Shah, J. - (1.) M/s. Sunder Lal and Son -hereinafter called 'the appellants' - are members of the East India Jute and Hessian Exchange Ltd., an Association recognised under the provisions of the Forward Contracts (Regulation) Act, 1952. The appellants applied to the High Court of Judicature at Calcutta on its original side under S. 33 of the Indian Arbitration Act 10 of 1940 for an order, inter alia, declaring that "there exists a valid arbitration agreement contained in Contract No. 750 dated September 18, 1960 between the petitioners and the respondents. The appellants claimed that they entered into a contract with the respondents on September 16, 1960, for the purchase of 6,00,000 bags of B Twill at the rate of Rs. 132.50nP. per 100 bags, "on their own account" in Transferable Specific Delivery. Form prescribed under the bye-laws of the Association and on terms and conditions set out therein. The respondents denied the existence of the contract and also, its validity. The High Court dismissed the application holding that the contract was invalid in that it did not comply with the requirements of S. 15, sub-s. (4) of the Forward Contracts (Regulation) Act, 1952. By special leave, the appellants have appealed to this Court.
(2.) The relevant recitals in the notes which, it was claimed, constituted the contract between the parties may first be set out: "7A, Clive Row Calcutta-1 Sunder Lal and Son Contract No. 750 M/s. Bharat Handicrafts (Private,) Ltd. Dear Sirs, We have, subject to the terms and conditions hereinafter referred to this day sold to M/s. Sunderlal and Son by your order, and on your account: ********** Your faithfully, Sunderlal and Son" "Calcutta, 16th September, l960 M/s. Sunderlal and Son. No. 750 Dear Sirs, We have, subject to the terms and conditions hereinafter referred to "this day bought from Bharat Handicrafts (Private) Ltd., by your order, and on your account: ********** Yours faithfully, Sd. Sunderlal and Son."
(3.) Validity of the contract was challenged by the respondents on two grounds- (1) that the appellants were not at the relevant time members of the Association, and (2) that the requirements of S. 15 (4) of the Forward Contracts (Regulation) Act were not complied with and the contract was on that account invalid. The High Court decided both the grounds in favour of the respondents.;