Appeal No 264 of 1956
Appeal by special leave from the Judgment and Order dated June 29 1954 of the Bombay High Court in Appeal No 127 of 1953
A V Viswanatha Sastri Hemendra Shah section N Andley J B Dadachanji Rameshwar Nath and P L Vohra forthe Appellant
J C Bhatt C J Shah and Naunit Lal for the Respondent 1960
November 30
The Judgment of the Court was delivered by SARKAR J
The appellant is a commission agent and pucca aratiya and has been acting as such for the respondent since November 7 1951 in the course of which various contracts were made between them in Greater Bombay
On February 26 1952 two of such contracts were outstanding one of which was in respect 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 making 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 contained in the contracts
On October 7 1952 the arbitrators made one composite award for Rs 22529 15 9 against the respondent in respect of the said disputes
It is not very clear whether this award covered other disputes also
This award was duly filed in the Bombay City Civil 99 782 Court under the  for a judgment being passed on it
Thereafter on July 17 1953 the respondent made an application to the Bombay City Civil Court for setting aside the award contending that forward contracts in groundnuts were illegal as the making of such contracts was prohibited by the Oilseeds Forward Contract Prohibition Order 1943 issued under the Essential Supplies Temporary Powers Act 1946 and hence the arbitration clause con tained in the forward contract in groundnuts between the parties was null and void
It was said that the award based on that arbitration clause was therefore a nullity
The appellant s answer to this contention was that the Essential Supplies Temporary Powers Act did not apply to Greater Bombay where forward contracts were governed by the Bombay Forward Contracts Control Act 1947 hereafter called the Bombay Act and as the contract in groundnuts had been made in terms of that Act it was legal and therefore the award in terms of the arbitration clause contained in it was a valid and enforceable award
The learned Principal Judge of the Bombay City Civil Court accepted the respondent s contention and set aside the award
An appeal by the appellant to the High Court at Bombay against the judgment of the City Civil Court failed
The appellant has now come to this Court in further appeal
The only question in this appeal is whether the Essential Supplies Temporary Powers Act which was passed by the Central Legislature in 1946 applied to Bombay If it did then the Oilseeds Forward Contract Prohibition Order 1943 hereafter called the Oilseeds Order issued under it would make the contract in groundnuts illegal and no award could be made under the arbitration clause contained in it
This is not in dispute
Now the Oilseeds Order was first passed in 1943 under r 83 of the Defence of India Rules
The Defence of India Rules ceased to be in force on September 30 1946
In the meantime however as the situation had not quite returned to normal in spite of the termination of the war the British Parliament passed 783 an Act on March 26 1946 called the India Central Government and Legislature Act 1946 9  10 Geo
VI Ch 39 hereafter called the British Act
Section 2 of this Act provided that the Central Legislature of India would have power to make laws with respect to various matters therein mentioned notwithstanding anything in the Government of India Act 1935 and that that power could be exercised during the period mentioned in section 4 and further that the laws so made to IV he extent they could not have been otherwise made would cease to have effect at the expiration of that period
The Governor General under the powers reserved in section 4 and subsequently the Constituent Assembly of India under the powers conferred on it under the Indian Independence Act 1947 extended the period mentioned in section 4 of the British Act from time to time and eventually up to March 31 1951
It would be unprofitable for our purposes to refer to the various statutory provisions and orders under which this was done for the extension is not in dispute
Under the powers conferred by the British Act the Governor General promulgated the Essential Supplies Temporary Powers Ordinance 1946 which came into force on October 1 1946
On November 19 1946 the Central Legislature under the same powers passe the Essential Supplies Temporary Powers Act 1946 hereafter called the Central Act repealing the Ordinance and substantially incorporating its terms
The Central Act originally provided that it would cease to have effect on the expiration of the period mentioned is section 4 of the British Act
As the life of the British Act was extended from time to time suitable amend ments were made in the Central Act extending its life also
Our Constitution came into force on January 26 1950 and by virtue of article 372 the Central Act was continued as one of the existing laws
