Beaman, J.

1. In this suit the plaintiff sues for a certain sum of money alleged to be due to him as the result of dealings between himself and the defendant in silver. According to the plaintiffs case there were forward contracts between the parties for the Maha and Fagan vaidas of 1967, that is to say, February and March 1911. The defence is that there was a settlement between the parties and that nothing is now due to plaintiff; in the alternative that whether there was a settlement or not the transactions were in furtherance of wagering, and, therefore, unenforceable at law.

2. In proof of the alleged settlement, there is nothing but the defendant's own word, supported by books of very questionable character. There is also a strange incident of a letter alleged to have been written and sent by the defendant in reply to the plaintiff's notice of demand. It is part of the plaintiff's argument that if there had really been such a settlement as the defendant now relies on, that would have been set up at the earliest opportunity ; whereas in fact it only appears in the written statement and is then made an alternative and really a subordinate defence. The defendant's answer is that by this letter he did immediately set up his present defence of settlement. The defendant has produced his press-copy of this letter, and it is certainly singular that he should have taken the trouble of getting it press-copied in the very unusual way he alleges. He has also produced a post office receipt to prove that on the date alleged he did post a letter to the address of the plaintiff. The plaintiff replies that he received somewhere about that time an empty envelope addressed in handwriting he did not recognise. I confess that I do not think it likely that the defendant should have intentionally omitted to enclose the letter in the envelope for which he obtained a postal receipt. Yet it is quite possible that by some inadvertence he may have omitted to enclose the letter in it. Except as bearing upon the relative veracity of the plaintiff and the defendant and upon the argument drawn from the alleged subordination of this line of defence and its being so long withheld, the point would have no great importance. I am not prepared to say that the plaintiff has deliberately sworn to a falsehood when he denies ever having received such a letter as the defendant swears that he wrote and posted to him. Now, as to the defendant's sworn testimony touching the settlement, it is contradicted by the sworn testimony of the plaintiff and his witness Ranchhoddas, both in my opinion much better witnesses than the defendant. The defendant's counsel has criticised the plaintiff's evidence insisting that it was evasive and untrustworthy. It is true that upon many points on which the Court desired information the plaintiff either could not or would not supply it. That may be accounted for by the great difficulty people of his class find in understanding that what appears to them almost a matter of course in daily practice seems to require so much explanation in the Courts. After having observed the plaintiff's demeanour very carefully throughout his long examination in the box, I am not prepared to say that he was a bad witness. Compared with the majority of his class, I am inclined to think that he was rather good than a bad witness ; while the worst that can be said of Ranchhoddas is that he is found to be indebted to the plaintiff in the sum of Rs. 10,000. He is, however, a wealthy man, and it can hardly be suggested that he has come forward to deliberately perjure himself on account of so relatively small an obligation. On the other hand he is a Bania like the defendant and his sympathies might be expected to be on the defendant's rather than on the plaintiff's side. The books by which the defendant has sought to support the alleged settlement are exposed to obvious criticism. I do not feel that I can place any reliance upon them. The plaintiff has charged the defendant with deliberately manufacturing the particular entries in these books in order to support his case, and that criticism has at least as good and solid ground to rest upon as can usually be found when documents of the kind are so challenged. The books are suspicious and it is, to say the least, quite possible that the material entries have been prepared for the purposes of this suit. I think, therefore, that this part of the defence entirely breaks down.

3. In the alternative the defendant has set up a defence which is only too common in this city, that the dealings resulting in the balance due to the plaintiff, for which this suit is brought, were in furtherance of wagering. Now, the contracts with which I have to deal were for the sale by the plaintiff to the defendant of fifty-two bars of silver for the February vaida and the purchase by the plaintiff from the defendant of sixty-seven bars for the March vaida. The February vaida settling date was the 25th of February and the March vaida settling date the 27th of March. There were side teji mandi contracts between the parties in connection with both the simple forward contracts which I have just mentioned. The settling date for the teji mandi contracts differs from the date of vaida or ordinary forward contracts ; and the existence of these teji mandi contracts has introduced some complication into what otherwise might appear to be an extremely simple case.

