- (1.) The East India Jute and Hessian Exchange Ltd. hereinafter called "the Association" - is recognised for the purpose of the Forward Contracts (Regulation) Act 74 of 1952 as an association concerned with the regulation and control of forward contracts in jute and jute goods. The Association has under S. 11 of the Forward Contracts (Regulation) Act, with the previous approval of the Central Government, made bye-laws to regulate and control forward contracts in jute and jute goods, and for trading in Transferable Specific Delivery Contracts in raw jute and jute goods. Clause (a) in Ch. V 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 he effected 1 otherwise than between members or though 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.
(2.) The appellant and the respondent are members of 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. the brokers sent a sold note on be half of the respondent to the appellant, and issued a bought note on behalf of the appellant which was sent to the respondent. The goods contracted to he purchased by the appellant were to be imported from Pakistan. 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.
(3.) Differences arose between the parties in respect of the execution of the contract and on January 11, 1961, the appellant referred its claim for Rs 1,17,750 against the respondent to the Tribunal of Arbitration of the Bengal Chamber of Commerce and Industry, on the plea 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.;