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Ramgopal Lath Vs. the Commonwealth Assurance Co. Ltd. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtKolkata High Court
Decided On
Case NumberSpecial Suit No. 3 of 1965
Judge
Reported inAIR1973Cal504
ActsArbitration Act, 1940 - Section 20(4)
AppellantRamgopal Lath
RespondentThe Commonwealth Assurance Co. Ltd.
DispositionApplication dismissed
Cases ReferredBungo Steel v. Union of India
Excerpt:
- .....the arbitrator was clearly wrong in making an award for a sum of rs. 20.000/-and in making such award the arbitrator is guilty of legal misconduct. dr. das draws my attention to the letter dated march 25, 1964 written to the officer-in-charge of the police station at rourkela wherein it was stated that the weight of the lost gold was to the extent of 200 tolas whereas sitaram in his evidence has said that the weight of the gold would be about 100 tolas. then again, sitaram in his evidence has named the ornaments but such names of ornaments did not tally with the list of ornaments mentioned in the letter to the police written on march 25, 1969. dr. das also contends thai the contract of insurance is a contract of indemnity and accordingly the claimant must give evidence of value in.....
Judgment:
ORDER

Ramendra Mohan Datta, J.

1. This is an application for setting aside the award dated June 25, 1970 made by Mrs. Pratibha Bonnerjea, an advocate of this Court mainly on two grounds. It is firstly argued that by the order made under Section 20 of the Indian Arbitration Act, 1940 the arbitrator was directed to decide the question whether or not the terms and conditions of the contract of insurance had been satisfied by the petitioner herein. The second argument is to the effect that the arbitrator was guilty of legal misconduct inasmuch as she was clearly wrong in appreciating the evidence adduced before her and in making her award for Rs. 20,000/-in favour of the claimant.

2. In support of his first contention Dr. Das has referred to the order made by Mallick, J., which reads as follows:--

'As indicated before there is clearly a dispute as to whether the insurance company is liable to compensate. Whether or not, the terms and conditions have been satisfied and the petitioner is entitled to compensation are questions to be decided by the Arbitrator. It is not for me to express any opinion on it. Suffice it to state that in the facts of the case, it has been proved to my satisfaction that there is an arbitration agreement and that there is a dispute which is covered by the arbitration agreement.'

Before Mallick, J., it was contended that there was no arbitration agreement which could be filed. In this case only the cover note was issued. Since the arbitration clause was in the policy, which had not been issued, there was no subsisting arbitration agreement between the parties. Mallick, J., came to the finding that the cover note contained provisions to the effect that in consideration of the insured having paid or agreed to pay the premium, the goods set out in the proposal form were held covered against burglary and house breaking as from March 19, 1964 according to the terms and conditions of the company's usual form of policy unless notice had been previously given that the proposal had been declined. On the basis of the said clause the Court came to the finding that there was an arbitration agreement. The Court also was satisfied that there was a dispute between the parties which was covered by the said arbitration agreement and on that basis the Court made the order under Section 20 of the Indian Arbitration Act, 1940. Under these circumstances the above observations made by Mallick, J., regarding the terms and conditions of the policy and whether the same had been satisfied or not cannot be construed to be an order directing the arbitrator to go into the said question. The above observations clearly meant that such questions, if raised before the arbitrator would be considered and gone into by the arbitrator and the Court had nothing to do with the same. The arbitration agreement is the creature of the parties alone and the Court cannot add to it. Accordingly, the first contention of Dr. Das cannot hold good and is rejected.

3. In support of his second contention Dr. Das had sought to rely on the evidence adduced before the arbitrator and has contended that the evidence regarding the value of the lost articles and ornaments is such that the arbitrator was clearly wrong in making an award for a sum of Rs. 20.000/-and in making such award the arbitrator is guilty of legal misconduct. Dr. Das draws my attention to the letter dated March 25, 1964 written to the Officer-in-charge of the Police Station at Rourkela wherein it was stated that the weight of the lost gold was to the extent of 200 tolas whereas Sitaram in his evidence has said that the weight of the gold would be about 100 tolas. Then again, Sitaram in his evidence has named the ornaments but such names of ornaments did not tally with the list of ornaments mentioned in the letter to the police written on March 25, 1969. Dr. Das also contends thai the contract of insurance is a contract of indemnity and accordingly the claimant must give evidence of value in order to succeed.

