P L D 1957 (W (PLP)

CONSTANIINE, J.--‑The plaintiff‑applicant brought a suit in the Small Causes Court upon a contract dated 10th April 1953, in which he was the buyer and the defendant‑opponents the sellers. It was in respect of 200 bags of gram. The price was fixed and payment was cash against delivery order. As regards delivery it was stated "May 1953, Seller's option at Karachi City Railway Station or any godown in Karachi." The deposit was Rs. 2 per bag as advance. The broker's name was given and the condition was, "if any restriction is imposed by the Government, this contract will be deemed as cancelled and the deposit amount returned". The defendant contended that this condition had been satisfied by a notification dated 25th May 1953, issued by the Central Government as the Food Grains (Futures and Options Prohibitions) Order, 1953. This order restricted (1) futures in foodgrains, and (2) options in foodgrains. Futures in foodgrains are defined as including all agreements relating to the purchase and sale of foodgrain made on a forward basis and providing for delivery at some future date in which actual delivery of the foodgrain by the seller to the purchaser was not contemplated, and the parties to the agreement contemplated the settlement of the agreement by cross‑contracts or the payment of margins; and "option in foodgrain" was defined as ,meaning an agreement for the purchase or sale of a right to buy, or a right to sell, or a right to buy and sell, any foodgrain in future, and including a teji or mandi and a teji mandi in any foodgrain. The opponents first contended that the meaning of the condition in the contract was that if any restrictions were imposed, whether they hit the actual contract between the parties or not, the contract should be viod. I do not think that this is a reasonable interpretation of this condition. I think it requires the actual contract to be affected by a specific provision made by Government. The learned Judge decided, and the parties agreed, that since the parties themselves stated that delivery was con templated, the definition of futures in foodgrains does not apply to this contract. The learned Judge, however, held that the contract was hit by the definition of options in foodgrains. He said " . the defendant had the right to offer to deliver the goods on and from the 1st May 1953, at the choice of the defendant . . . It is therefore quite clear that the defendant purchased the right to sell on any day in the month of May". If the interpretation of the learned judge is correct, the Order prohibits all contracts for the purchase or sale of grain in which delivery is to be effected in the future. If this were so, the language of the Order could have been much simpler; it could have defined such contracts as agreements to buy or sell grain in future. But the interpretation of the learned Sub judge is clearly wrong, since the seller in this kind of contract has not pur chased the right to sell. The words "purchase or sale" in the Order involve the giving of a price, i.e. money or money's worth, and no price has been given for the right to sell. Furthermore, it seems clear that the words "right to buy or to sell" mean not a single coupled with a duty as in the Present contract but a right unaccompanied by a duty ; what is purchased is an option, i.e. a choice either to buy or not to buy, to sell or not to sell. An admirably clear description of teji maridi contracts is given in Manilal v. Alibhai (47 Bom. 263), by the referring judge of the Small Causes Court. The object of the Order appears to be to stop speculation in grain and this description shows how options can be used as means of speculation ; so frequently indeed that Beaman J. had thought that a presumption of gaming should attach to such options. The result is that the application is granted with costs. The suit is remanded to the Lower Court for further disposal. A. H. Application granted.