Case: Jaikishan Dass Mull Vs. Luchhiminarain Kanoria &amp; Company

the chain until they reach the Mill Company. The process of the registered holder giving shipping instructions to his seller and each successive buyer passing on such shipping instructions to his immediate seller so as ultimately to reach the Mill Company would be cumbrous and time consuming and would impede quick movement of goods in performance of export contracts and bye-law 5 of Chapter VIII, therefore, provided that, instead of going through this tortuous process of passing on shipping instructions from one end of the chain to another through each link in the chain, the last buyer who is the registered holder may directly give shipping instructions to the Mill Company and that would be tantamount to giving shipping instructions in performance of each of the chain contracts all along the line. The presence of a clause in the chain contracts providing for delivery of Pucca Delivery Orders against payment of the price does not, therefore, exclude giving of shipping instructions by the buyers to the sellers. In fact, shipping instructions have to be given, because the contracts are export contracts providing for delivery free alongside export vessel in the port of Calcutta and, as pointed out above, bye-law 5 of Chapter VIII clearly provides for giving of shipping instructions. Now, obviously when shipping instructions are to be given, each of the chain contracts may legitimately stipulate that a particular number of clear working days notice to place goods alongside shall be given by the buyers to the sellers and that is precisely what is provided by cl. (2) of the prescribed form. Clause (2) of the prescribed form requiring buyers to give a particular number of clear working days notice to place goods alongside cannot, therefore, be said to be inconsistent with the provision for delivery of Pucca Delivery Orders against payment of the price.15. This view finds support from the decision of this Court in Duni Chand Rataria v. Bhuwalka Brothers Ltd. (1955) 1 SCR 1071 = (AIR 1955 Sc 182 ). N. H. Bhagwati, J., speaking on behalf of the Court in that case, quoted with approval the following passage from the judgment of the Trial Court setting out the manner in which transferable specific delivery contracts in jute goods are effected and carried out in the city of Calcutta:"Now visualize the long chain of contracts in which the defendants contract in 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 gives 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 between the mills and their immediate buyer. But eo instant 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 for its immediate seller and gives actual delivery of possession of jute goods to its immediate buyer. Prima facie at the moment of the delivery alongside the steamer there is appropriation and the passing of the property in the goods and the giving and taking all along the chain at the same moment.The learned Judge then, on the basis of this finding, proceeded to hold:"The mates receipts or the delivery orders as the case may be, represented the goods. The sellers handed over these documents to the buyer against cash payment, and the buyer obtained these documents in token of deliver of possession of that 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 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.These observations bear out what we have said in regard to the mechanics of performance of chain contracts in jute goods and show that shipping instructions can and must follow delivery and endorsement of Pucca Delivery Orders from one buyer to another in the chain and when the last buyer gives shipping instructions to the Mill Company and pursuant to such shipping instructions the Mill Company delivers the goods alongside the export vessel, the giving and taking of actual delivery of possession of the goods takes place "all along the chain at the same moment.16. It is, therefore, clear, both on principle and authority, that in case of a transferable specific delivery contract for export, clause (2) of the prescribed form requiring buyers to give a particular number of clear working days notice to place goods alongside is not rendered inapplicable by a provision in the contract under clause (4) stipulating for deliver of Pucca Delivery Orders against payment of the price. Clause (2) of the prescribed form can be appropriately incorporated in such a contract and omission to include, it cannot be justified on the plea that it would be inconsistent with clause (4) of the contract.17. We must, therefore, hold that since the contracts in the present case did not contain any provision corresponding to clause (2) of the prescribed form requiring buyers to give a particular number of clear working days notice to place goods alongside, they were not in the prescribed form and hence they were illegal under Section 15, sub-section (3A) and the arbitration clause contained in each of these contracts was also consequently void.