On August 16 1950 under powers conferred by article 369 of the Constitution Parliament passed the Essential Supplies Temporary Powers Amendment Act 1950 Act LII of 1950 amending the Central Act in various respects and extending its life up to December 31 1952
By another amendment made by Act LXV of 1952 the 784 life of the Central Act was extended till January 26 1955
Section 31 of the Central Act is in these terms The Central Government so far as it appears to it to be necessary or expedient for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices may by notified order provide for regulating or prohibiting the production supply and distribution thereof and trade and commerce therein
 Section 2 of the Act provides that foodstuffs would be an essential commodity within the meaning of the Act and would include edible oilseeds
We have earlier stated that the Oilseeds Order was originally passed under the Defence of India Rules which expired on September 301946
The Ordinance of 1946 continued in force orders issued under the Defence of India Rules in so far as they were consistent with it and provided that such orders would be deemed to be orders made under it
Section 172 of the Central Act provided that an order deemed to be made under the Ordinance and in force immediately before its commencement would continue in force and be deemed to be an order made under it
As a result of the Ordinance and the Central Act replacing it and the extension of the life of the latter from time to time the Oilseeds Order so far as it related to edible oilseeds including groundnuts continued in force after the expiry of the Defence of India Rules till January 26 1955
That Order as so continued prohibited the making of forward contracts that is to say contracts providing for delivery at a future date in respect of certain specified oilseeds including groundnuts
It is the respondent s contention that it is because of this order read with the Central Act that the contract in groundnuts between the parties was illegal and therefore the award made under the arbitration clause contained in it was void
Now the British Act under which the Central Act was passed provided in sub sec
4 of section 2 that Sub section 2 of section 107 of the Government of India Act 1935 and sub section 2 of section 126 785 of that Act shall apply in relation to a law enacted by virtue of this section with respect to any matter being a matter with respect to which a Province has power to make laws as if that matter were a matter specified in Part 11 of the Concurrent Legislative List
 Section 1072 of the Government of India Act 1935 laid down that Where a Provincial law with respect to one of the matters enumerated in the Concurrent Legislative List contains any provision repugnantto the provisions of an earlier Federal lawthen if the Provincial law having been reserved for the consideration of the Governor Generalhas received the assent of the Governor Generalthe Provincial law shall in that Province prevail It would follow from these provisions that if a Provincial Act which had received the assent of the Governor General contained anything repugnant to a Central Act passed under the powers conferred by the British Act then in the Province concerned the Provincial Act would apply and not the Central Act
Now the Bombay Act which had been passed by the Provincial Legislature of Bombay in 1947 came into operation in 1948
That Legislature had power to pass the Act and the Act had received the assent of the Governor General
At that time the Central Act deriving its force from the British Act was in operation
If therefore the Bombay Act was repugnant to the Central Act in Bombay the Bombay Act would apply and not the Central Act
This is not in dispute
The appellant contends that the Bombay Act is so repugnant and therefore the Central Act cannot render the forward contract in groundnuts made in Greater Bombay illegal and void
The question therefore is whether the Bombay Act contains any provision repugnant to the Central Act
The preamble of the Bombay Act states that it was enacted as it was thought expedient to regulate and control forward contracts and for certain other matters
Section 1 of this Act came into force at once and gave power to the Government to bring into force by notification the remaining sections of the Act in the 786 whole of the Province of Bombay or parts thereof on such date and in respect of such goods as might be specified
The Government of Bombay issued notifications under this section on December 19 1950 applying the remaining provisions of the Act to the area called Greater Bombay in respect of all varieties of oilseeds as from the said date
Section 8 of the Bombay Act provides as follows section 8 1 Every forward contract for the sale or purchase of or relating to any goods specified in the notification under sub section 3 of section I which is entered into made or to be performed in any notified area shall be illegal if it is not entered into made or to be performed aIn accordance with such bye laws made under section 6 or 7 relating to the entering into making or performance of such contracts as may be specified in the bye laws or b i between members of a recognised association ii through a member of a recognised association or iii with a member of a recognised association provided that such member has previously secured the written authority or consent which shall be in writing if the bye laws so provide of the person entering into or making the contract and no claim of any description in respect of such contract shall be entertained in any civil court
