JUDGMENT : T.U. Mehta, J. 1. This suit arises out of the award filed in this Court by the arbitrator Shri Kailash Chand, an advocate of this Court, u/s 14 of the Arbitration Act. The award is dated 23-1-1973 and by this award the said arbitrator has awarded the amount of Rs. 51,000/- to the claimant one Shri Trilok Chand Butail for the damage caused to his building and household articles which were gutted by fire which took place in the afternoon of 8-11-1971. The said arbitrator was the sole arbitrator nominated by the said claimant, and it is an admitted position that the arbitration proceedings undertaken by the arbitrator were unilateralin character, and the Respondent Insurance Company, which is now known as United India Fire and General Insurance Company Ltd., did not join arbitration proceedings. 2. Before going to the actual points of controversy between the parties, it would be necessary to state shortly some facts which form essential background of this litigation. These facts are as under. 3. The claimant Shri Trilok Chand Butail owns a property known as "Dilkhusha" situated at Ram Bazar Simla. This property is a partly two storeyed, and partly three storeyed building. The evidence shows that in the past this claimant used to insure this property with other Insurance Companies. Before the last and the disputed insurance was taken by him, this property was insured with the Oriental Insurance Company Ltd., but the policy of that insurance admittedly expired on 12-8-1971. Thereafter no policy was immediately taken till the month of November 1971. Thus from 12-8-1971 till 7-11-1971 the property has admittedly remained uninsured. 4. Facts of the case reveal that on 7-11-1971 the claimant put a proposal for the insurance of this property and household effects. The Respondent Insurance Company was at that time known as the Union Co-operative Insurance Society Ltd. Subsequently its name was changed to the United India Fire and General Insurance Company Ltd. When on 7-11-1971 the claimant made the proposal for the insurance, one Shri R.S. Sharma was acting on behalf of the Insurance Company as its Resident Officer at Simla. The proposal form for the main building is found at Ex. P.W. 1/4. It is an admitted position that this main building was insured for Rs. 50,000/- and household goods, furniture and personal effects of the claimant kept in that building were insured for Rs. The proposal form for the main building is found at Ex. P.W. 1/4. It is an admitted position that this main building was insured for Rs. 50,000/- and household goods, furniture and personal effects of the claimant kept in that building were insured for Rs. 20,000/- plus 5,000/-. Thus the total insurance which was proposed to be taken was for Rs. 75,000/-. It is an admitted position that the ground floor of this building was partly used by the claimant for his residence and partly for shops, godowns etc. and the upper floors of this building were used exclusively for residence by the claimant and his tenants. 5. Contiguous to this main building is situated another building belonging to the claimant himself. This portion has three storeys and was, at the relevant time, used for shops, offices and residence. That was separately insured for the amount of Rs. 25,000/-on the same day that is on 7-11-1971. At Ex. P. W. 1/5 is the proposal form for the same. 6. On the same date, that is, on 7-11-1971, the claimant made payment of Rs. 530/- as the first premium by a cheque which was drawn in favour of the Insurance Company by M/s Minjroo Mall Hem Raj on behalf of the claimant. This cheque was drawn on the Himachal Pradesh Co-operative Bank Ltd./Simla. The cheque was accepted by Shri Sharma, the Resident Officer of the Insurance Company, but could not be presented in the bank on the same day that is on 7-11-1971 as it was Sunday. After accepting this cheque two Cover Notes were issued in favour of the claimant with regard to both the policies. That was also done on the same day that is on 7-11-1971. These Cover Notes are found respectively at Ex. D. 23 and D.22. The Cover Note Ex. D. 23 is for Rs. 75,000/- and contains a note as under: The aforesaid building as a whole is used for shops, Godowns of hazardous, non-hazardous goods and residence only. The Cover Note found at Ex. D. 22 is for the amount of Rs. 25,000/- and contains the following note: The aforesaid building is three storeyed in height. The above mentioned building as a whole is used for Godowns of non-hazardous goods, offices and residence only. The Cover Note found at Ex. D. 22 is for the amount of Rs. 25,000/- and contains the following note: The aforesaid building is three storeyed in height. The above mentioned building as a whole is used for Godowns of non-hazardous goods, offices and residence only. Another thing about which due notice should be taken with regard to these Cover Notes is that they specifically stipulate that the insurance was taken "on usual terms and conditions of this Society's Policies". 7. Fire broke out in the main building after about 5 p.m. on the next day, that is, on 8-11-1971, as a result whereof much damage was done to the main building as well as to the furniture and household effects of the claimant. Some damage was caused even to the adjoining contiguous building which was insured for Rs. 25,000/-. The claimant thereupon made the total claim of Rs. 71,954/-. 8. Evidence shows that Shri Sharma, the Resident Officer, had deposited the cheque for the first premium in Bank on 8-11-1971 at about 11 a.m. and sent the proposal forms and the Cover Notes along with the premium receipt and bank slip to the Divisional Office of the Insurance Company at Chandigarh. 9. On receipt about the news of the fire, and the claim made by the claimant, the Insurance Company sent one. Surveyor Mr. Madan Lal Gupta to Simla for assessing the loss. This Surveyor rushed to Simla on 10-11-1971. He made the assessment of loss and came to the conclusion that the damage caused by fire was to the tune of Rs. 41,814/-. On 18-11-1971 this Surveyor is found to have addressed the following letter to the claimant: As per acceptance of loss by you to the tune of Rs. 41,814/-in full and final settlement of your claim, I hereby authorise you to remove the salvage at your convenience. This letter is found at Ex. D. 14. It is found from the deposition of Shri Gupta, who is D.W. 5 in this case, that before the above quoted letter was written that is, on 15-11-1971, he had returned to Simla along with one architect Mr. Puri and also with one Mr. Desai who was an officer of the Insurance Company. 10. It is, however, found that ultimately the Surveyor Mr. Puri and also with one Mr. Desai who was an officer of the Insurance Company. 10. It is, however, found that ultimately the Surveyor Mr. Gupta made a report to the Insurance Company about the Company's liability to pay damages adverse to the claimant. This report is found at Ex. D. 5 and is dated 22-12-1971. By this report he has raised certain doubts about the genuineness of the claim. Perusal of the report shows that according to Mr. Gupta the proposals and the insurance covers were taken actually after the fire broke out, and Shri Sharma the Resident Officer of the Insurance Company had colluded with the claimant in making out this claim. 11. Evidence further shows that ultimately the Insurance Company issued two policies embodying all the terms and conditions of the insurance. Both these policies are found at Ex. D. 19 and D. 20 and they are dated 25-11-1971. These policies were executed by the Divisional Office of the Insurance Company at Chandigarh and were sent to the claimant along with the covering letter found at Ex. P. 3 on 13-1-1972, that is, after the Company came to know that according to Mr. Gupta, the Surveyor, the claim was manipulated by the claimant in collusion with the Resident Officer of the Company Mr. Sharma. 12. On 22-4-1972 the Company rejected the claimant's claim by its letter found at Ex. D. 21 in the following terms: With reference to your telegram dated 11th instant to our Custodian, we have to inform you that on going through the claim papers, we find that there are breaches of policy conditions and mis-description of the risks. Under the circumstances we regret, we are not in a position to entertain your claim which is hereby repudiated. 13. Thereafter on 8-8-1972 the claimant approached the court of the Senior Sub-Judge, Simla, with an application u/s 20 of the Indian Arbitration Act which contemplates applications to file in court arbitration agreements. On 9-10-1972 the Insurance Company filed its objections to this application of the claimant before the said court. These objections are found at Ex. D. 16. 13. Thereafter on 8-8-1972 the claimant approached the court of the Senior Sub-Judge, Simla, with an application u/s 20 of the Indian Arbitration Act which contemplates applications to file in court arbitration agreements. On 9-10-1972 the Insurance Company filed its objections to this application of the claimant before the said court. These objections are found at Ex. D. 16. Reference to these objections shows that the Insurance Company raised the plea that there was no valid contract of insurance between the parties, that the Cover Notes issued in favour of the claimant were void, that the insurance was obtained by the claimant by non-disclosure of material facts, and that the court of Senior Sub-Judge at Simla had no jurisdiction because, according to the terms of the policy, only the courts at Chandigarh had jurisdiction in the matter. 14. While the above referred proceedings u/s 20 of the Arbitration Act were pending before the Senior Sub-Judge, Simla, the claimant addressed one notice to the Insurance Company on 21-8-1972 as found at Ex. P. 1 and informed the Insurance Company that Shri Kailash Chand, an Advocate at Simla, was nominated as claimant's arbitrator. By this notice the claimant also called upon the Insurance Company to appoint its own arbitrator, so that the dispute between the parties could be referred to arbitrators as per Clause (18) of the insurance policy. 