NATIONAL INSURANCE CO LTD Vs. PUNAM CHAND JAIN

JUDGEMENT

(1.) THIS is an appeal arising out of the order passed and judgment delivered on 31st Oct., 1979 dismissing an application for setting aside of an award. It appears that a Policy of Insurance against burglary and house breaking was issued by the appellant in favour of the respondent No. 1 on 7th Apr., 1972. On 13th Oct., 1972 there was an endorsement in respect of the amount and schedule of the articles insured under the Policy and all other terms and conditions of the Policy remained unchanged. The said Policy including the endorsement was valid till 29th Mar., 1973. The said Policy contained an arbitration clause which it is material to set out. The said clause was as follows:

(2.) THERE was also an agreed bank clause which is not relevant for our present purpose. On the 19th Mar., 1973 the alleged burglary in respect of this claim had taken place. On the 29th Mar., 1973 the respondent No. 1 had submitted a claim for Rupees 37,400 in respect of the alleged loss due in the said alleged burglary. By a letter dated 2nd May, 1973, the insurer, the appellant herein, repudiated the liability. On the 14th July, 1973, there was a letter from the insurer's lawyer reiterating the repudiation of liability. Three months thereafter, on 24th Oct., 1973, the respondent No. 1 referred the dispute to arbitration and appointed one Sri S. M. Chowdhury, as his arbitrator and called upon the appellant to appoint their arbitrator. On the 25th April., 1974 an order passed in an application under Section 20 of the Arbitration Act, 1940 filed by the respondent No. 1, being Special Suit No. 1 of 1974, and the said agreement was ordered to he filed in Court and an order of reference was made in terms of the arbitration agreement. We shall have occasion to refer to the decision in the said case while considering whether the specific question of law had been referred to the arbitrator or not. On the 9th Mar., 1976 an order was made appointing Mr. P. K. Roy, Barrister-at-Law, as the sole Arbitrator on a further application of the respondent No. 1 in the said Special Suit No. 1 of 1974. On the 23rd Mar., 1976 the sole Arbitrator had entered upon reference. On the 11th May, 1976 the arbitrator settled the issues. It is relevant in view of the contentions raised before us to refer how the arbitrator settled the issues. In his award dated 21st July, 1977 the arbitrator observed, inter alia, as follows:

(3.) IN this connection, our attention was drawn to the decision in the case of IN re. King and Duvecn, (1913) 2 KBD 32. where it was observed that if a specific question was submitted to an arbitrator and he answered it, the fact that the answer involved an erroneous decision in point of law did not make the award bad on its face so as to permit of its being set aside. Our attention was drawn to the several questions that were referred specifically to the arbitrator. The questions were as follows:--