- (1.) THIS is an application under S.33, 5 and 12 of the Arbitration Act for declaration that there is no arbitration agreement in existence between the parties, the reference made by the respondent No. 1 is invalid and for restraining the respondents Nos. 3 and 4, the joint arbitrators from proceeding with the arbitration.
(2.) ON 4th December 1973, the petitioner had issued a Miscellaneous Accident Policy bearing No. 533490425 in favour of the respondent No. 2 herein covering the risk of burglary and housebreaking in respect of stock-in-trade stored in the godown No. 57, Diamond Harbour Road, Calcutta for a period of 12 months from 1-12-1973 and 1-12-1974. The sum insured was Rs. 1,40,000/-. Clause 12 of the said policy contained an arbitration agreement as follows :- "If any dispute shall arise as to whether the company is liable under this policy or as to the amount of its liability the matter shall, if required by the company be referred to the decision of two neutral persons as Arbitrators one of whom shall be named by each party or of an umpire who shall be appointed by the said Arbitrators before entering on the reference; and in case the Insured or his legal personal representatives shall neglect or refuse for the space of two calendar months after request in writing from the company so to do to name an Arbitrator the Arbitrator of the company may proceed alone and no action or proceeding shall be brought or prosecuted on the policy until the award of the Arbitrator, Arbitrators or umpire has been first obtained" This policy also contained an agreed Bank Clause No. 4 which is as follows :- "That any adjustment, settlement, compromise or reference to arbitration in connection with any dispute between the company and the insured or any of them arising under or in connection with the policy if made by the Bank shall be valid and binding on all parties insured hereunder, but not so as to impair the right of the Bank to recover the full amount of any claim it may have on other parties insured hereunder........"
(3.) BY another policy bearing No. 533490537 dated 31-12-1974, the said earlier policy was renewed for 12 months up to December 1975. This policy also contained the agreed Bank Clause set out above. According to the petitioner by mistake the "Agreed Bank Clause" was sent with the policy and as such it did not form part of the contract During the subsistency of the policy, loss was caused to the respondent No. 2 in October 1974 and a claim was lodged with the petitioner which was numbered as claim No. 3130/74/025/BP. Another loss was caused on 7-11-1974 and the claim submitted was numbered as claim No. 3130/75/005/ BP. According to the petitioner the surveyor appointed for the purpose of assessing the loss, submitted a report on 28-8-1975 recording that the alleged claims were without any merit It is further alleged in the petition that a second surveyor was appointed but the respondent No. 2 did not produce its books of accounts to substantiate its claims. BY letters dated 25-5-1979 and 13-10-1979 the Bank, the respondent No. 1 requested the petitioner to settle the claims but the petitioner did not consider the same in view of the surveyor's report The respondent No. 1 again gave a reminder to the petitioner dated 13-3-1981 and informed the petitioner that it, had appointed its arbitrator and requested the petitioner to appoint its own arbitrator.;