I. N. Modi, J. - (1.) THIS is a regular first appeal by the plaintiffs Murlidhar and Banwarilal as owners of the firm Murlidhar Banwarilal against the judgment and decree of the Civi1 Judge. Alwar, dated the 22nd March, 1954, dismissing their suit for money.
(2.) THE plaintiffs were a firm who at all material times carried on business of the sale and purchase of cotton seeds in the name of Murlidhar Banwarilal at Khairthal in Mandi Teiganj, District Alwar. THE defendants are alleged to be owners of two firms Raghunath Sahai Kishorelal and Ramjilal Jainarain which also carried on business at Khairthal but which combined together and established a firm named Rughnath Sahai Kishorelal at Mirpurkhas, and this latter firm carried on business as commission agents. THE case of the plaintiffs, put briefly, was that they entered into certain forward transactions for the sale and purchase of cotton seeds under the commission agency of the defendants firm at Mirpur khas for the deliveries of May and October, 1947, and January, 1948, the particulars of which have been given in para 3 of the plaint but which need not be repeated here as there is no dispute about these transactions having taken place as alleged. It is admitted between the parties that the plaintiffs earned a profit of Rs. 17,755-13-9 in the transactions relative to the May delivery and that they suffered a loss to the extent of Rs. 953-2-0 in connection with the transactions relating to the October delivery and again earned a profit of Rs. 2,828-2-0 in connection with the transactions relating to the January 1948 delivery, and in this way they earned a total profit of Rs. 19,630-13-9. As against this, it is also admitted that a sum of Rs. 1,332-9-3 was due from the plaintiffs to the defendants by way of the latter's commission charges and other incidental expenses, the net profit due to the plaintiffs thus being Rs. 18,298-4-6. THE plaintiffs added to this a sum of Rs. 1,000 which was also admittedly deposited by them with the defendants and acknowledged that they had received a sum of Rs. 13,000 from the defendants towards their profits on the afore-mentioned transactions. THE plaintiffs thus claimed that they were entitled to receive a sum of Rs. 6,298-4-6 and to this they added a further sum of Rs. 368-4-9 as interest at the rate of six per cent, per annum, and a further sum of annas 0-11-0 as expenses of the notice given to the defendants and filed the present suit for the recovery of Rs. 6,667-4-3 and also claimed pending and future interest. This suit was filed on the 26th July, 1948, in the court of the Civil Judge, Alwar. The defendants admitted that the plaintiffs bad entered into the suit transactions under their commission agency. They also admitted that they had realised profits amounting to Rs. 17,755-13-9 from third parties in connection with the transactions of the May delivery in June, 1947. They, however, raised a number of pleas contesting the suit, the material of these at this date being that all the transactions were of a character in which delivery was never intended to be given or taken nor was it ever given or taken in actual fact and that the parties had intended merely to deal in differences, and, therefore, these transactions were of a wagering nature and were not enforceable in law. The defendants further pleaded that they did not recover any monies in connection with the transactions of October, 1947, and January 1948 deliveries and that they had paid income-tax on behalf of the plaintiffs to the tune of Rs. 5,086-8-0 on the May, 1947, transactions and Rs. 810-2-6 on the January, 1948, transactions, the total amounting to Rs. 5,898-10-6, and, therefore, at the most, a sum of Rs. 401-10-3 would have been payable by them to the plaintiffs being the difference between the net profits of the transactions amounting to Rs. 6,298-4-6 as alleged by the plaintiffs and the income-tax paid by them amounting to Rs. 5,896-10-6; but it was contended that, in any case, as they had not received the monies in connection with the October and the January settlements from the third parties concerned and as the entire transactions were bad for being of a wagering character, the plaintiffs were not entitled to recover anything from the defendants. The only other, plea which is relevant to mention is that the defendants also contended that the plaintiffs had brought the suit in an improper form inasmuch as they were members of a joint Hindu family firm and a suit could not as such be brought in the name of the firm. The defendants also pleaded in this connection that they did not know who were the owners of the joint family business. For all these reasons, the defendants contended that the plaintiffs' suit deserved to be dismissed. The trial court framed as many as fifteen issues and decided almost all of them in favour of the plaintiffs except the issues relating to the wagering nature of the suit transactions and the frame of the suit, and as these two last-mentioned issues were decided against the plaintiffs, it dismissed the suit but without costs. In this appeal it is strenuously contended on behalf of the plaintiffs that the trial court has fallen into serious errors in dismissing the suit on the grounds on which it did. The first question which falls for determination in the circumstances mentioned above is