Mtnch tY HEl\JRAJ KESHA VJI "(). SHAH HARIDA~ JETHABHAI (B. P. SINHA C. J ., J. C. SH All and N. RAJAGOPALA AYYANGAR jj.) Foru:urd Co11tracl-1'ran•ferabilit1/ of contrart-S u specific stipulations in co11trrir,t-lf indicates trant1Jerability- JVhethtr
other circu1n~ta11ces can he looked into-Sauraslttra Groundnut aJtd GruuJUlnut Products (l?or11:ard Cu1itn1ctg Pro- h1/,ition) Ordtr, 194!1. The appellant entered into contracts \Vith the 1espondent
(for sale of groundnuts) which were de'!Cribcd as ready delivery contracts and \Vere subject to the rules and regt1lations of the Vcraval Merchants Associati:>n. ·rhc contraccs specified the
price and quality of the goods and stipulated delivery at a specific price. But there was nothing in the contracts indicat- ing \vhethcr they were transferable to third parties. The
respondent clai1ncd certain arnounts of money in respect of these transactions but the appellant resisted the claitn 011 the ground that the contracts, being forv,rard contracts, were pro- hibited by the Saarashtra Groundnut and Groundnut Product' (Forward Contracts Prohibition) Order, 1949, and were illegal. The appellant c0n1cnded that the contracts for the delivery of groundnuts at a future dat(", even though they \\'ere for specific quality and for specific delivery at a specific price, must be deemed to be forward contracts unless it was expressly recited that they \Vere not transferable to third parties.
Held that the contracts \Vere not fur\vard contracts and were 1•ot hit by the Prohibition Order. A contmct for delivery of goods at a future date, even tho~gh for a specific price and
specific quality, can be excluded fro1n the definition of forward contracts only if the contract is no:1-transfcrablc. But from the mere absence of au express stipulation as to non-transfer· ability in the contract, it canno~ be <lcerned to bt~ transferable and outside the exception.
It is not re.quired either by the Order or by the object of rite Order that the <:on<lirion regard. ing nou-trdnsferability ~hould he mentioned iu the contract itself before the contract can be excluded frorn the definition of forward contract.
:\bsence of a specific stipulation in this regard is not conclusive. It has tu be SL'Cn whether upon the 2 S.C.R. SUPREME -cotJRT REPORTS language of the contract interpreted in the light of surrounding circumstances it can be held that there was an agreement
between the parties that the contract was not transferable. The rules and regulations of the Association to which the contracts in dispute were su!Jjecl clearly sho\ved that the con- tracts were not transferable.
Khardah Company Ltd. v. Raymon & Co. (India) Private Ltd., [1963] 3 S.C.R. 183, applied. Firm Hansraj v. Vasanji (1948) 4 D.L.R. Born. 7, Uma Satyanarayanamurty v. Kothamasit Sitaramayya & Co. (1950)
1 ML.J. 557. Boddit Seetharamaswami v. Bhagavathi Oil Company, I.L.R. (1951) Mad. 723, Hussain Kasam Dada v. Vijayanagaram Commercial Association, A.LR. (1954) Mad. and Vaddadi Venkataswami v. Hanura Noor
Muhammad Beegum, A.I.R. (1956) Andhra 9, referred to. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 164 of 1961. Appeal from the judgment and decree dated December 17, 1957, of the former Bombay High
Court (Now Gujarat), in Civil First Appeals Nos. 14 and 24 of 1956 from Original Decree. B.R.L. Iyengar, Atiqur Rehman, J.L. Doshi and K.L. Hathi, for the appellant. Purshottam Tricumdas, J.B. Dadachanji, 0.0.
