ORDER :- This is a suit filed by the Plaintiffs, against the defendants to recover a sum of Rs. 26,400/- together with interest thereon being the price of art silk sarees sold and delivered by the plaintiffs to the defendants under a contract in writing dated 7th August 1973. Pursnant to the said contract the plaintiffs have delivered 1200 sarees on 14th Aug. 1973 under two bills bearing Nos. 1406 and 1475. It is the case of the plaintiffs that under the said contract the price of the goods was payable on delivery. Since the price was not paid by the defendants to the plaintiffs, the plaintiffs did not supply any further goods to the defendants under the contract. According to the defendants, only 50% of the price was to be paid by the defendants to the plaintiffs within a few days of the delivery of the goods and the remaining 50% of the price was to be paid by them within 60 days of the date of delivery. According to the defendants, the plaintiffs have wrongfully refused to make any further supply under the contract. As a result thereof the defendants have suffered damages to the extent of Rs. 28,843.25 P. which they have claimed to set off against the claim of the plaintiffs.

2. It appears that the contract between the parties is subject to the Rules and Regulations of the Shree Market Silk Merchants' Association. By their complaint dated 31-10-1973 (there are two complaints, one in respect of each bill) the plaintiffs asked the Shree Market Silk Merchants' Association to get the defendants to pay to them the said amount of Rs. 26,400/- in accordance with the rules and regulations of this Association. The defendants did not appear before the Association though a notice was sent to them by the said Association asking them to appear before the Association. Thereafter the Association gave a decision dated 4-12-1973, wherein the defendants were found liable to pay to the plaintiffs the said sum of Rupees 26,400/- This decision was referred to the Joint Action Committee of Shree Market Silk Merchants' Association, the Silk Merchants' Association and Swadeshi Market Textile Merchants' Association for further action.

3. In view of the above proceedings the defendants have made certain submissions in para 1 of the written statement. They have submitted that in view of the said award dated 4-12-1973 the present suit filed by the plaintiffs against the defendants on the same cause of action is not maintainable in law and the same should be dismissed with costs. In the alternative, they have also submitted that the said Association had no jurisdiction to arbitrate in the matter; the said award is made without jurisdiction and the same is illegal and not binding on the defendants.

4. In view of the above submissions, a preliminary issue was framed, being Issue No. 2, namely whether the suit is maintainable in law as alleged in para 1 of the written statement ?

5. It is an admitted position that no decree has been passed in terms of the alleged Award dated 4-12-1973. The question is whether such an award which is ineffective and unenforceable bars a suit between the parties on the same cause of action. It has been held by our High Court in the case of Chandrabhaga Sadashiv v. Bhikachand Hansaji reported in 61 Bom LR 364 : (AIR 1959 Bom 549) that an award which had no legal existence (because though it was compulsorily registerable it was not registered) did not bar a suit based on the original cause of action. Mr. Jhunjhunwala, who appears for the defendants, has pointed out that this decision is impliedly overruled by a judgement given by the Supreme Court in the case of Satish Kumar v. Surinder Kumar reported in AIR 1970 SC 833. This judgement of the Supreme Court has cited with approval a previous decision of the Supreme Court in M/s. Uttam Singh Dugal and Co. v. Union of India (Civil Appeal No. 162 of 1962 decided on 11-10-1962). The following observations from Uttam Singh's Judgement have been cited with approval :

"The true legal posit

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