Judgment

HIDAYATULLAH, J. : This is an appeal (with certificate) by Messrs. Dhanrajamal Gobindram against a judgment of the Divisional Bench of the High Court of Bombay, by which a petition under S. 20 of the Indian Arbitration Act was held to be maintainable and the decision of the learned Judge (Original Side) who held otherwise, was reversed. The respondents are Messrs. Shamji Kalidas & Co. (a registered firm), who were the petitioners in the High Court.

2. The facts of the case are as follows: On October 24, 1957 Messrs. Dhanrajamal Gobindram (referred to as buyers, hereafter) entered into an agreement with Messrs. Shamji Kalidas & Co. (referred to as sellers, hereafter), for purchase of 500 bales of African raw cotton. The contract was in the form of a letter written by the sellers and confirmed by the buyers. The material portions of the letter, which bears No. SK/Bom/13/2014 and was stamped as an agreement, are as follows :

"We confirm having sold to you African raw cotton on the following terms and conditions subject to the usual Force Majeure Clause :

Description : ARBP 52 F. A. Q. Crop/58.

Quality : 500 (Five Hundred) bales.

Price : at Rs. 1401 nett pea candy CIF Bombay.

Payment : Against shipping documents in Bombay.

Packing : 420 lbs. Approximately per bale.

Shipment : February/ March 1958.

Remarks. The terms and conditions on the reverse form part of the contract. This contract is subject to the Bye-laws of East India Cotton Association, Ltd., Bombay, other than the bye-law 35 for arbitration on Quality in case of East African cotton.

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Terms and Conditions

1. The shipment is subject to any cause beyond seller s or seller s shipper s control and is also subject to availability of freight.

5. This contract is subject to the jurisdiction of the High Court of Bombay.

6. It will be the duty of the buyers to obtain the import licence and to communicate the number thereof to the sellers immediately on the same being obtained but in any event, not later than 20th February, 1958, and in the event of their failure to do so for any reasons whatsoever including the reason that the Government of India may not allow the imports of the contracted goods, the sellers shall be entitled at their discretion either to carry over the goods, in which event the buyers shall pay to the seller all carryover charges in addition to the contracted price or to call upon the buyers to pay for the contracted goods and take immediate delivery thereof in British East Africa and upon the buyers failing to do so, to sell the contacted goods at Kampala or Mombasa at the rates prevalent there in convenient lots and as and when it may be practicable to do so at the risk and account of the buyers and to claim from them any deficit that arise between the contracted price and such resale price and also all expense incidental thereto.

7. Even if the Government of India may announce the import policy of the contracted goods in such manner that only the consumers would be entitled to obtain the licences, it will be the duty of the buyers to see that necessary import licences for the contracted goods are obtained in the consumers name or in the joint names of themselves and those of the consumers the intention being that in all eventualities it is the duty of the buyers to obtain licences under any policy that may be followed by the Government of India for the import of the contracted goods and to communicate the number thereof to the sellers within the time as specified hereinabove and on the buyer s failure to do so all the eventualities contemplated under Cl. 6 shall operate."

By a letter dated November 30, 1957, the contract was later amended by the parties, as follows:

"With reference to the above mentioned contracts we hereby confirm that, if necessary, we shall carry over the contracted goods for two months, namely, March and April and you will pay as the carry over charges for the same. The interest payable under such carry over charges will be at the rate