11lathur and Ravinder Narain, for the respondent. 1963. March 29. The Judgment of the Court was delivered by SHAH J.-The appellant instituted Suit No. 250 of 1950 in the Court of the Civil Judge (Senior
Division), Junagadh for a decree for Rs. 72693/11/- alleging that the appellant had a personal account with the respondent in respect of drafts, cheques, hundis and cash, and at the foot of that account
Rs. 58,000(-as principal amount and Rs. 5, 793/12/- as interest remained_ due and payable by the respondent, that beside the amount due on the said H1mraj K1shavji v. 1-!aridaJ Jelhahh«i
Shah J. lltrnraj Krsh1,::.ji }/a,; ·'ai }tfl nbhai personal account au amount of Rs. 8,899/15/3 was due to l1i111 in respect of a transaction of sale of I :mo bags of groundnut sent by him
between .January {(i tJ Januarv ~1'. I \J.iO, and lite pr:cc of gunny bags and groundnut oil cakes delivered to the respondent. The appellant further alleged that forward contracts were prohibited with effect from
November 1 !J, l 949 by the Saurashtra Groundnut and Groundnut Products (forward Contracts Prohibition) order, and that the said contracts being illegal the appellant was not subject to any liability
arising from adjustments of credits and debits or differences in rates relating to forward contracts and the respondent was not entitled nor authorised to make credit and debit entries in the appellant's
account and that nothing was due by him in respect thereof. The respondent by his written statement contended that in the appellant's personal account an amotmt of Rs. 1,58,000/. stood initially credited
but at the foot of that account only a sum of Rs. 18,000/- was due and this sum was credited in the current account of the appellant in the name of Hemraj Keshavji Oil .\-fills and Ginning Factory
and therefore nothing was due in the personal account, that the transaction effected by the appellant through the commission agency of the respondent in groundnut seed for December-January
(Samvat 2006) S<'ttlement did not contravene the onlcr dated November 19, 1\149, of the United States of Saurashtra and that the respondent has not committed any breach of the order, that all the
transactions for the December-January Settlement were in ready goods of specific quality and that there was a condition relating to giving and taking of delivery on fixed dates and the same were all
effected at the direction of the appellant and that the appellant was legally responsible for all payments made in respect of those transactions by the respondents as the appellant's p1u;c.a arlatia.
He then contended that in Samvat year 2006 the appellant had sold 2 S.C.R. 689' 9000 bags of groundnut through the agency of the respondent and had purchased 2300 bags through him, that the appellant thereafter gave delivery of
only 2000 bags of groundnut and did not deliver the balance and on that account there resulted a loss of Rs. 9,221/7 /9 which the appellant was bound to reimburse. The respondent admitted that
the appellant had sent 1300 bags of groundnut but these bags were delivered towards the sale of 2000 bags of December-January settlement and the price thereof and of the balance of 700 bags was credited in the
account of the appellant, and that the appellant was not entitled to a decree for any amount except the amount found due at the foot of the account. The trial Court decreed the claim by awarding
Rs. 30,589/3/- and interest. Against the decree of the Trial Court the respondent as well as the appellant appealed to the High Court of the Saurashtra. The appeals were transferred for trail
under the States Reorganization Act to the High Court of .Judicature of Bombay at Rajkot. The High Court allowed the appeal of the respondent and dismissed the appeal of the appellant. The
appellant has with certificate issned by the High Court, appealed to this Court against the decree passed by the High Court. The appeal raises a dispute about the liability of the appellant for transactions in groundnut seed
effected through the agency of the respondent after November 19, 1949, for December 1949, aud .January 1950, settlement. The appellant says that these were forward transactions in groundnut and
were prohibited under the Saurashtra Groundnut and Groundnut Products (Forward Contract Prohibi- tion) Order, l!J49, and that these transactions gave rise to no liability which the appellant is obliged to
discharge. The respondent says that the transactions were ready delivery contracts which were not 1963. Hem1aj tesh~vji Hariias Jethabh«i Shah J. IHJ H1mraj K1slt•rji v. Hatii•s J1thUli•i
SMll J, prohibited by law and in respect of the losses suffered thereunder the appellant was bound to indemnify the respondent and that the losses suffered in those transactions were duly debited in the personal ac-
count of the appellant. There is no dispute before us about the correctness of the entries in the personal account of the respondent. If the respondent's case is held proved that the transactions were ready delivery
transactions, and not prohibited by the Saurashtra order the decree passed by the High Court must be maintained. The Saurashtra Groundnut and Groundnut Pro- ducts (Forward Contract Prohibition) Order, 1949,
was issued on November 19, J\M9, and was extended to the whole of the United States of Saurashtra. By cl. 2 (a) 'contract' was defined as meaning "a contract made or to be performed in whole or in part in the
United States of Saurashtra relating to the sale or purchase of groundnut whole, groundnut seeds, or groundnut oil.·• By cl. 3 forward contracts in groundnut and groundnut products were prohibited.