4. It appears that the arbitrator in making the award has not given any reason. The operative portion of the award runs as follows:--

'Now I the said Pratibha Bonnerjea having entered into the said reference, took evidence, and heard, examined and carefully considered the allegations of both the parties and their oral and documentary evidence as well as the arguments of respective lawyers and having duly and carefully considered the whole matter submitted to me, do hereby make my award as follows:--

'I award--

(1) That the plaintiff is entitled to Rs. 20,000/- from the defendant;

(2) That both the plaintiff and the defendant will pay and bear their respective costs of the Special Suit and the Reference excepting any cost which might have been expressly awarded by the Hon'ble Court in favour of either of the parties.'

5. On the face of the award there exists no error of law. It is not a case that the arbitrator made the award on the basis of no evidence at all. It is not a case where the arbitrator without hearing the parties or by refusing to examine any witness has come to the finding in making the award. In this case there is no allegation that she came to the finding or made the award without any material before her. The argument of Dr. Das boils down to this viz., that so far as the appraisement of the evidence was concerned she failed to appraise it properly and as such she was guilty of legal misconduct.

6. Dr. Das has relied on the case of Chhogmal Rawatmal v. Sankal Chand G. Shah, (1949) 53 Cal WN 828 where the Division Bench of this Court observed that it was legal misconduct to decide that there was an extension of the due date when there was absolutely no evidence in support of it and really no material before the arbitrators to justify such a finding or a conculsion. In deciding that case the Division Bench at page 830 further observed:

'It is impossible for any arbitrator to hold in favour of extension without any evidence and without any material. It is not a matter which is within the special knowledge of the arbitrators as businessmen of experience and they can only decide that the due dates of the contract were extended provided there were some materials before them on the point. They may be right or they may be wrong but they are entitled to come to a conclusion if there is evidence or if there is material on which they can determine the matter. But in the absence of any evidence or any material or even any allegation to that effect they are guilty of legal misconduct if they come to any such finding or determine damage on the basis of extension.'

7. In my opinion, the above case is clearly distinguishable in the facts and circumstances of this case. In the case before me there was sufficient material before the arbitrator to decide that question. The agent of the insurance company had given evidence about valuation and there was hardly any cross-examination on that. Moreover, the arbitrator had before her the other oral and documentary evidence. The point was raised before her and arguments were advanced and the parties asked for a decision on that point and on the basis thereof the award was made. The award does not give any reason. It does not contain any error on the face of it. Accordingly, it would be sheer guesswork if the Court would try to find out how she came to that conclusion and made the award. In my opinion, the observations made in the above Division 'Bench judgment cannot help the petitioner but rather the same are in favour of the respondent in the facts and circumstances of this case.

8. Dr. Das has relied on several other cases but, in my opinion, the same have no application to the facts and circumstances of this case.

9. To my mind, the principle laid down in the case of Champsey Bhara & Co. v. Jivraj Balloo Spinning and Weaving Co. Ltd., reported in AIR 1923 PC 66 applies to this case. The said principles have been adopted and applied by the Supreme Court in the case of Alien Berry & Co. (P) Ltd. v. Union of India, reported in : [1971]3SCR282 , in the case of Firm Madanlal Roshan-lal v. Hukum Chand Mills Ltd., Indore reported in : [1967]1SCR105 and in the case of Bungo Steel v. Union of India, reported in : [1967]1SCR633 .

10. In my opinion, on the basis of the evidence adduced before her both oral and documentary, and on the basis of the materials before her she was quite competent to come to the findings regarding valuation and further that the plaintiff would be entitled to Rs. 20,000/- from the defendant and to make the said award. All that the Court can consider under such circumstances is whether there were materials before the arbitrator to make such an award and once that has been done, the Court should no longer guess in what manner and how such evidence was appraised or weighed by the arbitrator in coming to the decision in a case where no reason has been given in making the award. I am satisfied that there is no error of law on the face of the award and the arbitrator is not guilty of any legal misconduct. I accordingly reject the contentions of Dr. Das on this point also.

11. The result, therefore, is that this application is bound to fail and the same be and is hereby dismissed with costs.

12. By consent the judgment upon award matter is treated as on the day's list.

13. It is ordered by Court that there will be judgment upon award and the decree is passed thereon. The award holder is entitled to the costs for filing the award and to the interest on decree as provided in the Indian Arbitration Act, 1940.


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