Fazl Ali, J. - (1.) This is an appeal by special leave against the Judgment of the Punjab High Court upholding the decision of a subordinate Judge of Delhi relating to a petition filed by the appellant-company under S. 33, Arbitration Act, against the respondents.
(2.) The material facts are these. On 22-4-1947; the appellant company insured a car belonging to respondent 1 and issued a policy which fully sets out the terms and conditions of the agreement relating to the insurance. Respondent 1 left his car in a garage at Lahore and came away to India on 31-7-1947. Subsequently, he learned about the loss of his car, and sent a legal notice dated 18-3-1948 through his advocate, Mr. A. R. Kapur to the Head Office of the company at Calcutta, claiming a sum of Rs. 7,000 for the loss of the car. On 10-4-1948, Mr. Kapur received a letter from the Branch Manager of the Company's office at Amritsar asking for information regarding certain matters stated in the letter. This information appears to have been supplied on 30-4-1948. On 26-5-1948, the company's Branch Manager at Amritsar wrote to respondent 1 repudiating the liability of the company for the loss of the car on the ground that the loss was "due to communal riots which were going on in the whole of Punjab" and was not covered by the agreement of insurance. A similar letter was written again by the Branch Manager on 3-7-1948 to respondent 1 and another letter was written by one Mr. Rattan Lall Chawla representing himself to be counsel for the company to Mr. A. R. Kapur, on 1-8-1948. On 21-11-1949, respondent 1 wrote a letter to the Branch Secretary of the Company's office at Calcutta, stating that his claim was valid and nominating Mr. T. C. Chopra, Assistant Manager, Lakshmi Insurance Company Ltd., Delhi, as arbitrator on his behalf and requesting the company to appoint another person as arbitrator on its behalf. Thereafter, the company presented an application on 29-12-1949, in the Court of the Senior Sub judge, Delhi, under S. 33, Arbitration Act, against respondent 1 and Mr. T. C. Chopra, the arbitrator, who is respondent 2 in this appeal, praying for -"(1) a declaration to the effect that the reference to arbitration and the appointment of respondent 2 as sole arbitrator was illegal;(2) a declaration to the effect that if respondent 2 made any award it would not be binding on the company; and(3) an injunction restraining respondents 1 and 2 from taking any proceeding in the matter and respondent 2 from making any award."Upon this petition, notice was issued to the respondents, and an injunction was issued directing them not to file any award till the date of the next hearing which was fixed for 31-1-1950. On 4-2-1950, respondent 1 wrote to respondent 2 (the arbitrator) that since no arbitrator had been appointed by the company and since the company had refused to appoint any arbitrator he. (Mr. Chopra) was to act as the sole arbitrator. On 6-2-1950, Mr. Chopra wrote to inform the Insurance Company that he had been appointed sole arbitrator and asked the company to send the statement of its case and to produce all the evidence on 14-2-1950. On 10-2-1950, the insurance company filed a petition before the subordinate Judge Delhi, praying that the respondent be stopped from proceeding further in the matter so that its application under S. 33 may not become infructuous. On 11th February, the subordinate Judge issued notice to the respondents fixing the 17th February as the date of hearing and passed the following order:"Moreover (till) the decision of this application the arbitrator should not give or pronounce his award but should continue the proceedings."On 14-2-1950, respondent 2 pronounced his award after making a note of the following effect:"Mr. G. R. Chopra, the counsel of the defendants, sent a telephone message at 12 A. M. requesting extension till 1 P. M. I agreed and accordingly I waited for him and the plaintiff with his counsel also waited up to 1 P. M. Nobody turned up on behalf of the defendants. I commenced the proceedings and took the statement of the plaintiff and the documents that he had produced."He made a further note at the end of the award to this effect:"As after the giving of the award a notice was served upon me not to give the award. I have not sent any formal letter to the parties informing them of the award and its costs."On 24-3-1950, the subordinate Judge passed an order on the company's application under S. 33, dismissing it and holding that the terms of Cl. 7 of the agreement "were comprehensive enough to include the points of disputes between the parties now and as such are triable by the arbitrator and not by the Court" The subordinate Judge concluded his order by observing:"I, therefore, hold that the reference to the arbitration of the differences is perfectly valid and the points raised by the parties to this application with regard to the abandonment of claim and its becoming irrecoverable are to be decided by the arbitrator."The Judgment of the Subordinate Judge was upheld in revision by the Punjab High Court, and the company has now preferred an appeal to this Court by special leave.
(3.) The points that were urged on behalf of the appellant in this appeal are these:(1) that the arbitration clause had ceased to be operative and the question as to the existence and validity of the arbitration agreement was triable by the Court under S. 33 Arbitration Act and not by the arbitrator; and (2) that the award was invalid and not binding on the appellant, because it was pronounced in spite of the order of the court dated 11- 2 - 1950, directing the arbitrator not to pronounce his award.;