Syed Sadat Abdul Masud, J. - (1.) This is an application on behalf of the Defendant No. 2, M/s New India Assurance Company Ltd. (hereinafter described as the 'insurer'), under Sec. 34 of the Arbitration Act for stay of further proceedings in suit No. 404 of 1969 Mahabir. Prosad Sharma v/s. Esso Standard Eastern Inc. and Anr. The said suit was instituted on January 31, 1969, for a decree for a sum of Rs. 58,850 on account of loss, suffered by the Plaintiff Mahabir Prosad Sharma, caused to his truck No. ASZ 446 as a result of the alleged negligent handling of the petrol tanker No. MHO -2227 belonging to the Defendant No. 1, M/s Esso Standard Eastern Inc. (hereinafter described as the, 'insured'). At the time when the alleged loss of the truck took place the said petrol tanker belonging to the insured was insured by the latter under its motor insurance policy with the said insurer. The said insurance policy contains an arbitration clause which reads as follows: All differences arising out of this policy shall be referred to the, decision of an Arbitrator to be appointed in writing by the parties in difference or if they cannot agree upon a single Arbitrator to the decision to two Arbitrators one to be appointed in writing by each of the parties -within one calendar month after having been required in writing so to do by either of the parties or, in case the Arbitrators do not agree, of an Umpire appointed in writing by the Arbitrators before entering upon the reference. The Umpire shall sit with the Arbitrators and preside at their meetings and the making of an award shall be a condition precedent to any right of action against the company. If the company shall disclaim liability to the insured for any claim hereunder and such claim shall not within twelve calendar months from the date of such disclaimer have been referred to arbitration under the provisions herein contained then the claims shall for all purpose be deemed to have been abandoned and shall not thereafter be recoverable hereunder. The Plaintiff has impleaded both the insurer and the insured in his said suit for damages.
(2.) Mr. N. Majumdar, counsel for the insurer, has moved the present application for stay of the said suit. He has submitted that under Sec. 96(1) of the Motor Vehicles Act, 1939, read with Sec. 96(4), the Petitioner is bound to satisfy the judgment that may be passed against the insured. According to him, the liability of the insurer with respect to third party claim is fixed by the statute on the Petitioner and taking advantage of the said contract of insurance between the insurer and the insured, the. Plaintiff has made the Petitioner a party in the said suit. The arbitration clause contains a clause of the nature of Scott v/s. Avery, (1856) 5 H.L. Cas. 811, that is to say, the making of an award shall be a condition precedent to any right of action against the Petitioner company. In the premises, Mr. Majumdar has asked me to hold that the Plaintiff is really claiming under the insured, the latter being a party to the arbitration agreement. He has, therefore, submitted that the Petitioner is entitled to make an application for stay of the suit under Sec. 34 of the Arbitration Act.
(3.) Mrs. P. Banerjee, counsel for Mahabir Prosad Sharma, the Plaintiff -Respondent has raised a preliminary objection challenging the maintainability of the present application. The present application, according to her, has been made in the said suit No. 404 of 1969 and on the first page of the petition the cause title of the said suit stating the names and the addresses of the Plaintiff and the Defendants have been mentioned and as such, the Petitioner having made as application in the said suit has taken steps 'within the meaning of Sec. 34 of the Act'. Accordingly, the Petitioner is debarred from making the present application. It is true that the Petitioner should not have set out the names and addresses of the parties at the top of the first page of the petition, giving an impression that the application has been made in the said suit. But I am, however, not inclined to dismiss the present application on the ground of such procedural irregularity. The objection is more of a form than of a substance. At the bottom of the first page of the said petition, the Petitioner has also added the following: In the matter of An application under Sec. 34 of the Arbitration Act, 1940, for stay of further proceedings in the suit. It is urged that on the notice of motion even the aforesaid description has not been mentioned at all. The notice of motion, however, refers to the present petition verified by an affidavit of Arun Chandra Mukherjee affirmed on March 21, 1969, as a ground for the said notice of motion. As there is no allegation that apart from the Petitioner's reference to suit in the cause title of the petition the Petitioner has taken any step in this suit and as the petition itself contains the statement that the present application has been made under Sec. 34 of the Arbitration Act, 1940, it cannot be said that the Petitioner has taken any step in this suit, disentitling him to make the present application.;