An arbitration agreement and award can be valid and enforceable even if the underlying contract is disputed to be void under a statute, provided that the arbitration clause is sufficiently broad to encompass the disputed factual issues and the parties have effectively submitted these issues to arbitration.

P. B. MUKHARJI, J.

( 1 ) THIS is an application by Bhudarmull Bazaz carrying on business under the name and style of Shivaramdas Bhudarmal under the Indian Arbitration Act for declaring the Award No. 139 of 1952 of the Bengal Chamber of Commerce dated 13-2-1952 as null and void, and for an order that there was no valid arbitration agreement in the contract dated 16-3-1951.

( 2 ) THE matter arises out of a transaction relating to sale and purchase of jute goods. On 16-3-51, there was a contract being contract No. 0 by which the petitioner agreed to sell and deliver to the respondent 15000 bags of B. Twills at Rs. 231-10-0 per 100 bags on the terms and conditions contained in a sold note of that date and number passed by the brokers to the petitioner. That contract No. 6 dated 16-3-1951, contained the following arbitration clause:"all matters, questions, disputes, differences and/ or claims arising out of and/or concerning and/ or in connection with and/or in consequence of relating to this contract whether or not the obligation 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 under the rules of its Tribunal of Arbitration for the time being in force and according to such rules the arbitration shall be conducted. "

( 3 ) AT that time when this contract was made there was the West Bengal Jute Goods Act, 1950 (West Bengal Act 5 of 1950) in operation. It is now contended by the petitioner that this contract is void under that statute. It is argued that under Section 3 of that Act the State Government may, from time to time, if it so thinks fit, by notification in the Official Gazette prohibit the making of contracts relating to jute goods and may, by like notification, withdraw such prohibition. It is also provided by Sub-section (2) of Section 3 of that Act that when the making of contracts relating to jute goods is prohibited by notification, no person shall make any such contract or pay or receive any margin except, in the case of any such contract made prior to the date of the notification, to the extent to which the payment or receipt is allowable on the basis of the last closing rate in a notified market. The section goes on to provide that notwithstanding anything contained in any other law for the time being in force, every such contract made and every claim in respect of margin in contravention of the provisions shall be void and unenforceable. It is contended on behalf of the petitioner that this contract was entered into after this Act came into operation and after there was a notification under Section 3 of the statute. It is, however, not stated in the petition that there was a notification under Section 3, but learned counsel appearing for the applicant has stated before me that it was so. I will accept that to be a fact. It is not disputed by counsel for the respondent.

( 4 ) THE main basis of the applicant's argument challenging the arbitration agreement and the award may be stated briefly. It is contended that by reason of the provisions in the statute which I have just mentioned this contract has become void and unenforceable. Therefore as the arbitration clause forms a part of this contract, this arbitration agreement is also void and unenforceable. Reliance has been placed on the decision of Sarkar J. in -- 'bhimraj Sethia v. Jiwanmull Tapuria from which there was an appeal, being A. F. O. O. No. 116 of 1950 (Cal) (A), but which appeal failed on a preliminary ground as being not a competent appeal. Reference has also been made to the observations of Viscount Simon L. C. in 'hayman v. Darwins Ltd. ', (1942) AC 356 at p. 360 (B ). In answer Mr. Ginwalla, learned counsel for the respondent, has relied on the decision of the Court of Appeal of this Court in -- 'state of Bombay v. Adamji Haji Dawood and Co. ', a

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