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The Premier Insurance Co. Ltd. Vs. V.R. Kannan and anr. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtChennai High Court
Decided On
Case NumberCivil Revn. Petn. No. 862 of 1963
Judge
Reported inAIR1964Mad284
ActsArbitration Act, 1940 - Sections 33
AppellantThe Premier Insurance Co. Ltd.
RespondentV.R. Kannan and anr.
Appellant AdvocateP. Ananthakrishna Nair, Adv.
Respondent AdvocateK.C. Jacob, ;S.K.L. Ratan, ;M. Cardoza, ;E.L. Subhanna and ;N. Balasubramanian, Advs.
DispositionRevision dismissed
Cases Referred and Mathu Kutti v. Varee Kutti
Excerpt:
- .....void and unenforceable. the petitioner is an insurance company carrying on business as insurers of motor vehicles. the first respondent who owned a bus took a comprehensive policy of insurance for the vehicle to be in force from 29th may 1961 to 28th may 196z. on 4th. march 1962, the bus met with an accident resulting in injuries to its passengers. there was also damages to the bus. the first respondent thereupon made a claim to me petitioner for the damage sustained by him which the latter would be liable to pay under the terms of the insurance. the claim1 was repudiated by the petitioner on the ground that the policy of insurance had become void by reason of the owner of the bus changing the original engine into a new one during the currency of the policy, it was said that it amounted.....
Judgment:
ORDER

S. Ramachandra Iyer, C.J.

1. This is a petition to revise the order of the Second Assistant Judge of the City Civil Court, Madras, refusing to declare an arbitration agreement as having, become void and unenforceable. The petitioner is an insurance company carrying on business as insurers of motor vehicles. The first respondent who owned a bus took a comprehensive policy of insurance for the vehicle to be in force from 29th May 1961 to 28th May 196Z. On 4th. March 1962, the bus met with an accident resulting in injuries to its passengers. There was also damages to the bus. The first respondent thereupon made a claim to me petitioner for the damage sustained by him which the latter would be liable to pay under the terms of the insurance. The claim1 was repudiated by the petitioner on the ground that the policy of insurance had become void by reason of the owner of the bus changing the original engine into a new one during the currency of the policy, it was said that it amounted to an alteration of the motor vehicle itself. Relying upon the arbitration clause container in the policy of insurance, the first respondent nominate his arbitrator. The petitioner then came toward with the application out of which this petition arises, purporting to do so under Section 33 of the Arbitration Act, for a declaration that the arbitration agreement contained in the policy of insurance had become void and unerstorceable. The learned Assistant City Civil Judge has dismissed this application and hence this revision1.

2. Mr. Sarvabhauman, appearing for the petitioner, contends that, as under Section 33 of the Arbitration Act, any party to an arbitration agreement can challenge the validity, of it before a court, it was obligatory upon the lower. Court to investigate the matter whether the engine has been changed, and, if so, to declare that there could be no valid reference to arbitration. The argument suffers under a double fallacy. A mere change of a part of a motor vehicle cannot obviously amount to a change of the vehicle itself. It will be a question of fact in each case whether any change effected in the motor vehicle would be such that it can be said that the vehicle itself has been, changed. Secondly, what Section 33 authorises the Court a enquire is about the validity of the arbitration agreement. It is not the petitioner's case that the arbitration agreement contained as it is in the insurance policy was invalid ab initio. What, is said is that, by reason of the change of the engine, the policy had become ineffective and that therefore the arbitration clause would not avail.

That is merely a defence to the claim made by the first respondent, which does not go to the root of the arbitration agreement itself. That conter on will have to be raised before the arbitrators. Learned counsel for the petitioner next referred me to the decisions reported in Suwalal Jain v. Clive Mills Co., : AIR1960Cal90 and Mathu Kutti v. Varee Kutti, : AIR1950Mad64 . But those are cases where the validity of the agreement was challenged on the ground that there was no valid agreement even, from the beginning or there were infirmities at the inception therefore. The present is not such a case. the substance of the plea of the petitioner is only a discharge of his obligation, by reason of the alleged change of the engine of the vehicle, and that cannot obviously affect the validity of the agreement itself. The civil revision petition fails and is dismissed with costs.


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