LexMESSRS. BASANT LAL BANARSI LAL versus BANSI LAL DAGDULAL
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z960 November 30. 780 SUPREME COURT REPORTS [1961] MESSRS. BASANT LAL BANARSI LAL v. BANSI LAL DAGDULAL (P. B. GAJENDRAGADKAR, A. K. SARKAR, K. SUBBA RAO, K. N. WANCHOO and J. R. MUDHOLKAR, JJ.) Forward Contracts in Oilseeds-If illegal in Greater Bombay-- Bombay Forward Contracts Control Act, r947 (Bom. LX IV of r947), s. 3-Essential Supplies (Temporary Powers) Act, r946 (XXlV of r946), s. 8. Various contracts for sale of goods had been made between the parties in Bombay each of which contained an arbitration clause. Disputes having arisen in March, 1952, in respect of these contracts, they were referred to arbitration and a compo- site award was made on October 7, 1952, against the respondent. One of these disputes had arisen out of a forward contract in groundnuts. The respondent applied to have the award set aside on the ground that the forward contract in groundnuts was illegal as such a contract was prohibited_ by the Oilseeds (For- ward Contract Prohibition) Order, 1943, issued under the Essen- tial Supplies (Temporary Powers) Act, 1946, passed by the Cen- tral Legislature. The appellant contended that the Essential Supplies (Temporary Powers) Act, 1946, was repugnant to the Bombay Forward Contracts Control Act, 1947, passed by the Provincial Legislature of Bombay which bad received the assent of tbe Governor-General of India and therefore under s. 107(2) of the Government of India Act, 1935, which applied, the Bom- bay Act prevailed in Bombay in preference to the Central Act and under the Bombay Act Forward Contract in groundnut was valid. The High Court accepted the contention of the respon- dent and set aside the award. Section 8 of the Bombay Act provided: "Every forward con- tract for the sale or purchase of, or relating to, any goods speci- fied in the notification under sub-section (3) of section I which is entered info, made or to be performed in any notified area shall be illegal if it is not entered into, made or to be perform- ed" and thereafter, set out the manner in which and the persons between whom such contracts could be made and also made punishable a person making a contract declared illegal. Section 3 of the Central Act provided, "The Central Govern- ment.. .... may by notified order provide for ...... prohibiting ...... trade and commerce" in any essential commodity. Under this section the Oilseeds (Forward Contract Prohibition) Order was passed prohibiting forward contracts in groundnuts, which was one of the essential commodities specified in the Central Act. Held, The Bombay Act did not make any contract legal. Its only effect was to render certain forwarJ contracts illegal if not ' 2 s.c.R. SUPREME COURT REPORTS 781 made in compliance with its terms while the Central Act ma.de :c96o the contracts to which itapplied, illegal. There was, therefore, no repugnancy between the Bombay Act and the Central Act and Mess 15• Ba~anl both of them applied to Bombay. Lal Banarsi Lal Article 372 of the Constitution continued both these Acts, Ban:i Lal and so there is n.1 provision in the Constitution under which any one of them may be said to apply to the exclusion of the other. Dacdult1I A composite award in respect of more than one dispute which is not Se\'erable, must be set aside as a whole if any of the disputes had been illegally referred. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 264of1956. · Appeal by special leave from the· Judgment and Order dated Jurie 29, 1954; of the Bombay High Court in Appeal No. 127 of 1953. A. V. ViswanathaBastri, He.mendra Shah, S. N. And- ley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the Appellant. · J. O. Bhatt, 0. J. Shah and Naunit Lal, for the Res- pondent. 1960. November 30. The Judgment of the Court was delivered by . · SARKAR, J.-The appellant is a commission agent Sarkar f. and pucca aratiya and has been acting as such for the respondent since November 7, 1951, in the course of which yarious contract.s were made between them. in Greater Bombay. On February 26, 1952, two of such contracts were outstanding, one of which was in res- pect of groundnuts and was a forward contract. In March 1952, disputes. arose between the parties as to whether these contracts had been closed, each side inaking a .·claim . on the other on the basis of its own contention. Eventually, on March 18, 1952, the appellant referred the disputes to arbitration under the arbitration clause c
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