Sabyasachi Mukharji, J. - (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: "All differences arising between Society and the insured of the Claimant hereunder shall be referred to the decision of an arbitrator to be appointed in writing by the parties in difference or if they cannot agree upon a single Arbitrator to the decision of two Arbitrators one to be appointed in writing by each of the parties. Before entering upon the reference the Arbitrators shall appoint an Umpire and in case of disagreement between the Arbitrators reference shall be made to the Umpire whose decision shall be final. The arbitration shall take place in Calcutta or in such other place as the Society shall at their discretion appoint. The obtaining of an award shall be a condition precedent to any liability or right of action against the society in respect of any such difference. If the Society shall disclaim liability to the Insured for any claim hereunder and such claim shall not within three calendar months from the date of such disclaimer have been referred to arbitration under the provision herein contained then the claim shall for all purposes he deemed to have been abandoned and thereafter no right shall be enforceable and nothing shall be recoverable hereunder."
(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: "And whereas upon going through the respective pleadings of the claimant and the respondent No. 1 and hearing respective submissions on behalf of the said parties, I settled the issues on May 11, 1976 as set out hereinafter." THEREafter on the 21st July, 1977, the Arbitrator made his award. In the said award, after reciting the necessary facts of his appointment and the order of the High Court and after setting out what we have set out before, the Arbitrator observed, inter alia, as follows : "And whereas by construing the printed Condition 10 of the relevant Policy of Insurance being No. CBB/16191 dated April 7, 1972 I have come to the conclusion that the Last Part thereof limits the time within which the Insured may enforce his right under the Policy and hence void to that extent under Section 28 of the Indian Contract Act, 1972." Then, he proceeded to answer the issues. It is also material to set out the issues, which the arbitrator has answered in the award which reads as follow Issues. Answers "1. Is the alleged claim of the claimant not maintainable or enforceable or recoverable on the grounds alleged in para 2 of the Counter Statement of the respondent No. 1 ? No. The claim is maintainable. 2. His the claimant any cause of action for the present Arbitration proceedings ? Yes. 4. (i) Was there any burglary and house breaking committed as alleged in para 7 of the Statement of Facts ? Yes. (ii) If so, did the unknown miscreants take away alleged 400 Kgs. of Nylon Hosiery and Iron rods alleged to be weighing approximately 1 ton alleged to be lying and stored at claimant's factory premises as alleged in para 7 of the Statement of Facts ? Re : Nylon Hosiery -- Yes. Re : Iron Rods -- No finding is warranted. (iii) If so were the 400 kgs. of Hosiery and from Rods weighing approximately 1 ton the properties of the claimant as alleged in para 7 of the Statement of Facts ? Re : Iron Rods -- No finding is warranted Re : Nylon Hosiery -- Yes. 5. Was the respondent No. 1's disclaimer and/or rejection of the claimant's claim by. inter alia, letters dated 2nd May, 1973, 24th May, 1973 and 14th July, 1973 wrongful as alleged in paras 9, 10 and 11 of the Statement of Facts ? Yes. 6. To what relief, if any, is the claimant entitled ? Rs. 37,400/- being the value of 400 Kgs. of Nylon Hosiery. In the premises, the arbitrator awarded a sum of Rs. 37,400/- in favour of the claimant against the insurer with a direction that each party will pay and bear his/its own cost of reference. On the 17th Dec., 1977, notice under Section 14 (2) of the Arbitration Act was issued. The said notice was addressed to all the parties and was to the following effect : "To : 1. Punak Chand Jain. 2. National Insurance Co. Ltd." State Bank of Bikaner and Jaipur. Take notice that the Award of the Arbitrator appointed in the matter of the above Arbitration Agreement had been filed on the 8th day of Dec., 1977 and that the Court will proceed to pronounce judgment on such Award on the 31st day of Jan., 1978. Dated the 17th day of Dec., 1977." The reason why we have set out before the said notice is that from the said notice, it appears that the award had been filed on the 8th Dec., 1977 but the said notice dated 17th Dec., 1977 under Section 14 (2) of the Arbitration Act was served upon the parties on the 19th Dec., 1977. On the 18th Jan., 1978, the petition for setting aside the award was affirmed and it was noted as made on the same day. Thereupon the matter came up for hearing after filing of the affidavit before the learned trial Judge and by a judgment delivered and order passed by the learned trial Judge dismissed the application and up-held the award. This appeal, as we have mentioned hereinbefore, is on the said judgment and order. A point was urged, before us on behalf of the respondent No. 1 that the application for setting aside the award was barred by limitation. It was contended that, the application having been filed beyond 30 days' of the knowledge of the filing of the award, the appellant was not entitled to maintain the application. We must observe that this point had neither been taken in the affidavit in opposition nor was this point urged before The learned trial Judge. The reason why this point was sought to be canvassed before us was that in the petition