Case: M.N. Gangappa (Dead) By L. Rs Vs. Atmakur Nagabhushanam Setty &amp; Company &amp; Another

reproduced :"EXHIBIT P-20 Bellary, Date 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 Atmakur 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 Rs. 173-0-0 per candy, (Rs. one hundred and seventy three) at Bellary f.o.r. on the Vaida in the month of January 1931. We shall deliver (the goods) on the above said Vaida. The goods referred to above are of Expeller quality loose in accordance with the conditions of the company. (Sd.) M. Gangappa, 1-11-50." "EXHIBIT P-29 Bellary, Date 21-11-1950. M. N. Gangappa, Merchants, Mundlur Narasemhappa Gangappa, Merchants, Bellary. The contract from executed by the above addressee this day in favour of M. R. Nadyal Atamakur Nagabhushanam Setty and Co., is as follows : We shall deliver to you 50 (fifty) tons of groundnuts seeds of expeller quality, loose of the 1951 January and February, vaida at the rate of Rs. 190/- (one hundred and ninety) per candy in accordance with the practice of the Company (after getting) Rly pass. (Sd.) M. Gangappa, 21-11-50." 7. In Hemraj Keshavji v. Shah Haridas Jethabhai, ([1964] 2 SCR 686 : AIR 1964 SC 1526 ) a question arose whether certain contracts which were described as ready delivery contracts and were subject to the rules and regulations of the Veraval Merchants Association were prohibited by the Saurashtra Groundnut and Groundnut Products (Forward Contracts Prohibition) Order, 1949. It was laid down that a contract for delivery of goods at a future date, even though for a specified price and specific quality could be excluded from the definition of forward contracts only if the contracts were non-transferable. But from the mere absence of an express stipulation as to non-transferability in the contract it could not be deemed to be transferable and outside the exception. The conditions of the contracts 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 within 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 would have shown whether the groundnut seeds which were the subject-matter of the two contracts were being purchased for use in the oil expelling business of the plaintiff or whether they were intended to be transferred to third parties. It has also been suggested that the High Court acted on mere conjecture in considering that the statement in the contracts that the goods sold were loose showed that the bags were to be supplied by the plaintiff. It is next pointed out that the payment of price of goods against delivery of the railway receipt could not be regarded as an obligation of a nature contemplated by law which would make it necessary to obtain the consent of the defendants if the contracts were to be assigned to third parties. On behalf of the plaintiff it has been pointed out that the courts below have not only looked at the terms of the contracts but have also taken into consideration the following material circumstances -(1) The contracts and transactions were for actual delivery of groundnut seeds and were not for payment of differences. (2) The plaintiff as well as the defendants carried on the business of expelling oil from groundnut seeds. It was, therefore, mere natural and probable that the contracts which they were entering into were meant for the purpose of the businesses of the plaintiff and not for being transferred to third parties. (3) The use of the word loose in the contract was significant and when read with the evidence produced by the plaintiff leads to the conclusion that the obligation to supply the bags was on the plaintiff. (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 or non-transferable, can only be decided on the facts of each 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 other evidence which showed that the contracts were non-transferable. 9. The only other question which has been agitated relates to the quantum of damages. It is common ground that no evidence was produced with regard to the actual rates prevailing on the date of breach but it was fully established by Ex. P-46, the validity and genuineness of which has not been disputed, that on January 13, 1951, the rate was Rs. 210/- per candy. Again on February 3, 1951, the rate was Rs. 224/- per candy vide Exs. P-1 and P-2. It was admitted by the defendant in his evidence that the price was rising from the month of November 1950, to March 1951, the rate finally going up to Rs. 220/- per candy. The High Court, therefore, took the lowest rate, namely, Rs. 210/- per candy which prevailed on January 13, 1951, as the rate for computing the damages. We do not find anything illegal or unreasonable about the process by which the damages were computed.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]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. The question whether a particular contract was of one category or the other, namely, transferable or9. The only other question which has been agitated relates to the quantum of damages.It is common ground that no evidence was produced with regard to the actual rates prevailing on the date of breach but it was fully established by Ex., the validity and genuineness of which has not been disputed, that on January 13, 1951, the rate was Rs. 210/per candy. Again on February 3, 1951, the rate was Rs. 224/per candy vide Exs.1 and. It was admitted by the defendant in his evidence that the price was rising from the month of November 1950, to March 1951, the rate finally going up to Rs. 220/per candy. The High Court, therefore, took the lowest rate, namely, Rs. 210/per candy which prevailed on January 13, 1951, as the rate for computing the damages. We do not find anything illegal or unreasonable about the process by which the damages were computed.