MESSRS. KHIMJI POONJA AND COMPANY versus SHRI BALDEV DAS C. PARIKH

Citation: [1950] 1 S.C.R. 64 · Decided: 14-03-1950 · Supreme Court of India · Bench: HARILAL JEKISUNDAS KANIA · Disposal: Dismissed

Judgment (excerpt)

1960 
March 14. 
SUPREME COURT REpORTS 
(1950] 
MESSRS. KHIMJI POONJA AND COMPANY 
v. 
SHRI BALDEV DAS C. PARIKH 
(SHRI HARILAL KANIA C.J., SAIYID F AZL ALI, 
PATANJALI SASTRI, MEHR CHAND MAHAJAN, 
MuKHERJEA and S. R. DAS JJ.] 
Bombay Cotton Contracts Act (IV of 1982). s. 8(1)-East 
India Cotlt!n Association Bye-laws, Nos. 61-A, 66-A, BO, 82-Cottcn 
Oontract-Oontract note stating minimum amount of depo!ii DI 
Rs. 26 and not in prescribed form-Validit11-Arbitration and 
award und~r arbitration clause, whether void. 
Section 8 of the Bombay Cotton Contracts Act, 1932, provided 
that contracts entered into after the date of the commencement 
of the Act which are not in accordance with the bye-laws of 
any recognised cotton association shall be void. Bye-law 80 of 
the East India Cotton Association, Ltd., which was a recognised 
cotton association within the meaning of the Act provided that 
contracts between members acting a.s commission agents on the 
one band and their constituents on the other shall be subject to 
the bye·laws and that a contract note in the form given in the 
Appendix to the bye-laws shall be rendered in respect of every . 
contract. Bye-law 51-A originally required a deposit at a rate 
not less than Rs. 25 per bale and the contract note accordingly 
contained a clause to that effect. 
During the war this bye-law 
was a.mended by reducing the minimum amount of deposit to 
Rs. 12·8 per bale and introducing a new bye·law (bye·law 65-A) 
which, ini'3r alia., gave certain options to the last buyer, and by 
a Notification of the Government the form of tbe contract note 
was also amended by altering the minimum deposit to Rs. 19-8 
and adding two new clauses to comply with the bye-law 65-A. 
A contract note rendered after these amendments to the bye-
laws and the form of contract note,' contained a rubber stamp 
impression in which the minimum amount of deposit was stated 
as Rs. 25, and did not contain the two new clauses that were 
introduced by the Government Notification : 
Held, that the 
contract 
note 
rendered 
was 
not in 
accor<la,nce with the bye-laws and in the prescribed form as 
the clause relating to the minimum amount ·of deposit was in-
consistent with the provisions of bye-law 51-A as amended, and 
the two new clauses had been omitted, even though the con-. 
tra.ct note recited that it was made in accordance with the bye-
laws, and it was accordingly void and a valid award could not 
be made under the arbitration clause contained in the note. 
[PATAN.JALI 8ABTRI J. preferred to rest his deci~ion solely 
on the ground of the omission to include in the contract in ques-
tion the two clauses newly added in the prescribed form in order 
to give effect to bye·law 65·A.] 
Judgment of the Bombay High Court affirmed. 
S.C.R. 
SUPREME COURT REPORTS 
65 
APPEAL from the High Court of Judicature at Bom-
1900 
bay. Civil Appeal No. XXVI of 1949. 
· 
Messrs. Khimji 
This was an appeal from a judgment and decree of the 
Poonja &- Co • 
. Bombay High Court (Stone C.J. and Coyajee J.) dated 
v. 
20th March, 1947, in Appeal No. 42 of 1946, reversing a Shri Balde.., Das 
• d 
t f Ch 
l J d' 
. . 
l' t' 
d 
C. Parikh. 
JU gmen o 
ag a . 1sm1ssmg an app 1ca 10n ma e 
by the respondent under the Indian Arbitration Act, 
1940, praying inter alia that the arbitration agreement 
containe<j in certain contract notes sent by the appel-
lants to the respondent be declared invalid and void 
and for setting aside an award made by arbitrators 
appointed under the said contract note. 
M. G. Setalvad, (Rameshwar Nath with him), for 
the appellants. 
G. K. Daphtary, ( B. Sen and K. T. Desai with him), 
for the respondent. 
1950. March 14. 
The judgment of the Court was 
delivered by 
DAS J.-This appeal arises out of an application 
Das J. 
made by the Respondent under the Indian Arbitration 
Act, 1940, praying inter alia that the arbitration 
agreement contained in certain contract notes includ-
ing contract note No. 17996 sent by the Appellants to 
the Respondent be declared to be invalid, void and 
unenforceable and be set aside and that a purported 
award made by the arbitrators appointed in terms of 
the said contract notes be set aside. That application 
came to be made in the following circumstances : 
The Appellants were and are members of the East 
India Cotton Association Ltd. The Respondent, how-
ever, was not and is not a member of that Association. 
In April, 1945, the Respondent employed the Appellants 
as 

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