in para 13 it was stated that the award had been filed by the arbitrator on the 8th Dec., 1977. It was urged on behalf of the respondent No. 1 that the petitioner having come to know of the filing of the award on the 8th Dec., 1977. as would be apparent from the averments made in para 13 of the petition, the limitation ran from the date and in view of the principles enunciated in the case of Nilkanta Sidramappa Ningashetti v. Kashinath Somanna Ningashetti. and as followed by the decision of this Court in the case of State of West Bengal v. L. M. Das. and also in the case of Octavious Steel Co. v. Endogram Tex Co. Ltd. this application before the learned Judge was made beyond time and, as such, had been rightly dismissed. It was submitted that in para 17 of the affidavit in opposition filed by the respondent No. 1 it was stated that the application was barred by limitation. In paragraph 17 of the affidavit in reply, this allegation was denied. It is quite true, as Mr. Bhabra contended, that the limitation would run from the date of the knowledge of the filing of the award. It was not necessary that for the limitation to run the notice should be given to the applicant. But the question, is, that there is no clear evidence that the appellants knew of the filing of the award on the 8th Dec., 1977. It is possible to read from the notice dated 17th Dec., 1977 that they came to know of that fact from the said notice. Therefore, whether the independent of the said notice the appellant had knowledge of the filing of the award on the date of the 8th Dec., 1977 is not quite clear. Furthermore, This point had not been taken in the affidavit. The parties had no opportunity to explain the position. There is also no categorical statement either by the appellant or the respondent that the appellant had knowledge as to that on the 8th Dec., 1977. In that background and in the background of the facts that this point was not stated in the affidavit nor was this point urged before the learned trial Judge, who might have investigated this question as a fact, we are of the opinion that the respondent No. 1 is not entitled to take this point in support of the judgment of the learned trial Judge and we therefore reject this contention for the purpose of this appeal that the application was barred on the ground of limitation. 3. Before we proceed further, in order to appreciate whether the learned trial Judge was right in upholding the award or not, it is necessary to refer to certain statements filed before the arbitrator. Before the arbitrator, the respondent No, 1 had filed its claim. To this the appellant herein filed a counter statement. Therein, the appellant has stated as follows : "2. The Claimant's alleged claim made in his statements of claim is not maintainable and is unenforceable and not recoverable by reason of his failure to refer his alleged claim to arbitration under the provisions of Clause 10 of the said Policy of Insurance within 3 calendar months from the date of the disclaimer and/or rejection of liability by this respondent and as such the claimant's alleged claim should for all purposes be deemed to have been abandoned and has been abandoned by him." There was a rejoinder by statement-in-reply to the said counter statement where it was stated as follows : "1. Each and every allegation contained in paras 1, 2 and 3 of the counter statement of facts is denied. It is denied that the claimant has no cause of action or that his claim is not maintainable or that he has abandoned his claim or that his claim is outside the scope or purview of the said Insurance Policy as alleged or at all. The claimant states that he has duly referred his claim to arbitration within time. The purported date of the purported disclaimer has not been intimated by the respondent No. 1 to the claimant at all. The claimant further slates that the portion of Clause 10 of the said Insurance Policy limiting the time for referring the claim in the event of disclaimer by the respondent No. 1 is not applicable to the instant case as the purported date of the alleged disclaimer was not and has not been made known to the claimant by the respondent No. 1 at all. In any event, the respondent No. 1 has waived and/or deemed to have waived the lime limited for preferring a claim under the said arbitration clause. The respondent No. 1 by reason of its conduct express and/or implied and by its correspondence is estopped from alleging that the claimant was required to refer his claim to arbitration within three months from the purported date of its purported disclaimer. In this context the claimant states that the respondent No. 1 in the proceedings in the Hon'ble High Court at Calcutta and before the previous joint arbitrators, Mr. S. M. Chowdhury and Mr. P. K. Ganguly intentionally abandoned and/or waived the plea now alleged in para 2 of the counter-statement." It was urged that there was an error of law on the construction of Clause 10 of the insurance policy in view of Section 28 of the Contract Act. It was urged that specific question of law had been referred to the arbitration and as such the arbitrator had jurisdiction to decide that question of law and even if the arbitrator had decided the question of law wrongly that decision should not be interfered with and in this regard the learned trial Judge was right. It will be material in this context to refer to the decision referring the matter to arbitration under Section 20 which is the statutory provision in connection with the scope and order and the order made in the case of Punam Chand Jain v. General Assurance Society