RAMAKRISHNAN Vs. NEW INDIA ASSURANCE CO LTD

JUDGEMENT

(1.) THIS appeal is directed against the order of the I additional Sub Judge, Kozhikode in O. P. No. 21 of 1979 filed by the New India assurance Co. Ltd. (the respondent here) against the appellant, requesting that o. S 87 of 1979 filed by the appellant against the respondent claiming an amount of Rs. 2,65 000/- as damages be stayed. The appellant carries on business in coir yarn and coir mats. He used to stock these materials in his godowns at Calicut On 4-5-1977 he insured the stock of coir materials with the respondent under a fire policy, the duration of which policy was to expire at 4 p. m. on 4-5-1978. There was an accidental fire in the godown on 29-3-1978. The appellant reported this matter to the respondent. On receiving this intimation the respondent instructed his surveyor to conduct a survey of the damages. The survey was conducted on 31-3-1978. The survey report was not given till 4-6-1979. The surveyor wanted inspection of additional records to file a report. The appellant made repeated demands on the respondent to settle the claim. The appellant filed bis claim on 5-4-1978, and sent several communications to the respondent personally and through his lawyer on 9-10-1978, 27-10-1978, 4-12-1978 and 3-2-1979.

(2.) SINCE the claim was not settled nor the amount disputed notified the appellant had to file the suit, since a claim against the respondent under the Policy would get barred on the expiry of 12 months from the date of the accident under the agreement. The respondent entered appearance in the suit and filed the Original Petition in question under S. 34 of the arbitration Act containing a prayer to stay the proceedings in the suit. The said application was filed on the ground that the suit was filed without availing of the arbitration clause under which the parties had agreed to refer disputes arising between them to arbitration before taking other proceedings, for which reason S. 34 of the Arbitration Act was attracted.

(3.) THE learned counsel for the appellant has assailed the order of the court below with the plea that the conclusions arrived at were on an erroneous approach to the facts of the case, on a misappreciation of the principles of law involved and without proper care to look into the authorities which were referred by him in the order. He also contended that the court below had not properly construed the ambit of Clause. 18 of the agreement, nor the nature of the dispute the said clause contemplates, nor the rigour imposed by clause. 19 limiting the time for initiating action. He took us through various authorities in reinforcement of the submissions that the court below had exercised its discretion erroneously and in violation of the settled principles of law governing the case.