SHYAMLAL AGARWALLA Vs. UNION LIFE

JUDGEMENT

(1.) This is an application on behalf of the Union Life & General Insurance Co., Ltd., inter alia for a declaration that the reference to arbitration of Sri Gangaprasad Lohia was and is invalid, that the said arbitrator had no jurisdiction to arbitrate with regard to the disputes and that the purported award made by him be declared invalid and the same be set aside. The matter arises in this way.

(2.) Under a policy of insurance, dated December 24, 1948, a motor car, belonging to the Respondent Shyamlal Agrawalla, was insured with the Petitioner for the sum of Rs. 4,000. Under Clause 8 of the said policy, it was provided that the truth of the statements and answers in the proposal should be condition precedent to any liability of the insurance company. There was an arbitration clause in the said agreement, the material portion of which runs as follows:

(3.) By a letter, dated March 31, 1949, the Respondent informed the Petitioner that his motor car was stolen and made a claim for the sum of Rs. 4,000. The Petitioner contended that the Respondent in the proposal form had made a false declaration as to the year of the manufacture of the said car, because the year of the manufacture of the said car was mentioned in the proposal form as 1940, but in fact the year of the manufacture of the said car was 1937. The Petitioner, therefore, contended that it had no liability whatsoever under the said policy and the said policy was void and/or voidable and the Petitioner avoided the same. By a letter, dated March 23, 1950, written by Sushil Kumar Ghosh, solicitor for the Respondent, to the Petitioner, the said Susil Kumar Ghosh informed the Petitioner that his client was prepared to go to arbitration and nominated Sri Gangaprasad Lohia of No. 161/1/1, Harrison Road, Calcutta, as arbitrator on the one side and he on behalf of his client called upon the Petitioner to nominate its arbitrator within seven days from the date of receipt of the said letter. In reply to the said letter the Petitioner, on May 1, 1950, through its lawyer wrote a letter to the Respondent, wherein it was alleged that the said insurance was void ab initio and that the arbitration clause had no application and that the Petitioner was within its rights in declining liability in toto as it had already done.