TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Supreme Court Reverses Appeal Decision, Upholds Validity of Settlement Contracts</h1> <h3>DUNI CHAND RATARIA Versus BHUWALKA BROTHERS LTD.</h3> DUNI CHAND RATARIA Versus BHUWALKA BROTHERS LTD. - 1955 AIR 182, 1955 (1) SCR 1071 Issues Involved:1. Legality of the settlement contracts under the West Bengal Jute Goods Future Ordinance, 1949.2. Whether the respondent habitually dealt in the sale or purchase of jute goods involving actual delivery of possession.3. Validity of the West Bengal Jute Goods Future Ordinance, 1949.Issue-wise Detailed Analysis:1. Legality of the Settlement Contracts:The appellant entered into three contracts with the respondent for purchasing jute bags, which were later settled through three settlement contracts. The respondent contested the legality of these settlement contracts, arguing they were prohibited by the West Bengal Jute Goods Future Ordinance, 1949. The Trial Court upheld the contracts, but the Appeal Court found them void and unenforceable under the Ordinance, which prohibited contracts for jute goods futures unless involving actual delivery of possession. The Supreme Court examined the relevant provisions of the Ordinance, particularly Section 2(1) defining 'contract relating to jute goods futures' and Section 3(1) and (2) prohibiting such contracts. The Supreme Court concluded that the settlement contracts did not involve mere speculative transactions but were genuine contracts involving actual delivery of possession through delivery orders, which represented the goods.2. Habitual Dealing in Jute Goods Involving Actual Delivery:The respondent argued it did not habitually deal in jute goods involving actual delivery, thus making the contracts void under the Ordinance. The Trial Court found that delivery orders in the jute trade represented actual delivery of goods and were exchanged for cash payments, thus involving actual delivery of possession. The Appeal Court, however, misinterpreted the facts, assuming no actual price was paid except by the shipper. The Supreme Court clarified that each successive buyer paid the full price in cash before endorsing the delivery order, thus involving actual delivery. The Supreme Court emphasized that 'actual delivery' in the Ordinance included symbolic or constructive delivery, not just physical or manual delivery, and the chain contracts resulted in actual delivery of possession in the ultimate analysis.3. Validity of the West Bengal Jute Goods Future Ordinance, 1949:The respondent's contention that the Ordinance was ultra vires was not seriously pressed before the Supreme Court. The Appeal Court had correctly held that the Ordinance fell within the legislative competence of the Provincial Legislature under Head 27 of List 2 of the Seventh Schedule of the Government of India Act, covering trade and commerce within the province.Conclusion:The Supreme Court allowed the appeal, reversing the Appeal Court's decision and restoring the Trial Court's decree in favor of the appellant. The settlement contracts were held valid and enforceable, involving actual delivery of possession through delivery orders. The Ordinance was found to be within the legislative competence of the Provincial Legislature. The appellant was entitled to recover the claimed amount with interest and costs.
TaxTMI 
TaxTMI 
