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TMI Blog1954 (12) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... stalments on terms and conditions contained in the relative contract forms of the Indian Jute Mills Association. In September 1949 the respondent expressed its inability to deliver the goods under the said contracts and requested the appellant to settle the same by selling back the goods under the said contracts to the respondent at the price of ₹ 161-8-0 per 100 bags. Three settlement contracts were accordingly entered into between the parties on the 28th September 1949 whereby the appellant agreed to sell the goods under the original contracts to the respondent at the rate of ₹ 161- 8-0 per 100 bags on the terms and conditions contained in the relative contract forms of the Indian Jute Mills Association. The appellant duly submitted to the respondent his bills for the amounts due at the foot of the said contracts aggregating to ₹ 1,15,650 which the respondent accepted but failed and neglected to pay in spite of repeated demands of the appellant. The appellant therefore filed the suit for recovery of the said sum with interest and costs. The respondent filed its written statement contesting the appellant s claim on the main around that the three settlement contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Gazette prohibit the making of contracts, relating to jute goods futures and may, by like notification, withdraw such prohibition ..................................... (2)When the making of contracts relating to jute goods futures is prohibited by a notification under sub-section (I),- (a)no person shall make any such contract or pay or receive any margin except, in the case of any such contract made prior to the date of the notification, to the extent to which the payment or receipt, as the case may be, of margin is allowable on the basis of the last closing rate in a notified market:.............. (c)notwithstanding anything contained in any other law for the time being in force,- (i)every such contract made, and every claim in respect of margin, in contravention of the provisions of clause (a), shall be void and unenforceable, and (ii) every such contract made prior to the date of publication of the notification shall be varied and settled on the basis of the last closing rate in a notified market. Explanation-In this sub-section,- (a) last closing rate means the rate fixed by the Directors of a notified market to be the closing rate of such market immediate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of the goods deliverable under the contracts the mills would, in the case of goods sent by them alongside the vessel in accordance with the shippers instructions in that behalf, obtain the mate s receipts in respect of the same and such mate s receipts would be delivered by the mills to their immediate buyers who in their turn would pass them on to their respective buyers in the chain of contracts resting with the ultimate shipper. If the mills held the goods in their godown they would issue delivery orders on the due date, which delivery orders would be dealt with in the same manner as the mate s receipts aforesaid. Both these sets of documents would represent the goods and would be passed on from seller to buyer against payment of cash. As a matter of fact on the evidence the learned Trial Judge held that in the Calcutta jute trade mills delivery orders are ordinarily issued by the mills against cash payment and pass from hand to hand by endorsement and are used in the ordinary course of business authorising the endorsee to receive the goods which they represent and that they are dealt with in the market as representing the goods. The Appeal Court accepted this position a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f business authorising the endorsee to receive the goods which they represent. The learned Trial Judge further observed: Now visualize the long chain of contracts in which the defendant s contract is one of the connecting links. The defendant buys from its immediate seller and sells to its immediate buyer. As seller it is liable to give and as buyer it is entitled to take delivery. As seller it receives and as buyer it shipping instructions. Similar shipping instruction is given by each link until it reaches the mills.The mills deliver the goods alongside the steamer.Such delivery is in implement of the contract betweenthe mills and their immediate buyer. But eo instanti it is also in implement of each of the chain contracts including the contract between the defendant and its immediate buyer and the contract between the defendant and its immediate seller. Not only does the mill give and its immediate buyer take actual delivery but eo instanti each middleman gives and takes actual delivery. Simultaneously the defendant takes actual delivery of possession of the jute goods from its immediate seller and gives actual delivery of possession of jute goods to its immediate buyer. Pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emselves both in regard to the facts and the position in law. They took it that none of the parties in the chain contracts paid the actual price of the goods except the shipper who took delivery of the goods from the mills against payment. They wrongly assumed that A endorsed the delivery order over to B and took the difference, B in his turn endorsed the delivery order to the defendant and took the difference and so on and concluded that nobody was concerned to pay the actual price or take delivery of the goods except the shipper who took the goods and paid the price to the mills. This assumption was absolutely unwarranted, the evidence on record being that each of the successive buyers paid to his immediate seller the full price of the goods represented by the delivery order in cash against the endorsement of the relative delivery order in his favour by the seller. The learned Judges of the Appeal Court also laid unwarranted emphasis on the words actual delivery of possession and contrasted actual delivery with symbolical or constructive delivery and held that only actual delivery of possession meaning thereby physical or manual delivery was within the intendment of the Ordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nclusion is reached it is easy to visualise the course of events. The mate s receipts or the delivery orders as the case may be, represented the goods. The sellers banded over these documents to the buyers against cash payment, and the buyers obtained these documents in token of delivery of possession of the goods. They in turn passed these documents from hand to hand until they rested with the ultimate buyer who took physical or manual delivery of possession of those goods. The constructive delivery of possession which was obtained by the intermediate parties was thus translated into a physical or manual delivery of possession in the ultimate analysis eliminating the unnecessary process of each of the intermediate parties taking and in his turn giving actual delivery of possession of the goods in the narrow sense of physical or manual delivery thereof. It is necessary to remember in this connection that the words used in section 2(1) (b) (i) are involving the actual delivery of possession thereof . The word involving in the context means resulting in and this condition would be satisfied if the chain contracts as entered into in the market resulted in actual delivery of poss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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