The clause provided "No person shall henceforth enter into any forward contract in groundnut whole, or groundnut seeds, or groundnut oil except under and in accordance with the permission granted by
Government." By cl. 4 all outstanding forward contracts on the date of the publication of the order are to be closed immediately and at such rates and in such manner as may be fixed by the Association
concerned under their respective bye-laws or other regulations that may be applicable to such contracts. The Trial Court held that out of the transactions which took place on or after November 19, I 949,
only one transaction which was for delivery on January 25, 1950, was not hit by the order. The remaining transactions, according to the Trial Court must be regarded as wagering transactions i. e.
transactions in which it was intended by the parties that delivery of the goods contracted for could not 2 S.C.R. be demanded without breach of the understanding. The Court did not consider whether the transactions
were invalid as being in violation of the prohibition contained in the order. The High Court held that according to the rules of the Association, by which the contracts were governed, delivery of the goods
contracted for was invariably to be given at the god own of the purchaser and therefore deli very orders, railway receipts or bills of lading were not contemplated by the parties and the contracts being
for specific quality or type of groundnut for specific delivery and for specific price in respect of ready delivery goods the transactions were not hit by the order. By cl. 3 of the order all forward contracts in
groundnut and groi;ndnut products except those in accordance with the permission granted by the Government were prohibited. It is not the case of the respondent that permission was obtained
from the Government in respect of those transactions, but he contends that the transactions were not "for- ward cantracts" and therefore not within the prohi- bition of the order.
The definition of the expression 'forward contract' is somewhat obscure and the precise significance of the expression "against which contracts are not transferable to third parties" is
difficult to guage. A forward contract is in the first instance defined as meaning "a contract for delivery of groundnut whole, or groundnut seeds or groundnut oil at some future date." The contracts in dispute
in the present case were indisputably contracts for delivery of groundnut at "some future date." But the definition expressly excludes certain contracts from its operation even if they are contracts for future
delivery viz. contracts for specific qualities or types for specific delivery at specific price, delivery orders, railway receipts or bills of lading, against which contracts are not transferable to third parties. Why
the draftsman should in prescribing the condition of Hemrai KtJhavji ha1idtu Jtth«bhoi Shah J. IJ63 Hmer•j K11J,nji H•rii.r /llhUMi non.transferability of a contract against delivery
orders, railway receipts or bills of lading, should have referred to "contracts" is difficult to appreciate • The contracts in dispute were effected according to the rules and regulations of the Veraval Merchants
Association. A sample form of the contracts between the parties may be set out : "This Sauda is to be treated as subject to the rules and regulations of the Association. No. 143 Ready Delivery Veraval, Dt. 21-11-49
Sheth Thaker Hemraj Keshavji at Malia. Please accept Jay Gopal from Shah Haridas Jethabhai. We have this day transacted the Sauda as under, on your behalf and as per your order. Having made a note of it and having signed
the slip below the counterpart, return it imme- diately. P. S. It is left to our choice whether on the deposit being exhausted to let the Sauda remain outstanding or not. 1. Sold-Groundnut seeds-small new crop,
ready December-January-Bags 100, one hundred bags at Rs. 31·6·3 rupees thirty- one annas six and pies three-Standard filling 177 (lbs.) 2. Sold-Groundnut seeds-small new crop, ready
December-January lDated 25th Bags 500, five hundred bags at Rs. 31-11-6 rupees thirty one annas eleven and pies six-Standard filling 177 (lbs.) 3. Sold-Groundnut seeds-small new crop,
ready Decemb~r. fanuary Bags 100 Qne 2 S.C.R. hundred bags-at Rs. 31-6-6 rupees thiry one, annas six and pies six-Standard filling 177 (lbs.) Sd. Chhaganlal for Shah Haridas Jethabhai
1st Shukla Margashirsh, St. 2006, Monday." At the foot of the contract is th~ acknowledg- ment as under :- "Shah Haridas Jethabhai, at Vera val. We have received your Sauda nondh Chitti
No. 143 and have noted accordingly. 2nd Shukla Margashirsh, St. 2006,Dt. 21-11-49 Sd. Kalidas Bhagwanji for Sheth Hemraj Keshavji." The contract is described as a ready delivery contract and is made subject to the rules and regula-
tions of the Association. The price of the goods and the quality of the goods are specified and delivery at a specific price is also stipulated. There is nothing in the contract indicating whether it was transferable
