Judgment

VENKATARAMA AIYAR, J. : These are appeals against the judgment of the High Court of Calcutta, setting aside an award of the arbitrators, which directed the respondents to pay to the appellants Rs. 41.250 as compensation for breach of contract, on the ground that the said contract was in contravention of a notification of the Central Government dated October 29, 1953, and was in consequence illegal and void. The facts are that the appellants own a Jute Mill at Calcutta and carry on the business of manufacture and sale of jute. On September 7, 1955 they entered into a contract with the respondent who are doing business as dealers in jute, for the purchase of 750 bales of jute cuttings (raw) of Pakistan at Rs. 80 per bale of 400 lbs, to be delivered in October, November and December at the rate of 250 bales every month. Clause 14 of the agreement provides that all disputes arising out of or concerning the contract should be referred to the arbitration of the Bengal Chamber of Commerce. The respondents failed to deliver the goods as agreed whereupon the appellants applied to the Bengal Chamber of Commerce for arbitration in accordance with Cl. 14 of the agreement. The respondents appeared before the arbitrators, and contested the claim on the merits. The arbitrators made an award in favour of the appellants for Rs. 41,250 with interest, and that was filed under S. 14(2) of the Indian Arbitration Act in the High Court of Calcutta in its original side and notice was. issued to the respondents. Thereupon, the respondents filed an application in the High Court, presumably under S. 33 of the Arbitration Act, wherein they prayed for a declaration that the contract dated September 7, 1955 was illegal, as it was in contravention of the notification of the Central Government dated 29-10-1953 & that in consequence proceedings taken thereunder before the Chamber of Commerce and the award in which they resulted were all void. The learned Judge on the original side before whom the application came up for hearing dismissed it, and passed a decree in terms of the award. Against both the judgment and order, the respondents preferred appeals to a Division Bench of the High Court, Appeals Nos. 154 and 173 of 1957. They were heard by Chakravartti, C. J., and Lahiri, J, who held that the contract dated September 7, 1955 was illegal as it fell within the prohibition of the notification aforesaid and accordingly allowed the appeal and set aside the award. The appellants then applied for a certificate under Art. 133(1) of the Constitution and the same was granted. This is how the appeals come before us.

2. The learned Additional Solicitor-General who appeared for the appellants urged the following contentions :-

(1) On the terms of the arbitration clause the question whether the contract dated September 7, 1955 is illegal is one for the arbitrator to decide and that it was not open to the respondents to raise the same in the present proceedings under S. 33 of the Arbitration Act.

(2) The respondents are estopped from questioning the validity of the award by reason of their having submitted to the jurisdiction of the arbitrators.

(3) The agreement dated September 7, 1955 is a non-transferable specific delivery contract within S, 2 (f) of the Act (Forward Contracts (Regulation) Act, 1952-Ed.) and is not hit by the notification dated October 29, 1953.

3. We now proceed to discuss these questions seriatim :

(1) Taking up the first question, Cl. 14 of the agreement which provides for arbitration is as follows :-

"All matters, questions, disputes, differences and/or claims arising out of and/or concerning and/or in connection with and/or in consequence of or relating to this contract including matters relating to insurance and demurrage whether or not the obligations of either or both parties under this contract be subsisting at the time of such dispute and whether or not this contract has been terminated or purported to be terminated or completed shall be r