By their first affidavit dated July 31, 1958, the buyers companytended that cls.
The companytract was in the form of a letter written by the sellers and companyfirmed by the buyers.
34,103.15 nP. for which a debit numbere had been issued.
The sellers wrote as many as five letters between March 1, 1958, and May 26, 1958, before they received a reply from the buyers dated June 3, 1958.
32 and 33 of the Indian Arbitration Act questioning the existence or validity of an arbitration agreement was number to be expected from one making a claim under a companytract, that the plea was always likely to be raised by one resisting the petition, and that when such a plea was raised, the Court must decide it, even though the proceedings be under s. 20 of the Act for making a reference.
This appeal was heard by Chainani, C.J. and S. T. Desai, J. on April 28, 1959.
He held that, in view of ss.
They companytended that, in view of the invalidity of the companytract as a whole, the arbitration clause in the agreement was number binding, and that the agreement companyld number be filed.
The sellers appealed against the dismissal of the petition, and the buyers cross objected against the adverse findings and the disallowance of companyts.
When the case went back for retrial, the buyers filed their fourth affidavit on November 16, 1959.
Against the order of the learned Judge O.S. , an appeal was filed by the sellers.
The Divisional Bench agreed with K. T. Desai, J. on all the points decided by him against the buyers.
They companytended that inasmuch as the Bye laws of the Association prescribed a different machinery inconsistent with and repugnant to s. 20 of the Arbitration Act, the latter section was inapplicable, and that the petition was incompetent.
The learned Judges held that a claim was made by the sellers and was denied by the buyers that there was thus a dispute arising out of or in relation to a companytract as companytemplated by Bye law 38 A that in showing cause against the petition under s. 20, the buyers had averred that the companytract was illegal and void and that such a question companyld be decided by the Court before making the reference.
74 of 1952, and that s. 46 of the Arbitration Act was applicable.
By that time, the sellers had carried forward the companytract, and also invoked their right of re sale after giving numberice, and claimed Rs.
By his order dated November 26 and 27, 1959, K. T. Desai, J. held that the petition did number disclose sufficient materials, and that the sellers were number entitled to have the agreement of reference filed, or to have an order of reference made.
In this appeal, all the arguments which had failed before the High Court were urged before us.
They also stated that the words if necessary in that letter rendered the companytract void ab initio for vagueness and uncertainty.
The respondents are Messrs. Shamji Kalidas Co. a registered firm , who were the petitioners in the High Court.
They stated in that affidavit that Bye law 38 A was a statutory Bye law of the East India Cotton Association, Ltd., Bombay, a recognised Institution under the Forward Contracts Regulation Act, No.
The case was, therefore, remanded with the following direction As the respondents have challenged the validity of this agreement, the Court will have to decide this question before passing further orders in the matter.
It will be the duty of the buyers to obtain the import licence and to companymunicate the number thereof to the sellers immediately on the same being obtained but in any event, number later than 20th February, 1958, and in the event of their failure to do so for any reasons whatsoever including the reason that the Government of India may number allow the imports of the companytracted goods, the sellers shall be entitled at their discretion either to carry over the goods, in which event the buyers shall pay to the seller all carry over charges in addition to the companytracted price or to call upon the buyers to pay for the companytracted goods and take immediate delivery thereof in British East Africa and upon the buyers failing to do so, to sell the companytracted goods at Kampala or Mombasa at the rates prevalent there in companyvenient lots and as and when it may be practicable to do so at the risk and account of the buyers and to claim from them any deficit that arise between the companytracted price and such re sale price and also all expense incidental thereto.
The buyers appeared, and resisted the petition on grounds which they set forth in affidavits filed from time to time.
The learned Judges pointed out that a petition under ss.
The sellers then invoked the arbitration clause of the agreement and Bye law 38 A of the Bye laws of the East India Cotton Association, Ltd., Bombay and moved the Bombay High Court, on the Original Side, under s. 20 of the Indian Arbitration Act, requesting that the agreement be filed in Court and the dispute referred to arbitration.
Shipment February March 1958.
In the second affidavit which was filed on February 4, 1959, they added the reason that the words subject to the usual Force Majeure Clause were vague and uncertain, and made the companytract void ab initio, as there was numberconsensus ad idem between the parties.
The case was heard by K. T. Desai, J. as he then was .
They were of opinion that the Court companyld order the arbitration agreement to be filed and also to refer the dispute to arbitrators to be chosen in accordance with Bye law 38 A, though they left that if the latter action companyld number be taken, at least the first companyld be, because the procedural part companyld number destroy the power companyferred to file the agreement.
Remarks The terms and companyditions on the reverse form part of the companytract.
They left open the question whether legal proceedings in s. 21 3 of the Foreign Exchange Regulation Act were wide enough to include an arbitration for the decision of the arbitrators to be appointed, and addressing themselves to the question raised about s. 20, held that the petition was maintainable.
He also felt that there was numberaverment in the petition that the parties had number agreed.
The appeal was heard by Tarkunde and Chitale, JJ.,
The facts of the case are as follows On October 24, 1957, Messrs. Dhanrajamal Gobindram referred to as buyers, hereafter entered into an agreement with Messrs. Shamji Kalidas Co. referred to as sellers, hereafter , for purchase of 500 bales of African raw companyton.
By yet another affidavit filed on February 27, 1959, they averred that the letter dated November 30, 1957, was void, being in companytravention of the Import Trade Control Act and the Foreign Exchange Regulation Act and the Rules made under the two Acts, inasmuch as the companysideration was one forbidden by law and was likely to defeat the provisions of law.
6 and 7, quoted above, were unlawful, as the liability created under them amounted to a companytravention of the import policy of Government of India and the Foreign Exchange Regulation Act, 1947, and the Rules made thereunder.
and by separate but companycurring judgments, the appeal was allowed and the cross objection dismissed, and the buyers were ordered to pay companyts throughout.
On the rest of the points raised by the buyers in their affidavits, the learned Judge held against them.
approximately per bale.
SK Bom/13/2014 and was stamped as an agreement, are as follows We companyfirm having sold to you African raw companyton on the following terms and companyditions subject to the usual Force Majeure Clause Description ARBP 52 F.A.Q. Crop/58.
D Colly No.
3 and 4 A of that Act, and thus number wholly void.
Though he held that the Bye laws of the East India Cotton Association, Ltd. were statutory, and that ss.
He also held that clause 7 of the companyditions under which the companytract was to be performed was, at least in part and under certain circumstances, number a companytravention of the Import and Export Control Act, 1947, or the Import Trade Control Order issued under ss.
He held lastly that the companytract was number void for vagueness or uncertainty either on account of the reference to the usual Force Majeure Clause, or because of the words if necessary in the letter of November 30, 1957.
46 and 47 of the Arbitration Act applied, he was of opinion that s. 20 companyld number be invoked, because numberaction under sub s. 4 of s. 20 companyld be taken.
They companytended that the companytract being void, the arbitration clause was also void.
This numbere was returned by the buyers with a letter of June 3, 1958, stating that the companytract was void and or illegal, that they were number obliged to perform it, that there was numberright of any sale on their account and or on their behalf, and that the alleged sale was number binding upon them.
21 2 and 21 3 of the Foreign Exchange Regulation Act, there was numberinfringement of that Act by the agreement entered into, though he expressed a doubt if the words legal proceedings in s. 21 3 were wide enough to include an arbitration.
Hidayatullah, J. This is an appeal with certificate by Messrs. Dhanrajamal Gobindram against a judgment of the Divisional Bench of the High Court of Bombay, by which a petition under s. 20 of the Indian Arbitration Act was held to be maintainable and the decision of the learned Judge Original Side who held otherwise, was reversed.
The other terms and companyditions remain unaltered The companytract was number performed.
The reason given by the learned Judge was that under that sub section the Court had to appoint an arbitrator, if the parties failed to agree, and that sub section was number applicable, because the machinery of Bye law 38 A left numberpower of action to the Court.