15. The Insurance Company did not prefer to give any reply to this notice of the claimant, whereupon the claimant addressed one notice to Shri Kailash Chand Advocate who was nominated by him as his arbitrator calling upon him to enter into a reference as he had become the sole arbitrator to settle the dispute between the parties in terms of the arbitration clause No. (18). This notice is dated 3-11-1972 and is found at Ex. P.W. 2/20. On the next day, that is on 4-11-1972, the claimant, through his Advocate Shri Malhotra, addressed a notice to the Insurance Company calling upon it to make the payment of Rs. 71954/-being the amount due under the policies. This notice is found at Ex. P.W. 1/8. 16. As by the above referred notice Ex. P.W. 2/20 dated 3-11-1972 Shri Kailash Chand, nominee of the claimant, was called upon to enter into the reference as sole arbitrator, the said Kailash Chand entered into the reference and addressed the notice found at Ex. 71954/-being the amount due under the policies. This notice is found at Ex. P.W. 1/8. 16. As by the above referred notice Ex. P.W. 2/20 dated 3-11-1972 Shri Kailash Chand, nominee of the claimant, was called upon to enter into the reference as sole arbitrator, the said Kailash Chand entered into the reference and addressed the notice found at Ex. P.2 on 14-11-1972 to the Insurance Company intimating it that 1-12-1972 was the date fixed for the appearance of parties before him at his office and for the submission of their claims. The Insurance Company did not pay any attention to this notice of the arbitrator. Again on 4-12-1972 the said arbitrator addressed another notice to the Insurance Company informing it that it had not preferred to remain present on 1-12-1972 and that the case was adjourned to 11-12-1972. He also informed the Insurance Company that if it failed to appear on the adjourned date, ex-parte proceedings against it would be taken. 17. Before the arbitrator completed his proceedings and gave his award on 23-1-1973, the Insurance Company approached the court of Senior Sub-Judge at Simla, before whom proceedings u/s 20 of the Arbitration Act were still pending, and submitted an application u/s 33 of the Indian Arbitration Act for setting aside the nomination of Shri Kailash Chand Advocate as the sole arbitrator. This application is found at Ex. D. 17 and is dated 27-11-1972. 18. The arbitrator pronounced his award thereafter, that is, on 23-1-1973. After this award was pronounced the claimant withdrew his application u/s 20, which was pending before the Senior Sub-Judge, Simla, on 25-4-1973, and pursuant to this, the court of the Senior Sub-Judge, Simla passed the order which is found at Ex. D. 18 on the same day dismissing the claimant's said application. The record of this case does not contain anything to show what happened to the Insurance Company's application u/s 33 of the Arbitration Act. The file of that application which is summoned by this Court in this matter shows that no orders were passed on that application of the Insurance Company, and also that the Insurance Company has not done anything in that matter to pursue that application. 19. The award passed by the arbitrator on 23-1-1973 shows that he allowed the claim of the claimant with regard to both the policies only to the tune of Rs. 51,000/-. 19. The award passed by the arbitrator on 23-1-1973 shows that he allowed the claim of the claimant with regard to both the policies only to the tune of Rs. 51,000/-. Thereafter as already stated, the arbitrator has moved this Court u/s 14 of the Arbitration Act to make his award the rule of the court. 20. The record of this case show that initially even the claimant challenged the award with a view to obtain the full claim of Rs. 71,954/- and raised certain objections to it. These objections were, however, not subsequently pressed. 21. So far as the Insurance Company is concerned, it has challenged the award on different grounds. According to the Insurance Company the appointment of Shri Kailash Chand as the sole arbitrator is illegal and void, the entering into reference by the arbitrator is also illegal and void as it was unilateral in character, the contract of the insurance obtained by the claimant is void as it was obtained in collusion with the Resident Officer Shri Sharma after the fire broke out. It is further pleaded by the Insurance Company that both the insurance policies are rendered void because on non-disclosure of material facts inasmuch as the building called Dilkhusha Annexe which is situated near the main insured building of the claimant contained an oil mill as well as some stock of arms and ammunition, and this fact was not mentioned in the proposal form filled by the claimant. The Insurance Company has further raised the question of jurisdiction by contending that according to the relevant terms of the insurance policies only the court at Chandigarh was stipulated to be having jurisdiction to entertain such proceedings to the exclusion of all other courts. 22. In view of these pleas my learned predecessor framed the following 15 issues on 10-4-1975: 1. Whether the award is imperfect in form and contains any obvious error which can be amended without affecting such decision? Whether such obvious error cannot be amended without setting aside the interim order? 2. Whether the award contains an error arising from an accidental slip or omission and as such the award can be modified? 3. Whether the award need be remanded because there is an objection to the legality of the award apparent upon the face of it? 4. Whether the appointment of the Arbitrator was illegal and void as alleged? 5. 2. Whether the award contains an error arising from an accidental slip or omission and as such the award can be modified? 3. Whether the award need be remanded because there is an objection to the legality of the award apparent upon the face of it? 4. Whether the appointment of the Arbitrator was illegal and void as alleged? 5. Whether the policy of insurance was invalid and hence no arbitration agreement existed? 6. Whether the award is illegal, void and inoperative for the reasons stated in para No. 7 of the written statement of the Union of India, Fire & General Insurance Company? 7. Whether the alleged Cover Note was obtained after the fire had broken out in the premises in dispute as a result to collusion between the claimant-Plaintiff and Shri R.S. Sharma, Agent of the Defendant at Simla? 8. Whether in view of the serious allegations of fraud as contained and referred to in issue No. 4, the matter could not be referred to arbitration? 9. Whether there was no valid contract of insurance arrived at between the parties for the reasons stated? 10. Whether the court at Chandigarh alone had jurisdiction to entertain the proceedings? 11. Whether the Defendant is estopped to raise the objection as to jurisdiction of the Court at Simla? 12. Whether the Arbitrator was interested person and whether he has misconducted himself for the reasons stated? 13. Whether the claimant relied to two different policies and separate agreements and as such the dispute could not be referred to the same arbitrator under one and same reference? 14. Whether petition under sections 30 and 33 of the Arbitration Act are barred by time as alleged? 15. To what reliefs, if any, the parties are entitled? It is an admitted fact that out of these 15 issues the issues found at serial No. 1, 2, 3 and 13 have arisen on account of the objections initially preferred by the claimant against the award. But since the claimant has not pressed these objections, these issues are not now required to be determined. 23. So far as issue No. 14 is concerned, it relates to the question of limitation raised by the claimant with regard to the objections filed by the Insurance Company. But since the claimant has not pressed these objections, these issues are not now required to be determined. 23. So far as issue No. 14 is concerned, it relates to the question of limitation raised by the claimant with regard to the objections filed by the Insurance Company. But this issue is given up by the learned Advocate of the claimant, and rightly so, because the matter is governed by Article 119(B) of the Limitation Act which says that an application for setting aside an award should be filed with in 30 days from the date of the service of the notice of the filing of the award, and such an application by the Insurance Company is in fact found to have been filed within 30 days from the date of the service of the notice of the filing of the award. Thus issue No. 14 does not remain to be decided. 24. So far as the issue No. 12 is concerned, it is with regard to the alleged misconduct of the arbitrator. But even this issue does not remain to be decided as there is no evidence about the alleged misconduct of the arbitrator, and hence Shri K.D. Sood appearing for the Insurance Company was justified in not insisting on the decision of this Court on this issue. 