Judgement

BHAGWATI J.: This appeal with certificate from the High Court of Judicature at Calcutta arises out of the suit filed on the original side of the High Court by the Appellant against the Respondent to recover a sum of Rs. 1,25,962-2-0 with interest and costs.

2. The Appellant entered into three contracts, two dated the 8th August 1949 and the third dated the 17th August 1949 with the Respondent agreeing to purchase 1,80,000 bags of B twills at the price of Rs. 134/4/0 per 100 bags, 1,80,000 bags at the rate of Rs. 135-4-0 per 100 bags and 90,000 bags at the rate of Rs. 138/- per 100 bags respectively for October, November and December 1949 deliveries in equal monthly instalments on terms and conditions contained in the relative contract forms of the Indian Jute Mills Association. In September 1949 the Respondent expressed its inability to deliver the goods under the said contracts and requested the Appellant to settle the same by selling back the goods under the said contracts to the Respondent at the price of Rs. 161-8-0 per 100 bags.

Three settlement contracts were accordingly entered into between the parties on the 28th September 1949 whereby the Appellant agreed to sell the goods under the original contracts to the Respondent at the rate of Rs. 161-8-0 per 100 bags on the terms and conditions contained in the relative contract forms of the Indian Jute Mills Association. The Appellant duly submitted to the Respondent his bills for the amounts due at the foot of the said contracts aggregating to Rs. 1,15,650 which the Respondent accepted but failed and neglected to pay in spite of repeated demands of the Appellant. The Appellant therefore filed the suit for recovery of the said sum with interest and costs.

The Respondent filed its written statement contesting the Appellant s claim on the main ground that the three settlement contracts above-mentioned were illegal prohibited by the West Bengal Jute Goods Future Ordinance, 1949. The Respondent contended that it never dealt in the sale and/or purchase of jute goods involving actual delivery of possession thereof nor did it posses or have control over any godown and other means of equipments necessary for the storage and supply of jute goods and that therefore the said 184 settlement contracts were void and not binding upon it and that the Appellant was not entitled to any relief as prayed. The trial Court negatived the contention of the Respondent and decreed the Appellant s claim.

The learned Judges of the Appeal Court however came to the conclusion that the said settlement contracts were contracts relating to the purchase of jute goods made on a forward basis by the Respondent not being a person who habitually dealt in the sale or purchase of jute goods involving the actual delivery of possession thereof and were therefore void and unenforceable. The only right which the Appellant had against the Respondent was to have the said original contracts settled on the basis of the last closing rate in a notified market which was Rs. 146/14/0 per 100 bags. No such claim was however made by the Appellant. A further contention which was raised by the Respondent (Appellant ?), viz. that the Ordinance was ultra vires was negatived by the Court. But in view of its finding on the main issue the Appeal Court dismissed the Appellant s suit with costs.

3. The relevant provisions of the West Bengal Jute Goods Future Ordinance, 1949 were as under:

"Section 2. In this Ordinance, unless there is anything repugnant in the subject or context:

(1) Contract relating to jute goods futures means a contract relating to the sale or purchase of jute goods made on a forward basis:

(a)providing for the payment or receipt, as the case maybe, of margin in such manner and on such dates as may be specified in the contract, or

(b) by or with any person not being a person who,

(i) habitually deals in the sale or purchase of jute goods involving the actual delivery of possession thereof, or

(ii) possesses, or ha