PURAN CHAND KATOCH Vs. NATIONAL INSURANCE CO.LTD.

JUDGEMENT

(1.) Appellant is the plaintiff whereas respondents are the defendants and they will be referred to as such in this judgment. Plaintiff is aggrieved by the decree and judgment dated 31.8.1998 passed by the District Judge, Kangra at Dharamshala, whereby the appeal of the defendants was allowed and the decree and judgment dated 30.3.1996 passed by the Sub Judge 1st Class (2), Palampur, district Kangra, was set -aside as a result of which the suit of the plaintiff was dismissed as not maintainable holding that remedy lies only under the Arbitration Act. The Sub Judge 1st Class had decreed the suit to the effect that the plaintiff is entitled to receive a sum of Rs.56,000/ - from the defendants and the defendants were directed to make payment of this amount along with interest at the rate of 12.5% per annum from 3.8.1988 till the date of realization. The plaintiff was also directed to affix and valorem court fee on the plaint at the suit amount of Rs.70,000/ - within a period of two weeks, failing which the suit would be deemed to have been dismissed with costs. It was also decreed that after payment of Rs.56,000/ - with interest to the plaintiff he would not have any right, title or interest whatsoever in car No.HPZ -488 and would be liable to get the registration transferred in the name of the defendants.

(2.) The brief facts of the case are that the plaintiff had insured his Ambassador taxi -car (Model -1984) with the defendants for a sum of Rs.70,000/ -. The said taxi car was stolen and theft was reported in the police by the driver on 28.7.1988 and the defendants were duly informed of the same. The plaintiff filed his claim for Rs.70,000/ - with the defendants which was not finalized on one pretext or the other and the defendants firstly offered a sum of Rs.30,000/ - on 10.7.1989 and thereafter a sum of Rs.45,000/ - on 16.10.1989. Ultimately, the plaintiff asked the defendants to refer the matter to arbitration in terms of arbitration agreement to which they agreed. Accordingly, Capt. S.P. Dhawan was appointed arbitrator on behalf of the plaintiff and shri R.K. Sood, Advocate was appointed arbitrator on behalf of the defendants. Both the arbitrators by their communication dated 26.3.1990, Ext.P -2, wrote to the parties that keeping in view their mood to compromise, they had found a reasonable solution, without going into the arbitration proceedings, to recommended Rs.56,000/ - as amicable and respectable settlement, but it was left to the parties to agree upon the settlement amount in their own interest and to cut down the arbitration proceedings and further expenses.

(3.) Thereafter, the plaintiff vide his letter dated 28.5.1990, Ext. D -l, wrote to the defendants to make payment of Rs.56,000/ - considering the settlement Ext.P -2 as award, but his arbitrator Capt. S.P. Dhawan informed him vide letter dated 21.6.1990, Ext.D -3 that no arbitration proceedings were conducted and the settlement was made with the consent of the parties. On the other hand, the arbitrator of the defendants Shri R.K. Sood, Advocate, vide his letter dated 8.6.1990, Ext. D -4, asked the defendants whether they - wanted registration of the award which would be done with the Sub Registrar, Palampur, or decree of the Court under Section 14 of the arbitration Act. Despite the opinion of their arbitrator the defendants wrote to the Manager, Punjab National Bank (PSC Cell), Palampur with a copy to the plaintiff on 8.6.1990, Ext.D -1, that as per their earlier offer they were ready to settle the matter for Rs.45,000/ -on the plaintiffs submitted the requisite documents within 15 days of the receipt of their letter, failing which the matter would be closed as no claim. It was clearly mentioned in the letter that the so called arbitration was totally ambiguous and in fact, no arbitration was ever held under the Arbitration Act.