25. Before touching other controversial issues, I would prefer to dispose of issue No. 8. This issue is with regard to the plea raised by the Insurance Company to the effect that in view of the serious allegations of fraud with regard to the Cover Notes, the matter could not have been referred to any arbitrator. In support of this plea, Shri K.D. Sood appearing on behalf of the Insurance Company has relied upon the decision given by the Patna High Court in Saibalani Devi and Others Vs. Dipti Bikash Bhaduri and Another, The learned Judge of the Patna High Court has taken the view that there cannot be a reference for arbitration in regard to the dispute arising out of partnership which is assailed on the ground that it was vitiated by fraud, misrepresentation and undue influence. The learned Judge who has given this decision has not discussed this point any further but has reliance upon a previous decision of that Court in Shah Md. Yunus Vs. Bajrang Mahto and Others, . The learned Judge who has given this decision has not discussed this point any further but has reliance upon a previous decision of that Court in Shah Md. Yunus Vs. Bajrang Mahto and Others, . It should, however, be noted that the facts of the Saibalani Devi case (supra) show that the partnership agreement with which the court was concerned in that case violated the Excise Act and the Rules and, therefore, the arbitration clause which was part and parcel of that agreement was found to be unworkable inasmuch as the partnership agreement itself was in violation of the statutory rules. This decision has, therefore, no relevance to the facts of the case before me. 26. As far the previous Patna decision in Pramada Prasad (supra) on which the sole reliance is placed in Saibalani Devi's case, I find that the ratio of that decision has not been properly understood. The Patna decision in Pramada Prasad case holds that the submission of the question relating to the validity of the contract containing arbitration clause in that case was not proper because the same was not intended by the parties to be referred to arbitration agreement. The Court read arbitration clause in that case, and came to the conclusion that the parties did not intend that the arbitrator should decide the validity of the contract which was challenged on the ground of fraud or misrepresentation. In my view, therefore, this ratio of the earlier decision of the Patna High Court has not been properly appreciated in the subsequent decision in Saibalani Devi's case. 27. So far as the facts of the present case are concerned, the arbitrator Shri Kailash Chand was not asked to give his award on the question of validity or otherwise of the contract of insurance between the parties. Under the circumstances none of these Patna decisions is in any manner helpful to the Insurance Company. Therefore, issue No. 8 is decided accordingly against the Insurance Company, 28. Out of the remaining issues, I first propose to consider issues No. 10 and 11 which are with reference to the jurisdiction of this Court to entertain these proceedings. Under the circumstances none of these Patna decisions is in any manner helpful to the Insurance Company. Therefore, issue No. 8 is decided accordingly against the Insurance Company, 28. Out of the remaining issues, I first propose to consider issues No. 10 and 11 which are with reference to the jurisdiction of this Court to entertain these proceedings. So far as issue No. 10 is concerned, the contention of the Insurance Company is that the policies of insurance contain a clause as regards the exclusion of jurisdiction of every court other than the courts at Chandigarh and, therefore, this Court has got no jurisdiction to entertain these proceedings u/s 14 of the Arbitration Act. As far issue No. 11, the contention which is raised by the claimant is that the Insurance Company is estopped to raise any objection as regards the jurisdiction of this Court. 29. Taking up issue No. 11 first for my consideration I find that there is nothing in the record of the case which would go to show that the Insurance Company is estopped from raising this contention as regards the jurisdiction. As already noted above, the claimant filed proceedings u/s 20 of the Arbitration Act before the court of the Senior Sub-Judge at Simla and the Insurance Company appeared in these proceedings and filed its objections. These objections are at Ex. D. 16. Reference to these objections shows that even at that stage the Insurance Company raised the plea that only the courts at Chandigarh had jurisdiction to entertain such proceedings in view of the terms of the policy. Thus the principle of estoppel is wrongly invoked by the claimant with regard to the Insurance Company's pleas as regards the exclusive jurisdiction of Chandigarh court in such matters. 30. Coming to issue No. 10, the Insurance Company puts re-lianceupon Clause (15) of the warranties, clauses and conditions attached to each of the policies in question. This clause No. (15) is in the following terms: Warranted that in case of any claim arising in respect of the property hereby insured the same shall be settled and paid in Bombay and entire cause of action shall also be deemed to arise in Bombay and further that all legal proceedings in respect of any such claim shall be instituted in a competent court in the city of Bombay only. This clause is modified as found from the rubber stamp affixed on the face of the policy reading as under: Warranted that the word "Bombay" in jurisdiction clause is replaced by "Chandigarh. Thus the jurisdiction clause when read with this amendment means to say that in case of any claim in respect of the property insured only the competent court at Chandigarh would have jurisdiction. Therefore, if this clause is found to be valid and binding as between the parties, the jurisdiction of Simla court is clearly excluded. On behalf of the claimant Shri R.L. Sood contended that the amendment made by the rubber stamp affixed on the face of each of the policies is not binding on the claimant as it was without the knowledge of the claimant that this amendment was inserted in the policy. This contention must be over-ruled because the evidence recorded in the case shows that both the policies were initially produced before the arbitrator by the claimant himself. The claimant received these policies as early as the month of January, 1972 and since then both the policies were in his possession. He has not repudiated this rubber stamp amendment carried out in the jurisdiction clause and, therefore, it cannot be said that this amendment is not binding on him. 31. Shri K.D. Sood appearing on behalf of the Insurance Company contended that since the jurisdiction clause creates a deeming fiction to the effect that the cause of action shall be deemed to arise in Chandigarh, the said clause would be valid and would not be offending the rule of public policy contemplated by Section 28 of the Contract Act even if it is found that courts at Chandigarh had other wise no jurisdiction in the matter. In this connection he put reliance upon the decision given by a single Judge of the Allahabad High Court in Gammon India Ltd. v. Singh reported in 1967 ALJ. 343, In that Allahabad case the relevant jurisdiction clause was clause 13 and it read as under: Notwithstanding the place where the work under this contract is to be executed it is mutually understood and agreed by and between the parties hereto that this contract shall be deemed to have entered into by the parties concerned in the city of Bombay and the court of law in the city of Bombay alone shall have jurisdiction to adjudicate thereon. This clause which excluded the jurisdiction of all courts other than the courts at Bombay was held as valid and binding on the parties. The court further observed that such a clause was put in to avoid any dispute on the question as to where the contract was entered into, and, to eliminate the necessity of providing it. The said High Court, therefore, concluded that the court below should have given effect to this part of the contract and disallowed the Plaintiff from attempting to establish that the contract was actually executed at Varanasi. 32. It is found that the matter did not rest with the decision of the Allahabad High Court in the above referred case because it was taken in appeal to the Supreme Court in Hakam Sing Vs. Gammon (India) Ltd., . Reference to this decision of the Supreme Court shows that the court was of the opinion that Bombay being the place which was the principal place of business of the Respondent Gammon India Ltd., the courts at Bombay, had, even otherwise, jurisdiction to try the suit in view of the explanation (2) of Section 20 of the Code of Civil Procedure, and therefore, exclusion of the jurisdiction of all other courts except the courts of Bombay, as contemplated by above referred clause 13, was proper. At the same time the Supreme Court observed that it was not open to the parties by agreement to confer jurisdiction upon a court which did not possess any jurisdiction under the provisions of the Code of Civil Procedure, because in that event the provisions of Section 28 of the Contract Act would be contravened. This ratio is stated by the Supreme Court in the following words: In any event the Respondents have their principal office in Bombay and they were liable in respect of a cause of action arising under the terms of the tender to be sued in the Courts at Bombay. It is not open to the parties by agreement to confer by their agreement jurisdiction on a Court which it does not possess under the Code. But where two courts or more have under the CPC jurisdiction to try a suit or proceeding an agreement between the parties that the dispute between them shall be tried in one of such Courts is not contrary to public policy. But where two courts or more have under the CPC jurisdiction to try a suit or proceeding an agreement between the parties that the dispute between them shall be tried in one of such Courts is not contrary to public policy. Such an agreement does not contravene Section 28 of the Contract Act. Thus these observations of the Supreme Court in the same case show that if a particular court, which is invested with the sole jurisdiction to try a particular cause, by agreement between the parties to a contract, has no jurisdiction under the provisions of the Code of Civil Procedure, then investment of jurisdiction in that court by agreement, even with the help of a deeming clause, would be contrary to public policy. However, if the Court which is invested with such exclusive jurisdiction is found to be one of the courts which has jurisdiction under the provisions of the Code of Civil Procedure, then it is open to the parties to prefer that court with exclusive jurisdiction to try the cause in question. In my view, therefore, the decision given by the Allahabad High Court on which the Insurance Company wants to put reliance, should be read subject to the decision given by the Supreme Court, and if that is done, the courts at Chandigarh would have exclusive jurisdiction in this matter only if it is found that under the provisions of the CPC these courts had jurisdiction in the matter. 