Case: Hemraj Keshavji Vs. Shah Haridas Jethabhai

at the settlement regarding the commodity. The Managing Committee after hearing the seller and buyer may grant extension of time on receipt of an application to the Association from such buyer or seller, or the Association may determined and fix a reasonable rate after considering the rates as well as circumstances in the local as well as other centres of Saurashtra between the seller and the buyer and that the transactions between the buyer and the seller have to be settled at the rate so fixed.10. The transactions for purchase and sale are to be carried through between two members of the Association and under the rules and regulations of the Association. Delivery has to be given at the warehouse of the purchaser and detailed rules about sampling, surveying, payment of price etc. are made. Prima facie, these rules apply in the transactions of sale and purchase. But Mr. Ayyangar appearing on behalf of the appellant contended that the expression buyer would include a purchaser from the buyer because under the general law of contracts the benefit of a contract to purchase goods can be assigned and therefore the rights of the buyer would be enforceable by the transferee of the buyer. But the scheme of the rule indicates that the entire transaction has to be carried through between the parties to the transaction and not between the seller and a transferee of the rights of the buyer. In carrying out the transactions under the rules, diverse obligations are imposed upon the buyers, and it is settled law that without the consent of the seller, the burden of a contract cannot be assigned. The rules provide, as we have already pointed out, that the empty bags are to be supplied by the buyer. Such an obligation cannot be transferred by the buyer. Again diverse rules provide liability for payment of penalty. If a buyer cannot transfer the obligations under a contract which is made subject to the rules and regulations of the Association, all the obligations prescribed by the rules being made part of the contract, a very curious result would ensure in that whereas an assignee of the buyer would be entitled to demand delivery at his own godown at the rate fixed, for his default by the buyer would remain liable for the diverse obligations including liability to pay penalty for default of his assignee under the rules. Again the seller by Rule 6 has to deliver the goods at the warehouse of the buyer, and if the benefit of the contract is transferable, it would imply an obligation to deliver at the warehouse of the buyers assignee, wherever the warehouse of the assignee may be. The warehouse of the assignee of the buyer may be in Veraval or at any other place, but the seller having entered into a contract at a rate which would include normal expenses for delivery at the buyers godown may be required to undertake an intolerable burden of meeting all the charges for transporting the goods to the warehouse of the buyers assignee wherever such godown may be situate. Such an obligation could never have been under contemplation of the rule making body.11. Mr. Ayyangar contended that the assignee of the buyer contemplated by the rules would of necessity have to be a member of the Association and therefore resident in Veraval. But the rules to which our attention has been invited do not, if the buyer is to include the assignee of the benefit of the contract, seem to impose any such restriction. If the general law relating to assignment of benefit under a contract is to be superimposed upon the rules, notwithstanding the scheme which prima facie contemplates performance between the parties there is no reason why any such reservation should be made. It was alternatively urged by Mr. Ayyangar that the rules of the Association use two expressions - “buyer" and persons - and wherever the expression person is used it would include an assignee of the buyer. This argument, in our judgment is without force. The rules have not been drawn up with any precision, and there is nothing to indicate that by using the expression person a larger category was intended. For instance in Rule 5, the obligation to supply empty bags is imposed upon the buyer and the penalty for failing to carry out that obligation is imposed upon the person. Similarly in Rule 10 when delivery is taken by the buyer the person receiving the commodity has to make payment of 90 per cent of the price to the person giving delivery. There are a large number of other rules which deal with the rights of the buyer and the obligations simultaneously imposed upon persons which in the context may mean only the buyers. The use of the expression person does not in our judgment. Indicate that he was to be anyone other than the buyer or his representative.12. On a careful review of the rule we are of the view that under the rules and regulations of the Veraval Merchants Association pursuant to which the contracts are made, the contracts were not transferable. The contracts were undoubtedly for delivery of groundnut at a future date, but they were contracts for specific quality for specific price, and for specific delivery under the rules of the Association under which they were made. The contracts were, for reasons already mentioned, also not transferable to third parties, and cold not be regarded as forward contracts within the meaning of the order. It is unnecessary therefore to consider whether the respondent who claimed to have acted as Pucca Adatia and therefore as Commission Agent was entitled to claim reimbursement for any amount alleged to have been paid by him on behalf of the appellant for losses suffered in the transactions in dispute.13. We are therefore of the view that the High Court was right in modifying the decree passed by the trial Court and in dismissing the appellants suit.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 0

Reasoning from the judgment:
0[ds]12. On a careful review of the rule we are of the view that under the rules and regulations of the Veraval Merchants Association pursuant to which the contracts are made, the contracts were not transferable. The contracts were undoubtedly for delivery of groundnut at a future date, but they were contracts for specific quality for specific price, and for specific delivery under the rules of the Association under which they were made. The contracts were, for reasons already mentioned, also not transferable to third parties, and cold not be regarded as forward contracts within the meaning of the order. It is unnecessary therefore to consider whether the respondent who claimed to have acted as Pucca Adatia and therefore as Commission Agent was entitled to claim reimbursement for any amount alleged to have been paid by him on behalf of the appellant for losses suffered in the transactions in dispute.13. We are therefore of the view that the High Court was right in modifying the decree passed by the trial Court and in dismissing the appellants suit.