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PETITIONER: HEMRAJ KESHAVJI

       Vs.

RESPONDENT: SHAH HARIDAS JETHABHAI

DATE OF JUDGMENT: 29/03/1963

BENCH: SHAH, J.C. BENCH: SHAH, J.C. SINHA, BHUVNESHWAR P.(CJ) AYYANGAR, N. RAJAGOPALA

CITATION:  1964 AIR 1526            1964 SCR  (2) 688  CITATOR INFO :  RF         1972 SC 696  (7)

ACT:    Forward Contract-Transferability of contract-No. specific stipulations  in contract-If indicates  transferability  whe ther  other  circumstances  can  be  looked  into-Saurashtra Groundnut  and  Groundnut Products (Forward  Contracts  Pro- hibition) Order, 1949.

HEADNOTE:   The  appellant entered into contracts with the  respondent (for  sale  of  groundnuts) which were  described  as  ready delivery  contracts  and  were  subject  to  the  rules  and regulations.  of  the Veraval  Merchants  Association.   The contracts  specified the price and quality of the goods  and stipulated  delivery  at a specific price.   But  there  was nothing  in  the  contracts  indicating  whether  they  were transferable  to  third  parties.   The  respondent  claimed certain  amounts of money in respect of  these  transactions but the appellant resisted the claim on the ground that  the contracts,  being forward contracts, were prohibited by  the Saurashtra   Groundnut  and  Groundnut   Products   (Forward Contracts  Prohibition) Order, 1949, and were  illegal,  The appellant  contended that the contracts for the delivery  of groundnuts  at  a  future date, even though  they  were  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 were not transferable to  third parties. Held that the contracts were not forward contracts and  were not  hit by the Prohibition Order.  A contract for  delivery of goods at a future date, even though for a specific  price and specific quality, can be excluded from the definition of forward contracts only if the contract is  non-transferable. But  from the mere absence of an express stipulation  as  to non-transferability in the contract, it cannot be deemed  to be  transferable  and  outside the  exception.   It  is  not required  either by the Order or by the object of the  Order that  the condition regarding non-transferability should  be mentioned in the contract itself before the contract can  be excluded  from the definition of forward contract.   Absence

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of a specific stipulation in this regard is not  conclusive. It has to be seen whether upon the  687 language  of  the  contract  interpreted  in  the  light  of surrounding circumstances it can be field 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  subject  clearly showed that the contracts 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.  Bom.  7,  Uma Satyanarayanamurty v. Kothamasu Sitaramayya & Co. (1950) 1 M L.J. 557.  Boddu Seetharamaswami v. Bhagavathi Oil  Company, I.L.R. (1951) Mad. 723, Hussain Kasam Dada v.  Vijayanagaram Commercial  Association, A.I.R. (1954) Mad. 528 and  Vaddadi Venkataswami  v. Hanura Noor Muhammad Beegum, A.I.R.  (1956) Andhra 9, referred to.

JUDGMENT:   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,  O.C.  Mathur  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 688 personal account an amount of Rs. 8,899/15/3 was due to  him in  respect  of  a  transaction of  sale  of  1300  bags  of groundnut  sent  by him between January 16  to  January  28, 1950,  and the price of gunny bags and groundnut  oil  cakes delivered to the respondent.  The appellant further  alleged that  forward  contracts were prohibited  with  effect  from November 19, 1949 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 contendedthat  in the  appellant’s personal account an amountof   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 Mills 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

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(Samvat 2006) Settlement did not contravene the order  dated November  19, 1949, 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 pucca  adatia.  He then contended that in Samvat  year  2006 the appellant had sold  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 appellanthad  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 issued 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, and 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 Prohibition) Order, 1949, 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 690 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  account  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  Products  (Forward Contract  Prohibition) Order, 1949, was issued  on  November 19, 1949, 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

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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, 1949, 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  691 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 godown of the purchaser and therefore  delivery 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 groundnut  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 "forward  contracts" and therefore not within the prohibition 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 692 non-transferability  of a contract against delivery  orders, railway receipts or bills of ladnng, 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

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             Sheth Thaker Hemraj Keshavji at Malia.               Please  accept  Jay Gopal  from  Shab  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 (1bs.)               2.    Sold--Groundnut  seeds-small  new  crop,               ready  December-January Dated 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 December--January Bags 100 one  693               hundred bags-at Rs. 31-6-6 rupees thirty  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 the acknowledg-               ment as under :-                    "Shah Haridas jethabhai, at Veraval.               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  regulations  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 against delivery orders, railway receipts  or bills of lading, it must be deemed  capable  of being transferred to third parties and so for the purpose of the order, be deemed to be a forward contract.  The 694 argument  in substance -is that a contract for  delivery  of groundnut at a future date even for specific quality and for specific delivery at 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  third  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  products,  and  to achieve   that  purpose  it  sought  to   prohibit   forward transactions  which were transferable 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 definition  of

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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 Hansraj  v.  Vasanji (1).   In that case the contract was for spot delivery  i.e. where no delivery 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  stipulation 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.  justice  M. V. Desai : "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 (1)  (1948) 4 D.L.R, Bom. 7.  695 that  the  Delivery Orders, 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  contemplated 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  Satyanarayanamurty  v. Kothamasu  Sitaramayya  &  Co.  (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  speculation,  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 transferable.  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  (2),  Hussain  Kasam  Dada  v. Vijayanagaram   Commercial  Association  (3)   and   Vaddadi Venkataswami  v.  Hanura  Noor  Muhammad  Beegum  (4).   The phraseology  of  the notifications and  the  definitions  of forward  contract  were not in terms identical, in  each  of these cases; but these cases lay down that before a contract (1)  (1950) 1 M. L. J. 557. (3)  A.I.R. (1954) Mad. 528. (2)  1. L R. (1951) Mad. 723. A.I.R. (1956) Andhra 9. 696 for  delivery  of  a commodity at 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

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prohibiting   the  transfer  of  delivery  orders,   railway receipts or bills of lading. We are 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 date 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 Khardah Company  Ltd.  v. Raymon -it- Company (India) Private Ltd. (1), 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  Regulations Act 74 of 1952 forward  contracts  in contravention of the provisions of sub-s. (1) 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, (1)  [1963] 3 S.C.R. 183.  697 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 Seetharamaswani v.  Bhagwathi  Oil Co. (1), Hanumanthah v. U. Thimmaiah (2)  and Hussain  Kasam Dada v. Vijananagaram Commercial Association (3) were cited. Venkatarama   Aiyar,  J,  observed  in  dealing  with   this contention:               "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  agreement               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               document  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               nontransferrable,  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

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             contract, aided by such considerations as  can               legitimately  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, (1) (1951) 1 M.L.J. 147.  (1) A.I.R. (1954) Mad. 87. (3)A.I.R. (1954) Mad, 528. 698               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, 1949.  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 that 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 surrounding circumstances, and silence of  the contract   cannot   be   regarded  as   an   indication   of transferability-much less would it justify an inference that it is transferable. We  must  then  consider having regard  to  the  surrounding circumstances if such a term can be implied.  The  contracts are made subject to the rules and regulations of the Veraval Merchants’ Association.  These rules are designated  "’Rules and  Regulations  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 bags.  In the event of failure to supply  a Bardan  Chitti within 48 hours a penalty of Rs. 2/- per  100 bags is to be paid to the seller for every 24 hours.  Rule 6 deals with delivery.  The seller has to give delivery 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  commodity at his godown to pay 90% of  the  invoice price,  and 10% may be retained against defects or  shortage discovered  in weighment (Rule7).  Weighment has to be  made at  the  godown  of  the  buyer,  at  the  earliest   moment according,  to the convenience of the seller and the  buyer, after  the  commodity  has reached the  buyer’s  godown.   A sample has to be preserved, if  699 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 analyzed  at  the buyer’s place but after weighment of the commodity, cleaning of  sample should not take more than 6 days and if a  person makes any delay 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 -/12/- twelve annas per centum  per mensem.   Rule II provides for "survey of disputes"  arising

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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  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  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 700 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  to the persons named as the seller and the  buyer  in the  transactions  of sale and purchase.  But  Mr.  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 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 rules  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 connot transfer the Obligations under a contract which is made subject to the rules and  regulations of  the Association, ail 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 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 buyer’s assignee, wherever the warehouse of the assignee may be.  The  701 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 buyer’s godown maybe 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 necessity have to  be  a member of the Association and therefore resident in Veraval.

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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% 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 702 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  any one other than the buyer or his representative. On  a  careful review of the rules 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  could 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. 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 appellant’s suit.  The appeal  is  dismissed with costs. Appeal dismissed.  703