33. Under the circumstances, it is first necessary to consider whether the courts at Chandigarh have any jurisdiction in the matter apart from the jurisdiction clause No. 15 which is quoted above. In order to determine this question, it would be necessary to refer to Section 20 of the CPC which provides for the courts within whose jurisdiction a suit could be filed. Explanation which is attached to this section is with regard to corporations and it is only this explanation which is relevant for the purpose of this matter. It reads as under: A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place. It reads as under: A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place. According to this explanation so far as the corporation is concerned, a suit can be filed against it at the place where its principal office is situated or at any other place where its subordinate office is situated provided any cause of action has arisen at such a place. It is an admitted position that Chandigarh is not a place where the principal office of Respondent Insurance Company is situated and it is also an admitted position that the Divisional Office of the Respondent Insurance Company is situated at Chandigarh. However, the exclusive jurisdiction of Chandigarh court could be availed of by the Insurance Company only if it is found that a part of cause of action in this matter had arisen at Chandigarh. The real question, therefore, to be considered is whether any part of cause of action can be said to have arisen at Chandigarh. 34. With a view to appreciate this question certain facts are required to be recapitulated. These facts are that though the proposals for both the policies were made and accepted at Simla, and Cover Notes were also issued at Simla, these proposals and Cover Notes along with the bank receipt of the cheque for the first premium were sent by the Company's Resident Officer Shri Sharma to the Divisional Office of the Company at Chandigarh. It was the Chandigarh office which eventually issued and executed the two policies embodying all the terms of the contracts of insurance between the parties. These policies were thereafter sent to the claimant at Simla from Chandigarh as per letter found at Ex. P.3 which is dated 13-1-1972. It is also evident from the Cover Notes that the parties agreed to "usual terms and conditions" of insurance, but these terms and conditions of the insurance were reduced in writing only in Chandigarh when the policies were issued, therefore, the two policies are the written documents embodying these terms and conditions. The terms and conditions having been reduced to writing, the two policies, which were issued at Chandigarh and sent to the claimant at Simla, were the only documents evidencing these terms and conditions. 35. The terms and conditions having been reduced to writing, the two policies, which were issued at Chandigarh and sent to the claimant at Simla, were the only documents evidencing these terms and conditions. 35. In view of these facts, the material question to be considered is whether it is possible to say that the execution of these two policies at Chandigarh constituted a part of cause of action or not. The contention of the learned Advocate of the Insurance Company is that they did, because without the proof of these policies there would be no proof of terms and conditions, and since these policies were executed at Chandigarh there would be no difficulty in concluding that part of cause of action in the matter arose at Chandigarh. 36. As against this Shri R.L. Sood, learned advocate of the claimant, contended that the contract between the parties was concluded when the proposals were accepted and the Cover Notes were passed in favour of the claimant at Simla. He also pointed out that these Cover Notes specifically mention that the terms and conditions of the contracts of insurance were those which were usually prescribed by the Respondent Insurance Company. According to Shri R.L. Sood, therefore, the policy documents were merely formal and at best could be treated only as a pieces of evidence which would reveal what were the terms and conditions of the contract of insurance. According to Shri R.L. Sood, therefore, even if such pieces of evidence were issued and executed at Chandigarh, since the contract was already completed at Simla for all intents and purposes, no part of the cause of action can be said to have arisen at Chandigarh. If this be so, contended Shri R.L. Sood, explanation attached to Section 20 of the CPC has no application and investiture of exclusive jurisdiction in the courts at Chandigarh by agreement between the parties would offend the principles of public policy contemplated by Section 28 of the Contract Act. 37. On consideration of the facts of this case I am of the opinion that it is not possible to say that no part of the cause of action has arisen at Chandigarh. It is first necessary to consider what is meant by the expression "cause of action". 37. On consideration of the facts of this case I am of the opinion that it is not possible to say that no part of the cause of action has arisen at Chandigarh. It is first necessary to consider what is meant by the expression "cause of action". Much thought has been bestowed upon this expression by various courts and I do not find it necessary to burden this judgment with different citations on this point. I would, however, refer to the decision of the Privy Council in AIR 1949 78 (Privy Council) wherein, relying upon other previous decisions, it has been ruled that cause of action means every fact which will be necessary for the Plaintiff to prove if traversed in order to support his right to the judgment. Vide (1889) 22 Q.B.D. 128. It is further observed in that decision that the expression cause of action refers to the media upon which the Plaintiff asks the court to arrive at a conclusion in his favour. As observed by the High Court of Bombay in Shaw Wallace and Co. v. Gordhandas reported in ILR 30, Bom 364 at 376, the expression cause of action means "that bundle of facts which it is essential for the Plaintiff to prove before he can succeed in a suit" or, as Mr. Justice Fry puts it, "that bundle of necessary facts in the absence of which the Plaintiff must necessarily fail". Considering these two quoted propositions, the High Court of Bombay has observed in the above referred case that in every case "cause of action" means and includes everything without which the Plaintiff must necessarily fail. 38. Now if we apply this test, the question is: would the claimant in this case not fail if he omits to rely upon the conditions governing the terms of contract of insurance between the parties by withholding the production of insurance policies which are found to have been executed at Chandigarh or by not proving these policies by some other method. It is apparent that though the Cover Notes make a general reference to "usual terms and conditions" of the policies issued by the Insurance Company, a mere production of these Cover Notes would carry us nowhere because they do not reveal what these "usual terms and conditions" of the contract of insurance were. It is apparent that though the Cover Notes make a general reference to "usual terms and conditions" of the policies issued by the Insurance Company, a mere production of these Cover Notes would carry us nowhere because they do not reveal what these "usual terms and conditions" of the contract of insurance were. The result, therefore, is that the only evidence of these "usual terms and conditions" of the contract of insurance is the insurance policies executed at Chandigarh. Applying the above referred test of deciding the meaning of the expression "cause of action" the question which I would like to ask myself is whether the arbitration clause on which the claimant puts reliance in this case could have been available to the claimant without proving the documents of policies. If the answer is in the negative then it must necessarily follow that the execution of the policy documents which contain the arbitration clause was a necessary part of the bundle of facts which constituted the cause of action in this case. As held by the High Court of Bombay in East India Trading Co. Vs. Badat and Co., in a suit on an award the agreement to go to arbitration does constitute an important material and necessary part of cause of action. Since in the instant case the arbitration agreement contains arbitration clause which was signed at Chandigarh, I find that even under the provisions of the Code of Civil Procedure, Chandigarh courts had jurisdiction to deal with the matters arising out of this arbitration clause. 39. It is undoubtedly true that when the Cover Notes in this case were passed in favour of the claimant on 7-11-1972 at Simla, the contract between the parties was complete, and the Insurance Company became liable under the terms of the contract of insurance to pay damages for loss by fire. But in the world of contractual obligations it is frequent to find cases wherein though the contractual obligations as between the two parties are complete, a formal document embodying the terms of the contract is still required to be passed. In such cases the mere fact that a formal document of contract is required to be executed in future will not prevent the coming into existence of a binding nature of contract between the parties as held by the Supreme Court in Sk. Abdul Karim and Others Vs. In such cases the mere fact that a formal document of contract is required to be executed in future will not prevent the coming into existence of a binding nature of contract between the parties as held by the Supreme Court in Sk. Abdul Karim and Others Vs. State of West Bengal, But the fact remains that in such cases even if the binding contract between the parties comes into existence earlier, the execution of the subsequent document embodying the terms of the agreement between the parties is a necessity which must be complied with. And if this necessity is required to be complied with, the fact that it is in fact complied with does become an essential part of the bundle of facts which go to constitute the whole cause of action. In other words, the execution of such a document at a subsequent stage does not prevent the cause of action coming into existence merely on account of the fact that the contractual obligations between the parties have been perfected before the document embodying the terms and conditions came into existence. The reason behind this rule is that the incipient terms and conditions agreed by the Cover Note