whether the suit transactions were of a wagering character and whether this plea is open to the defendants in the circumstances of this case. It was contended on behalf of the plaintiffs that the defendants were commission agents and that they had done business with third parties and had earned profits for them, the most part of which they had received on their own admission, and, consequently, it was not open to them to deny their liability to the plaintiffs in connection with them in so far as they had admittedly received the profits from third parties. Reliance was placed in this connection on the provisions of Sections 217 and 218 of the Contract Act. It was also urged that the transactions were not of a wagering character although no delivery was actually given or taken by the parties in relation to them. These submissions were sought to be met on the side of the defendants by the contention that the defendants were Pucca Adatias according to the evidence led by the plaintiffs themselves, that it was never intended between the parties that deliveries of the cotton seeds purchased or sold should ever be given or taken (and none indeed was ever so given or taken), that all the contracts were squared up before the due dates, that the defendants being Pucca Adatias, their position was virtually that of principles and not of, agents and consequently in the circumstances referred to above, the suit transactions were of a wagering character and It was perfectly open to the defendants to raise that plea in law. The important question to consider in this connection, therefore, is whether the defendants were Pucca Adatias and whether that by itself should be accepted as a ground for holding that the suit transactions had been entered into between the parties as principals to principals and that the position of the former was not that of commission agents at all. But before we deal with this, let us see what was the nature of the suit transactions between the parties. The plaintiffs' case as disclosed in the plaint is that some time in February, 1947, it was orally agreed between them and the proprietors of the firm Kishorelal Jagannath Prasad at Khairthat (where the parties lived) that the latter would do forward business in cotton seeds on behalf of the former according to their instructions, and that they would be responsible for giving or taking delivery or profits or losses as the case may be, and it was also agreed that the defendant firm would be entitled to receive Adat, dalali and dbarmada charges from the plaintiffs on every transaction of purchase and sale according to the custom in vogue in the mandi at Mirpurkhas. It was further agreed that the defendants would be at liberty to demand margin-money it they thought it necessary and that interest thereon at the rate of 6 per cent, per annum would be pay able. In para 2 of their written statement, the defendants denied that any such agreement had taken place at Kairthal, and according to them what was only agreed between the parties was that the business would be done according to the custom in vogue in the mandi at Mirpurkhas, and, inter alia, that the plaintiffs would pay (to the defendants) income-tax at a certain rate which was specified in the written statement. The defendants, however, clearly accepted in their pleading that all the dealings (which were to be in forward business) had been done under their commission agency though they contended that all these transactions were of a wagering nature, and [hat only differences had to be given or taken therein. It was further pleaded that such differences were usually given or taken after about 15 days of the due date and the commission agent was to be liable to pay the profits only when he received them from the third parties with whom the transactions came to be made but not otherwise. It was also admitted that the defendants as "adatias" had received the sum of Rs. 17,755-13-9 by way of profits on transactions of the May, 1947, delivery from the several third parties concerned, but the plea was raised that no deliveries were ever given or taken in those transactions. As regards the transactions of October, 1947, and January, 1948, deliveries the case of the defendants was that the partition of India had taken place in August, 1947, and a terrible catastrophe had taken place in Mirpurkhas (which was in the then province of Sind) and so the defendants as well as the persons with whom they had done business for those Vaidas had to flea from there for their lives and therefore they had no opportunity to recover the profits from the third parties concerned and consequently they were not liable to pay anything to the plaintiffs on account of the latter transactions. It is significant to mention that alternatively it was contended by the defendants that even if as alleged by the plaintiffs delivery was intended to be given or taken between the parties the plaintiffs had never asked them to give or take delivery, not did they place the defendants in funds to take of give delivery and, therefore, the plaintiffs were not entitled to claim any profits in respect of their transactions. It is also important to mention at this stage that it is the common case of the parties that practically all the transactions of purchase and sale had been covered by the plaintiffs by cross contracts by July, 1947, before the respective due dates with the result that so far as these parties are concerned, the transactions were settled by adjustment of differences only and no delivery was actually given or taken with respect to any of these transactions. Now learned counsel for the defendants has laid very considerable stress on those portions of the: evidence of Harphool (P. W. 3) and the plaintiff Murlidhar (P. W. 6) wherein they deposed as follows : P. W. 3 Harphool : "
