Judgment

VENKATARAMA AYYAR, J.: These are appeals by special leave against judgments of High Court of Calcutta setting aside awards which directed the respondents to pay compensation to the appellants for breach of contracts, on the ground that they were in contravention of a notification of the Central Government dated October 29 , 1953, and were in consequence illegal and void. These appeals were heard along with Civil Appeals Nos. 98 & 99 of 1960 as there were common questions of law to be decided in all.

2. In Civil Appeals Nos. 389 & 390 of 1960 the facts are that on September 7, 1955, the appellants who are a company owning a Jute Mill at Calcutta entered into an agreement with the respondents who are also a Company doing business as dealers in jute, for the purchase of 2,250 bales of jute cuttings at Rs. 80 per bale of 400 Ibs. to be delivered 750 bales every month in October, November and December 1955. 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 delivered, pursuant, to the contract, in all 2000 bales and made default in the delivery of the balance. The appellants then 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 claims on the merits. The arbitrators made an award in favour of the appellants for Rs. 10,525, and that was filed under S. 14(2) of the Indian Arbitration Act in the High Court of Calcutta on its original side and notice was issued to the respondents. Thereupon they filed an application presumably under S. 33 of the Arbitration Act 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 October 29, 1953, and that the award based thereon was a nullity. 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 the order, the respondents preferred appeals to a Division Bench of the High Court, Appeals Nos. 140 & 141 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 contained in notification of the Central Government dated October 29,1953 and accordingly allowed the appeals and set aside the award. The appellants then applied for a certificate under Art.133(1)of the Constitution but the same was refused. Thereafter they applied to this Court for leave under Art.136 of the Constitution and that 93 was granted. This is how these appeals come before us.

3. In Civil Appeals Nos. 391 and 392 of 1960 the facts are similar. The appellants who are a company carrying on business in the manufacture of jute entered into a contract with the respondents on October 17, 1955, for the purchase of 500 bales of jute cuttings at Rs. 87-8-0 per bale of 400 lbs., to be delivered in equal instalments of 250 bales in November and in December 1955. Clause 14 of the agreement provides that all differences arising out of or concerning the contract should be referred to the Bengal Chamber of Commerce for arbitration. The respondents made default in the delivery of the goods and thereupon the appellants moved the Chamber of Commerce for arbitration under 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. 17,500, and that was filed in the High Court of Calcutta on its original side and notice under S.14(2) of the Arbitration Act was served on the respondents. Thereupon they filed an application in the High Court of Calcutta, presumably under S.33 of the Arbitration Act, for a declaration that the contract dated October 29,1953 and was therefore i