Ruby General Insurance Co. Ltd. vs Peare Lal Kumar and Another

Kapur, J.—This is a rule directed against order passed by Mr. Parshotam Sarup, subordinacy Judge, Delhi, holding that the reference to are right tration was valid and the points raised before decided by him should and could have been decide by the arbitrator and that any objections that Petitioner may have can be raised at the time since the objections to the award.

A car was insured by Piare Lal in April 19 and it is alleged that it was stolen at Lahore in September 1947. A notice of this was sent to the surance Company on 18-3-1948, but the complaint repudiated, its liability on 26-5-1948, and then on 31, 1948. Piare Lal gave notice claiming the among on of insurance on the 18th of July, but again on since 1948, the Company repudiated the claim.

On 21-11-1949, Piare Lal gave notice for (sic) embrreference to arbitration under Clause 7, of the (sic) Policy. The Ruby General Incurrence Company, Limited, the Petitioners before me, cond nothing effective till 30-12-1949, when they flit Lord an application u/s 33, Arbitration Act, alled that reference to the arbitrator wag illegal passed) cause of the lapse of twelve months as provided possible Clause 7 of the Conditions of the Policy and that (sic) appointment of the arbitrator was illegal. The (sic) also asked for an injunction against the opposite party which was granted on the same day, but 6 have not been told when it was served on Piards of Lal.

On 31-1-1950, the Court refused to extemethe operation of this injunction and discharged is clause Again, the Company for ten days did nothing, it was on 10-2-1950, they applied for and got an injunction against the arbitrator that he should not give hurt to award, although he may continue with the proceeding. The arbitrator had fixed 14-2-1950, as the effect date for hearing. The proceedings were fixed for do in the O'' clock, but the Company got him served with the order of the Court at 2 or 2-30 p.m. on the 14th of February. I am informed that the award that have been made round about 12 O''clock. It has noding been explained to me why the Company was (sic) laying the taking of any proceedings, which the by law allowed it to take, for such a long time.

The only point for decision before me is which would ther in view of the wording of Clause 7 of the conclusion of the Policy the arbitration agreement have come to an end. Clause 7 is as follows:

(7) All differences arising out of this Policy (sic) be referred to the decision of any Arbitrator, to be appointed in writing by the parties in difference or if they cannot agree upon a single Arbitrator to AIR the decision of two Arbitrators one to be appointed in writing by each of the parties within on calendar month after having been required (sic) writing so to do by either of the parties or in (sic) the Arbitrators do not agree of an Umpire appointed writing by the Arbitrators before (sic) upon the reference. The Umpire shall sit with (sic) Arbitrators and preside at their meetings and the (sic) of an award shall be a condition precedent (sic) any right of action against the Company. If the (sic) Company shall disclaim liability to the insured for (sic) any claim hereunder and such claim shall not (sic) twelve calendar months from the date of such disclaimer have been referred to arbitration under the provisions herein contained then the claim (sic) for all purposes be deemed to have been (sic) and shall not thereafter be recoverable hereunder. Reliance is placed by the learned Advocate for the Petitioner on that part of this Clause which (sic) if the Company disclaims its liability and the (sic) is not referred to arbitration within twelve (sic) of such disclaimer then the claim shall be (sic) to have been abandoned. The opening words his Clause are, in my opinion, quite wide. ''All references arising out of this policy.shall be (sic) to the decision of an arbitrator" are sufficiently wide to include the question of disclaimer and (sic) rights of the parties to make a reference to (sic)., In ''Chandanmull Jhalerla v. Clive (sic) Ltd". 52 C.W.N. 521, ''it was held by a Division Bench of the Calcutta High Court that an agreements which contained the words "any dispute (sic) to this contract " or "in relation to contract" in the arbitration Clause were sufficiently in (sic) as to cover a dispute as to frustration of a contract or to its avoidance at a later date. The learned Judge there relied on ''Heyman v. Darwins'' (sic) 1942 A.CC. 356, where at p. 366 Viscount (sic) , L.C, observed:

Ordinarily speaking, there seems no reason at why a widely drawn arbitration Clause should embrace a dispute whether a party is discharge-from future performance by frustration, (sic) the time for performance has already arrived (sic) not''.

Lordship continued and said:

I do not agree that an arbitration Clause (sic) in such terms as above ceases to have any (sic) application merely because the contract (sic) ''come to an-end'', as, for example, by frustra-(sic). In such cases it is the performance of the contract that has come to an end.

In my opinion, as I have said above, the (sic) of this section are wide enough and must (sic) the point whether in the circumstances of this (sic) the insured must be deemed to have abandoned (sic) is claim.

It was then submitted by the learned Counsel the Petitioner that u/s 33, it is for the (sic) to determine (sic) existence or validity of an (sic) agreement or an award or to determine (sic) effect of either. What the Petitioner is trying (sic) in the present case is not to determine the (sic) of the agreement because he does not say (sic) the agreement is illegal. What he says is (sic) it has come to on end, but according to the (sic) of the agreement that is also a matter (sic) the contract and should therefore be determine (sic) by the arbitrator. In my opinion, the Court has (sic) not interfered u/s 33, Arbitration Act, (sic) would therefore dismiss this petition for (sic) and discharge the rule. The opposite party (sic) have his costs in this Court and in the Court (sic).