4. Taking the first contract of sale by the plaintiff to the defendant for the February vaida, it is to be split up into several parts. Originally, it would appear that at different dates the plaintiff had sold thirty-eight bars of silver forward to the defendant. Then, there was a further sale of fourteen bars, and the contract was finally settled by the resale of the whole of the fifty-two bars to the plaintiff; thirty-eight of the bars so bought and sold were struck off by a simple cross contract. In respect of the remaining fourteen, the defendant appears to have given havalas upon other persons from whom he had himself contracted to buy ; and there was a side teji mandi contract upon twenty-five bars which was closed on the 5th of Maha Vad at a rate which apparently yeilded to the plaintiff a small profit of some Rs. 600, which he has included in the sum due to him upon the whole forward transaction of the sale and purchase of fifty-two bars. It is alleged by the defendant that on or about the 23rd of February not only were the forward dealings for the February vaida settled but also those for the March vaida. These, again, comprised a teji mandi side contract, which, being closed as the defendant alleges on or about the 23rd of February, resulted in a loss to him of Rs. 2110-8-0; while the ordinary forward contracts for sixty-seven bars squared by simple cross contracts resulted in a loss of Rs. 1659 to the defendant.

5. These are in rough outline the actual dealings between the parties, which I had to examine, and the case has been to some extent protracted by my desire to obtain as much accurate information as possible, regarding the true nature of these side teji mandi contracts and the manner in which they are ' applied ' (to use the word of the plaintiff) to ordinary forward contracts at the time current. But before summarising the result of such information as has been afforded to me in this case by the examination of the plaintiff on this point, I may turn to the manner in which the foward contracts and the teji mandi contracts of February and March are said to have been settled. On the February forward contracts including the Rs. 600 for the teji mandi on twenty-five bars of silver, the defendant was found indebted to the plaintiff in the sum of Rs. 4139-10-0 : of this, he says, he paid Rs. 2139-10-0 on the understanding that the rest was to be remitted. The plaintiff, however, alleges that the understanding was that two or three months' time was to be given to the defendant in which to pay the balance. The defendant further alleges that it was part of that settlement that the plaintiff should remit to him the whole loss for the teji mandi side contract for the Fagan vaida upon the ground that the defendant had only entered into it at the plaintiffs own suggestion. Then the defendant paid Rs. 1669-8-0 to the plaintiff in settlement, as he alleges, of what was due to the plaintiff from him on account of Fagan vaida contracts, that is to say, Rs. 1659 and Rs. 10-8-0 for charity. As to this the plaintiff contends that the Rs. 1669-8-0 was paid in part settlement of the defendant's loss on the teji mandi contracts; so that there should remain a balance, making with what was already due on the Fagan vaida the round total of Rs. 2100. The plaintiff, when the case came on for trial, relinquished his claim for the balance of Rs. 441 on account of Fagan teji mandi, and in the course of his concluding address, Mr. Vakil for the plaintiff admitted that he would not press for Rs. 600 due to the plaintiff on the Maha teji mandi, although it could not now be said to be clear whether that was meant to be included in the payment already made or in the balance alleged by the plaintiff to be still due for the Maha vaida contract, so that in any event the sum of Rs. 1041 would have to be deducted from the plaintiff's present claim. Several of the points, which I have thus mentioned in summarising the course of these transactions, are of course only appropriate and material to the alleged settlement. In that connection, it has always been the plaintiff's case that as soon it had become known in the Bazaar that these Courts set their face against teji mandi contracts, he insisted upon the defendant first settling his losses on the teji mandi of Fagan; and the defendant has sought to show that while his whole loss on that account was remitted, the payment of Rs. 1669-8-0 was made in full settlement of his loss on the ordinary Fagan vaida contract. The story, however, appears improbable on the face of it. No reason is suggested why the defendant should have paid Rs. 10-8-0 in charity, nor are any parallel instances adduced. I think as a mere matter of fact, the plaintiff's version of the manner in which the Fagan contracts, both vaida and teji mandi, were disposed of, ought to be accepted.

