Janah, J. - (1.) This appeal is on behalf of the defendant and it arises out of a suit for recovery of damages to the extent of Rs. 11,165.24 p. The respondent instituted the suit for damages against the appellant on account of loss suffered to a Jeep belonging to the respondent bearing registration No. WBD 231 which was insured with the appellant for a sum of Rs. 24,029.80 p. The lose was suffered as a result of the vehicle being set on fire by some of the workers belonging or who belonged to the respondent, Calcutta Dock Labour Board. It was alleged fey the plaintiff that as a result of the fire the vehicle was heavily damaged and the cost of repair was assessed at Rs. 11,170.24 p. by Khettry Motors. The defendant was informed of the damage and of the cost of repair but the defendant illegally disclaimed its liability. Subsequently, the jeep was repaired by Khettry Motors at a cost of Rupees 11,155.24 p. which was paid by the plaintiff to Khettry Motors. The plaintiff respondent brought the suit for recovery of the said sum on the basis of the comprehensive policy.
(2.) The defendant contested the suit by filing a written statement. The written statement was filed on February 23, 1970. In that written statement, the defendant denied its liability for the amount claimed, on two grounds. The two grounds were that the plaintiff not having referred the claim to arbitration within 12 calendar months from the defendant's disclaimer of the liability, the claim must be deemed to have been abandoned by the plaintiff in terms of condition No. 7 of the Policy. The second ground was that the damage to the vehicle was caused by riot and the plaintiff was, therefore, not entitled to any compensation in terms of the general exception No. 4 of the Policy. Subsequently, on the date of hearing on 18th May, 1971, the defendant filed an additional written statement which was accepted by the Court. By the said additional written statement the defendant introduced a further defence to the effect that condition No. 7 of the Policy lays down that any dispute between the parties arising out of the Policy shall be referred to arbitration and the making of an award shall be a condition precedent to any right of action against the Corporation. As the dispute in question was not referred to arbitration and no award was made, the suit is not maintainable in accordance with the terms of the said condition No. 7.
(3.) Originally six issues were framed but subsequently by an order dated 4th August, 1971 the issues were recast and the issues originally framed were substantially altered. The parties went to trial on the issues thus recast. The trial Court, upon a consideration of the materials on record came to the conclusion that the damage was caused by fire but there was no rioting as alleged by the defendant and therefore, it did not fall within the general exceptions contained in Clause 4 of the Policy. The trial court found that although there was repudiation of the claim by the defendant, it was still open to the plaintiff to insist on the performance of the arbitration clause, inasmuch as, the entire arbitration agreement was not repudiated by the defendant. The trial court further found that the contract contained in Clause 7 of the Policy to the effect that claim shall have to be made within 12 months from the date of disclaimer by the insurer was not hit by Section 28 of the Indian Contract Act and that Condition No. 7 of the Policy was valid in law. The trial court, however, found that in the circumstances of the case, the defendant waived its right with regard to the arbitration clause and the suit was, therefore, maintainable. The trial court accordingly passed a decree in favour of the plaintiff.;