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TMI Blog1934 (2) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... 1918, between some Marwadi firms and individuals, and the idea was to corner the market in what is called Count No. 20 of Gokak yarn. The corner failed to be secured and broke down. This agreement was made between a firm named Pannaji Devichand and five other firms or individuals. In the agreement seven parties are mentioned, but one did not sign. Nine persons did sign and they represented six firms, more than one person haying signed for a single firm in some cases. The result of this agreement was a kind of pool of yarn belonging to the parties to it in different quantities, and the arrangement was that the person to whom the yarn belonged should be given credit for it by the pool at Rs. 14 in the case of yarn for delivery on one settlement day, and at Rs. 14-4-0 for a second. This syndicate was called by the name of the principal firm, Pannaji Devichand Co. The remaining two documents are Exhibits A and 5 in the case. Exhibit A is an agreement between the larger firm of Pannaji Devichand and three Bellary firms, and was come to on 13th October, 1918. It is both a partnership agreement and a forward contract. The partnership is between the larger Pannaji Devichand firm, call ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivy Council failed. This suit had in the meanwhile been stayed, and was proceeded with on the final decision of the Bellary one. The plaint in the Bellary suit set out a partnership of 22 persons, fourteen plaintiffs and eight defendants, and was, on its face, a breach of the provisions of the Companies Act. The present plaint does not proceed on the same lines, though based on the same facts. The plaintiff firm here, the firm of Pannaji Devichand excluding the three Bellary firms, sought to recover from the Bellary firms damages for failure to take delivery of 1,500 bales on 19th October, 1918, Rs. 3,12,627-9-0 with interest and costs. There has been a long trial in the Court below, and the suit has been dismissed. The plaintiffs are the appellants. It is obvious that if, as found by the learned Subordinate Judge, the larger syndicate of Pannaji Devichand included more than 20 persons, the suit must fail; but I think myself that though in form it is different from the Bellary suit, it must also fail for the same reason as that one did, for its basis is the contract, Exhibit A, and Exhibit A on its face includes a partnership agreement between the larger firm of Pannaji Devichand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and. Mr. Murdeshwar's other point turns on the interpretation of the contract. His contention is that though the original arrangement was as contemplated in Exhibit A, and its counterpart Exhibit B, what really happened on 19th October, which was the settlement day, was that by an agreement between the parties, being the Bellary firms and the small firm of Pannaji Devichand, who transacted the business of the. larger syndicate of that name also, the original contract was modified to one of an offer to buy at Rs. 17 by the three Bellary firms, and an acceptance of that offer and an agreement to deliver 1,500 bales by the larger syndicate, and that the suit was really based on such an agreement and therefore did not involve any transaction by an illegally constituted syndicate. In order to examine this point the plaint has to be looked at. It begins by reciting the negotiations which had preceded the agreement evidenced in Exhibit A, and then goes on to say: "On 19th October, 1918, the said wahiwatdars of the defendants came to Gadag and accepted the proposal of Dhulaji regarding the purchase by them of 2,000 bales from the plaintiff at the rate of Rs. 17 per bundle, and consent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidenced by Exhibit A went by the board, and that what really happened on 19th October was the entering into a new contract for a simple sale by the plaintiffs to the defendants of 1500 bales, are supported by the facts of the case. The defendants' case throughout has been on the basis of their claim in the Bellary suit, that what happened was, that after the contract, Exhibit A, was entered into, they exercised their option of buying or selling on 14th October that between that date and 18th October the plaintiff firm sold 800 bales to other persons, and that this was a breach of the condition in the agreement, that the 2000 bales contemplated by Exhibit A were first to be sold by the plaintiff firm, before there was any sale on their own account. There was a conflict of evidence as to this point in the Bellary suit. The finding was that the option had been exercised on 14th and not on 19th October and it is clear, I think, on the evidence that this was, in fact, so. There are several other points in the appeal including the question whether the plaintiff really sold the bales which had been refused delivery of by the defendants some time later. As to this it is clear to me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h that case from the present one on the ground that here the allegations in the plaint are different to those in the plaint in that case. But there is no substantial difference. It seems to me that the terms of the agreement are to the effect that what was to be divided between the parties was only the profit to be realised from these bales, and as sales were to be made and the profits divided into several shares, that transaction was clearly a partnership business and not a mere single venture, as has been held in Karmali Abdulla v. Vora Karimji Jiwanji. On the merits of the case the question to be decided is which version is correct, that of the plaintiffs or that of the defendants. On this ground I am of opinion that the defendants have not broken the contract, and even if they have, the plaintiff is not entitled to any damages. I may mention one fact here. It is conceded by the learned advocate for the appellants that if the transaction with regard to the sale of 800 bales be regarded as a part of the transaction of the 2,000 bales in suit, then in that case it would clearly be illegal and the case would be governed by the decision in Pannaji Dcvichand v. Senaji Ka ..... X X X X Extracts X X X X X X X X Extracts X X X X
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