6. I am now, therefore, to consider whether these vaida contracts for the months of Maha and Fagan were, as the defendant alleges, pure wagers. I have had considerable experience of cases of this kind coming from the Bombay market, and it might be a short and easy way of disposing of this case to refer to my judgment in Mathuradas v. Narbadashankar (1909) 11 Bom. L. R. 997 in which I examined the whole of the law in relation to varying sets of facts, and to say that this case clearly falls under the third category mentioned in that judgment. But there is so much uncertainty as to what the true nature of a teji mandi transaction really is that in the light of what has been revealed in the evidence of the plaintiff here I may take advantage of this opportunity to briefly resume my own view of that peculiar form of local dealing. In the first teji mandi case I had to dispose of, I laid it down broadly that every such transaction must be a wager. In a later case a great deal of evidence was brought before me which led me to doubt whether there might not be exceptional cases in which teji mandi like the Liverpool double option might represent fair business dealings. I still, however, adhere generally to the view that in this country the rule ought to be that transactions shown to be teji mandi are wagering transactions, and that the onus of proving that they are not would lie heavily indeed upon the party so alleging. Where there is a great business firm doing extensive buying and selling business in foreign markets, transactions exactly corresponding in every detail with the teji mandi of the Bombay bazaar may no doubt quite honestly be entered into, be indeed necessary for the successful conduct of business by way of providing a certain amount of cover, but where parties, who indulge in teji mandi exclusively or where they have small dealings of their own, which may or may not be genuine, in forward contracts and make side teji mandi contracts not really by way of cover but by way of hedging, it is almost certain that the latter class of contracts are in their nature essentially wagers. The teji mandi contract in its naked simplicity is quite intelligible, at least it appears to me to be so, though owing to the difficulty of obtaining accurate explanations from the class of people who habitually deal in such contracts, I may even now be mistaken. I should thus describe a simple teji mandi contract. The party selling the double option is really doing no more than backing the stability of the market against its possible fluctuation. The party buying the double option is backing the fluctuations of the market against its stability and it is pretty obvious that where these are the only or the principal contracts between the parties, there can be no real intention or desire to do genuine business. Thus the seller of a double option for a future vaida takes a unit such as a bale of cotton or a bar of silver or a bag of rice at the price of the day, say Rs. 100, and sells' the double option at say Rs. 20 per unit. This means, as I understand teji mandi, that if by the settling day the market has either gone up or down more than ten points, the purchaser of the double option by electing to be buyer or seller according as the market has risen or fallen at due date will make profit to that extent out of the seller of the double option. If, for instance, on settling day the selling price of the unit is Rs. 88 or Rs. 112, the purchaser of the teji mandi by declaring himself a seller or a buyer would make a profit of Rs 2 per unit; while if the market neither rises nor falls more than ten points either way, the purchaser of the teji mandi is a loser to the extent of the difference. Thus in the case supposed, if the market falls to 91 he declares himself a seller and loses one point for each unit; if it rises up to 109, he declares himself a ^buyer at the same loss; and so through all the intermediate stages. From the very nature of the transaction, from the fact of a man being utterly indifferent whether he is going to buy or sell, there must arise a very strong presumption that he is not doing a genuine business and that the whole contract is really in the nature of a pure wager. I have already pointed out that that presumption may in special cases be rebutted; but as a rule, I think, it will be extremely difficult to do so. Where, however, the Court is not concerned with the simple teji mandi but teji mandi 'applied' to the ordinary forward contracts current, as in the present case, the true nature of the double transaction becomes more difficult to analyse and understand. I expect, however, the real explanation is that teji mandi is not in reality applied at all to the subject matter of a particular-forward contract but is merely entered into by way of. a side contract and hedge upon a part or whole of it. Thus in respect of the twenty-five bars of silver for the Maha vaida upon which the defendant made a teji mandi contract with the plaintiff, declared himself a seller practically at the limit of the margin rate, and so made neither profit nor loss, although in some manner not clearly explained to me he was found to be a loser of a very small sum, I apprehend that that matter was really quite distinct from any given twenty-five bars forming the subject of the forward contracts aggregating fifty-two bars in all of the Maha vaida. The plaintiff is quite unable to explain to me, or perhaps it would be fairer to say quite unable to make me understand how in this particular teji mandi upon the twenty- five bars he made a profit of Rs. 600. The only way in which I can account for that is that although the contract was closed on due date at a certain figure, which would have left the parties quits, the market must have risen before the settling date; so the defendant- having declared himself a seller may have incurred a small loss. Now, if I am right in supposing that at least 99 out of every 100 teji mandi contracts daily and hourly made in our Bombay market are pure wagers, no doubt the defendant would be entitled to what he could make out of the argument that since parts at least of the transaction between himself and the plaintiff were thus tainted, the Court ought to infer that the remainder was of like nature. But I do not like these rather loose and general inference per saltum. I do not see any necessary reason why a person who is doing a thoroughly genuine business in forward contracts might not at the same time indulge himself or his constituents in a little parallel gambling. So that I attach little or no importance to the fact that along with the plaintiff's and the defendant's ordinary forward contract dealings, we find these teji mandi gambling transactions going on. It would, of course, have been different had the plaintiff been suing to recover gain made in this way, but as he is proved to have relinquished so much of his claim as depends upon teji mandi contracts, I need say no more of them.