2 Any person entering into or making such illegal contract shall on conviction be punishable with imprisonment for a term which may extend to six months or with fine or with both Recognised association is defined in the Bombay Act as an association recognised by the Provincial Government and on December 19 1950 the Bombay Oilseeds Exchange Limited was recognised as such an association by the Government of Bombay
The appellant is a member of this association
The contracts between the parties were all expressly made subject to the rules and regulations of this Association
The case before us has proceeded on the basis that the impugned contract in groundnut had been made in compliance 787 with the requirements of section 8 and there is no finding to the contrary by the Courts below
We have hence to proceed on the same basis
The appellant contends that section 8 of the Bombay Act and section 3 of the Central Act are repugnant to each other
Now section 8 of the Bombay Act it will be noticed does not purport to make any contract legal
Its only effect is to render forward contracts in all varieties of oilseeds illegal if not made in compliance with its terms
The learned Advocate for the appellant says that the effect of section 8 was to render a forward contract in all oilseeds made in terms of it legal and therefore a repugnancy arose between its terms and the terms of the Oilseeds Order issued under the Central Act which made forward contracts in edible oilseeds illegal
The learned Advocate referred to various other provisions of the Bombay Act and the bye laws of the Association made in terms of the Act to show that the Bombay Act was intended to cover the entire field of forward contracts with respect to all varieties of oilseeds and was therefore intended to oust the operation of the Central Act in Greater Bombay with regard to the forward contracts covered by the former
It does not seem to us that a reference to the other provisions in the Bombay Act or to the bye laws is relevant in deciding the question
If the effect of section 8 of the Bombay Act was not to render forward contracts made in terms of it legal then no question of repugnancy with the Central Act can arise whatever may be the scope of the Bombay Act and the provisions in the bye laws
Therefore it seems to us that the question is whether section 8 of the Bombay Act by its terms makes any forward contract legal
Section 3 of the Central Act as already seen gives power to the Central Government to prohibit trade and commerce in oilseeds
That Act therefore enable the Central Government to make forward contracts in essential commodities as defined in it illegal
That is what the Central Government did by the Oilseeds Order in so far as edible oilseeds are concerned
We find nothing in section 8 from which it can be said 788 that it rendered any contract legal
Its only intent and effect is to declare certain forward contracts illegal
We think that the matter was very correctly put by Chagla C J who delivered the judgment of the High Court
He said All that Sec 8 does is to declare that forward contracts will be illegal unless they comply with the procedure laid down in Sec 8
But it is one thing to declare a certain contract illegal
It is entirely another thing to declare an illegal contract legal
Sec 8 does not even make an attempt to declare that forward contracts declared illegal by the Central legislation shall be legal if they comply with the technicalities laid down in Sec 8
The assumption underlying Sec 8 it seems to us is that forward contracts which the Legislature is dealing with are legal contracts but even if they are legal they are declared to be illegal unless they are performed or made or entered into in the manner laid down in Sec 8
With these observations we fully agree
In regard to the contention that section 8 of the Bombay Act necessarily implies that contracts made in terms of it would be legal it seems to us that there is no such necessity indicated in the Act
The Act clearly intends only to create an illegality that is to say as Chagla C J said it takes a legal contract and imposes on it certain conditions and makes it illegal if those conditions are not fulfilled
If a contract is already illegal there is no scope for applying the Bombay Act
Furthermore the Bombay Act deals with all kinds of goods
Sub section 4 of section 2 of this Act defines goods as any kind of movable property including securities but not including money or actionable claims
Now the Central Act only applies to essential commodities as defined in it
