JUDGMENT

1. The following is. the Judgment of the District Judge from which the second Appeal came up before the High Court:

This is a plaintiff's appeal arising out of a suit for damages for non-delivery of 150 bags of sugar under a forward contract for January, February, March, 1920 delivery.

The defence that found favour with the lower Court was that the contract was a wagering one; and that is the one main question in this appeal.

To correctly appreciate the points in the case some general observations are necessary.

Sugar transactions at Cawnpore may be classified first under two heads.

1. Dealings in foreign imported sugar known as Java sugar. From the number of cases that have come before me, it may be provisionally accepted that about September, 1919 owing to wagon restrictions the import of this class of sugar was nominal and so, the prices went up from near Rs. 11 to near Rs. 40. There was a fever of speculation in the market and in case of dealings in such sugar it is not impossible to say that most of them were highly speculative and probably a good many of them bordered on, if not actually, wagering. A set of circumstances attending transactions on this class of sugar may, in particular cases, be sufficient to justify a finding of " wagering."

2. Contracts in sugar known as.-

(a) " Cawnpore special." These are of local manufacture, Messrs. Begg Sutherland and Company, are sole agents for the manufacture and there is a certain firm here who are sole agents for Begg Sutherland Company Auctions at Begg Sutherland and Company, commence in October when contracts for future delivery are sold. A large number of these are secured by few firms, who then, in a way retail out by entering into contract with others. Such contracts may pass from hand to hand- and ultimately the last link in the chain must take delivery. Thus, so far as these series of contracts are concerned every link in the chain would be backed by actual commodity to be ultimately delivered to the last holder. None of the intermediate chain actually handle the goods or have sufficient funds to pay in full. With a very moderate capital, a very large business in this class of contracts may be done. From the above it would be clear that the same set of circumstances that may be sufficient to support a finding of wagering in the first class of contracts would be wholly insufficient to support such a finding in this latter class of cases.

(b) A sub-head of this class of transaction will include the following :-

1. Private contracts before the Begg Suther's auctions, where there would be no actual delivery order then available.

2. Even after the auctions by a person who has not yet secured any contract backed by delivery orders.

It is in these latter class of cases that the question becomes difficult and in such cases, the course of dealings of the parties becomes almost all important. It may be that these contracts are entered into in anticipation of securing contracts backed by delivery orders. Where it is shown in a particular case that parties never dealt in contracts actually backed by genuine delivery orders, it would be a very strong circumstance in support of the contention that the parties were really gambling. But where it is shown that at least one party has been dealing in the actual commodity in the sense that he has been actually securing Begg Suther's contracts or subcontracts backed by delivery orders, then it would become very difficult to say that other contracts of his not so backed by actual commodity to be delivered to the last link in the chain-were wagering.

Coming now to the facts of the case before me, I find it falls under the last mentioned class, Plaintiff's accounts extracts show he had (at least) 18 " sold notes." Of these 500 bags for ' immediate delivery' and 875 bags " forward contract." It was practically conceded that these may be regarded as genuine transactions. Though, I must say, my attention was called to one item in which differences ha