- (1.) The facts of this case are fully set out in the order of this Court dated March 19, 1968* by which this Court required the High Court to take some additional evidence in the case. We shall briefly refer to those facts for giving a connected picture. * Reported in AIR 1968 SC 1308.
(2.) The appellant and the respondent are the members of the East India Jute and Hessian Exchange Ltd. (hereinafter called the "Association"). On August 11, 1960, the appellant agreed to purchase and the respondent agreed to sell 750 bales of Pakistan raw jute at the rate of Rs. 103 per bale of 400 lbs. net ex-Narayanganj and/or Daulatpur and/or Khulna for delivery during October and/ or November, 1960. In the transaction W. Haworth and Co. (P.) Ltd. acted as brokers for both the parties. According to the custom of the trade which is recognised by the Bye-laws of the Association, the brokers sent a Sold Note on behalf of the appellant to the respondent and issued a Bought Note on behalf of the respondent to the appellant. The goods contracted to be purchased by the appellant were to be imported from Pakistatn. The appellant was in terms of the Sold Note to furnish to the respondent import licence and a letter of authority issued by the proper officer authorising the respondent or his nominee to import the requisite quantity of jute from Pakistan for delivery to the appellant. For importing jute from Pakistan, a letter of credit had, under the terms of the contract, to be opened by the respondent. Differences arose between the parties in respect of the execution of the contract as a result of which on January 11, 1961, the appellant referred its claim for Rs. 1,17,750/- against the respondent to the Tribunal of Arbitration. The Association is recognised for the purpose of Forward Contracts (Regulation) Act 74 of 1952 as an Association concerned with regulation and control of forward contracts in jute and jute goods. The Association, has under S. 11 of that Act with the previous approval of the Central Government made Byelaws to regulate and control forward contracts in jute and jute goods and for trading and Transferable Specific Delivery Contracts in raw jute and jute goods. Clause (a) in Ch. V of of the Bye-laws provides that no trading in Transferable Specific Delivery Contracts in any delivery or deliveries in raw jute and/or jute goods shall be effected otherwise than between members or through or with any member, or where the services of a broker, who is not a member, are employed by a member, otherwise than through a licensed broker. Clause 1 (b) provides that all Transferable Specific Delivery Contracts shall be in writing in the prescribed forms. The plea taken by the appellant in the claim made before the Tribunal was that the respondent had failed to open a letter of credit for importing the stipulated 750 bales of "jute cuttings" from Pakistan according to the terms of the contract.
(3.) On June 26, 1961, the respondent moved before the High Court of Judicature at Calcutta on its original side a petition under S. 33 of the Arbitration Act, 1940, inter alia, for the following orders: (a) that the existence or validity or otherwise of the alleged arbitration agreement dated August 11, 1960 between. the appellant and the respondent be adjudicated upon and determined by the High Court and (b) that it be declared that the alleged arbitration is void, illegal and ineffective and of no effect and such arbitration agreement be set aside.;