LexHEMJRAJ KESHAVJI versus SHAH HARIDAS JETHABHAI
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
1963
Mtnch tY
686 SUPREME COURT REPORTS [1964] \rot.
HEl\JRAJ KESHA VJI
"().
SHAH HARIDA~ JETHABHAI
(B. P. SINHA C. J ., J. C. SH All and
N. RAJAGOPALA AYYANGAR jj.)
Foru:urd
Co11tracl-1'ran•ferabilit1/
of
contrart-S u
specific stipulations in co11trrir,t-lf indicates trant1Jerability-
JVhethtr
other
circu1n~ta11ces can he looked into-Sauraslttra
Groundnut aJtd GruuJUlnut Products (l?or11:ard Cu1itn1ctg Pro-
h1/,ition) Ordtr, 194!1.
The appellant entered into contracts \Vith the 1espondent
(for sale of groundnuts) which were de'!Cribcd as ready delivery
contracts and \Vere subject to the rules and regt1lations of the
Vcraval Merchants Associati:>n.
·rhc contraccs specified the
price and quality of the goods and stipulated delivery at a
specific price.
But there was nothing in the contracts indicat-
ing \vhethcr they were transferable to third parties.
The
respondent clai1ncd certain arnounts of money in respect of
these transactions but the appellant resisted the claitn 011 the
ground that the contracts, being forv,rard contracts, were pro-
hibited by the Saarashtra Groundnut and Groundnut Product'
(Forward Contracts Prohibition) Order, 1949, and were illegal.
The appellant c0n1cnded that the contracts for the delivery of
groundnuts at a future dat(", even though they \\'ere for specific
quality and for specific delivery at a specific price, must be
deemed to be forward contracts unless it was expressly recited
that they \Vere not transferable to third parties.
Held
that the contracts \Vere not fur\vard contracts and
were 1•ot hit by the Prohibition Order.
A contmct for delivery
of goods at a future date, even
tho~gh for a specific price and
specific quality, can be excluded fro1n the definition of forward
contracts only if the contract is no:1-transfcrablc.
But from
the mere absence of au express stipulation as to non-transfer·
ability in the contract, it canno~ be <lcerned to bt~ transferable
and outside the exception.
It is not re.quired either by the
Order or by the object of rite Order that the <:on<lirion regard.
ing nou-trdnsferability ~hould he mentioned iu the contract
itself before the contract can be excluded frorn the definition of
forward contract.
:\bsence of a specific stipulation in this
regard is not conclusive.
It has tu be SL'Cn whether upon the
2 S.C.R.
SUPREME -cotJRT REPORTS
687
language of the contract interpreted in the light of surrounding
circumstances it can be held that there was an agreement
between the parties that the contract was not transferable.
The rules and regulations of the Association to which the
contracts in dispute were su!Jjecl clearly sho\ved that the con-
tracts were not transferable.
Khardah Company Ltd. v. Raymon & Co. (India) Private
Ltd., [1963] 3 S.C.R. 183, applied.
Firm Hansraj v. Vasanji (1948) 4 D.L.R. Born. 7, Uma
Satyanarayanamurty v. Kothamasit Sitaramayya & Co. (1950)
1 ML.J. 557. Boddit Seetharamaswami v. Bhagavathi Oil
Company, I.L.R. (1951) Mad. 723, Hussain Kasam Dada v.
Vijayanagaram
Commercial
Association,
A.LR.
(1954)
Mad.
528
and Vaddadi
Venkataswami v. Hanura Noor
Muhammad Beegum, A.I.R. (1956) Andhra 9, referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 164 of 1961.
Appeal from the judgment and decree dated
December 17, 1957, of the former Bombay High
Court (Now Gujarat), in Civil First Appeals Nos. 14
and 24 of 1956 from Original Decree.
B.R.L. Iyengar, Atiqur Rehman, J.L. Doshi
and K.L. Hathi, for the appellant.
Purshottam Tricumdas, J.B. Dadachanji, 0.0.
11lathur and Ravinder Narain, for the respondent.
1963. March 29. The Judgment of the Court
was delivered by
SHAH J.-The appellant instituted Suit No. 250
of 1950 in the Court of the Civil Judge (Senior
Division), Junagadh for a decree for Rs. 72693/11/-
alleging that the appellant had a personal account
with the respondent in respect of drafts, cheques,
hundis and cash, and at the foot of that account
Rs. 58,000(-as principal amount and Rs. 5, 793/12/-
as interest remained_ due and payable by the
respondent, that beside the amount due on the said
1963
H1mraj K1shavji
v.
1-!aridaJ Jelhahh«i
Shah J.
1963
lltrnraj Krsh1,::.ji
'"
}/a,; ·'ai }tfl nbhai
688
SUPREME COURT REPORTS [1964]VOL.
personal account au amount of Rs. 8,899/15/3 was
due to l1i111 in respect of a transaction of sale of
I :mo bags of groundnut
sent by him
between
.January {(i tJ Januarv
~1'. I \J.iO, and lite prExcerpt shown. Read the full judgment & AI analysis in Lexace.