Ltd. between the same parties as the appellant and respondent No, 1, reported in. There, sitting singly, I myself observed when an application under Section 20 was filed, the question, when after the matter vent before the arbitrator, it would be held that the matter had become time barred or had been abandoned was not to be decided at that stage. Reliance was placed on several decisions in arriving at the said decision. It was recorded, the second point in opposition to the application for filing of application under Section 20 was that the claim had became barred by limitation and as such, the plaintiff, viz. the respondent No. 1 herein had abandoned the claim and was not entitled to proceed with the arbitration. Reliance was also placed on the aforesaid arbitration clause and it was contended that in view of the fact there was repudiation on the 2nd May, 1973, or in any event, on the 14th July, 1973 and the claim had been referred to arbitration on the 24th Oct., 1973, the claim was no longer alive. In support of this argument, reliance was placed on certain observations of this Court in the case of Girdharilal Hanuman Bux v. Eagle Star and British Dominions Insurance Co. Ltd., AIR 1924 Cal 186 a decision to which we shall have occasion to refer later in dealing with the argument whether the arbitrator had committed an error on the face of the record. But it had been observed in the decision just now mentioned, that is to say, in the case of Punam Chand Jain v. General Assurance Society Co. Ltd. Whether the claim had become time barred or not was not a material question under Section 20 application and that would be a matter to go into in the arbitration. It was sought to be urged that this precise question, viz. whether in view of Clause 10 of the insurance policy, the respondent No. 1 had waived or abandoned its right was a specific question of law which had been referred to the arbitrator. It is true that this contention was raised in opposition to the filing of the arbitration agreement. But, it appears to us that there was no specific question, as such, of law, which was referred on this aspect to the arbitrator. But what was noted in the said decision was that whether the claim had been abandoned or the claim had become barred by lapse of time was a question to be adjudicated, if it arose for consideration before the arbitrator. Therefore, there was, as such, no clear reference of any specific question of law by the said decision to the arbitrator. We have set out hereinbefore the issues that were framed by the arbitrator, as arose before him. No issue, as such, specifically was submitted to the arbitrator but parties had raised their contention in their statement and in their counter statement and the reply thereto and on those the arbitrator had framed the issues as he thought arose on the statement, counter statement and the reply and the parties participated in the arbitration proceeding thereafter. The question is, can it be said by that fact the specific question had been referred to the arbitrator whether in view of Section 28 of the Contract Act, Clause 10 of the policy of insurance was void or invalid? In this connection, it was contended on behalf of the appellant that no such specific question had been raised and the specific question of law had to be raised in a particular manner and that had not been done in the facts and circumstances of this case. It was further submitted that the counter claim did not specifically raise the question whether in view of Section 28 of the Contract Act, Clause 10 of the policy of insurance was valid or invalid. Therefore, there was no specific reference for a specific question of law by filing of the statement and counter-statement of claim. It was also submitted that the issue as framed by the arbitrator was not on this aspect and was rather vague, i. e., whether the claim was maintainable or enforceable or recoverable on the grounds alleged in para 2 of the counter-statement, which we have stated hereinbefore. Neither in para 2 nor in the issues, according to the appellant, there was no specific issue raised as to whether in view of Section 28 of the Contract Act, Clause 10 of the Policy of Insurance was invalid or had become bad.
(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:-- "(a) Which, if any, of the flues belonging to 138, Piccadilly emit smoke into any room passage or other place in 138, Piccadilly by reason of the erection of the new building adjoining thereto; (b) what works, if any, should be done with a view to cure such, if any of the said flues as to emit smoke as aforesaid; (c) if such, if any, of the said flues as do emit smoke as aforesaid should continue to emit smoke after the completion of the works directed by you, if any, or if you should be of opinion that no works can usefully be done to cure such flues, then whether under the agreement of October 25, 1905, the executors of Sir Joseph Joel Duveen are liable to pay damages in respect thereof to Mr. Henry James King, and. if they are so liable, what damages should be paid; (d) as to the payment of the costs of and incidental to this reference." IN view of the fact that there was specific question on the construction of the agreement dated Oct. 25, 1905 and whether on that construction and in the facts that was specifically submitted, the executors of Sir Joseph Joel Duveen were liable to pay damages was specifically referred to the Court. The Court of Appeal in England found that the specific question of law having been referred to the arbitrator, his decision was final even if it might be erroneous.;