TMI Blog1972 (1) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... him for the supply of groundnut seeds. It was claimed that both the contract were for a specified quality of groundnut seeds, for specific delivery at a specified price and were not transferable. The first contract (Exhibit P-20) was entered into on 1st November 1950 and the delivery was stipulated to be made by 31st January 1951. The damages relating to this contract were claimed at the difference between the contract rate and the market rate which was stated to be ₹ 224/-per candy, on the date of breach i.e. 31st January, 1951. The second contract (Exhibit P-29) was entered into on 21st November, 1950. The damages relating to that contract were claimed on the basis of the difference between the contract rate and the market rate, nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as asserted by the defendants that the contract were void under Section 30 of the Contract Act and the Oil Seeds (Forward Contracts Prohibition) Order 1943 (hereinafter called 'the Order'). The material issues which arose for decision were as follows: 1. Did the suit contracts not intend delivery of goods but only payment of difference in prices and hence void and unenforceable ? 2. Do the suit contracts contravene the provisions of the Oil Seeds (Forward Contracts Prohibition) Order 1943, and hence void and unenforceable ? 3. What is the quantum of damages to be awarded? The Distt. Judge, Bellary, who tried the suit, held that the defendants by means of the contracts Exhibit P-20 and Exhibit P-29 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (v) It was well-settled that the mere fact that there was no express mention in the contracts that they were non-transferable was not sufficient to treat them as transferable contracts. (vi) The express mention in the contracts that the goods sold were 'loose' showed that it was contemplated by the parties that the groundnut seeds were to be put in the bags which were to be supplied by the plaintiff. (vii) Under the contracts two obligations were imposed on the plaintiff one to supply empty bags and the other to pay the price of goods against delivery by the Railway Receipt. (viii) Looking at the surrounding circumstances, it was established that the plaintiff required the groundnut seeds for use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is whether the two contracts Exhibit P-20 and Exhibit P-29 fell within the exception. In other words, if they were not transferable to third parties, the prohibition contained in the Order was not applicable to them. These contracts may be reproduced : - EXHIBIT P-20. Bellary, Dt. 1-11-1950. M.N. Gangappa, Merchants, Mundlur Narasemhappa Gangappa, Merchants, Bellary. As per the contracts executed by the above addressee in favour of M.R. Nandyal Atmakua Nagabhushanam Setty and Co., we have given to you business by agreeing to supply 75 (Seventy five) tons of groundnut seeds at the rate of ₹ 173.0.0 per candy, (Rs. One hundred and seventy three) at Bellary for on the 'Vaida' in the month o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not be deemed to be transferable and the surrounding circumstances were taken into consideration in that case and it was held that the contracts were not transferable to third parties and could not be regarded as forward contracts with in the meaning of the Saurashtra Order. It is thus apparent that the mere omission or non-mention of any words which would expressly show that the contracts were not transferable would not make them transferable. The main criticism of the learned Counsel for the appellant before us is that the High Court as also the trial court did not attach sufficient importance to the omission on the part of the plaintiff to produce the books of account which were the subject-matter of the two contracts were being purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aintiff. 4. The goods which were the subject-matter of the contracts were of expeller quality which reinforced the view that they were intended for the oil expelling business of the plaintiff. 8. After a careful consideration of the contentions of both sides and the findings of the courts below, we do not consider that any interference is called for with the concurrent conclusion of two courts that the suit contracts were non-transferable. The question whether a particular contract was of one category or the other, namely, transferable, can only be decided on the facts of case and we are unable to find any such infirmities in the reasoning of the two courts particularly with regard to the surrounding circumstances and othe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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