MAHABIR PROSAD SHARMA Vs. ESSO STANDARD EASTERN INC.

JUDGEMENT

(1.) This is an application on behalf of the Defendant No. 2, M/s New India Assurance Company Ltd. (hereinafter described as the 'insurer'), under Sec. 34 of the Arbitration Act for stay of further proceedings in suit No. 404 of 1969 Mahabir. Prosad Sharma v/s. Esso Standard Eastern Inc. and Anr. The said suit was instituted on January 31, 1969, for a decree for a sum of Rs. 58,850 on account of loss, suffered by the Plaintiff Mahabir Prosad Sharma, caused to his truck No. ASZ 446 as a result of the alleged negligent handling of the petrol tanker No. MHO -2227 belonging to the Defendant No. 1, M/s Esso Standard Eastern Inc. (hereinafter described as the, 'insured'). At the time when the alleged loss of the truck took place the said petrol tanker belonging to the insured was insured by the latter under its motor insurance policy with the said insurer. The said insurance policy contains an arbitration clause which reads as follows:

(2.) Mr. N. Majumdar, counsel for the insurer, has moved the present application for stay of the said suit. He has submitted that under Sec. 96(1) of the Motor Vehicles Act, 1939, read with Sec. 96(4), the Petitioner is bound to satisfy the judgment that may be passed against the insured. According to him, the liability of the insurer with respect to third party claim is fixed by the statute on the Petitioner and taking advantage of the said contract of insurance between the insurer and the insured, the. Plaintiff has made the Petitioner a party in the said suit. The arbitration clause contains a clause of the nature of Scott v/s. Avery, (1856) 5 H.L. Cas. 811, that is to say, the making of an award shall be a condition precedent to any right of action against the Petitioner company. In the premises, Mr. Majumdar has asked me to hold that the Plaintiff is really claiming under the insured, the latter being a party to the arbitration agreement. He has, therefore, submitted that the Petitioner is entitled to make an application for stay of the suit under Sec. 34 of the Arbitration Act.

(3.) Mrs. P. Banerjee, counsel for Mahabir Prosad Sharma, the Plaintiff -Respondent has raised a preliminary objection challenging the maintainability of the present application. The present application, according to her, has been made in the said suit No. 404 of 1969 and on the first page of the petition the cause title of the said suit stating the names and the addresses of the Plaintiff and the Defendants have been mentioned and as such, the Petitioner having made as application in the said suit has taken steps 'within the meaning of Sec. 34 of the Act'. Accordingly, the Petitioner is debarred from making the present application. It is true that the Petitioner should not have set out the names and addresses of the parties at the top of the first page of the petition, giving an impression that the application has been made in the said suit. But I am, however, not inclined to dismiss the present application on the ground of such procedural irregularity. The objection is more of a form than of a substance. At the bottom of the first page of the said petition, the Petitioner has also added the following: