( 1 ) BY the order dated October 7, 1996, petition under Section 20 of the Arbitration Act registered as Suit No. 1571/89 filed by respondent No. 1 was allowed and the disputes as raised in para 14 of the petition were referred to the sole arbitration of Shri Sashivansh Bahadur, Advocate and OMP No. 60/90 preferred under Sections 30,31 and 33 of the Arbitration Act by the appellant was dismissed by the learned Single Judge FAO (OS) No. 53/97 is against the former part while FAO (OS) No 52/97 is against the latter part of the aforesaid order. Since both these appeals arise out of the same order we propose to dispose them of by this common order.

( 2 ) SUIT No. 1571/89 was filed by respondent No. 1, inter alia, contending that it is carrying on business of giving on lease equipment, vehicles, etc. It leased out machinery/equipment described as Stanford Eder Hydraulic Excavator Model R. 825 LC to the appellant under a lease-agreement dated December 9, 1987, duly executed between respondent No. 1, on the one hand, and appellant and respondents 2 and 3 on the other hand on the terms and conditions mentioned therein. Lease rental amounting to Rs. 26,11,200. 00 was payable to respondent No. 1 in 24 lease rentals as agreed upon. Appellant paid only an amount of Rs. 3,27,000. 00 i. e. three rentals out of 24 rentals. The two cheques, one amounting to Rs. . 2,18,000. 00 and the other amounting to Rs. 3,27,000. 00 , issued by the appellant to respondent No. 1, when presented to the bank for encashment were bounced. It was prayed that as the appellant had failed to make further payments, in respect of the lease rental, dispute arising between the parties were liable to be referred to the named arbitrator as per the artritration dausc being No. 39 contained in the aforesaid lease agreement dated December, 9,1987.

( 3 ) APPELLANT filed OMP No. 60/90 under Section 33 read with Sections 30 and 31 of the Arbitration Act praying for declaration to the effect that the lease agreement dated December 9, 1987, is invalid, illegal, ineffective and void. On identical plea the appellant contested the petition by filing written statement.

( 4 ) BY the impugned order dated October 7, 1996, both Suit. No. 1571/89 and OMP No. 60/90 were disposed of in the manner staled above observing:-

". . . . . . . . THE respondents are estopped from contending at the present stage that the agreement itself is invalid having agreed to the terms Bad conditions with open eyes and having received benefit thereof and having not refuted the said clauses earlier. Even otherwise, the said clauses in my opinion, could not be said to be against the public policy as is alleged by the respondents. The Court should always given effect to the terms and conditions of a commercial contract entered into between the private parlies in view of the fact that the parties to the contract of their own free will have entered into the terms and conditions of the contract in the context of their needs and requirement and, therefore, the Court should not ordinarily declare the terms of the agreement to be invalid unless it is established with the cogent reasons that the same is either against the public policy or in violation of any of the provisions of the Contract Act. "

CONTENTION advanced by Shri W. S. Kathuria, whom we have heard on the point of admission of appeals was that clauses 25 and 33 of the lease agreement dated December 9, 1987 render that lease agreement invalid and void and when the agreement itself is invalid/void every part of it including the clause as to arbitration contained therein becomes invalid and the impugned order is, thus, not legally sustainable. Strong reliance was placed by him on the decisions injaikishun Dass Mull Vs Luchhiminurain Kanoria and Co. , AIR 1974 SC 1579, K. P. Subbama Sustri and Others Vs K. S. Raghavun and Others, AIR 1987 SC 1257 and Kamla Prasad Ram Pandey Vs. Hasanali Khan, AIR 1939 Allahabad 308.

AFORESAID clauses 25 and 33 of