FIRM OF PRATAPCHAND NOPAJI vs FIRM OF KOTRIKE VENKATTA SETTY & SONS ETC.

The Supreme Court held that forward contracts on groundnut seeds and oil-seeds were unlawful under Section 23 of the Indian Contract Act, as they violated the prohibition imposed by the Central Government to ensure reasonable supply of essential commodities. The Court clarified that agreements aimed at defeating legal prohibitions are unenforceable, and the contracts in question did not meet the conditions for exclusion from prohibition under the Oil-seeds (Forward Contracts Prohibition) Order, 1943. Consequently, the contracts were struck down as illegal.