VENKATARAMA AIYAR, J.: - (1.) THE Judgment of the court was delivered by '
(2.) THESE are appeals against the judgment of the High court of Calcutta, setting aside an award of the arbitrators, which directed the respondent to pay to the appellants Rs. 41,250.00 as compensation for breach of contract, on the ground that the said contract was in contravention of a notification of the central government dated 29/10/1953, and was in consequence illegal and void. The facts are that the appellants own a Jute Mill at Calcutta and carry on the business of manufacture and sale of Jute. On 7/09/1955 they entered into a contract with the respondents who are doing business as dealers in jute, for the purchase of 750 bales of Jute cutting 'raw) of Pakistan at Rs. 80.00 per bale of 400 lbs. to be delivered in October, November and December at the rate of 250 belles every month. Clause 14 of the agreement provides that all disputes arising out of or concerning the contract should be referred to the arbitration of the Bengal Chamber of Commerce. The respondents failed to deliver the goods as agreed whereupon the appellants applied to the Bengal Chamber of Commerce for arbitration in accordance with el. 14 of the agreement. The respondents appeared before the arbitrators, and contested the claim on the merits. The arbitrators made an award in favour of the appellants for Rs. 41,250.00 with interest, and that was filed under s. 14(2) of the Indian Arbitration Act in the High court of Calcutta in its original side and notice was issued to the respondents. Thereupon the respondents filed an application in the High court, presumably under s. 33 of the arbitration Act, wherein they prayed for a declaration that the contract dated 7/09/1955, was illegal, as it was in contravention of the notification of the central government dated 29/10/1953, and that in consequence proceedings taken thereunder before the Chamber of Commerce and the award in which they resulted were all void. The learned Judge on the original side before whom the application came up for hearing dismissed it, and passed a 'decree in terms of the award. Against both this judgment and order, the respondents preferred appeals to a division bench of the High court, Appeals Nos. 154 and 173 of 1957. They were heard by Chakravartti, C. J., and Lahari, J., who hold that the contract dated 7/09/1955, was illegal as it fell within the prohibition of the notification aforesaid and accordingly allowed the appeal and set aside the award. The appellants then applied for a certificate under Art. 133 (1) of the Constitution and the same was granted. This is how the appeals come before us. The learned Additional Solicitor-General who appeared for the appellants urged the following contentions : (1)On the terms of the arbitration clause the questionwhether the contract dated 7/09/1955, isillegal is one for the arbitrator to decide and that it was not open to the respondents to raise the same in the present proceedings under s. 33 of the Arbitration Act, (2)The respondents are estopped from questioning the validity of the award by reason of their having submitted to the jurisdiction of the arbitrators.
(3.) THE agreement dated 7/09/1955, is a non transferable specific delivery contract within s. 2(f) of the Act and it is not hit by the notification dated 29/10/1953. We now proceed to discuss these questions seriatim : (1)Taking up the first questions, cl, 14 of the agreement which provides for arbitration is as follows : 'All the matters, questions, disputes, differences and/ or claims arising out of and/ or concerning and/ or in connection with and/ or in consequence of or relating to this contract including matters relating to insurance and demurrage whether or not the obligations of either or both parties under this contract be subsisting at the time of such dispute and whether or not this contract has been terminated or purported to be terminated or completed shall be referred to the arbitration of the Bengal Chamber of Commerce and Industry under the rules of its tribunal of Arbitration for the time being in force and according to such rules the arbitration shall be conducted and any Award made by the said tribunal under the clause. shall be final, binding and conclusive on the parties.' Now the contention of the appellants is that the clause is general in its terms and is wide enough to include dispute as to the validity of the contract that in consequence the only right of the respondents is to agitate this question before the arbitrators and if the award goes against them to move the court either to modify it under s. 15 of the Arbitration Act or to remit it under s. 16 or to set it aside under s. 30 on the grounds mentioned therein and that the present application for a declaration that the contract is illegal, and that the arbitration proceedings are without jurisdiction is therefore incompetent and misconceived.;