become final and get crystalised only when they are reduced to writing in form of a policy which, when executed, becomes the only evidence of these terms as per Section 91 of the Evidence Act, and hence the execution of such basic document constitutes a very material part of the whole cause of action. This principle |is brought out in bold relief by the Supreme Court in General Assurance Society Ltd. v. Chandmull Jain and Anr. reported in 1966 ACJ 267 . Their Lordships have held in that case that the contract of insurance is complete as soon as the proposal is accepted and the cover notes are issued irrespective of the question whether the policy has been delivered or not. However, this does not in any manner undermine the importance of the special terms and conditions which are embodied in the insurance policies which are subsequently issued. This is what their Lordships have observed in the said Judgment: A cover note is a temporary and limited agreement. It may be self-contained or it may incorporate by reference the terms and conditions of the future policy. This is what their Lordships have observed in the said Judgment: A cover note is a temporary and limited agreement. It may be self-contained or it may incorporate by reference the terms and conditions of the future policy. When the cover note incorporates the policy in this manner, it does not have to recite the terms and conditions, but merely to refer to a particular standard policy. If the proposal is for a standard policy and the Cover Note refers to it, the assured is taken to have accepted the terms of that policy. The reference to the policy and its terms and conditions may be expressed in the proposal or the Cover Note or even in the letter of acceptance including the Cover Note. The incorporation of the terms and conditions of the policy may also arise from a combination of references in two or more documents passing between the parties. Documents like the proposal, cover note and the policy are commercial documents and to interpret them commercial habits and practice cannot altogether be ignored. During the time the cover note operates, the relations of the parties are governed by its terms and conditions, if any, but more usually by the terms and conditions of the policy bargained for and to be issued. When this happens the terms of the policy are incipient but after the period of temporary cover, the relations are governed only by the terms and conditions of the policy unless insurance is declined in the meantime. Delay in issuing the policy makes no difference. The relations even then are governed by the future policy if the cover notes give sufficient indication that it would be so. These observations show that the main document by which the contractual relationship between the parties are regulated and governed is the document of insurance policy even though the said document has been issued after the contractual obligations between the parties assume a binding nature. In the same judgment the Supreme Court has further elucidated this aspect of the matter in the following words: The four essentials of a contract of insurance are, (i) the definition of the risk, (ii) the duration of the risk, (iii) the premium and (iv) the amount of insurance. See Macgillivray on Insurance Law (5th Edition) Volume I, paragraph 656, page 316. See Macgillivray on Insurance Law (5th Edition) Volume I, paragraph 656, page 316. But the policy which is issued contains more than these essentials because it lays down and measures the rights of the parties and each side has obligations which are also defined. In a policy against fire the purpose is not so much to insure the property but to insure the owner of the property against loss. The policy not only defines the risk and its duration but also lays down the special terms and conditions under which the policy may be enforced on either side. Even if the letter of acceptance went beyond the cover notes in the matter of duration, the terms and conditions of the proposed policy would govern the case because when a contract of insuring property is complete, it is immaterial whether the policy is actually delivered after the loss and for the same reason the rights of the parties are governed by the policy to be, between acceptance and delivery of the policy. Even if no terms are specified the terms contained in a policy customarily issued in such cases, would apply. The Lahore High Court has observed in Balli Brothers v. Firm Bhagwan Das reported in AIR 1945 Lah 35 that it is well settled that when a contract of sale of goods is embodied in written deed the previous offers and acceptances lose all importance and the only contract between the parties is the written contract. The said High Court has quoted with approval and following observations of Leake on Contracts: Upon the contract being reduced into writing the previous negotiations, whether it resulted in a binding agreement or not is presumptively merged in the writing, which thence forth becomes the exclusive evidence of the terms; and if there is any discrepancy between the previous negotiation or agreement and the final writing, the latter must prevail. 40. Speaking of the facts of this case it is evident that the policy documents issued by the Insurance Company from Chandigarh would be the only written documentary evidence which would exclude u/s 91 of the Evidence Act any oral evidence on this matter. Under the circumstances, the contention of Shri R.L. Sood on behalf of the claimant that these policy documents were merely formal in nature and were of little consequence so far as the cause of action is concerned, cannot be accepted. Under the circumstances, the contention of Shri R.L. Sood on behalf of the claimant that these policy documents were merely formal in nature and were of little consequence so far as the cause of action is concerned, cannot be accepted. 41. On this point, therefore, I conclude that even under the provisions of Section 20 of the CPC and even apart from the deeming fiction contemplated by the jurisdiction clause in the policy the courts at Chandigarh had jurisdiction in the matter. Therefore, if the parties to the contract selected courts at Chandigarh as having exclusive jurisdiction, the said agreement cannot be considered as offending public policy u/s 28 of the Contract Act. On the question of jurisdiction, therefore, I find that the contention of the Insurance Company must be upheld and it should be concluded that this Court has no jurisdiction in this matter. 42. Another contention of preliminary nature embodying purely the question of law is raised by issues Nos. 4 and 6. So far as issue No. 4 is concerned, the contention of the Insurance Company is that the appointment of Shri Kailash Chand as the sole arbitrator was illegal and void. In order to appreciate this contention, it is necessary to refer to the arbitration clause which is written at the back of the policies. This clause is in the following terms: If any difference arises as to the amount of any loss or damage, such difference shall independently of all other questions 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 the decision of the two disinterested persons as arbitrators of whom one shall be appointed in writing by each of the parties, within two calendar months after having been required so to do in writing by the other party, in case either party shall refuse or fail to appoint an arbitrator, within two calendar months after receipt of notice in writing requiring an appointment, the other party shall be at liberty to appoint a sole arbitrator, and in case of this agreement between the arbitrators, the difference shall be referred to the decision of an umpire who shall have been appointed by them in writing before entering on the reference and who shall sit with the arbitrators and preside at their meetings. The death of any party shall not revoke or effect the authority or powers of arbitrator, event of the death of an arbitrator or umpire, another shall in each case be appointed in his stead by the party or arbitrator (as the case may be) by whom the arbitrator or umpire so dying was appointed. The cost of the reference and of the award shall be in the discretion of the arbitrator, arbitrators or umpire making the award. And that it shall be a condition precedent to any right of action or suit upon this policy the award by such arbitrator, arbitrators or umpire of the amount of the loss or damage if disputed shall be first obtained. Reference to this clause shows that if any dispute arises between the parties, the same should be referred to an agreed arbitrator, and if parties cannot agree upon a name of a single arbitrator, then it should be referred to the decision of two persons of whom one shall be appointed in writing by each of the parties within two months. This clause further stipulates that in case either party refuses or fails to appoint an arbitrator within two calendar months after the receipt of notice in writing for that purpose, the other party shall be at liberty to appoint a sole arbitrator. 43. Now the contention of Shri K.D. Sood on behalf of the Insurance Company was that this clause contemplates three stages and all these three stages should be resorted to by the parties one after the other. According to Shri Sood since the claimant has not resorted to all these three stages separately by giving separate notices, the appointment of Shri Kailash Chand as the sole arbitrator is invalid. I see no force in this contention because from the initial notice found at Ex. P-l, given by the claimant for the appointment of arbitrator, it is evident that the Insurance Company was not willing to name any arbitrator of its choice. The clause does not stipulate any distinct and separate stage by which each of the parties is required to call upon the other party to make an appointment of an arbitrator or arbitrators. In my view the notice found at Ex. P-l is sufficient compliance with the arbitration clause quoted above. 44. The clause does not stipulate any distinct and separate stage by which each of the parties is required to call upon the other party to make an appointment of an arbitrator or arbitrators. In my view the notice found at Ex. P-l is sufficient compliance with the arbitration clause quoted above. 