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

Reasoning from the judgment:
0[ds]11. Now there can be no doubt that clause (2) of the prescribed form was scored out and omitted from the contracts notes in respect of the contracts between the parties. There was no provision included in any of these contracts requiring the buyers to give any particular number of clear working days notice to the sellers to place goods alongside export vessel in the port of Calcutta. The contracts thus clearly departed from the prescribed form in respect of this particular provision. The question is whether on this account it could be said that the contracts were not in the prescribed form in accordance with the requirement of1 (b. Now, when can a contract be said to be in the prescribed form and when not is no longer a question which presents any serious difficulty. It is settled by the high authority of the Judicial Committee of the Privy Council and there is also a pronouncement of this Court on the point. We may first refer to the decision of the Privy Council in Radhakisson Gopikisson v. Balmukund Ramchandra. 60 Ind App 63 = (AIR 1933 PC 55  ). The question which arose for determination in this case was whether certain contracts entered into whether the parties contravened any of themade by the Board of Directors of the East India Cotton Association Ltd. and were, therefore, void under Section 5 of the Bombay Cotton Contracts Act 1922.81 provided that "contracts...shall be in writing in the form given in the Appendix. The contracts in question were admittedly inconsistent with the terms and conditions set out in the prescribed form in at least two respects and yet the contention of the appellants was that the contracts were in the prescribed form and there was no contravention of81 so as to render the contracts void under Section 5. The Judicial Committee of the Privy Council negatived this contention. Lord Thankerton, delivering the opinion of the Judicial Committee. pointed out at page 70 of theLordships are of opinion that the form prescribed is, in its terms, applicable to contracts between a commission agent and his constituent, and that the parties in the present case were bound to comply with theand its form. They are unable, however, to agree with the view that the form is a streotyped one and that literal compliance with it is essential; in their opinion, the contract must contain all the terms and conditions set out in the form in order to comply with it. For instance, in the prescribed form the main terms and conditions are contained in the memorandum of contract... sent by the agent to his constituent, in which the former reports the fulfilling of the order by a purchase or a sale, as the case may be, in Bombay. If identical terms and conditions, instead of being in the memorandum sent by the agent, were contained in the initial order by the constituent, their Lordships are of opinion that there would be protanto sufficient compliance with theBut that is clearly not found in the present case, for the initial orders are inconsistent with the terms and conditions set out in the prescribed form in at least two respects.... It follows that the contracts having failed to comply with thethey are rendered void under the provisions of S. 5 of thesame view was reaffirmed by this Court in (1971) 2 SCR 751   = (AIR 1971 SC 166  ) where Grover, J., speaking on behalf of the Court, said with reference to the same1 (b) with which we are concerned in the present appealand what was said there is binding uponcompliance with the prescribed form may not be essential but if the contract does not contain all the terms and conditions set out in the form the contract will be void under the provisions set out before; See the ratio of the decision in 60 Ind App 63 = (AIR 1933 PCis, therefore, clear that in order that a contract may be in the prescribed form, literal compliance is not essential: what is necessary is that the contract must contain all the terms and conditions set out in the prescribed form. If this test is applied, as it ought to be, there can be no doubt that the contracts in the present case were not in the prescribed form as they did not contain any term or condition corresponding to clause (2) of the printed form requiring the buyers to give a particular number of clear working days notice to place goods alongside export vessel in the port of Calcutta.In the first place it is not correct to say that the prescribed form may be followed only in so far as circumstances may admit. The prescribed form, as we have already pointed out above, is imperative and a contract in order to be valid must contain all the terms and conditions set out in the prescribed form. Either the contract must incorporate all those terms and conditions or no contract can be made at all. No term or condition in the prescribed form can be dispensed with on the plea that it is inapplicable. What Bankes L. J. said in Burchell v. Thompson, (1920) 2 KB 80, with reference to Section 9 of the Bills of Sale Act, 1882, namely, "...a bill of sale will be void unless all the blanks which are included in the statutory form are filled up, applies equally in the present case. Nothing can be omitted from the contract which is included as a term or condition in the prescribed form. The only departure that is permissible from the prescribed form is that provided in23 where contract is not for export but for inland delivery. The words "free alongside delivery export vessel in the port of Calcutta would in case of such a contract be wholly inapplicable, and therefore,23 permits these words to be substituted by some such words as F.O.R. or C. and F. or C.I.F. or F.O.B., as the case may be. That is the only variation permissible under theand beyond that there can be no departure from the prescribed form.23 indeed, by necessary implication, clearly suggests that the prescribed form is mandatory and must be followed scrupulously in regard to all the terms and conditions therein set out except to the limited extent to which departure may be permitted under thatThat is the plain intendment and effect of1 (b), 15, 17 and 23 read with Section 15,(3A.). Vide 60 Ind App 63 = (AIR 1933 PC 55  ) and (1971) 2 SCR 751   = (AIR 1971 