(3.) QEZ fd'kksjhyky ls okfdq gwa A ;g ehjiqj [kkl esdke djrh Fkh] iddh vkmr fcrksys dh deh'ku ,tsav Fks A** I am acquinted with the firm Kishorelal Jagannath. It used to do business at Mirpurkhas. It traded as a Pakki Adat agent in cotton seeds.) P. W. 6 Murlidhar :" Mugksus dgk Fkk fd ge ehjiqj [kkl esa fcrksys dhiddh vkm+r dk dke dj jgs gs A** (They i. e. , the defendants had said that they were doing the business of Pakki Adat commission agents in Mirpurkhas ). Based on this foundation, learned counsel for the appellants (defendants?) sought to build up a strong edifice of the argument that the position of the defendants was not of commission agents at all but was of principals as against principals on the authority of Bhagwandas v. Kanji, ILR 30 Bom 205, Harcharan Das v. Jai Jai Bam, AIR 1940 All 182; Firm Ram Krishna Das Jawaharlal v. Firm Mutsaddi Lal Murlidhar, AIR 1942 All 170, and Sheo Narain v. Bhallar, AIR 1950 All 352, and further contended that because the defendants were really principals and not agents, the principle according to which the inference of wager was almost irresistibly destroyed where such transactions are put through by an agent on the authority of Ismail Lebbe v. Bart-leet and Co. , AIR 1942 PC 19, was no longer applicable and that the suit transactions were of a wagering character. It was also contended in this connection that the circumstance that the defendants were Pakka Adatias took the case out of the principles of the division bench decision of this Court in Surajmal v. Doongar Mal, ILR (1958) 8 Raj 1162: (AIR 1959 Raj 27), to which I was a party and on which learned counsel for the plaintiffs placed strong reliance for his submission that being agents the plea of wager was not open to the defendants. I have given this argument my very careful consideration and find myself unable to accede to it. It is true that the plaintiff Murlidhar as also his witness Harphool have purported to say that the defendants were Pakka Adatias. The use of this expression, however, is not enough, in my judgment, to attract the incidents of Pakka adat business so as to found a plea of wager between the plaintiffs and the defendants. There is no magic in the mere use of this expression, and it would be going very very far indeed to infer merely from the defendants having been characterised as Pakka adatias that they had transacted the given dealings as principals with and not as agents of the plaintiffs. I am fully conscious of the custom which has- been recognised in some of the cases referred to above that a Pakka adatia may allocate business which he is asked to transact by life principal to himself as also of the principle that where the intention of both parties be established in such cases to deal in differences and differences only and under no circumstances to give or take delivery, a plea of wager may in such circumstances be well-founded. For one thing, this custom has not been established so far as the market of the Mirpurkhas is concerned. There is not a shred of evidence on this point on the record and I am therefore unable to take such a practice for granted. For mercantile customs like these may vary in different places. Not a single witness of the defendants has testified to this custom, nor has any witness of the plaintiffs been crossrexamined on this line of argument. It would, therefore, be hardly legitimate to hold that because one of the witnesses of the plaintiffs or even the plaintiff Murlidhar thought that the defendants' firm was of Pakka adatias they were in the position of principals when they transacted the suit dealings for the plaintiffs. What matters, as I think, is, not the label by which the defendants may be called but the precise position they occupied with reference to the suit dealings and the practical and substantial manner in which the transactions were put through. If I may say so in a nut-shell, the crucial test is whether the defendants had any personal interest of their own when they entered into the suit transactions or whether their interest was limited to their commission agency charges and certain out of pocket expenses or their right of indemnity against the principals in the event of loss. If the answer to the last-mentioned test is that the defendants had no personal interest of their own in the suit dealings beyond the charging of their commission and other customary charges and they had their right to be indemnified by their principals in case the transactions resulted in losses, then I have no hesitation in saying that the plea of wager by or against such a commission agent cannot be well-founded; for it cannot be predicated of such an agent that he stands to gain by the rise or fall in the market and was, therefore, wagering. See Bhagwandas v. Burjori, AIR 1917 PC 101, and AIR 1942 PC 19, and Kishanlal v. Bhanwarlal, AIR 1954 SC 500. ;