Mathew, J. - (1.) This appeal, by special leave, is directed against an order of a learned Judge of the Calcutta High Court allowing an application filed under Section 37 (4) of the Arbitration Act, 1940 thereinafter called the Act) for extension of time to refer the matter to arbitration.
(2.) The facts are these. The appellant is a company doing business in general insurance. The respondent caries on business as a common carrier of goods. The respondent had taken out three transit policies of insurance renewable every year. The policy which is relevant for the purpose of the present appeal is Freight Policy No. CL/REP/257 taken by the respondent in January, 1969, from the appellant against risk of loss or damage to any goods or merchandise during transit.
(3.) In June 1971. the respondent declared to the appellant that it had received for transit a consignment of 185 packages of general merchandise alleged to be of the total value of Rs. 1,10,000/- (approx.) for transportation from Calcutta to various places in Assam and Tripura and paid the requisite premium on the value of goods and the goods stood insured under the said policy. According to the respondent, on the evening of 29-6-1971, the consignment of 185 packages was loaded in Truck No. WGH 8261, and the truck left Calcutta on the same day for Gauhati. It is alleged that the owner of the truck informed the respondent that after the truck reached Barasat on the night of 29th June, 1971, there was a robbery and neither the truck, nor the driver, nor the merchandise could be traced. On 1-7-1971. the respondent sent letters to the officer-in-charge of Jorabagan Police Station, the Assistant Commissioner of Police Intelligence Branch, Lal Bazar, Calcutta-1 and the Deputy Commissioner of Police, Intelligence Branch intimating them that the truck which left Calcutta on 29th June, 1971, had not reached Beniagram at the scheduled time and that the truck, the driver, the assistant and the merchandise could not be traced. A copy of the letter sent to the Assistant Commissioner of Police. Lall Bazar Calcutta was sent to the appellant end it was received by the appellant on 2-7-1971. On 1-7-1971 and 21-9-1971, the respondent lodged the claim for loss with the appellant on the basis that the loss was covered by the policy. On 3-7-1971, the appellant sent a latter to the respondent calling upon the respondent to furnish the particulars as regards the name and address of the owner of the vehicle, the name and address of the driver and other particulars. On 21-9-1971, the respondent informed the appellant by a letter that the information and the records asked for in the letter dated 3-7-1971 were already supplied to Mr. A. L. Chopra, the agent of the appellant on 5-7-1971 when he called upon the respondent for that purpose On 10-10-1971 the appellant wrote to the respondent informing that until the report of the investigation by the police was produced by the respondent, it would not be possible for the appellant to proceed further in the matter. The appellant received a copy of the investigation report by the police at Barasat on 12-5-1972. The report was to the effect that the alleged episode of robbery was false. On this basis, the appellant sent to the respondent a letter dated 4-8-1972 stating the contents of the investigation report of the police at Barasat and asking for the investigation report of Jorabagan Police and Lal Bazar Police. Thereafter the appellant intimated the respondent by letter dated 16-2-1973 disclaiming its liability under the freight policy as regards the loss of the consignment of 185 pages. On receipt of the letter, the respondent wrote to the appellant on 30-3-1973 asking for the ground on which the appellant disclaimed its liability, appellant sent a letter after two months on May 30, 1973, stating that it had nothing to add to what had been stated in its letter dated February 16 1973. Thereafter the respondent took the advice of solicitors and counsel. On 17-8-1973, the respondent filed the application before the High Court under Section 37 (4) of the Act for extension of time for referring the dispute to arbitration till a date 15 days after the order of the High Court. In the application, the respondent stated the reasons for the delay in filing the application in court after receiving the letter dated May 30, 1873. In answer to the application, the appellant contended that Section 37 (4) of the Act had no application that the court had no jurisdiction to extend the time and that even if the court had jurisdiction, there were no valid rounds for extension.;