TMI Blog1955 (10) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, and sent the relative contract notes therefor Nos. 2438 and 2439 (Exhibit A) to her. She sent a reply repudiating the contracts on the ground that the appellant had not been authorised to close the transactions on 11-8- 1947, and instructed him to square them on 14-8-1947. The appellant, however, declined to do so, maintaining that the transactions had been closed on 11-8-1947 under the 109 860 instructions of the respondent. After some correspondence which it is needless to refer to, the appellant applied on 21-8-1947 to the Native Share, and Stock Brokers Association, Bombay for arbitration in pursuance of a clause in the contract notes, which runs as follows: In event of any dispute arising between you and me/us of this transaction the matter shall be referred to arbitration as provided by the Rules and Regulations of the Native Share and Stock Brokers Association . The Association gave notice of arbitration to the respondent, and called upon her to nominate her arbitrator, to which she replied that the contract notes were void, and that in consequence, no arbitration proceedings could be taken there under. The arbitrators, however, fixed a day for the hearing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therein for performance. The learned City Civil Judge, who heard the application agreed with this contention, and holding that the contracts were not void under section 6 of Act VIII of 1925, dismissed the application. The respondent took the matter in appeal to the High Court of Bombay, and that was beard by Chagla, C.J. and Tendolkar, J. They were of the opinion that the con tracts in question were not ready delivery contracts as defined in section 3(4) of the Act, because though no time for performance was specified therein, they had to be performed within the period specified in the Rules and Regulations of the Association, which were incorporated therein by reference, and not immediately or within a reasonable time as provided in section 3(4), that they were accordingly void under section 6, and that consequently, the arbitration clause and the proceedings taken thereunder culminating in the award were also void. They accordingly set aside the award as invalid and without jurisdiction. Against this judgment, the appellant has preferred this appeal 862 on a certificate under article 133(1) (c). It was argued by the learned Attorney-General in support of the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt for the recovery of any commission, brokerage, fee or reward in respect of any contract for the purchase or sale of securities. That is to say, the bar is to the broker claiming remuneration in any form for having brought about the contract. But the contract of employment is not itself declared void, and a claim for indemnity will not be within the prohibition. The question whether contract notes sent by brokers to their constituents are contracts for the sale and purchase of securities within section 6 of Act VIII of 1925, came up for consideration before the Bombay High Court in Promatha Nath v. Batliwalla Karani I.L.R. [1942] Bom. 655; A.I.R. 1942 Bom. 224. 864 and it was held therein that they were not themselves contracts for sale or purchase but only intimations by the broker to the constituent that such contracts had been entered into on his behalf. We agree with this decision. It may be argued that if the contract note is only intimation of a sale or purchase on behalf of the constituent, then it is not a contract of employment, and that in consequence, there is no agreement in writing for arbitration as required by the Arbitration Act. But it is settled law that to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the securities are purchased or sold and the other, the brokerage. The contract notes sent to the respondent are not in this form. They are in accordance with Form A in Appendix A, and show the rates at which the securities are sold or purchased, the brokerage not being separately shown. At the foot of the document, there is the following note; 865 This is net contract. Brokerage is included in the price . The contention of the respondent is that the contract notes are not in accordance with Form A in Appendix H, as the price and brokerage are not separately shown, and that therefore they are void under Rule 167(c). Now, Rule 167 applies only to forward contracts, and the basis of the contention of the respondent is that inasmuch as the contract notes, Exhibit A, have been held by the learned Judges of the High Court not to be ready delivery contracts but forward contracts, they would be void under Rule 167(c), even if they were not hit by section 6 of Act VIII of 1925. The assumption underlying this argument is that what is not a ready delivery contract under the definition in section 3(4) of Act VIII of 1925 must necessarily be a forward contract for purposes of Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
