A contract for the sale of goods that provides for delivery of the goods and payment of the price within 15 days from the date of the contract is not a ready delivery contract and is, therefore, illegal and void under the Forward Contracts Act.

JAGANMOHAN REDDY, J.

( 1 ) THIS second appeal has been referred to the bench by our learned brother Ekbote, J. , In view of the important question raised as it is likely that more than one case is affected and also because there is no direct authority available.

( 2 ) THE question that falls for determination is a simple one, whether the contract in question is hit by Section 15 read with Section 2 (c) of the Forward Contracts (Regulation) Act, 74 of 1952 (herein called the Forward Contracts Act ).

( 3 ) THE appellant and the respondents are merchants whose business consists of buying and selling ginned cotton. The appellant agreed to sell 60 bales of Narasaraopet Bale Cotton at the rate of Rs. 332. 00 per putti of 784 Ibs. before 25-11-1955 the payment to be made after the weighment of bales and to be delivered at the site of Raleigh Company or Valcot Company. This agreement was entered into on 10-11-1955. When the goods were not delivered, the respondent filed a suit to claim damages for the non-performance and breach of the contract.

( 4 ) THE appellant raised several contentions, one of them being that the transaction is hit by the Forward Contracts Act. IN view of that plea, an issue was framed as to whether the suit contract was a forward contract, and so not valid and enforceable. Since this is the only point which we are called upon to consider it is not necessary to refer to the other contentions which were urged before the Trial Court, and were the subject-matter of other issues. The Trial Judge on this issue permitted oral evidence to be adduced by either side and came to the conclusion that since the appellant had available at the time of the contract ready goods and could have delivered them, it was a ready delivery contract and, therefore, the transaction was not illegal, nor was it hit by any of the provisions of the Forward Contracts Act. The Subordinate Judge Narasaraopet affirmed the decision of the Trial Court and dismissed the appeal.

( 5 ) INASMUCH as the validity of the contentions urged before us depends upon a proper interpretation of Section 15 read with Section 2 (c) (f) (i) (m) and (n) of the Forward Contracts Act, it is necessary to extract those provisions. Section 2 (f):"non-TRANSFERABLE specific delivery contract means a specific delivery contract, the rights or liabilities under which or under any delivery order, railway receipt, bill of lading, ware-house receipt or any other document of title relating thereto are not transferable. Section 2 (I): "ready delivery contract" means a contract which provides for the delivery of goods and the payment of price therefor, either Immediately or within such period not exceeding eleven days after the date of the contract and subject to such conditions as the Central Government may, by notification in the Official Gazette, specify in respect of any goods, the period, under such contract not being capable of extension by the mutual consent of the parties thereto or otherwise. "section 2 (m):"specify delivery contract means a Forward Contract which provides for the actual delivery of specific qualities or types of goods during a specified future period at a price fixed thereby or to be fixed in the manner thereby agreed and in which the names of both the buyer and the seller are mentioned. "section 2 (n):" transferable specific delivery contract means a specific delivery contract which is not non-transferable specific delivery contract and which is subject to such conditions relating to its transferability as the Central Government may, by notification in official Gazette specify in this behalf. "section 15:" (1) The Central Government may by notification in the Official Gazette, declare this section to apply to such goods or class of goods and in such areas as may be specified in the notification, and thereupon subject to the provision contained in Section 18, every Forward Contract for the sale or purchase of any goods specified in the notification which is

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