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6. Before the learned single Judge, NLC contended that the writ petition was not maintainable since there were disputed questions of fact and that there was an arbitral clause in the agreement entered into between the parties and the same has to be invoked. The learned single Judge accepted the case that there were two independent transactions, one between MMT and NLC, which culminated in the auction sale and the other between MMT and STC, which was subjudice. The learned Judge, however, with regard to the transaction between MMT and NLC, held that NLC had knowledge about the importation of the goods subject to the Notification and that it could be sold only after the dutis are cleared and otherwise, the stringent provision under the law would follow. The learned Judge held that the machinery had been imported and there was a ban for sale of the property without the clearance from the Department and therefore, the sale was forbidden by law and that it is a contract void ab initio. According to the learned Judge, the factual position with regard to the payment of concession and duties and the use of the imported materials for its own purpose were matters within the special knowledge of NLC and the bidders were not put on notice of this position and therefore, the officials, who (should have got the clear knowledge of the transactions) and had a duty to bring it to the notice of the auction purchasers, had not done so and that no one would have ventured to purchase the properties when it was under the active clutches of law and that concealment is evident and having come to the above conclusions, answered the question regarding whether the contract was void ab initio and whether there was fraud in favour of MMT. But, as regards the remedy that MMT claimed, the learned Judge, while referring to Clause 59 of the agreement, which is the arbitration clause, held that when the contract is prohibited by law, even if there was an independent arbitration clause, no one can derive benefit from the void contract. Therefore, according to the learned Judge, the parties cannot invoke the arbitration clause. As far as quantification of the monetary relief is concerned, the learned Judge had considered the facts relating to the dismantling and removal of the goods and held that a perusal of these details would clearly reveal all the facts "except the value of the materials removed". Therefore, the learned Judge held that in a case like this, "Where the petitioner wants to have the entire amount to be refunded, unless and until facts regarding the value of the machineries removed are not certain, the Court cannot grant the relief sought for". Therefore, the learned Judge held that the Court is unable to grant the relief and it could be decided "only by a court of civil law" and not by a writ court. The impugned order was passed by the learned single Judge on 26.10.2007. It is against these findings that NLC has filed W.A. No.1488 of 2007; STC has filed W.A. No.1502 of 2007 against the refusal to order restitution and MMT has filed W.A. No.1562 of 2007 against the refusal to grant refund.

9. Learned counsel appearing for NLC would submit that the impugned order suffers from severe infirmities :

(a) When the learned single Judge had come to the conclusion, and rightly so, that there were disputed questions of fact, he ought not to have given any findings regarding factual issues.

(b) The finding that the goods were prohibited goods and therefore, the contract was void ab initio is ex facie wrong since the goods at the worst are only dutiable goods. As per the Government Notification, NLC could import the goods subject to certain conditions and according to NLC, those conditions were complied with. The DRI has presently initiated proceedings where this issue would be adjudicated upon and even if the DRI and the Customs Authorities do not accept the case of the appellant, the only consequence would be that the appellant would be called upon to pay the duty because the goods are not prohibited goods and therefore, the contract is not void ab initio.

(e) Even assuming the argument that the contract is void ab initio, the contract between the parties contained an arbitration clause and this question as to whether the contract was void is an arbitrable issue and therefore, MMT must go before the arbitrator for resolution of its disputes.

(f) In addition, learned counsel submitted that several truckloads had been removed and the learned single Judge had accepted all those documents as though they were proved documents, whereas only in some of the gate passes, the endorsement of STC is there and that too, only as Court Receiver, and some of the others do not bear the endorsement and therefore, there is a serious dispute with regard to the value of the quantity of goods removed.

41. We have disagreed with the findings of the learned single Judge that the goods are prohibited goods. We have also held that the question whether there was fraud must be decided only by a court of fact. If there is fraud, Section 19 of the Contract Act will come into play, which deals with voidable contracts. Therefore, assuming that fraud is proved, the contract only becomes voidable and not void ab initio. Therefore, the finding of the learned single Judge that the contract is void ab initio is also erroneous. The question whether there is unjust enrichment or whether NLC had knowingly entered into a contract which was incapable of being performed are all matters which can be decided only by adducing evidence. In view of the decisions cited above, even if the contract is void, the arbitral clause does not become void in any circumstance, and the parties would have to go before the arbitrator, who will decide whether the contract has become void.