to third parties. But the appellant submits that where the contract is silent as to whether it is transferable a~ainst delivery orders, railway receipts or bills of lading, it must be deemed capable of being transfer-
red to ·third parties and so for the purpose of the order, be deemed to be a forward contract. The 1'i3 Htmr•j E1sh11i1 Hcriic1 Jetkcih~ Sh<ii J /95J Htmr11.j Kt.>hrnji v. lla1itf1U J ttA.1.~bai
Sltizh J. argument in subitance is that a contract for delivery of groundnut at a future date even for specific quality and for specific delivery<11t a specific price would not be excluded from the definition of forward contract,
unless it is expressly recited in the contract that it is not transferable to tlurd parties against delivery orders, railway receipts or bills of lading. This, it is urged, is so because it was the object of the order to
prohibit speculation in groundnut and groundnut pro- ducts, and to achieve that purpose it sought to prohibit forward transactious which were transfera- ble to third parties. By insisting upon completion of
the contract between the parties thereto, it is urged it was intended to prevent speculation in essential commodities. Reliance in this behalf was sought to be placed upon several decisions of the Bombay,
Madras and Andhra Pradesh High Courts dealing with the interpretation of clauses similar to the defini· tion of forward contract in the Saurashtra order, in which it was held that exclusion from the prohibition
against forward contracts can be regarded as effective only if the stipulation about non-transferability is expressly mentioned in the contract, and silence of the contract imported transferability even in respect
of contracts for specific quality for specific delivery at specific price. The earliest decision of this clause was a decision of a single Judge of the Bombay High Court in Firm Ilansraj v. Vasanji (').
In that case the contract was for spot delivery i.e. where no deli· very order or railway receipt or bill of lading would ordinarily be issued. But the learned Judge held that such a contract in the absence of an express stipula-
tion prohibiting transfer would not fall within the Notification granting exclusion from the prohibition of forward contracts, because the condition regarding non-transferability would not be fulfilled.
It was observed by Mr. J ustic~ .M. V. Des'ai : "The only classes of cases of forward contracts which were exempted were those which contained in them the guarantee against speculation by reason of a provision
(I) (1948) 4 D.L.R, Bom, 7. 2 S.C,R. that the Delivery Ordern, Railway Receipts, or Bills of Lading (which were contemplated by the contracts and would be issued) should not be transferable to
third parties ………………… ", and he recorded his conclusion as follows : "In my opinion, if Delivery Orders were con- templated under these contracts, they were illegal, as the Delivery Orders were not made
non-transferable. If Delivery Orders, Railway Receipts or Bills of Lading were not contem- plated under the contracts, then the exemption (which deals with cases where Delivery Orders,
Railway Receipts or Bills of Lading are issued) has no application." This decision was approved in Uma Satyanarayana· murty v. Kothamasu Sitaramayya & Go. (1), where in considering whether a disputed contract was a
'forward contract' within the meaning of the Vegetable Oils and Oilcakes (Forward Con- tract Prohibition) Order, 1944, Rajamannar, C. J., held that the intention underlying the notification
being to grant exemption only to cases of forward contracts in respect of which there could be some guarantee that they would not be subject to specula- tion, exclusion from the prohibition imposed by the
notification may be established only if one of the terms of the contract is that the delivery order or railway receipt or bill of lading relating thereto is not transfer- able. It is not enough that such documents are not
contemplated, because it cannot be said that they are prohibited. This view was followed in Bodhu Seetharamaswami v. Bhagavathi Oil Company ('), Hussain Kasam Dada v. Vijayanagaram Commercial
Association(') and Vaddadi Venkataswami v. Hanura Noor Muhammad Beegum ('). The phraseology of the notifications and the definitions of forward con- tract were not in terms identical, in each of these
cases; but these cases lay down that before a contract (I) (1950) 1 M. L. J. 557 {S) A.l.R. (1954) Mad. 528. (2) J.L.R. (1951) Mad. 723. (4) A.I,R. (1956) Andbra 9; Hemraj Kesht11ji
v. H•rii«s Jeth<bhai Shah J; Htm1aj Krsliarji /!nriias Jttl,Rbhm for delivery of a commodity al a future date could be regarded as excluded from the definition of forward contract, even if the contract was for a specific price
or specific quality, it must be stipulated that the contracts were not transferable to third parties by expressly prohibiting the transfer of delivery orders, railway receipts or bills of lading.
