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1987 Supreme(MP) 204

High Court of Madhya Pradesh
Gulab C. Gupta, J.
Bhagwati Trading Co. (M/s)
v.
M/s Krishnadas Bhagchand
F.A. No. 14 of 1982
against the judgment and decree passed by Shri N.P. Mishra, IV Additional District Judge, Raipur;
Decided on 9-7-1987

Advocates Appeared:
K.P. Munsbi & Y.K. Munshi for appellant;
B.R. Kriplani for respondent;

Headnote:(1) Forward Contracts (Regulation) Act, 1952-S.2 (c)-forward contract -what is Forward contract as defined in section 2 (c) means a con, tract for delivery of goods and excludes a ready delivery contract defined in clause (i) of this section. A ready delivery contract is a contract which provides for delivery of goods and the payment of its price either immediately or for such period not exceeding 11 days after the date of the contract. AIR 1968 SC 653 followed. [Para 3]

       In order to bring a contract between the parties within the definition of ready delivery contract, availability of goods alone is not sufficient. [Para 4]

       (2) Forward Contracts (Regulation) Act, 1952-Ss. 2 (c) & 17-ccntracts for supply of goods-payment to be made in future-such contracts are forward contracts.

       Since they are the contracts for supply of goods and receiving payment in future, they are covered by the definition of forward contract as appearing in section 2 (c) of the Act. Since a notification in respect of these contracts have been issued under section 17 (1) of the Act and conditions of the notifications remain violated, these contracts must be held to be illegal under sub-section (2) of section 17 of the Act. AIR 1962 SC 1810, AIR 1963 SC 90 & AIR 1969 SC 9 followed. [Para 4]

       Since the contracts are illegal even if a party has committed a breach thereof the process of this Court would not recognise the right of a party to claim compensation to be benefited by the illegality. The illegal contracts cannot be enforced through the process of the Court. [Para 4]

       (3) Practice (Civil)-expectations from a senior Judge.

       A judge should not handle a case in a casual manner. Such an approach from the senior Judge does not add to the reputation of the judiciary and should be avoided. The very purpose of assigning important cases to the members of the Higher Judicial Service is to get the benefit of their knowledge and experience and ensure little more satisfaction to the litigant public. This purpose cannot be achieved either by a careless handling of the case or casual attitude. [Para 7]

       

JUDGMENT

Gulab C. Gupta, J.

l. This is defendant's appeal under section 96 of the Code of Civil Procedure and is directed against the judgment and decree dated 30-6-1977, passed by Shri N.P. Mishra, IV Additional District Judge, Raipur in Civil Suit No. 14-B of 75.

2. The respondents-plaintiffs had filed their suit for damages amounting to Rs.15,500/- and interest thereon for the alleged breach of two contracts by the appellants. There is no dispute between the parties that two contracts were entered into by them on 17-2-73 and 23-3-73. Both these contracts were oral. By the first contract, dated 17-2-1973 the respondents had agreed to purchase and the appellants had agreed to sell one wagon load of Kulthi weighing 220 quintals at the rate of Rs.91/ per quintal bilti cut, consigned to Poona (Maharashtra). From the facts on record there appears to be no agreement between the parties about the time during which the contract was to be executed. The second contract dated 23-3-1973 was for 3 meter guage railway wagons of Juwar weighing 165 quintals each at the rate of Rs.135/- per quintal builti cut ex-Purl a Ki Mandi (Orissa) to Aasangaon (Maharashtra). There is nothing on record to indicate the period during which this sale was to be completed. It is not in dispute that the appellants were required to show the goods to the respondents' man who was to be satisfied about the quality and thereafter got the same weighed in his presence. It was the responsibility of the appellant thereafter to book the goods to the destination station and obtain payment of the goods at Raipur against railway receipt it is also not in dispute that out of 3 wagons of Juwar 2 wagons were supplied and dispute between the parties remains for one wagon only. The respondents plaintiffs claimed that since the appellants had failed to consign and give delivery of goods under contract they have committed the breach of those contracts resulting in damages. The respondents, therefore, claimed a sum of Rs.15,500/- on this score. The appellants resisted the claim on several grounds, including the objection that contracts were forward contracts within the meaning of Forward Contracts (Regulation) Act, 1952 (hereinafter referred to as 'the Act') and were illegal. It was also their case that they were not guilty of any branch of contract and hence not liable to pay any damages. The learned trial judge held that the contracts were not forward contracts and therefore decreed the suit with costs. It is this judgment and decree which is impugned in this appeal.

3. The Act was enacted to provide for regulation of forward contracts and therefore prohibits forward trading in commodities essential to the community. It is a valid piece of legislative enactment. Section 17 of the Act empowers the Central Government to ban forward contract by issuing a notification in the official Gazette. After the notification has been issued all those contracts which are in contravention thereof are treated to be illegal contracts. Section 18, however, makes this provision inapplicable to non-transferable specific delivery contract for sale or purchase of goods Forward contract as defined in section 2 (c) means a contract for delivery of goods and excludes a ready delivery contract defined in clause (i) of this section. A ready delivery contract is a contract which provides for delivery of goods and the payment of its price either immediately or for such period not exceeding 11 days after the date of the contract. A combined reading of these provisions would therefore lead one to conclude that after issuing notification under Section 17 (1) of the Act all forward contracts in violation of the provision and notification become illegal. However, non-transferable specific delivery contracts remain unaffected by this notification provided they settled requirements of section 18. These provisions do not affect ready delivery contracts which are not included in the definition of the forward contract. T














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