Report No. 76

8.25. Section 32 and validity of substantive agreement.-

The principle of section 32 is sound enough. But certain questions of detail have arisen, which we shall deal with presently. Where a substantive agreement contains an arbitration clause, and the validity of the substantive agreement itself is attacked, the question may arise whether the suit is barred under section 32. In certain cases, section 33 may, of course, be invoked and the procedure of application utilised. Thus, according to one view,1 sections 32 and 33 do not apply to suit for a declaration that there never was a contract or that the contract was void,2 and that such a suit was maintainable, notwithstanding the ban in section 32.

According to another view,3 the case falls under section 33. We do not express any opinion as to which view is correct, because neither view necessitates any amendment.

1. State of Bombay v. Adamjee, ILR 1952 Cal 49: AIR 1951 Cal 147.

2. See also Banwari Lal v. Board of Trustees, Hindu College, Delhi, AIR 1948 EP 165 (174), paras. 33 & 34 (commenting on Deokinandan v. Basantlal, AIR 1941 Cal 52).

3. Municipal Board v. Eastern Uttar Pradesh Electric Supply Co. Ltd., AIR 1958 All 506 .