We arc unable to hold that a contract for delivery of goods at a future date would fall within the exception in the definition of forward contract if other conditions are fulfilled only if there is
an express stipulation recorded in the contract prohibiting the transfer of delivery orders, railway receipts or bills of lading against the contract thereof. The order issued by the Saurashtra
Government excluded from the definition of forward contract all contracts for specific qualities or types of groundnut whole or groundnut seeds or groundnut oil and for specific delivery at a
specific price, delivery orders, railway receipts or bills of lading against which contracts, were not transferable to third parties. But the Legislature did not impose the condition that the contracts for delivery of goods
at some future <late must recite that the contracts were not to be transferable, and there is no indication of such an implication. Nor is the object of the order sufficient to justify an overriding reason for
implying that condition. In a recent case Kliardah Company Ltd v. Raymon .C: Compan11 (India) Private Ud. ('), this Court had to adjudicate upon the validity of a forward contract relating to jute.
By cl. (2) of s. 17 of the Forward Contracts Regu· lations Act 74 of I 952 forward contracts in contra- vention of the provisions of sub-s. (I) of s. 17 were declared illegal, but the Notification did not apply
to non-transferable specific delivery contracts for the sale or purchase of any goods. In a dispute relating to non-delivery of jute, which was one of the commodities to which the Act was made applicable,
(I) (1963] 3 8.C.R. lij3, 2 S.C.R. the Bengal Chamber of Commerce made an award. In a petition to set aside the award it was urged that in the absence of a specific clause prohibiting
transfer in the contract itself, the plea that the contract is not transferable is not open to the party supporting the contract and that evidence aliunde is not admissible to establish the condition, and in
support of that argument Seetharanmswani v. Bhagwathi Oil Co. (1l, Hanumanthah v. Thimmaiah ('), and Hussain Kas11m Dada v. Vijayanagaram Commercial Association (') were cited. Venkatarama Aiyar, J, observed in dealing
with this conteFJtion: "x x x that when a contract has been reduced to writing, we must look only to that writing for ascertaining the terms of the agree- ment between the parties, but it does not follow
from this that it is only what is set out expressly and in so many words in the docu- ment that can constitute a term of the contract between the parties. If on a reading of the document as a whole, it can fairly be deduced
from the words actually used therein that the parties had agreed on a particular term, there is nothing in law which prevents them from setting up that term. The terms of a contract
can be express or implied from what has been expressed. x x x x on the question whether there was an agreement between the parties that the contract was to be non- transferable, the absence of a specific clause
forbidding 'transfer is not conclusive. What has to be seen is whether it could be held on a reasonable interpretation of the contract, aided by such considerations as can legiti-
mately be taken into account that the agree- ment of the parties was that it was not to be transferred. When once a conclusion is reached that such was the understanding of the parties,
(I) (1951) I M.L.J. 147. (I) A.I.R. (1954) M•d. 87. (3) A,!.j.t, ( 1954) M•4• 528, 1'1i!I Hemr11j Kdsliavji Haridas Jethiiluii Shah J, Htm,si Kt.rliaojl Hariicr J1thabht1i Sh<h J.
there is nothing in law which prevents effect from being given to it." In our view this principle applies to the interpretation of the Saurashtra Groundnut and Groundnut Products (Forward Contract Prohibition) Order, 194.9.
From the absence of a clause expressly prohibiting transfer of the contract against delivery orders, railway receipts or bills of lading it cannot be inferred r.hat the contract is transferable.
