1. The defendants Rangasa and Kisan Patel had purchased 1,100 khandis of cotton seed through Salemuhammad Nurmuhammad as brokers for delivery on Pous Sudi 15 Sambat 1982 (1925-1926 A.D) Salemuhammad Nurmuhammad had in turn purchased this quantity of cotton seed from the plaintiff for delivery on the same date. In November 1925 it was agreed between the plaintiff and the defendants that the contract should be treated as one directly between them and on 10th November, 1925 the defendants wrote the letter (Ex. P. 6) to the plaintiff and another letter (Ex. P. 7) to Salemuhammad Nurmuhammad. On the date fixed for delivery, which corresponds to 29th December, 1925, the defendants did not desire to take delivery as the price of cotton seed had gone down considerably and they agreed to pay to the plaintiff the difference in the prices. They executed an acknowledgment in favour of the plaintiff agreeing to pay Rs. 6,240 on 2nd January, 1926 and the plaintiff has now sued to recover that sum with interest thereon at 12 per cent, per mensem.
2. The defendants had pleaded in the lower Court that they had been induced to execute the acknowledgment through fear and under threats from the plaintiff. They also alleged that the contract was a wagering one, that nothing can be recovered on it by a suit and even that it was agreed between the parties that nothing would be recoverable. The main contention in appeal is that the contract was a wagering one. An attempt has been made to show that the plaintiff did not really step into the shoes of Salemuhammad and take his place as a party to the contract. The defendants' own letters go to show that Salemuhammad was eliminated and the plaintiff and the defendants stood face to face in connexion with the contract originally entered into through Salemuhammad as broker.
3. The pleadings of the defendants equally show that there was a contract between them and the plaintiff; and it seems to me that the only question I have to consider is whether the acknowledgment was executed by the defendants in favour of plaintiff in respect of a wagering contract.
4. It is alleged by the defendants that all contracts for delivery of cotton seed on Pous Sudi 15, are, by custom of the Khamgaon market, wagering contracts, that is, in no case and in no circumstances is delivery made or accepted. There is only the evidence of one of the defendants Rangasa (D.W 1) to support this allegation. On the other hand, 11 witnesses have been examined by the plaintiff who are all men engaged in dealing in cotton and cotton seed transactions in the Khamgaon market and they unanimously depose that contracts for delivery on Pous Sudi 15 are not wagering contracts and that it is intended that delivery should be made. As regards what was intended in the particular contract between the plaintiff and the defendants, reference has to be made to the letter (Ex. P. 6) written by the latter to the former. In that letter they say that they will sell the cotton seed if on the fixed date the rate is a good one; and if the rate is not a good one, they would make a deposit with the plaintiff and would be liable for profit or loss. The wording is not altogether clear, but it does seem to provide for delivery to the plaintiff, if the defendants were satisfied that the prevailing rate would give them a profit, but that if they were liable to loss they would simply pay the difference between the two prices. It is urged, however, that the mere form of the contract does not finally determine its nature. That view has been held in Motilal v. Govindram [1906] 30 Bom. 83 , 7 Bom. L.R 385 and also in Doshi Talakshi v. Shah Ujamsi Velsi [1900] 24 Bom. 227 , 1 Bom. L.R 786, in which it was held that the Court will not only look at the terms of the original contract but also probe among the surrounding circumstances to find out the true intention of the parties.
5. There is evidence to show how the defendants settled other contracts entered into in circumstances similar to those of the one that I am considering. Gokuldas (P.W 3), Purnaji (P.W 4), Chotalal, (P.W 5), who is employed by H. Eawjai and Co., and Bansiralal (P.W 8), who is employed by Rambax, Laxmandas, depose to contracts entered into, in the first place, with Salemuhammad Nurmuhammad, in which the broker was eliminated, as he was in the contract with the plaintiff, and which became direct contracts with the defendants. Some of these witnesses depose to delivery of the goods contracted for. Gokuldas (P.W 3) says that delivery was made by storing the goods in the kotha of Rambax Laxmandas which had been taken on rent for the defendants; and delivery in a similar manner is deposed to by Purnaji (P.W 4) and Bansiralal (P.W 8). It appears, however, that in none of these cases did the defendants actually take delivery. According to Gokuldas, one of the defendants, Kisan, mortgaged a field to cover the difference in prices and according, to Purnaji the other defendant Rangasa gave a mortgage for Rs. 3,000, which again must relate only to the difference. Bansiralal does not say how the matter was eventually settled. The evidence is therefore somewhat inconclusive as to how the defendants settled other contracts for delivery on Pous Sudi 15 in the year in question; but it certainly does not prove that delivery was never-intended by either party.
6. There is also evidence as to the way in which the plaintiff settled other contracts entered into in the year in question. Mohanlal (P.W 2), who is in the service of Jasraj Shriram, deposes that in the year in question his firm purchased 1450 khandis of cotton seed from the plaintiff, that they resold to the plaintiff 750 khandis before the date fixed for delivery, that they took delivery of 400 khandis and paid the difference on 300 khandis. Again Eaichand (P.W 7) deposes that he had sold 1800 khandis of cotton seed to the plaintiff, had repurchased 1,700 khandis from time to time before the due date and delivered in the end 100 khandis. This evidence shows that the plaintiff's dealings did not necessarily contemplate that no delivery would be made or taken.
7. On the above evidence it seems to me impossible to hold that the contract now before me was a wagering one. It has been held in Ramratan v. Seth Kanakmal [1902] 15 C.P.L.R 58, Kong Yee Lone & Co. v. Lowjee Nanje [1902] 29 Cal. 461 , 28 I.A 239 , 8 Sar. 101 (P.C), Bhagwandas Parasram v. Burjorji Ruttonji Bomanji A.I.R 1917 P.C 101 , 42 Bom. 373 , 45 I.A 29 (P.C) and Manilal Dharamsi v. Allibhai Chagla A.I.R 1922 Bom. 408 , 47 Bom. 263 that there must be a common intention of the parties to the contract to make and accept no delivery and to deal only in differences. In Bhagwandas Prasram v. Burjorji Buttonji Bomanji A.I.R 1917 P.C 101 , 42 Bom. 373 , 45 I.A 29 (P.C) the Privy Council have decided that there is no wager even if a large portion of the goods contracted for is, not delivered. In Sukdedoss Ramprasad v. Govindoss Chaturbhujadoss A.I.R 1928 P.C 30 , 51 Mad. 96 , 55 I.A 32 (P.C) it was held that a subsequent agreement called “patta patti” which means that the buyer has no longer a right to demand delivery and the seller is no longer obliged to give delivery, does not make the contract a wagering one, because until patta patti was made, delivery might have been insisted on. That decision is given, although it is said that there can be little doubt that, even before patta patti was made, a demand for delivery would, among the merchants who deal in such transactions, be considered bad form. On the evidence I cannot hold that there was from the outset no intention on the part of both the plaintiff and the defendants that no delivery should be made and I cannot hold the contract entered into to be a wagering one. That being so, I must dismiss the appeal with costs.
P.N/R.K
8. Appeal dismissed.