Therefore there would be many contracts to which the Central Act would not apply and such contracts may be rendered illegal by the Bombay Act if they come within its scope and are made in disregard of the conditions laid down in section 8
We therefore come to the conclusion that there is no repugnancy between the Bombay Act and the Central Act
It follows that there is no scope for 789 applying the provisions of section 1072 of the Government of India Act 1935
That would be the position in 1948 when the Bombay Act came into force and the Central Act was already in existence
Both the Acts would then be applying to Greater Bombay as there is no inconsistency between them
Article 372 of the Constitution continued both these Acts after the Constitution came into force and there is nothing in the Constitution which provides that any one of two existing laws both of which had applied up to the coming into force of the Constitution would apply to the exclusion of the other
It follows that in 1951 or 1952 when the contract in groundnuts which it is not disputed was a forward contract within the meaning of both the Acts was made both the Acts applied to it
The Constitution had not affected such application
That being the position the contract in groundnuts must be held to be illegal under the Central Act which clearly prohibited the making of it
The Bombay Act could not make it legal for as we have said it was not intended to make any contract legal
It would follow that the arbitration clause contained in that contract was of no effect
It has therefore to be held that the award made under that arbitration clause is a nullity and has been rightly set aside
The award it will have been noticed was however in respect of disputes under several contracts one of which we have found to be void
But as the award was one and is not severable in respect of the different disputes covered by it some of which may have been legally and validly referred the whole award was rightly set aside
The appeal therefore fails and is dismissed with costs
Appeal dismissed
100 619 of the Act
These rules are called the Bihar Preservation and Improvement of Animals Rules 1960
The provisions of r 3 have also been impugned by the
petitioners by an amendment petition filed by them
Rule 3 so far as it is material
for our purpose is in these terms 31
For the purpose of section 3 of the Act the Veterinary Officer and the Chairman or Chief Officer as the case may be shall be the prescribed authority Provided that where there is no Chairman or Chief Officer in respect of any area the Veterinary Officer shall be the sole prescribed authority
2 Where the authority prescribed under subrule 1 or sub rule 5 refuses to issue a certificate under the proviso to section 3 it shall record the reasons for the refusal and no such refusal shall be made unless the person applying for the certificate has been given a reasonable opportunity of being heard
3          4A bull bullock or she buffalo in respect of which a certificate has been issued under section 3 shall not be slaughtered at any place other than the place indicated in the certificate and it shall be slaughtered within 20 days of the date of the receipt of the certificate by the person in whose favour it is issued
5 In case of difference of opinion between the Veterinary Officer and the Chairman or Chief Officer the matter shall be referred to the Sub divisional Animal Husbandry Officer or the District Animal Husbandry Officer as the case may be and the certificate shall be issued or refused according to the decision of the Sub divisional Animal Husbandry Officer or the District Animal Husbandry Officer as the case may be


Summary:
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 composite 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 Forward Contract Prohibition Order 1943 issued under the Essential Supplies Temporary Powers Act 1946 passed by the Central 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 had received the assent of the Governor General of India and therefore under section 1072 of the Government of India Act 1935 which applied the Bombay 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 respondent 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 specified in the notification under sub section 3 of section 1 which is entered into made or to be performed in any notified area shall be illegal if it is not entered into made or to be performed 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 forward contracts illegal if not 781 made in compliance with its terms while the Central Act made the contracts to which it applied illegal
There was therefore no repugnancy between the Bombay Act and the Central Act and both of them applied to Bombay
Article 372 of the Constitution continued both these Acts and so there is no provision in the Constitution under which any one of them may be said to apply to the exclusion of the other
A composite award in respect of more than one dispute which is not severable must be set aside as a whole if any of the disputes had been illegally referred