KHARDAH COMPANY LTD. vs RAYMON & CO. (INDIA) PRIVATE, LTD.

The Supreme Court held that the dispute regarding the validity of the contract dated September 7, 1955, was not within the arbitrators' competence under Clause 14, thus allowing the respondents to challenge the award under Section 33 of the Arbitration Act, 1940. The Court established that if an agreement is invalid, all its parts, including the arbitration clause, are also invalid. The respondents were not estopped from questioning the award despite their participation in arbitration proceedings. The ruling emphasized the limitations of arbitration in cases of illegal contracts under the Forward Contracts (Regulation) Act, 1952, particularly Sections 2(f) and 17.