44. Shri K.D. Sood then contended that the Insurance Company has not neglected to appoint an arbitrator and, therefore, there was no justification for appointing Shri Kailash Chand as the sole arbitrator. This contention is also devoid of merits because the facts of the case are eloquent enough to suggest that the Insurance Company was not willing to name any arbitrator, or to submit to the arbitration proceedings. Its stand is that the whole contract of insurance is null and void and therefore, the arbitration clause which forms part of that contract is also null and void. In view of this, it is evident that the Insurance Company has neglected to make the appointment of arbitrator. This is of course subject to the Insurance Company's contention that both the contracts of insurance are not binding on it. 45. In view of this, I find that, if the contracts of insurance are found to be legally binding on the parties, then the appointment of Shri Kailash Chand as the sole arbitrator is valid. Issue No. 4, is therefore, decided accordingly. 46. The next issue is issue No. 6 which seeks to challenge the legality of the award on various grounds mentioned, in paragraph 7 of the written statement of the Insurance Company. If a reference is made to para 7, it will be found-that it embodies therein different challenges to the award. These different challenges are on grounds of facts and law. So far as the challenges contained in clauses (d) and (e) and (f) are concerned, they-relate to the allegations which are covered by issues Nos. 5, 7 and 9. Since I am disposing of this matter on preliminary legal issues regarding the jurisdiction of this Court and the competency of a unilateral reference to arbitrator, I am of the opinion that it would not be in the interest of justice to touch these questions of facts. Therefore, the challenges contained in clauses (d), (e) and (f) of para 7 of the written statement of the Insurance Company are not proposed to be discussed in this Judgment. Therefore, the challenges contained in clauses (d), (e) and (f) of para 7 of the written statement of the Insurance Company are not proposed to be discussed in this Judgment. So far as the challenge contained in Clause (g) of para 7 is concerned, it relates to the exclusive jurisdiction of the Chandigarh courts. This question is already discussed by me above. So far as the challenges contained in Clauses (h) and (i) are concerned, they are covered by issue No. 12, which, as already noted above, is not pressed on behalf of the Insurance Company. So far as Clause (J) of para 7 is concerned, it relates to the issue No. 8 which is already discussed and disposed of by me in the foregoing discussion. Thus we are left with the challenges contained in clauses (a) and (b) of para 7. So far as the Clause (b) is concerned, the Insurance Company has challenged the validity and legality of the award on the ground that the reference made to the arbitrator was unilateral. In my view, this is the main and important challenge and since as shown hereafter I find myself in agreement with the contention of the Insurance Company that the reference to the arbitrator could not have been unilateral, Shri K.D. Sood appearing on behalf of the Insurance Company has not pressed for this Court's finding on the challenge contained in Clause (a) of para 7 of the written statement. I will, therefore, presently take up for my consideration the challenge contained in Clause (b) of para 7. 47. The question to be considered is whether unilateral reference by one of the parties to the dispute to arbitrator for his decision of disputed questions can be considered as legal or not. The contention which is raised on behalf of the Insurance Company is that even if it is found that the appointment of the arbitrator in this case was proper and legal, it was not open to the claimant to make unilateral reference of the disputes to the arbitrator because such a reference can be made either out of court by the parties jointly or through the process of court u/s 20 of the Arbitration Act. The learned Advocate of the Insurance Company has, in support of this contention, cited several decisions including the decision given by the Supreme Court in Seth Thawardas Pherumal Vs. The learned Advocate of the Insurance Company has, in support of this contention, cited several decisions including the decision given by the Supreme Court in Seth Thawardas Pherumal Vs. The Union of India (UOI), The learned Advocate of the claimant has, however, tried to distinguish these cases and has contended that there is no prohibition against making a unilateral reference to an arbitrator who is duly appointed under the arbitration clause agreed between the parties. It is further contended on behalf of the claimant that any rate the facts of the case show that the Insurance Company has acquiesced in unilateral reference of the dispute to the arbitrator inasmuch as the said Company has preferred not to respond to the notice issued by the claimant as well as by the arbitrator in this connection. 48. Before touching the actual controversy between the parties, it would be necessary to consider shortly the scheme of the Arbitration Act. Chapter II of the Arbitration Act contemplates arbitration without intervention of the court, while Chapter III which contains only one section, namely Section 20, contemplates arbitration with the intervention of the court where there is no pending suit. Chapter IV of the Act makes provisions with regard to arbitration in suits. For the purpose of this question we are not concerned with the remaining Chapters of the Act. Now Section 8 which is placed by the Legislature in Chapter II of the Act refers to the powers of the court to appoint an arbitrator or umpire. The purpose of this section is to enable the court to appoint an arbitrator or umpire in cases where all parties to the difference are not able to concur in the said appointment or appointments. The purpose of this section is to enable the court to appoint an arbitrator or umpire in cases where all parties to the difference are not able to concur in the said appointment or appointments. Section 9 which follows says that where an arbitration agreement provides that a reference shall be to two arbitrators one to be appointed by each of the parties, then unless different intention is expressed in the agreement, if one party fails to appoint an arbitrator for 15 clear days after the service of notice by the other party in writing to make the appointment, such other party having appointed his arbitrator before giving the notice, the party who has appointed the arbitrator may appoint the arbitrator to act as a sole arbitrator in the reference and the award given by such sole arbitrator shall be binding on both the parties as if he had been appointed by consent. The proviso which is attached to this section says that the court may set aside any appointment as sole arbitrator so made by one of the parties on sufficient cause being shown. Thus reading Sections 8 and 9 together, it follows that in a given case it is possible for one of the parties to the dispute to appoint a sole arbitrator to decide the dispute. The point which is required to be noted with regard to these two sections is that both these sections are with reference to the "appointment" of an arbitrator or arbitrators. These sections, however, do not speak as to how the arbitrator or arbitrators so appointed should enter into a reference. Nor do they say as to whether one of the parties to the dispute can, without the consent of the other party, determine the points of dispute on which reference should be made to the appointed arbitrator. In other words, though both these sections refer to the procedure by which the arbitrator or arbitrators are required to be appointed, they speak nothing about the manner in which the disputed questions are required to be referred to the arbitrator or arbitrators so appointed. 49. Now, if a reference is made to Chapter III, which contains Section 20, it will be found that it provides for an application to file in court the arbitration agreement and the appointment of an arbitrator by the court. 49. Now, if a reference is made to Chapter III, which contains Section 20, it will be found that it provides for an application to file in court the arbitration agreement and the appointment of an arbitrator by the court. Sub-section (1) of Section 20 is in the following terms: (1) Where any persons have entered into an arbitration agreement before the institution of any suit with respect to the subject-matter of the agreement or any part of it, and where a difference has arisen to which the agreement applies, they or any of them instead of proceeding under Chapter II, may apply to a Court having jurisdiction in the matter to which the agreement relates that the agreement be filed in Court. Sub-section (2) of this section provides for the manner in which the application should be made. Sub-section (3) provides for the issuance of show cause notice and Sub-section (4) says that where no sufficient cause is shown the court shall order the agreement to be filed, and shall make an order of reference to the arbitrator appointed by the parties, whether in the agreement or otherwise or where the parties cannot agree upon the arbitrator, to an arbitrator appointed by the court. Thus according to this subsection, it is the court which can make reference to the arbitrator either appointed by the parties or appointed by the Court. According to Sub-section (5) the arbitration proceedings thereafter are to be started in accordance with law. It is thus evident that Section 20, unlike sections 8 and 9, embodies within itself a complete procedure not only for the purpose of making an appointment of an arbitrator but also for the purpose of making a reference of the disputed questions to the arbitrator so appointed. 