Judgment

BHAGWATI, J. :- This appeal, by special leave, is directed against a judgment of a single Judge of the Calcutta High Court declaring arbitration agreement contained in certain contracts between the parties to be invalid on the ground that the contracts were illegal under Section 15, sub-section (3A) of the Forward Contracts (Regulation) Act, 1952 (hereinafter referred to as the Forward Contracts Act).

2. The appellants and the respondents were both at all material times members of the East India Jute & Hessian Exchange Ltd. (hereinafter referred to as the Exchange). On 13th June, 1969, the appellants entered into two contracts with the respondents agreeing to purchase 12,00,000 yeards of hessain cloth at the price of Rupees 70.50P. per hundred yards and 6,00,000 yards of hessain cloth at the price of Rs. 70/- per hundred yards on the terms and conditions set out in the respective contract notes which were in the printed contract form prescribed in Appendix IV to the bye-laws of the Exchange. These two contracts were transferable specific delivery contracts for jute goods in the city of Calcutta. It was stated in the body of each of the two contract notes within the cage that