SC 166  ).The omission of clause (2) of the prescribed form from the contracts in question must, therefore, be held to render these contracts illegal under section 15,(3A).14. Secondly, in any event, clause (2) of the prescribed form could not be said to be inapplicable in case of the present contracts. It is clear from theand particularly the prescribed form and23 that a contract which is a transferable specific delivery contract may be of one of two kinds. It may be either a contract for export or a contract for inland delivery. A contract for export would stipulate a price "free alongside export vessel in the port of Calcutta, while in a contract for inland delivery, the price would be F.O.R. or C. and F. or C.I.F. or F.O.B., as the case may be. The contracts in the present case were clearly contracts for export and under these contracts the sellers were bound to deliver goods alongside export vessel in the port of Calcutta. That is why clause (3) in each of the contracts provided that the goods shall be "packed, folded, well pressed, marked and shipped by sellers in cargo boats in iron bound bales of 2000 yards or 1829 Metres each." But then what is the effect of clause (4) which provided that "Delivery of the goods shall be given and taken as follows: the specified month of delivery "(Due Date P.D.O.). This clause clearly contemplated delivery of Pucca Delivery Orders on/or before due date under each of the contracts. Could this be said to be inconsistent with clause (2) of the prescribed form so as to render that clause inappropriate for application to these contracts? We do not think so. The question has to be examined against the background of the practice followed by traders in effecting transferable specific delivery contracts in jute goods in the city of Calcutta. There is usually a chain of contracts starting from the Mill Company and ending with the actual shipper of the goods. There are in between the Mill Company and the ultimate shipper various intermediate buyers and sellers who enter into chain contracts on the same terms and conditions as the original contract between the Mill Company and its buyer. Where the first contract between the Mill Company and its buyer provides for delivery of Pucca Delivery Orders against payment of the priceand such a provision is clearly contemplated by4(a) in Chapter VIIa similar provision would be repeated in the entire chain of contracts and the Pucca Delivery Orders would be issued by the Mill Company to its buyer and they would then go on being transferred by the endorsement from one buyer to another along the chain until they reach the last buyer who is the shipper of the goods. The last buyer being the shipper would get himself registered as the holder of the Pucca Delivery Orders in the books of the Mill Company under3 of chapter VIII and he would then give shipping instructions to the Mill Company in writing accompanied by the Pucca Delivery Orders to place the goods alongside a specific export vessel or wharf or jetty in the port of Calcutta as provided in5 of Chapter VIII. When the registered holder of the Pucca Delivery Orders gives shipping instructions to the Mill Company, the effect is as if eo instanti such shipping instructions are given by the registered holder to his seller and by such seller to his immediate seller and so on along each link of the chain until they reach the Mill Company. The process of the registered holder giving shipping instructions to his seller and each successive buyer passing on such shipping instructions to his immediate seller so as ultimately to reach the Mill Company would be cumbrous and time consuming and would impede quick movement of goods in performance of export contracts and5 of Chapter VIII, therefore, provided that, instead of going through this tortuous process of passing on shipping instructions from one end of the chain to another through each link in the chain, the last buyer who is the registered holder may directly give shipping instructions to the Mill Company and that would be tantamount to giving shipping instructions in performance of each of the chain contracts all along the line. The presence of a clause in the chain contracts providing for delivery of Pucca Delivery Orders against payment of the price does not, therefore, exclude giving of shipping instructions by the buyers to the sellers. In fact, shipping instructions have to be given, because the contracts are export contracts providing for delivery free alongside export vessel in the port of Calcutta and, as pointed out above,5 of Chapter VIII clearly provides for giving of shipping instructions. Now, obviously when shipping instructions are to be given, each of the chain contracts may legitimately stipulate that a particular number of clear working days notice to place goods alongside shall be given by the buyers to the sellers and that is precisely what is provided by cl. (2) of the prescribed form. Clause (2) of the prescribed form requiring buyers to give a particular number of clear working days notice to place goods alongside cannot, therefore, be said to be inconsistent with the provision for delivery of Pucca Delivery Orders against payment of the price.It is, therefore, clear, both on principle and authority, that in case of a transferable specific delivery contract for export, clause (2) of the prescribed form requiring buyers to give a particular number of clear working days notice to place goods alongside is not rendered inapplicable by a provision in the contract under clause (4) stipulating for deliver of Pucca Delivery Orders against payment of the price. Clause (2) of the prescribed form can be appropriately incorporated in such a contract and omission to include, it cannot be justified on the plea that it would be inconsistent with clause (4) of the contract.17. We must, therefore, hold that since the contracts in the present case did not contain any provision corresponding to clause (2) of the prescribed form requiring buyers to give a particular number of clear working days notice to place goods alongside, they were not in the prescribed form and hence they were illegal under Section 15,(3A) and the arbitration clause contained in each of these contracts was also consequently void.