DHANRAJAMAL GOBINDRAM Vs. SHAMJI KALIDAS AND CO

JUDGEMENT

(1.) THE following Judgment of the court was delivered by

(2.) 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 respondents are Messrs. Shamji Kalidas and Co. (a registered firm), who were the petitioners in the High court.

(3.) WHEN the case went back for retrial, the buyers filed their fourth affidavit on 16/11/1959. 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. 74 of 1952, and that s. 46 of the Arbitration Act was applicable. They contended 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. By his order dated November 26 and 27,1959, K. T. Desai, J. hold that the petition did not disclose sufficient materials, and that the sellers were not entitled to have the agreement of reference filed, or to have an order of reference made. Though be held that the Bye-laws of the East India Cotton Association, Ltd. were statutory, and that ss. 46 and 47 of the Arbitration Act applied, he was of opinion that s. 20 could not be invoked, because no action under sub-s. (4) of a. 20 could be taken. The reason given by the learned Judge was that under that Ss. the court had to appoint an arbitrator, if the parties failed to agree, and that Ss. was not applicable, because the machinery of Bye-law 38-A left no power of action to the court. He also felt that there was no averment in the petition that the parties had not agreed. On the rest of the points raised by the buyers in their affidavits, the learned Judge held against them. He held that, in view of ss. 21(2) and 21(3) of the Foreign Exchange Regulation Act, there was no infringement 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. He also held that cl. 7 of the conditions under which the contract was to be performed was, at least in part and under certain circumstances, not a contravention of the Import and Export Control Act, 1947, or the Import Trade Control Order issued Under ss. 3 and 4-A of that Act, and thus not wholly void. He held lastly that the contract was not 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 30/11/1957.