50. The Arbitration Act itself does not make any specific provision with regard to a joint reference of disputed questions between the parties. However, it is a basic postulate of every arbitration proceeding that parties to these proceedings should come to an agreement not only with regard to an appointment of an arbitrate or but also with regard to the points which are required to be referred to the said arbitrator. It should be noted here that the Arbitration Act, is a special statute which either excludes or limits the ordinary jurisdiction of civil courts to decide disputed questions of civil nature between the parties. It should be noted here that the Arbitration Act, is a special statute which either excludes or limits the ordinary jurisdiction of civil courts to decide disputed questions of civil nature between the parties. It is for this reason that the agreement of the disputed parties is required not only for the appointment of a particular person as an arbitrator, but also with regard to the questions which that [person is required to decide as an arbitrator. This is the judicial interpretation made by several courts, and this judicial interpretation veers round certain observations made by the Supreme Court in the above referred decision in Thawardas v. Union of India (supra). In the said decision the Supreme Court has make the following observations which have been repeatedly referred to by different High Courts in subsequent judgments. These observations are: A reference requires the assent of "both" sides. If ore side is not prepared to submit a given matter to abstraction when there is an agreement between them that it should be referred, then, recourse must be had to the Court under. Section 20 of the Act and the recalcitrant party can then be compelled to submit the matter under Sub-section (4) In the absence of either agreement by "both" sides about the terms of reference, or an order of the Court u/s 20(4) compelling a reference, the arbitrator is not vested with the necessary exclusive jurisdiction. These observations of the Supreme Court have been utilised by subsequent decisions of different High Courts as meaning that under the Arbitration Act there is no scope for a unilateral reference to arbitrator except by proceeding u/s 20 of the Act. 51. Before referring to these decisions of different High Courts, it will be necessary to make a short reference to the facts which the Supreme Court considered in Thawarda's case. 52. In this case the Appellant Thawardas entered into contract with the Union of India for the supply of bricks to the Central P.W.D. Dispute arose between the parties with regard to this contract. Clause 14 of the agreement between the parties provided that all disputes arising out of or relating to the contract should be referred to the Superintending Engineer of the Circle for the time being. Accordingly there was a reference, and award followed. Ultimately decree was passed by the court in terms of the award. Clause 14 of the agreement between the parties provided that all disputes arising out of or relating to the contract should be referred to the Superintending Engineer of the Circle for the time being. Accordingly there was a reference, and award followed. Ultimately decree was passed by the court in terms of the award. On appeal being taken to the High Court the said appeal was allowed in part and, therefore, the contractor Thawardas approached the Supreme Court. One of the claims made by the contractor was as regards the price of eighty-eight lakhs of kacha bricks that were destroyed by rain. This claim was a claim of damages based on an allegation that since the department failed to take delivery of bricks in time the contractor had to keep some kacha bricks in open. These kacha bricks were thereafter destroyed by rain. The contention of the contractor was that this damage was caused to him on account of the neglect of the department in taking the delivery of the pacca bricks in time. The question was whether the department could be held liable to the contractor for this item of damages. The Supreme Court held that the arbitrator was wrong in law in allowing this claim because he wrongly construed the relevant terms of the contract. The Supreme Court further considered the question whether the decision of the arbitrator on this question was final, despite it being wrong in law. While discussing this question the Supreme Court observed that an arbitrator is not a conciliator and cannot ignore the law or misapply it in order to do what he thinks just and reasonable. According to the Supreme Court the arbitrator was bound to follow and apply the law and if he did not he could be set right by the courts provided the error committed by him appeared on the face of the award. The Supreme Court, however, carved out one exception observing that the single exception to this proposition is when the parties choose specifically to refer a question of law as a separate and distinct matter. The Supreme Court, however, carved out one exception observing that the single exception to this proposition is when the parties choose specifically to refer a question of law as a separate and distinct matter. According to the Supreme Court, therefore, if no specific question of law is referred, either by agreement or by compulsion, the decision of the arbitrator on that question should not be treated as final, however, much it may be within his jurisdiction and however much it would be essential for him to decide the question incidentally. The Supreme Court thereafter proceeded to consider whether the arbitrator in that case was specifically asked to construe relevant clause of the contract, and stressed the word "specifically" because, in its opinion, the parties who make a reference to arbitration have a right to insist that the tribunal of their choice shall decide their dispute according to law, so that before the right can be denied to them in any particular matter, the court must be very sure that both sides wanted the decision of the arbitrator on a point of law rather than that of courts, and they wanted this decision on that point to be final.. The Supreme Court finally concluded that in its opinion the case before it was not the kind of specific reference on a point of law, which the law of arbitration required. Then the Supreme Court made the above quoted observations on which reliance has been repeatedly put by different High Courts. 53. It must be conceded that the actual question which the Supreme Court was called upon to decide in Thawarda's case was whether in absence of a specific reference by the parties to the arbitrator on the disputed questions of law, the jurisdiction of civil court was barred or not. But while solving this question the Supreme Court has made the above quoted observations which have been the base of subsequent development of case law on the question of validity or otherwise of a unilateral reference to an arbitrator. 54. Before the above referred Supreme Court decision was pronounced, the High Court of Allahabad observed in Ram Harakh Singh Vs. S. Mumtaz Husain and Another, that reference to arbitration which is void at its inception for want of consent of interested party cannot be validated by ratification by such party after the passing of the award. 54. Before the above referred Supreme Court decision was pronounced, the High Court of Allahabad observed in Ram Harakh Singh Vs. S. Mumtaz Husain and Another, that reference to arbitration which is void at its inception for want of consent of interested party cannot be validated by ratification by such party after the passing of the award. In the Puijab case of Ajit Singh v. Fateh Singh AIR 1962 Pun 412 Mahajan, J. observed that there cannot be an agreement to reference by one party and therefore, any amount of consent by the other party to the award would be of no consequence. This decision does not take any note of the Supreme Court decision in the case of Thawardas v. Union of India (supra). However, the point appears to have been specifically considered and treated by a Division Bench of the Allahabad High Court in Om Prakash Vs. Union of India (UOI), This case makes a reference to para 3 of Schedule I of the Arbitration Act. It is, therefore, necessary to make a short reference to this para of the First Schedule of the Arbitration Act. 55. It should be noted that Sub-section (1) of Section 20 to which reference is already made above, uses the word "may" with regad to the application to the court to file an agreement of arbitration in court. It also uses the expression "instead of proceeding under Chapter II". In view of this, a contention was raised that for the purpose of making a unilateral reference to the appointed arbitrator, it is not obligatory on a party to the dispute to proceed u/s 20, and that provisions contained in Chapter II of the Act as read with para 3 of Schedule I can be availed of by a party wishing to make unilateral reference to arbitration without availing of the provisions contained in Section 20. Schedule I to the Arbitration Act prescribes implied conditions of every arbitration agreement unless a different intention is expressed by the parties to an arbitration agreement. One of these implied conditions is found in para 3 of this Schedule which reads as under: The arbitrator shall make its award within four months after entering upon the reference or after having been called upon to act by notice in writing from any party to arbitration agreement or within such extended time as the court may allow. One of these implied conditions is found in para 3 of this Schedule which reads as under: The arbitrator shall make its award within four months after entering upon the reference or after having been called upon to act by notice in writing from any party to arbitration agreement or within such extended time as the court may allow. In view of these provisions of para 3 a contention was raised before the Allahabad High Court in the above referred case of Om Parkash (supra) that an arbitrator who is validly appointed can be unilaterally called upon to act by a notice in writing from any of the parties to the dispute. The Allahabad High Court considered this aspect of the matter and held, interpreting the above quoted provisions of para 3, that this para merely refers to a stage when the matter has already been referred to an arbitrator and the arbitrator neglects his duty of starting the work. This is what the