7. There remains only to consider the ordinary forward contracts in silver for the Maha and Fagan vaidas of 1911. Where we find parties buying and selling forward and habitually settling their contracts on a mere payment of differences there would no doubt ordinarily be a presumption that neither the one, nor the other party ever meant to give or take delivery. But that presumption need not necessarily be very strong and is always liable to be displaced by evidence ; for, while one party might have desired throughout as buyer or seller either to take or give delivery, while the other party might have had no intention of doing so, when the due date arrived and the latter repudiated, the former might very well consent to square the contracts up by the payment of differences. This must occur thousands of times in all honest trade upon a large scale. It is only where the two parties who are not really traders at all or not traders on a large scale are found to be habitually gambling with each other in this way without ever attempting to obtain or have command of any of the commodities which are made the nominal subject of their dealings that the inference becomes almost irresistible that the whole course of the transactions is in furtherance of wagering and not of genuine trade. The difficulty in deciding all cases of this kind is so often felt (and Courts have laboured so much in pointing out the way of surmounting it) that it will not be necessary for me to go again over much of the ground covered in the former decisions to which my attention has been invited by the learned Counsel engaged in the present case. It is easy enough to put extreme cases at either end of the scale, which are either plainly gambling or plainly honest. But as we go down from the extreme points to the intermediate ground where the various contentions in issue begin to overlap each other, it will be found in practice that any attempts at definition or formulating rules for the guidance and assistance of judges in dealing with these matters are not of much use. We always reach a point at which it becomes virtually impossible to formulate any rules or universally valid distinction between what is and what is not, or rather what may or what may not be, a genuine or gambling transaction. It is well enough to say that in handling cases of this kind the Courts are not to be misled by the apparent rectitude of documents, are not to rely too much upon the protestations of one party or another but are to probe all the surrounding circumstances and discover the true nature of the transaction. That is what the Courts always desire to do but what in so many cases they find so much difficulty in doing. What is meant is that cases of this kind are not summarily to be disposed of merely because the plaintiff swears that the transactions were genuine and supports them by such documents as delivery orders. Still there must be a limit to all further inquiries, however eagerly desirous the Court may be of arriving at the true nature of any given transaction ; for once the evidence of the plaintiff and his documents are eliminated, then the Court has nothing to fall back upon except purely general considerations, drawn from the business relations of the parties, and the probabilities of the one or the other having intended under the form of quite honest business dealings to conceal pure wagering. One test which has been suggested by their Lordships of the Privy Council, namely, a comparison of the defendant's means with the magnitude of the transactions he is shown to have engaged in, is clearly a very unsafe criterion, Where the commodity nominally trafficked in has a substantial and almost stable value of its own, it is quite clear that buying or selling forward can be carried on honestly and with profit upon a capital entirely disproportionate in appearance to the aggregate value of the commodity dealt in. Thus, for instance, dealers in silver and gold may buy 100,000 pounds worth for future delivery with a virtually sure confidence that on the due date the commodity they purchase will not be worth less than say 99,000 pounds; so that any person with a modest capital of 2000 pounds might quite safely and honestly deal habitually to the extent of 100, 000 pounds a month in these precious metals for future delivery. In the present case all the ordinary tests, which have to be applied in order to ascertain whether the transaction was really a wager, and known to be a wager, by both the parties to it who acted upon that knowledge with no intention of treating it as anything but a wager, yield a result, I