does not appear to be of indigenous Telugu origin but appears to have been imported into the Telugu and other South Indian languages. " Chalamani" may have several shades of meaning in different contexts. With reference to coins, coins which are no longer legal tender or which have ceased to be current are stated to have lost their " Chalamani". The learned Subordinate Judge translates the words " Swantha Chalamani" as personal delivery. In my view, there is no need to interpret that expression in this limited sense. It might mean that the contract has force as between the parties only or that the rights and obligations under the contract are of a personal nature, personal to the parties concerned.

Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.