AJODHYA PRASAD Vs. THE PREMIER INSURANCE CO. LTD.

JUDGEMENT

(1.) THIS appeal is directed against an order rejecting an application under Section 20, Arbitration Act.

(2.) ON 23rd December, 1964, the Appellant submitted a proposal of insurance to the Respondent, the Premier Insurance Company Limited. The same day the Respondent company issued a certificate of insurance stating that the insurance for the purpose of the Motor Vehicles Act has commenced on 23rd December, 1964 and will continue till 22nd December, 1965 in relation to the vehicle owned by the Appellant. It appears that on 25th December, 1964 while the truck of the Appellant was in transit from Allahabad to Banda, it caught fire and was on the Allahabad -Banda Road, near Chiwlal. The Appellant claimed reimbursement of a sum of Rs. 28,317.30 P. The Respondent company, however denied its liability. The Appellant at first gave a notice to institute a suit. To that notice the company replied that in view of Clause 8 of the policy, the matter had first, to be raised by way of arbitration before a suit could validly be instituted. Thereupon the Appellants gave notice that the Appellant had appointed Mr. Krishna Nand as the arbitrator. The notice required the company either to agree to the appointment, or to nominate an arbitrator of its choice. At first the company intimated that it will appoint its own arbitrator but later it resiled from that statement and intimated to the Appellant that since there was no completed contract between the parties, there was no occasion to enforce any arbitration clause thereof. In this situation the Appellant moved the learned civil Judge, Allahabad under Section 50 of the Arbitration Act praying that the company should be directed to file the original policy agreement dated 23rd December, 1964 and to refer the dispute to arbitration.

(3.) THE learned Civil Judge found that there was no evidence of any fraud having been practised upon the Respondent company. It held that there was no concluded contract between the parties in which an arbitration clause may have been provided. He also held that since arbitration was contemplated to be held at Madras, the courts at Allahabad would have no jurisdiction, because under Section 20 of the Arbitration Act, reference can be made to an arbitrator who can give his award within the jurisdiction of this Court and not beyond it.