Bhagwati, J. - (1.) This appeal, by special leave, is directed against a judgment of a single Judge of the Calcutta High Court declaring arbitration agreement contained in certain contracts between the parties to be invalid on the ground that the contracts were illegal under Section 15, sub-section (3A) of the Forward Contracts (Regulation) Act, 1952 (hereinafter referred to as the Forward Contracts Act).
(2.) The appellants and the respondents were both at all material times members of the East India Jute and Hessian Exchange Ltd. (hereinafter referred to as the Exchange). On 13th June, 1969, the appellants entered into two contracts with the respondents agreeing to purchase 12,00,000 yeards of hessain cloth at the price of Rupees 70.50P. per hundred yards and 6,00,000 yards of hessain cloth at the price of Rs. 70/- per hundred yards on the terms and conditions set out in the respective contract notes which were in the printed contract form prescribed in Appendix IV to the bye-laws of the Exchange. These two contracts were transferable specific delivery contracts for jute goods in the city of Calcutta. It was stated in the body of each of the two contract notes within the cage that the contract was one for delivery alongside export vessel in the port of Calcutta. The other terms and conditions set out in the two contract notes were identical but it is not necessary to refer to all of them. We may reproduce only a few which are material. "3. Goods to be packed folded, well pressed, market and shipped by sellers in covered cargo boats in iron bound bales of 2000 yards or 1829 metres each. 4. Delivery of the said goods in to be given and taken as follows: September 1969 (Payment against P.D.O.) Each delivery under this contract shall be treated as a distinct and separate contract. 5. Arbitration:The Bengal Chamber of Commerce and Industry/The Indian Chamber of Commerce. The printed contract form prescribed in Appendix 17 to the bye-laws of the Exchange contained Clause 2, which was as follows: "2. Buyers to give .... clear working days' notice to place goods alongside." But this clause was scored out and cancelled in the contract notes in respect of these two contracts. There was accordingly no provision made in either of these two contracts for the buyers to give a particular number of clear working days' notice to the sellers to place goods alongside export vessel in the port of Calcutta.
(3.) Though the period of delivery specified in each of the two contracts dated 13th June, 1969 was September, 1969, it was by mutual agreement arrived at between the appellants and respondents on 18th June, 1969, extended to October/December, 1969 at a discount of Re. 1/- per hundred yards on the contract price. The result was that in these two contracts, as modified, the period of delivery was changed to October/ December, 1969 and the price was reduced to Rs. 69.50 per hundred yards in the case of the first contract and Rs. 69/- per hundred yards in case of the other contract.;