Baburam vs M/s Roshanlal Shri-krishnadas

A.H. Khan, J.—The facts giving rise to this appeal under Letters Patent in short are that the Plaintiff purchased some sugar from the Defendant hut the Defendant failed to give its delivery. The Plaintiff brought this suit for the recovery of damages thus sustained by him. The trial Court decreed the suit but the District Judge, Gwalior, accepted the appeal and dismissed the Plaintiff''s suit. The High Court in appeal No. 27 of 1961, set aside the judgment and decree of the District Judge and decreed the Plaintiff''s suit with costs throughout. It is against this judgment that the present appeal under Letters Patent is filed.

The main defence in this case was that the transaction was a future in sugar and that according to Sugar & Gur (Futures & Options) (Prohibition) Order 1949, the suit is not entertainable. This contention was rejected by the High Court and it is now again urged that the transaction is a future in sugar. The term, futures in sugar or gur, is defined in the Order referred to above, in Section 2 (d) thus:-

Futures in sugar or Gur'' means any agreement relating to the purchase or sale of sugar or gur made on a forward basis and providing for delivery at some future date and payment of margin on such date or dates as may be expressly or impliedly agreed upon by the parties.

From a perusal of the above definition it would appear that in order to make a transaction in futures, three ingredients must exist:

(i) it must be an agreement on forward basis;

(ii) the agreement must be provided for delivery on some future date; and

(iii) that the agreement must further provide for payment of margin on such date or dates as may be expressly or impliedly agreed upon.

In the instant case there is no doubt that the agreement is on a forward basis and that it provides for delivery at future date. But it lacks the third ingredient, namely, an agreement for payment of margin. It being of the said transaction can not be said to be one in futures in sugar.

Mr. Bhagwandas Gupta, learned Counsel for the Appellant contends that in determining whether the transaction is in futures or not, it is not necessary that there should also be an agreement for payment of margin and that this third ingredient may be ignored. But he has failed to cite any authority in support of his contention. It is a a well known principle of interpretation of statutes that all words are to be taken into consideration and no word, should be considered as redundant.

The true scope of enacting clauses must be determined on the fair reading of the words used in their natural and ordinary meaning. Their Lordships of the Supreme Court in Aswini Kumar Ghosh and Another Vs. Arabinda Bose and Another, ) have observed that it is not a sound principle of construction to brash aside words in a statue as being inapposite surplusage. I am therefore unable to accept the contention of the learned Counsel that in determining the nature of the transaction some words of the statue should be brushed aside-Precisely this point was considered in another case of this Court Hirekhan v. Babakhan Civil Revision No 169 of 1960, in which my learned brother had held that unless there is an agreement for payment of margin on an agreed date in the futures, the transaction will not be hit by the provisions of Clause (3) of the Sugar & Gur (Futures & Options) (Prohibition) Order, 1949.

For reasons stated above we do not find any substance in the appeal which is dismissed.

Shivdayal, J.

I have already stated my reasons in Hirekhan''s case (supra). I agree that this LPA must be dismissed.