The question whether an impugned contract is transferable must depend upon the language of the contract interpreted in the light of surroun:ling cirrnmstances, and silence of the contract cann<Jt be regarded as
an indication of transferability· -much less would it justify an infere- nce that it is transferable. We must then consider havinfS" regard to the surrounding circumstances if such a term can be
implied. The contracts arc made subject to the rules and regulations of the Vera val Merchants' Associa- tion. These rules are designated "Rules and Regula- tions of groundnuts ready delivery". Rule 5 provides
that the buyer has to supply empty bags to the seller and he has to supply a Bardan Chitti within 48 hours from the receipt of the letter of the seller to the buyer asking for empty b~gs. In the event of failure to
supply a Bardan Chilli within 48 hours a penalty of Rs. 2;. per 100 bags is to be paid to the seller for every 24 hours. Rule ()deals with delivery. The seller has to give de livery at the godown of the buyer
and the seller is to unload the carts at his own cost. The buyer has, on presentation of the receipt of the co· mmodity at his godown to pay 90% of the invoice price, and 10% may be retained against defects or
shortage discovered in weighment (Ru lei). Weighment has to be made at the godown of the buyer, at the earliest moment according to the convenience of the seller and the buver, after the commodity has reached
the buyer's godoivn. A sample has to be preserved, if 2 S.C.R. the seller so chooses, at the buyer's place. At the con- venience of both the buyer and the seller and at the earliest opportunity the sample should be analysed at
the buyer's place but after weighment of the commo- dity, cleaning of sample should not take more than 6 days and if a person makes any del.iy he would be liable to pay a penalty of -/8/ · eight annas for every
24 hours per every lot of 100 bags. Rule 9 deals with shortages and provides for reimbusement of loss to the buyer. Rule 10 deals with payment of price. On taking delivery of the commodity, the person
receiving the commodity, having obtained a kutcha receipt, is to make 90% payment to the person giving delivery immediately. If the person giving delivery of a commodity so desires, the person
taking delivery has to furnish surety for the value of commodity and acceptable to the Association. After weighment and shortages are settled and on receiving the invoice, the buyer must pay in full the balance
of 10% within 96 hours. The buyer paying after 96 hours must pay interest at the rate of -/1"2/- twelve annas per centum per mensem. Rule 11 provides for "survey of disputes" arising between the members
at the time of delivery of "weighed commodity." The application may be made both by the buyer and the seller. Rule 15 provides for steps to be taken if the seller or the buyer be "unable to meet
amount" found due at the settlement regarding the commodity. The Managing Committee, after hear- ing 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 determine and fix a reasonable rate after considering the rates as well as circumstances in the local as well as other centres of Saurashtra between seller
and the buyer and that the transactions between the buyer and the seller have to be settled at the rate so fixed. The transactions for purchase and sale are to be carried through between two members of the
H1mr•j K1shavji Haridas JeJhahhai /9i3 Httr1raj A'1shatji Harii•1 Jtlh•lh1i Sh•h J, Association and uuder 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., arc made. Prima Jacie, these rules apply to the persons named as the seller and the buyer in the transactions of sale
and purchase. But I\fr. Ayyanger 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 bene-
fit 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 rules indicates that the entire transac-
tion 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 connot transfer the obligations under a contract
which is made subject to the rules and re~ulations of the Association, al! the obligations prescribed by the rules being made part of the contract, a very curious result would ensue 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 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 Ii has to deliver the goods at the ware- house of the buyer, and if the benefit of the contract is transferable, it would imply an
obli~ation to deliver at the warehouse of the buyer's assignee, wherever the warehouse of the assi(lnee may be. The 2 S.C.R. stJl>:lU:ME COURT REPORTS \'iarehouse 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 buyer's godown may be required to undertake an intolerable burden
of meeting all the charges for transporting the goods to the warehouse of the buyer's assignee wherever such godown may be situate. Such an obligation could never have been under contemplation of the
rule-making body. Mr. Ayyanger contended that the assignee of the buyer contemplated by the rules would of neces- sity have to be a member of the Association and therefore resident in Veraval. But the rules to
w;1ich our attention has been invited do not, if the buyer is to includr 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 prirna 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 '\)erson' 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 commodiL y has to make payment of 90% of the price to the person giving delivery. There arc a large number of other rules which deal
with the rights of the 'buyers' and the obligations H1mrtfj K1~litJoji Hflrirlas I 1thobl"i Shah J, /fOJ llemt•} IruAotji Hcriiu l11habMi SA-A I· simultaneously imposed upon persons which in the
context may mean only the buyers. The use of the expression 'person' does not, in our judgment, indi- cate that he was to be any one other than the buyer or his representative. On a careful review of the rules we arc 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 Associa· tion under which they were made.
The contracts were, for reasons already mentioned, also not transferable to third parties, and could not be regard- ed as forward contracts within the meaning of the order. It is unnecessary therefore to consider whether
the respondent who claimed to have acted as Pucw 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. We arc therefore of the view that the High Court was right in modifying the decree passed by the Trial Court and in dismissing the appellant's
suit. The appeal is dismissed with costs. Appeal dismissed.