BHARGAVA, J. - (1.) THIS is an appeal by the defendant against the order of the learned District Judge, Ajmer dated 30th May, 1957 reversing the judgment and decree of the learned Additional Sub-Judge, Ajmer and remanding the case for retrial in a suit for recovery of damages.
(2.) THE plaintiff's case was that on 21st May, 1954 the defendant contracted to purchase 500 x 36 lbs. tins of Prabhat Hydrogenated Ground Nut and Til Oil at the rate of Rs. 3 2/- per tin inclusive of all charges deliverable at the purchasers' godown or at their nominees' godown. THE delivery was to be made on any day in the month of July, 1954. THE defendant paid a sum of Rs. 1000/- as advance which was to be deducted from the invoice amount. THE plaintiff claimed damages from the defendant on the ground that the defendant failed to take delivery of tins although he was always prepared to perform his part of the contract. THE loss suffered by him was calculated at Rs. 2875/- and after deducting a sum of Rs. 1000/- which had been paid to him as advance he filed the present suit for recovery of Rs. 1875/ -. The defendant admitted the contract but resisted the claim on several grounds one of which was that the contract in question was illegal under the vegetable Oils and Oilcakes (Forward Contracts Prohibition) Order, 1944, (hereinafter called the Order) and was not therefore enforceable. He further claimed the refund of Rs. 1000/- paid by him as advance along with Rs. 40/-- as interest and paid court fees on this claim. The trial court agreeing with the defendant dismissed the plaintiff's suit and decreed the defendant's claim for the refund of Rs. 7000/ -. On appeal the learned District Judge relying upon a notification issued by the Central Government in exercise of the powers conferred by Clause (5) of the Order, excluding a class of contracts from the purview of the said order namely: - "forward contracts for specific qualities or types of any article to which the said Order applies, and for specific delivery at the specified price, delivery order, railway receipts or bills of lading against which contracts are not transferable to third parties. " set aside the decree of the learned Additional Sub Judge and remanded the case for retrial. The defendant has now come in appeal against the said order. Learned counsel for the appellant contends that the contract in question was unenforceable because of the provisions of the order. On the other hand the respondent urges that the contract is covered by the above notification. He also urges that the order itself which will be deemed to have been issued under sec. 3 of the Essential Supplies (Temporary Powers Act, 1946, hereinafter called the Act) was not in force at the time of this contract as the Act itself had expired before 21st May, 1954. Being a temporary Act it could not remain in force by virtue of Art. 372 of the Constitution of India. As to the second contention of the respondent it may be pointed out that the life of the Act was extended upto 31st March, 1951 by resolutions of the Constituent Assembly. Question of the validity of this extension is concluded by the authorities of Supreme Court in Joylal Agarwala Vs. The State; The Union of India, (1) and Sisir Kumar Dutta. Vs. The State of West Bengal, (2 ). Its life was further extended upto 31st December, 1952 by sec. 3 (b) of Act No. 52 of 1950 and again by Act No. 65 of 1952 to 26th January, 1955. It will thus appear that the life of the Act was extended upto 26th January, 1955 by an act of the Parliament. Explanation 3 to Art. 372 of the Constitution of India on which learned counsel for the respondent relies is as follows: - "nothing in this article shall be construed as continuing any temporary law in force beyond the date fixed for its expiration or the date on which it would have expired if this Constitution had not come into force. " It is true that the life of the Act which was a temporary law could not be extended by virtue of Art. 372 of the Constitution of India beyond the date of its expiration because of Explanation 3 but there is nothing in the explanation which prevents the Parliament from enacting any law to extend the life of the Act. The Parliament was quite competent to enact the law which extended the life of the Act. Therefore the Act as well as the order will be held to be in force at the time the parties entered into this contract. The main question therefore, is regarding the ambit and scope of the notification issued under clause (5) of the order. The appellant's contention is that the plaintiff has not proved that the delivery order, railway receipt or bill of lading relating to this contract was not transferable to third parties which is essential before the contract in question could fall within the notification. The respondent on the other hand contends that in the transaction in question physical delivery of the goods was the essence of the agreement as provided therein and it did rot contemplate any delivery order, railway receipt or bill of lading so as to require in it any term regarding its non-transferability to third parties. In other words it was a contract for spot delivery in which the question of delivery order, railway receipt or bill of lading did not arise. According to the respondent the prohibition as to transferability applies only in those cases where there are actual or contemplated delivery orders, railway receipts or bills of lading. The appellant however submits that whether it may be a case of spot delivery or a contract in which there is a delivery order, railway receipt or bill of lading there should in every case be an agreement to show that the delivery order or railway receipt or bill of lading was not transferable to third parties. In my opinion the notification applies to those forward contacts which are: - (1) For specific qualities or type of any article, and (2) For specific delivery at a specified price, and (3) Delivery order, railway receipts or bills of lading against such contracts are not transferable to third parties. Unless the above three conditions are fulfilled the exemption will not apply to the contract. In every case it should be shown whether it is a case of spot delivery or otherwise that the delivery order or railway receipt or bill of lading in regard to that contract was agreed to be not transferable to the third parties. Even though in a contract a delivery order, railway receipt or bill of lading may not be contemplated yet there is no prohibition either that there will be none. It is quite open to the party even in such cases to send the delivery order in respect of the goods covered by the contract. The idea underlying the order is to prevent forward transactions leading to speculation and consequent inflation in prices resulting in dimunition of the goods essential for the life of the community. A forward contract for spot delivery is transferable and may equally lend itself to speculation by any other * contract. The notification requires that in order to prevent speculation there should be a guarantee in the contract that the delivery orders, railway receipts or bills of lading in respect of the contracts will not be transferred. The exemption clause is to be read as a whole and not disjunctively. In this connection reference may be made to: Messrs. Hansraj Keshavji and Company Vs. Vasanji Lakhamsey, (3 ). Uma Satya-narayanamurty Vs. Kothamaan Sitaramayya & Co. , (4 ). and Boddu Seetharamaswami and others Vs. Bhagwathi Oils Company, (5 ). In the contract in question the term of the payment is that it shall be made as soon as as the delivery is tendered at the purchaser's godown or his nominee's godown. Regarding the rate it is provided that it will be Rs. 32/- per tin inclusive of all charges deliverable at the purchasers' godown or at their nominees' godown. The contract does not say that there will not be any delivery order or a railway receipt and further that they will not be transferable to third parties. On the other hand indications are that the contract could be assigned to third persons. The nominee mentioned in the contract is not necessarily the nominee for the godown but may be a person to whom the contract itself has been assigned. I am therefore, of the view that the contract in question is hit by the order and is not saved by the notification. That being so that contract is void and unenforceable. I therefore, allow this appeal, set aside the order of the learned District Judge, Ajmer and restore that of the learned Additional Sub Judge, Ajmer. The plaintiff's suit shall stand dismissed. In the circumstances of the case parties shall bear their own costs of this appeal. Learned counsel for the respondent prays for special leave to appeal to a Division Bench. Leave to appeal is granted as prayed for. . ;