[1945] EACA 14

#### COURT OF APPEAL FOR EASTERN AFRICA

## Before Sir Joseph Sheridan, C. J. (Kenya), Sir Norman Whitley, C. J. (Uganda), and MARK WILSON, Acting C. J. (Tanganyika)

### REX, Respondent (Original Respondent-Prosecutor)

# JANMOHAMED JAFFER, LTD., Appellants (Original Appellants-Accused) Criminal Appeal No. 164 of 1944

#### (Appeal from decision of H. M. High Court of Uganda)

Criminal Law-Neglecting to make an entry concerning sale of goods-Uganda Price of Goods Regulations, 1942, Reg. 6 (6)—Meaning of "sale".

The appellants were convicted of an offence under Reg. 6 (6) of the Uganda Price of Goods Regulations, 1942, for neglecting to make an entry in their books in the normal course of trade of a sale of $49\frac{1}{4}$ yards of cloth for Sh. 2,156. The evidence appeared to show that the appellant had received a deposit of some Sh. 2,000 from another firm, from which the prices of suit lengths sold from time to time by the appellants to the firm were deducted. Whenever such sales were effected the requisite entries were made and invoices supplied. The appellants appealed.

Held $(16-2-45)$ .—(1) That the evidence did not support there having been a definite sale or a definite agreement to sell as alleged.

(2) On a proper construction of Regulation 6 (6) it is only when there is an actual sale or an agreement to sell on agreed terms that an entry of the contract is necessary,<br>"in the normal course of trade".

Appeal allowed, conviction set aside.

Verice for the Appellants.

Phillips, Crown Counsel (Kenya), for the Crown.

JUDGMENT (delivered by SIR JOSEPH SHERIDAN, C. J.).—This is a second appeal and accordingly only lies on a point of law.

The accused was convicted by the learned Resident Magistrate, Kampala, of an offence contra Reg. 6 (6) of the Price of Goods Regulations, 1942, in that he neglected to make an entry in his books concerning the sale of goods. The Regulation, in so far as it is relevant, reads:-

"Any person who neglects to make an entry concerning the sale, purchase or disposal of any goods which should have been made in the<br>normal course of trade or in accordance with the requirements of these Regulations shall be guilty of an offence."

The charge framed against the accused was: "On or about 21-8-43, at their shop at Kampala, did neglect to make an entry in their cash book, being a record book concerning their trade, which should have been made in the normal course of trade". Particulars of the offence appear as follows: -

"It is alleged that the accused sold the following goods to the Fancy" Tailoring House: $49\frac{1}{4}$ yards of woollen cloth for Sh. 2,156. It is alleged that payment was made by cheque No. L. L.23104, dated 21-8-43, S. B. A., for Sh. $2,156$ ."

There were 20 charges framed against the accused on all of which he was convicted, but this Court is only concerned with the above charge, the 18th, as on first appeal the accused was acquitted on the other 19 charges. The accused was sentenced to pay a fine of Sh. 500 on the charge with which we are concerned.

On the first appeal the High Court came to the conclusion that "the only fact satisfactorily proved is that Fancy Tailoring House on or about 21-8-43 paid Sh. 2,000 to the appellants. The defence that it was deposited for safe keeping is incredible: it is sufficiently clear that that sum was paid in advance as a deposit against goods to be delivered in the future. That was a payment concerning a sale and should have been entered in the cash book.

We agree that the defence that the money was deposited for safe keeping is not credible.

Earlier in his judgment the learned Judge said that he was not satisfied that a definite contract had been made. It seems to us difficult to sustain a conviction in the absence of a definite contract of sale. Although the Crown witness Bhalla was held to be an unreliable witness, the following account of the transaction which is relied on by the defence was not rejected and it seems to us reasonable. He said: $-$

"They (the accused firm) would not let me have the 50 yards at one time. They said I could buy suit lengths. I left a deposit of Sh. 2,000 not Sh. 2,156. From that day onwards I began ordering suit lengths daily. Our main business is tailoring $\ldots$ . I never bought in one lot 49¹ yards. I therefore could not have an invoice for it."

It was admitted and proved that no record of the deposit of Sh. 2,000 was made in the accused firm's books and it does not appear to be questioned in this appeal that when actual sales of pieces of cloth were made against the deposit the requisite entries were made and invoices supplied. It is true that on the charge sheet it is alleged that the invoices admittedly supplied in conformity with Regulation 17 were false, but the evidence recorded and the findings thereon, in our opinion, fail to establish this allegation. If these invoices and the entries relevant thereto are genuine it is difficult to see how the accused can be said to have failed to make all the necessary entries with regard to the transaction which would normally be made in the course of business.

Having heard a very full argument by learned counsel for the accused and the Crown, we have come to the conclusion that on the facts of the case, so far as they can be discovered, the provisions of Regulation 6 $(6)$ have not been affirmatively proved to be applicable. One has to bear in mind that the Regulations in question are price control regulations and their manifest object is to provide that the Price Controller, by the inspection of trader's books, is in a position at any time to ascertain the particulars of any sale or agreement to sell so as to ensure that no contravention of the Regulations, such as, for instance, a sale or an agreement to sell at a price in excess of the controlled price, has taken place.

Crown Counsel referred us to the definition of "contract of sale" in the Sale of Goods Ordinance as including an agreement to sell as well as a sale, and Regulation 2 contains a similar definition. In the present case the evidence, in our opinion, does not support there having been a definite sale or a definite agreement to sell. No terms were fixed at which any particular prices of cloth were to be sold. In fact, our reading of the evidence is that the Fancy Tailoring House, did they so wish, were at liberty to withdraw their deposit and go elsewhere for their cloth. On our construction of Regulation 6 (6) it is only when

there is an actual sale or an agreement to sell pieces of cloth on agreed terms that an entry of the contract is necessary "in the normal course of trade". The two cases referred to by the learned Resident Magistrate Soner v. Arnold, 14 A. C. 429, and Howe v. Smith, 27 Ch. 89, are not relevant authorities in the present case. They refer to contracts for the purchase and sale of land where the terms of the contracts, including price, had been settled between the parties. In those cases a deposit paid by the purchaser on account of the purchase price was held to be forfeited on the purchaser failing to perform that contract.

It may be that the authorities consider it necessary that traders should keep a record of the kind of transaction which we have had under consideration. If so, the obligation will require to be stated in clear, unambiguous language.

As we are deciding this appeal on the construction of Regulation $6$ (6) it is not necessary for us to express any opinion on the question as to whether, on the finding of the High Court as to what the transaction between the parties was. the accused was rightly convicted, but we feel that we should have had difficulty in upholding a conviction on a finding so unrelated to the particulars of the charge on which the accused was tried.

We allow the appeal and set aside the conviction and sentence, and order the fine, if paid, to be refunded.

$\mathcal{L}_{\mathcal{A},\mathcal{B}}$