think, unfavourable to the defendant. Many cases do present very great difficulties. No case could well be stronger than that of Kesarichand v. Merwanjee (1899) 1 Bom. L.R. 263, decided by Tyabji J-Indeed, on the facts found by that learned Judge, I should have felt some hesitation in coming to the conclusion he did. But even where every fact of the case was so strongly in defendant's favour, that learned Judge was not satisfied that it was proved conclusively that the plaintiff knew that the defendant was merely gambling. That must always be a point of the utmost difficulty to determine where the parties to any suit had had dealings not only with each other but with the outside public generally, and those dealings had been on a considerable scale. In the present case there is no reason whatever to suppose that the plaintiff is not a genuine dealer or broker in silver. He has proved conclusively in this Court that he purchases silver in very large quantities either for his own benefit or that of his numerous constituents. The defendant's case is far weaker than most cases of this kind are, for he too appears to have many dealings with many persons in the silver market. It is not as though his gambling transactions, if they are gambling transactions, have been confined to himself and the plaintiff. He is shown to have taken nominal delivery at least and given nominal delivery at least by way of delivery orders of silver to the extent of lacs of rupees. He is shown to have paid cash for silver bars although he now alleges that that was not his own money but the money of his constituents. Where, however, the answer to the question depends entirely upon the knowledge of one party of what was passing in the other party's mind, facts of this kind which will naturally warrant a man in the plaintiff's position believing that a man in defendant's position was doing genuine business, are practically conclusive. In settling the Maha vaida, the defendant is shown to have given havalas for fourteen bars of silver out of the total of fifty-two, and the evidence in this case leaves no doubt that to all outward appearances the defendant, although he may have been gambling on his own account, was doing legitimate business not only for himself but for a considerable body of constituents on a moderately large scale. If then the plaintiff, who is certainly doing large genuine business entered into these contracts with the defendant honestly and with the intention of giving or taking delivery as the case might be, how could any Court conclude merely because the contracts were settled, as so many of these contracts are, chiefly by cross contracts, that the plaintiff must have known that the defendant in no circumstances either meant to give or take delivery or do more than gamble on differences? I think on the facts disclosed in this case it would be quite impossible for any Court to come to such a conclusion. Nor do I think the Courts ought lightly to favour gambling defences. My own leaning has always been very strongly against them, because while I am well aware that the sentiments of the British Courts in the olden times have given them the strongest possible bias against lending themselves however inadvertently to enforcing wagering contracts, it has always seemed to me politic on the part of the Legislature, which would suppress gambling, and the Courts, which would wash their hands of all such dirty transactions, to insist upon the strictest proof of what is upon the face of it genuine business, being proved not to be so at all but in reality gambling, before they refuse relief to the plaintiff, and that for this very simple reason that by making the defence of gambling too easy and too profitable the Courts would be really encouraging the very evil they wish to suppress. I think it is only too clear that if dishonest gamblers know that they can their liabilities upon every occasion without much trouble by merely pleading wagering, the worst class of gamblers will gamble more desperately and with a greater sense of impunity than they ever did before. The Courts by countenancing such gamblers in receiving their winnings when they win and refusing to pay when they lose, confident that they will not be compelled by process of law to pay, may indeed foster the evil which both the Legislature and the Courts would desire to see altogether suppressed.

8. I must, therefore, award the plaintiff's claim, subject to the deductions I have already mentioned, with all costs.

9. There will be a decree for the plaintiff for Rs. 3046-8-0 with interest at 6 per cent, per annum from the 8th of April 1911.