GORDHANDAS PURSHOTTAMDAS SONAWALA AND ANOTHER versus THE EASTERN COTTON COMPANY

Citation: [1959] 1 S.C.R. 346 · Decided: 31-03-1958 · Supreme Court of India · Bench: NATWARLAL HARILAL BHAGWATI · Disposal: Dismissed
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

Ktiithaiyalal 
v. 
Dr. D. R. Banafi 
and Others 
Sinha ]. 
346 
SUPREM.E COURT REPORTS 
[1959] 
of infringing the souml principle discussed above. But 
the absence of the leave of the Court and of the 
necessary notice to the Receiver, makes all the 
difference between a valid and an illegal sale. The 
High Conrt has also relied upon the well-known rule of 
natural justice-audi alteram, parteni-as another 
reason for holding the sale to be illegal. It is not 
necessary for the purposes of this case to pronounCJ) 
upon the difficult question of how far a principle of 
natural justice can override the ~pecific provisions of a. 
statute . 
.E'or the reasons given above, we agree with the High 
Court in its conclusion that the auction-sale impugned 
in this · case, was illegal, and that the suit was not 
barred'by the provisions of the Code. 
The appeal is, 
accordingly, dismissed with costs to the ReceiYer who 
alone has contested the appeal. 
• 
Appeal dismissed. 
, 958 
G<'.>RDHANDAS PURSHOTTAMDAS SONAVVALA 
lvlarclt 31. 
AND ANOTHER 
v. 
THE EASTERN COTTON COMPANY 
(BHAGWA'rI, J. L. KAPUR and GAJENDRAGADKAR JJ.) 
Cotton, Contracts-Cotton Association-Statute providing for 
cotton contracts to be in accordance with the by-la121s of the Association 
-By-laws prescribing Forms of Contract-Substantial compliance 
with Form-V aUdity of the contracts-Bombay Cotton Contracts Act, 
x932 (Bom. IV of I932), s. 8(I). 
· 
Sub-section~r) of s. 8 of the Bombay Cotton Contracts Act, 
r932. provides: "Save as hereinafter provided in this Act, any 
contract .... which is entered into after the date on which this 
Act comes into operation and which is.. not in accordance with the 
by-laws of any recognized cotton association shall be void". 
In respect of the transactions in cotton entered into bet\veen 
the parties, the appellants had to pay the respondents a sum of 
money for failure to gi\'e delivery of the cotto~1 bales under the 
• 
r 
., 
S.C.R. 
SUPREME COURT REPORTS 
347 
contracts, but the payment was made without prejudice to the 
rights and contentions of the parties. Subsequently, the appel-
lants sued the respondents for recovery of the amount on the 
footing that the contracts were void under s. S(r) of the Bombay 
Cotton Contracts Act, r932, as· being not in accordance with the 
by-laws of the East India Cotton Association Ltd., of which both 
the parties were members, inasmuch as the contract notes did not 
comply with the terms contained in the official contract form pro-
"ided by the by-laws of Association, by reason of the omission 
to fill in the blanks relating to measurements and difference above 
or below the settlem~nt r!lte. ·The respondents contended that 
the relevant provisions contained in the official contract form had 
either become obsolete or were suspended at all material times. 
The evidence showed that according to the practice of the trade the 
parties to the contract were not tied down to a literal compliance 
with the terms contained in the official contract form but were 
required to act according to the position as it then obtained and 
that it was sufficient if they substantially complied with the 
requiJ"ements of the contract form : 
Held, that in the circumstances of the case the official con-
tract form had to be filled in so far as it was practicable and that 
the omission to fill in the blanks in the contract notes did not 
spell any departure from an essential or a characteristic part of 
the contract form ; consequently, the legal effect of the contracts 
was not in any manner changed so as to render the contracts 
void as not being in accordance with the by-laws of the Associa-
tion, within the meaning of s. 8 of the Bombay Cotton Contracts 
Act, r932. 
• 
Radhakisson Gopikisson v. Balmukund Ramchandra, (r932) 
L. R. 60 I. A. 63, relied on. 
CIVIL APPELLATE .JURISDICTION: Civil Appeal No. 
398of1956. 
Appeal from the judgment and order dated March 
19, 1956, of the Bombay High Court in Appeal No. 45 
of 1955, arising out of the judgment and order dated 
March 23, 1955, of the said High Court in its Ordinary 
Original Civil Jurisdiction in Suit No. 468of1951. 
M. C. Setalvad, Attorney-General for. India, N. P. 
Nathwani, J.B. Dadachanji, S. N. Andley and Ramesh-
war Nath, for the a pp~llants. 
Purshottam Tricumdas, K. K. Desai and J. N. Shroff, 
for the respondents. 
1958. March 31. 
The Judgment of the Court was 
delivered by . 
... 
Gordhandas 
Purshottamdas 
Sonawala 
v. 
Eastern Col
Excerpt shown. Read the full judgment & AI analysis in Lexace.