THE RUBY GENERAL INSURANCE CO. LTD. Vs. THE BHARAT BANK, LTD. AND OTHERS
HIGH COURT OF PUNJAB AND HARYANA
The Ruby General Insurance Co. Ltd.
The Bharat Bank, Ltd. And Others
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Kapur, J. -
(1.) IN this defendant's appeal the sole point for determination is the interpretation of cl. 19 of the terms of the policy.
(2.) IN order to resolve the controversy it is necessary to give in some detail the facts of this case. On 21st December 1947, firm Kartar Singh Amrik Singh took out a policy of fire insurance on cotton goods stock which was lying in the godown of M. Gore Cotton Ginning Factory situate at Jandiala in the district of Amritsar, and it was pledged with the Bharat Bank, Limited, Katra Abluwalian Branch, Amritsar. On 13th February 1948, this policy was renewed for a period of three months. On the night between 20th and 21st March 1948, there was a fire and the allegation is that the whole of the goods were burnt down. By letter, Ex. R/1, dated 22nd March 1948, the Bharat Bank informed the insurers that the goods had caught fire and asked the Insurance Company to sent their representative to inspect the godown. It appears that a difference arose between the parties with regard to the amount of the damage which had been caused by the fire. Sometime in March 1948, the Insurance Company informed the Bank that they had appointed Mr. Nand Lal Oberoi to assess the loss on their behalf. What happened exactly after this is not clear, but some correspondence ensued between the parties as regards the appointment of the arbitrator. On 21st January 1949, the Insurance Company offered a sum of Rs. 22,500 in full and final settlement of the loss that had occurred. This offer was without prejudice, but the offer was rejected by the Bank in the following terms:
With reference to your letter.....we beg to advise that your offer of Rs. 22,500 in full and final settlement of our above claim is not acceptable to Messrs Kartar Singh Amrik Singh. They are, therefore, taking steps to serve you the necessary notice for referring the matter to arbitration.
The evidence of Mr. Baij Nath Chopra, Manager of the Insurance Company, shows that some kind of notice was served on the company for referring the matter to arbitration, but what happened to this notice and why an arbitrator was not appointed does not seem to be clear from the record. The fact remains that no arbitrator was appointed.
(3.) ON 18th March 1949, an application under S. 20, Arbitration Act, was filed by the Bank praying that the agreement as contained in the policy be filed, arbitrator be appointed and an award obtained from him which should be made a rule of the Court To this application the Insurance Company replied on 21st April 1949, in which they pleaded that the Bharat Bank had no locus standi to make the application; that there was no agreement in writing and that the 12 months from the happening of the alleged loss having already expired and the claim being neither the subject -matter of pending action nor arbitration, the Company was no longer liable for any loss and the policy was not enforceable.;
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