Venkatarama Ayyar, J. - (1.) The appellant is a share broker carrying on business in the City of Bombay, and a member of the Native Share and Stock Brokers' Association, Bombay. The respondent, Mrs. Goolbai Hormusji, employed him for effecting sales and purchases of shares on her behalf, and on 6-8-1947 there was due from her to the appellant on account of these dealings a sum of Rs. 6,321-12-0. On that date, the respondent had outstanding for the next clearance, sales of 25 shares of Tata Deferred and 350 shares of Swadeshi Mills. On 11-8-1947, the appellant effected purchases of 25 shares of Tata Deferred and 350 shares of Swadeshi Mills to square the outstanding sales of the respondent, and sent the relative contract notes therefor Nos. 2438 and 2439 (Exhibit A) to her. She sent a reply repudiating the contracts on the ground that the appellant had not been authorised to close the transactions on 11-8-1947, and instructed him to square them on 14-8-1947. The appellant, however, declined to do so, maintaining that the transactions had been closed on 11-8-1947 under the instructions of the respondent.
(2.) After some correspondence which it is needless to refer to, the appellant applied on 21-8-1947 to the Native share and Stock Brokers' Association, Bombay for arbitration in pursuance of a clause in contract notes, which runs as follows: "In event of any dispute arising between you and me/us of this transaction the matter shall be referred to arbitration as provided by the Rules and Regulations of the Native share and stock Brokers' Association". The Association gave notice of arbitration to the respondent, and called upon her to nominate her arbitrator, to which she replied that the contract notes were void, and that in consequence, no arbitration proceedings could be taken thereunder. The arbitrators, however, fixed a day for the hearing of the dispute, and gave notice thereof to her, but she declined to take any part in the proceedings. On 10-10-1947 they made an award in which, on the basis of the purchases made by the appellant on 11-8-1947 which were accepted by them, they gave credit to the respondent for Rs. 1,847, and directed her to pay him the balance of Rs. 4,474-12-0.
(3.) The respondent then filed the application out of which the present appeal arises, for setting aside the award on the ground, 'inter alia', that the contracts in question were forward contracts which were void under S. 6 of the Bombay Securities Contracts Control Act 8 of 1925, that consequently the arbitration clause was also void and inoperative, and that the proceedings before the arbitrators were accordingly without jurisdiction and the award a nullity. S. 6 of the Act is as follows: "Every contract for the purchase or sale of securities, other than a ready delivery contract, entered into after a date to be notified in this behalf by the Provincial Government shall be void, unless the same is made subject to and in accordance with the rules duly sanctioned under S. 5 and every such contract shall be void unless the same is made between members or through a member of a recognised stock-exchange; and no claim shall be allowed in any Civil Court for the recovery of any commission, brokerage, fee or reward in respect of any such contract". Section 3(1) defines 'securities' as including shares, and therefore, contracts for the sale or purchase of shares would be void under S. 6, unless they were made in accordance with the rules sanctioned by the provincial Government under S. 5. The appellant sought to avoid the application of S. 6 on the ground that the contracts in question were 'ready delivery contracts' and fell outside the operation of that section. Section 3 (4) of Act 8 of 1925 defines 'ready delivery contract' as meaning "a contract for the purchase or sale of securities for performance of which no time is specified and which is to be performed immediately or within a reasonable time", and there is an Explanation that "the question what is a reasonable time is in each particular case a question of fact" The contention of the appellant was that contracts Nos. 2438 and 2439 were ready delivery contracts as defined in S. 3 (4), as no time was specified therein for performance.;