A. Banerji, J. - (1.) This first appeal from order arises out of judgment dated September 13, 1977, passed by the 1st Civil Judge, Kanpur, on an application by the appellant for restraining the opposite parties to proceed with the arbitration proceedings before respondent No. 2. The application was rejected and against that order, the present first appeal from order has been filled.
(2.) Although the respondents were duly served and Mr. B. R. Tripathi, advocate, filed his vakalatnama on behalf of respondent No. 1, no one has appeared to contest this appeal. Respondent No. 2 was named as arbitrator. He is not represented In this court. The Bench secretary has informed us that Mr. B. R. Tripathi has indicated that he has no instructions in this case.
(3.) We have heard Mr. S. M. Dayal, learned counsel for the appellant. The principal contention of the learned counsel was that since the appellant-company had repudiated the agreement, there was no jurisdiction in the arbitrator to proceed with the arbitration proceedings. Reference was made to Clause 10 of the conditions of the policy to say that if the company disputes or does not accept the liability under or in respect of the policy, then the matter could not be referred to arbitration at all. In other words, the principal question depends on the interpretation of Clause 10 of the conditions of the policy. We may, therefore, refer to the said clause, which reads as under ; " 10. Arbitration.--If any difference shall arise as to the quantum to be paid under this policy (liability being otherwise admitted) such difference shall be referred to arbitration in accordance with the provisions of the Indian Arbitration Act, 1940, as amended from time to time and for the time being in force. It is clearly agreed and understood that no difference or dispute shall be referable to arbitration as hereinbefore provided, if the company has disputed or not accepted liability under or in respect of this policy. It is also hereby further expressly agreed and declared that if the company shall disclaim liability to the insured for any claim hereunder and such claim shall not, within 12 calendar months from the date of such disclaimer have been made the subject matter of a suit in a court of law, then the claim shall for all purposes be deemed to have been abandoned and shall not thereafter be recoverable hereunder. ";