A contract that is prohibited by law is void and any arbitration agreement contained in such a contract is also illegal and void.

( 1 ) THIS appeal is from a judgment of P. B. Mukharji, J. dismissing an application to adjudge and declare the contract dated 17-8-1954 to be illegal and invalid and to decide an award of the Bengal Chamber of Commerce. By the contract dated 17-8-1954 the appellant agreed to sell and the respondent agreed to buy raw jute. The contract contains the usual arbitration clause which is as follows:"14. Arbitration -- 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 referred to the arbitration of the Bengal Chamber of Commerce and Industry under the rules of its Tribunal of Arbitration for the time being in force and according to such rules the arbitration shall be conducted and any Award made by the said Tribunal under this clause shall be final, binding and conclusive on the parties". The buyer-appellant contends that the contract is prohibited by the Forward Contracts Regulation Act, 1952 and the Notifications issued thereunder. The contract provides for shipment or rail despatch within two months from the issue of the letter of authority to import the jute. Mr, Sethia concedes and in my opinion rightly that the contract is a forward contract as defined in Section 2 (c) of the Forward Contracts Regulation Act, 1952. Prima facie, the making of such a contract is prohibited under Section 17 of the Forward Contracts Regulation Act 1952 and the Notifications issued thereunder, unless it is made out that the contract is a non-transferable specific delivery contract. The contract is! a specific delivery contract as it provides for the actual delivery of specific qualities of goods during a specified future period at a price fixed thereby and as the names of both the buyer and the seller are mentioned. The question still remains whether the specific delivery contract is a non-transferable specific delivery contract as defined in Section 2 (f) of the Forward Contracts Regulation Act, 1952. It is now well settled that the word "or" in Section 2 (f) is used conjunctively, and not distributively, and that the contract can be said to be non-transferable only if the rights as also the liabilities under the contract as also under the documents of title relating thereto, are not transferable. This point was decided in Agarpara Co. Ltd. , v. Sumatichand Kochar, A. F. O. No. 60 of 1956 (Cal), as also in Raymon and Co. (India) Private Ltd. v. Khardah Co. Ltd. , A. F. O. O. No. 173 of 1957:.

( 2 ) THOUGH the liabilities under the contract are not transferable, prima facie the rights under the contract can be transferred. Thus, prima facie, the right of a buyer to obtain delivery of the goods under the contract of sale as also the right of the seller to obtain payment of the price of goods supplied under such a contract, can be transferred. It is said, however, that by reason of the special terms of the contract in this case, the rights of both the buyer and the seller under the contract are not transferable. The goods to be supplied under the contract were to be imported from Pakistan. At the relevant time no jute could be imported from Pakistan except under a licence obtained under the Imports and Exports Control Act, 1947. The contract, therefore, provides that the goods would be imported against the buyer's import quota. The import licence obtained by the uyer is a licence which, by its terms, is made non-transferable except under a letter of authority from the authority who issued the liences or from any Import Trade Controller. The condition of the licence is that the goods will be utilised only for consumption as raw materials or ac