NEW GREAT INSURANCE COMPANY OF INDIA LTD Vs. UNITED EQUIPMENTS AND STORES PVT LTD

JUDGEMENT

(1.) THIS case raises a very important and interesting point as to the right of the party to a contract of insurance to file a suit where under the contract it is provided for that all differences arising out of the policy are to be referred to arbitration and that the making of an award shall be a condition precedent to any right of action against the company.

(2.) THE broad facts of this case are admitted. THE opposite party's motor car was insured with the petitioner company and it was involved in an accident on the 8th of March, 1963. THE opposite party sent the claim form duly filled in and signed, together with detailed estimate of repairs done by Barman and Company in respect of the damage to whom it had paid a sum of Rs. 1113.35 on this account. THE petitioner company by its letter dated the 24th August, 1964 (Exhibit 2) contended that the opposite party had taken away the motor car from the garage and did not give any opportunity to the surveyor appointed by the petitioner company to inspect the car, and as such, the petitioner company repudiated the claim. THEreafter the opposite party filed the instant suit in the court of the Small Causes, at Calcutta for recovery of the sum of Rs. 1113.35 paise. Before the learned trial Judge the petitioner raised only one point and it was to the effect that in view of clause 7 of the Contract of Insurance the dispute in question was to be referred to arbitration, and the making of an award was a condition precedent to the institution of the suit, and as arbitration had not been resorted to, the suit was a premature one and should be dismissed. THE learned trial Judge did not accept this contention and decreed the suit. THE petitioner filed an application under Section 38 of the Presidency Small Cause Courts Act before the Full Bench of the small causes Court at Calcutta and that Full Bench also upheld the decision of the trial Court. Hence this application.

(3.) MR. Gupta has referred to a number of decisions and also to different parts of Halsbury's Laws of England. I will refer to the same as and when it would be convenient.