High Court is found to have stated in the reported judgment: From this (from the provisions of para 3 of the First Schedule) it was sought to be inferred that one party alone could refer the dispute to and ask the arbitrator to take up the matter. We are unable to agree with this contention. This paragraph merely refers to a stage when-the matter has already been referred to an arbitrator and he neglects his duty of star ting work. Then one of the parties may give notice that he should proceed with the arbitration. This paragraph has nothing to do with reference being made by one party alone. I find myself in respectful agreement to this interpretation of paragraph 3 of the First Schedule. In the case of Om Parkash the High Court of Allahabad observed that the arbitrator appointed in that case, one Brig. Bhandari, had no jurisdiction to take up the matter and assume the duties of an arbitrator. But further observed that even assuming that the said arbitrator had juridiction to assume the duties of an arbitrator, he entered into reference without any jurisdiction because the reference to him was' unilateral. Bhandari, had no jurisdiction to take up the matter and assume the duties of an arbitrator. But further observed that even assuming that the said arbitrator had juridiction to assume the duties of an arbitrator, he entered into reference without any jurisdiction because the reference to him was' unilateral. This is evident from the following observations made by that court in that case: As stated above, he had merely been appointed as an arbitrator and the effect of such an appointment by court was that he was considered to be an arbitrator appointed by the parties themselves. It was then for* the parties to refer the dispute to the arbitrator. Reference in such a case must be out of court and must be by both the parties together. Reference out of court cannot be by one party alone. In the present case after the appointment of Brig. Bhandari only the Government approached the arbitrator to take action and the Appellant flatly refused to submit to his jurisdiction and even applied to the court for his removal. The order of the court referring the dispute to him was wholly without jurisdiction and had no effect in law unless an application u/s 20 was made to the court, for referring the matter to arbitration, the court could not pass any order making the reference through court. An application u/s 20 has to be made in writing as provided for in Section 20(2) of the Arbitration Act. No such application having been made the direction of the court was without authority." The High Court has further taken support for this proposition by making reference to the above quoted observation of the Supreme Court in Thawardas's case. 56. Practically the same view is taken by the same High Court in a subsequent case of Union of India (UOI) Vs. Gorakh Mohan Das and Another, where the distinction is made between the provisions contained in sections 8 and 20 of the Arbitration Act. 57. The question was, however, specifically dealt with by Punjab High Court (Circuit Bench at Delhi) in Madhusudan Ltd. v. Ram Parkash reported in 1966 (2) D.L.T. 123 . Gorakh Mohan Das and Another, where the distinction is made between the provisions contained in sections 8 and 20 of the Arbitration Act. 57. The question was, however, specifically dealt with by Punjab High Court (Circuit Bench at Delhi) in Madhusudan Ltd. v. Ram Parkash reported in 1966 (2) D.L.T. 123 . In this case the High Court has held that a reference to arbitration when there is an agreement between the parties to do so, must be with the consent of both the parties and in absence of such consent only a court's order under the Arbitration Act can give jurisdiction to the arbitrator and apart from these two contingencies the arbitrator has no jurisdiction. Again the above referred observations of the Supreme Court in The 'wardas's case are relied upon. 58. A Full Bench of Delhi High Court has considered this question in P.C. Agarwal v. Banwari Lal reported in ILR (1972) 1 Del 279. The facts of this Full Bench case were quite similar to the facts of the case under my consideration. In that case also the Respondent appointed a member of the Delhi Stock Exchange as his arbitrator and called upon the Appellant to appoint his arbitrator. The Appellant failed to appoint his arbitrator and thereupon the Stock Exchange appointed one Khambate as the second arbitrator. The two arbitrators thereafter made their award which was sought to be made rule of the court. After exhaustively making a reference to the decision given by the Supreme Court in Thawarda's case the Full Bench observed as under: In cases where a contract between the parties contains what may be called an arbitration clause to refer future disputes to arbitration the agreement is merely an agreement to submit future differences to arbitration within the meaning or Section 2(a) of the Arbitration Act. If disputes arise in the future, a reference has to be made to arbitration within the meaning of Section 2(e) of the Arbitration Act and at this stage there should be a consent of both the parties. If the consent exist, it would not be necessary to proceed under Chapter III by ma-king an application u/s 20 of the Arbitration Act and the parties or one of the parties can proceed under Chapter II of the said Act. If the consent exist, it would not be necessary to proceed under Chapter III by ma-king an application u/s 20 of the Arbitration Act and the parties or one of the parties can proceed under Chapter II of the said Act. This reinforces our earlier view that the above quoted observations of the Supreme Court are of general application and do not contemplate a unilateral reference. This Full Bench decision of the Delhi High Court was subsequently followed in Madhubala Private Ltd. v. Jsaaz Cinema reported in AIR 1972 Del. 263 wherein it was held that if no consent to the terms of reference is given by the other party the arbitrator has no jurisdiction to aibitrate and the award given by him is illegal. 59. The High Court of Punjab and Haryana has also taken the same view in Union of India Vs. Hari Krishan Joshi and Others, and the Allahabad High Court in a recent case of Jagannath Kapoor and Another Vs. Premier Credit and Instalment Corporation (P) Ltd., has again reiterated the same view and had held that unilateral inference to the arbitration by the Plaintiff alone is wholly illegal and confers no jurisdiction on the arbitrator. 60. Considering this established position in law I find that since in this case reference to the arbitrator Shri Kailash Chand has been made unilaterally by the claimant, the reference must be treated as illegal. It should be remembered here that the claimant had already approached the court of Senior Sub-Judge, Simla, u/s 20 of the Arbitration Act and had withdrawn that application. Even when that application was pending the Insurance Company had resisted it and, as already noted above, it also moved an application before that court to set aside the unilateral reference to the arbitrator. Shri R.L. Sood appearing on behalf of the claimant contended that in view of the fact that the Insurance Company gave no response either to the claimant's notice or to the two notices issued by the arbitrator, it should be held that the said Company has acquiesced in the reference made to the arbitrator. In my opinion, such silence on the part of the Insurance Company cannot be treated as acquiescence. In my opinion, such silence on the part of the Insurance Company cannot be treated as acquiescence. In fact, it is very much evident from the record of the case that the Insurance Company has all throughout resisted not only the unilateral appointment of the arbitrator but also the unilateral reference made by the claimant to the arbitrator. It was contended that the application to set aside the reference made to the arbitrator was made by the Insurance Company before the Senior Sub-Judge only after it came to know that the arbitrator has passed the award. However, this is not true because the date on which this application was made by the Insurance Company to the court of Senior Sub-Judge was prior to the declaration of the award by the arbitrator. 61. Under these circumstances, I find that the reference made by the claimant to the arbitrator is illegal and void and, therefore, even the award given by the arbitrator is illegal and void. 62. This leaves us with issues Nos. 5, 7 and 9. These are, issues covering different contentions raised by the Insurance Company challenging the very existence of the contract of insurance including the arbitration agreement. In view of the fact that this Court is found to have no jurisdiction to decide this matter as well as the fact that unilateral reference to arbitration is also found to be illegal and void, I do not find it necessary to go into all these questions of fact lest either of the parties may be prejudiced by some of my observations in a subsequent litigation which may follow. 63. Before parting with this case it would not be out of place to state that in order to avoid future litigation the Insurance Company would be well advised to consider the claim of the claimant especially in view of the fact that at one stage an offer was made without prejudice to receive the amount of Rs. 41,814/-in full settlement of the claimant's claim on behalf of the Insurance Company. 64. In the result, therefore, the prayer of the claimant that the award passed by the arbitrator should be made the rule of this Court is rejected. This suit, therefore, stands dismissed. In view of the peculiar facts of the case, I make no order as to costs. 65. 64. In the result, therefore, the prayer of the claimant that the award passed by the arbitrator should be made the rule of this Court is rejected. This suit, therefore, stands dismissed. In view of the peculiar facts of the case, I make no order as to costs. 65. O.M.P. No. 5 of 1977: The claimant has agreed to pay Rs. 800/- as remuneration of the arbitrator. Shri O.P. Sharma, appearing on behalf of the arbitrator, accepts the settlement of this amount. The amount, therefore, be paid accordingly to the arbitrator by the claimant.