ADVANCE COMMERCIAL CO. LTD. Vs. DALMIA CEMENT LTD.

JUDGEMENT

(1.) This appeal is preferred by the appellant insurance company, M/s. Advance Commercial Co. Ltd. against the order of the learned single Judge dated 10th Jan., 1995. The appellant was the respondent in the Suit No. 2529-A of Delhi Rent Control Act, 1986 filed by M/s. Dalmia Cement (Bharat) Ltd., (respondent in this FAO). The point raised concerns interpretation of Sections 8 and 9 of the Arbitration Act. 1940

(2.) The appellant Co. (formerly known as Advance Insurance Co. Ltd) was doing business in insurance. The respondent had taken an insurance policy from the appellant. In 1967, there was a fire at the plant of the respondent Co. It filed two claims viz. (i) for Rs. 65,304.19 for loss of production and (ii) tor Rs.6,17,030 on account of reduction in production against the appellant and other insurance companies. Clause 8 of the policy read as follows:

(3.) The respondent (claimant) moved petition under Sec. 20 of the Arbitration Act (Suit No. 70(A) of 1969.) The suit was compromised and on 18-4-1969, it was withdrawn. Under the compromise, parties agreed to refer the dispute to an arbitrator. The respondent company named one Mr. D.P. Kapoor. Chartered Accountant as arbitrator and the appellant and other insurance companies named Mr. B.S. Khosla. as their arbitrator, as permitted by the arbitration clause. It appears that Mr. B.S. Khosla died in March, 1986 after prolonged illness. But, even earlier, when on 16-9-1984, notice was issued on behalf of the respondent-claimant to the arbitrators, the notice was received by Shri D.P. Kapoor but the one sent to Mr. B.S. Khosla was returned as refused. On that basis, the claimant's lawyers issued notice dated 12-11-1984 to the appellant insurance company that tho appellant's arbitrator was neglecting and refusing to act in the above arbitration. As such the appellants were required to let them know as to whether Shri B.S. Khosla was continuing to act as Arbitrator, and if he was so continuing. to have the copy of the notice dated 16-9-84 sent to him. The letter further stated that in the event of the said Shri B.S. Khosla not continuing to act in the matter, the appellant may appoint another arbitrator in this place. It was also stated that in case, nothing was heard from the appellant in 15 days after service of the above letter dated 12-11-84, then the claimant's arbitrator Shri D.P. Kapoor would act as the sole arbitrator in the matter.