BRAHMADEO CHOUDHARY Vs. NATIONAL INSURANCE CO LTD

JUDGEMENT

(1.) This is an appeal under Section 39 Sub-section (1) (f) of the Arbitration Act (hereinafter referred to as the Act) by the opposite party against a proceeding which arose out of an application filed under Section 33 of the Act by the respondent-Insurance Company in the following circumstances:-- The Insurance Company had issued a comprehensive insurance policy with respect to a truck No. BRV 731 owned by the appellant sometime in the year 1971 containing an arbitration clause. Sometime thereafter, the truck met with am accident which led the appellant to make a claim, for compensation against the respondent-company for a sum of Rs. 40,000/-. As the Company put of the matter for a considerable time, the appellant made an application under Section 20 of the Act in the court of the Subordinate Judge, Ranchi, which was registered as Misc. Case No. 6 of 1972. The stand of the Insurance Company in that proceeding was that the Insurance policy containing the arbitration clause was obtained by the appellant on suppression of material facts and, therefore, there was no occasion for making any reference to the arbitrator in respect of the claim made under the insurance policy. The court below however, overruled the Company's objection by its order dated the 5th May, 1973 and referred the matter for arbitration,

(2.) Hardly the arbitrators had entered upon the reference, the Company filed an application on 18th April, 1974 in the court below under Section 33 of the Act for withdrawing the matter from the arbitrators and to deal with the same in the court and for a declaration that the entire agreement was void. The ground taken by the Company for challenging the validity of the agreement of the insurance policy was that a fraud was practised by the appellant. The learned Special Subordinate Judge, by the impugned order, accepted the case of the company and accordingly held that the arbitrators had got no jurisdiction. The finding of the learned Subordinate Judge in this regard are as follows :--

(3.) It is against this order that the appellant has filed the present appeal.