RAMBILAS NANDLAL Vs. IMPERIAL OIL MILLS LTD

JUDGEMENT

(1.) BY a contract dated the 27th December, 1955, the appellant agreed to buy and the respondent agreed to sell 25 tons of pure raw linseed oil. The contract reads as follows:

(2.) ON behalf of the respondent it was urged before Ray, J., and is urged before us that the award is rendered invalid by Section 35 of the Indian Arbitration Act in view of the pendency of the legal proceedings commenced by the respondent and the notice served upon the arbitrators. Ray, J. accepted this contention. In my opinion, the respondent's contention is not tenable and ought not to be accepted. The legal proceeding commenced by the respondent was for a declaration that the contract was void and invalid and for cancellation and delivery up of the contract. The validity or the invalidity of the contract was not and could not be referred to arbitration under the arbitration clause contained in the contract. The arbitrators had no power and authority to decide upon the question of their own jurisdiction. The legal proceedings commenced by the respondent were not upon either the whole or part of the subject-matter of the reference. The subject-matter of the reference was a dispute relating to and arising out of the contract. The subject-matter of the legal proceeding was the validity or invalidity of the contract. The legal proceeding was not one which could be stayed under Section 34 of the Indian Arbitration Act. The question of the validity or the invalidity of the contract was not a question which was agreed to be referred to arbitration. Section 35 of the Indian Arbitration Act presupposes a legal proceeding which is capable of being stayed by the Court under Section 34 of the Indian Arbitration, Act. From whatever point of view the matter is looked at, it is impossible to say that the pendency of the legal proceedings commenced by the respondent in any way rendered the award invalid.

(3.) IT is common case before us that the contract in question is a forward contract for the sale and purchase of raw linseed oil. IT is also common case before us that the contract in question is a specific delivery contract inasmuch as it provides for actual delivery of specific qualities or types of oil during a specified future period at a price fixed thereby and in which the names of both the buyer and seller are mentioned.