Bapna, J. — This is an appeal by Kishanlal and Satya Narain, minors under the guardianship of their mother, against the judgment of a Division Bench of the High Court of the former Jodhpur State, dated the 24th of September, 1948. The applicants were plaintiffs in suit No. 49 of 1945-46, which was decided on the original side of the High Court of the former Jodhpur State. After the decision of the Division Bench, there was an application to the High Court for leave to appeal which was granted. That is how the present appeal has come up before us.

2. The plaintiffs suit was for recovery of Rs. 10,342/3/3. The plaintiffs owned two firms, one in Jodhpur, called Kanmal Surajmal, and the other in Indore, called Kanmal Kishanmal, and both these firms were acting as commission agents. The plaintiffs case was that the defendant, Banwar Lal, who is a resident of Jodhpur, entered into certain forward transactions in bullion with their Indore firm. These transactions resulted in a loss, a part of which was paid up. The suit was filed for recovery of the remainder of the loss consisting of Rs. 9,861/13/6 as principal and Rs. 480/5/9 as interest.

3. The suit was resisted by the defendant on a number of grounds, and seven issues were framed by the trial Judge. There was a total denial by the defendant of any contract having been entered into between him and the plaintiffs firm at Indore. It was also alleged that the transactions were of a wagering nature, and further that in view of a Notification, dated the 3rd of June, 1943, the transactions were illegal, and no decree could be passed by the courts in Jodhpur State in consequence.

4. The plea as to illegality of the contracts was considered by the court as a pure question of law and the court, after hearing arguments on the question, upheld the plea of the defendant that the contracts were illegal by virtue of the provisions of the Notification of 3rd June 1943, and dismissed the suit.

5. The Notification of 3rd June, 1943, was issued by the Jodhpur Government under the Defence of India Act and Rules as in force in the former State of Jodhpur. It related to forward transactions in bullion where the date of delivery was more than 12 days after the contract, and provided a punishment for breach of its provisions. The Notification remained in force till the 30th of September, 1946, when it came to an end by efflux of time. The present suit was filed on the 19th of August, 1946, and was decided by the trial court on the 2nd of March, 1948.

6. The trial Judge held that the consideration of these contracts was not lawful as it was of such a nature that, if permitted, it would defeat the provisions of the Notification of the Jodhpur Government dated the 3rd of June, 1943 and therefore, in view of sec. 23 of the Contract Act and sec. 13 of the Code of Civil Procedure, the suit was liable to be dismissed as it involved a violation of the Notification of the. 3rd of June, 1943, and it would not be proper for the courts of Jodhpur State to allow a claim which definitely and clearly contravened the rule embodied in that Notification, as the rule in question was a part of the substantial law and not a mere matter of procedure. He did not go into the question whether any part of the contract was entered into or performed within Jodhpur State.

7. When the matter came in appeal before the Division Bench, three points, which were formulated as below, were agitated:—

(1) That since the contracts were neither made nor intended to be performed in part or in whole in Marwar and were, on the contrary, made and performed in Indore where they were not forbidden by law, the Notification dated 3rd of June, 1943 was not applicable to them and therefore was not a bar to the competency of the suit in the courts of Marwar.

(2) That since the contracts were neither made nor intended to be performed in Marwar, their enforceability here should not be affected by the mere fact that they were inconsistent with the law prevailing f

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