RUBY GENERAL INSURANCE CO. LTD versus PEAREY LAL KUMAR AND ANOTHER

Citation: [1952] 1 S.C.R. 501 · Decided: 25-02-1952 · Supreme Court of India · Bench: SIR SYED FAZL ALI · Disposal: Dismissed

Judgment (excerpt)

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-
S.C.R. 
SUPREME COURT REPORTS 
501 
date of the agreement and having none he could not 
have transferred it. 
The mortgagor's possession was 
consequently not referable to the agreement. 
The · appeal fails and is dismissed with costs. 
Appeal dismissed. 
Agent for the appellant : Ganpat Rai. 
Agent for the respondent: A. C. Dave. 
RUBY GENERAL INSURANCE CO. LTD. 
ti. 
PEAREY LAL KUMAR AND ANOTHER. 
[ SAIYID F AZL Au and VIVIAN BosE JJ.] 
lt1Jian Arbitration Act (X of 1940), s. 33-Arbitration clause-· 
Wht'ther" disputt' "arises out of agrt't'ment"-Tests-Plea that agree• 
1flt'11t is not applicable and does not subsist-No dispute about the· 
existence or validity or meaning-Jurisdiction of arbitrator-Appli; 
cation under s. 33-Maintainability. 
The appellant company insured a car belonging to respondent' 
No. 1 and issued a policy which contained, inter alia, the following_ 
tcrms:-"All differences arising out of this policy shall be referred 
to the decision of an arbitrator to be appointed by the parties • 
. . . . . . If the company 
shall disclaim 
liability to the insured for 
any claim 
hereunder and 
such claim shall 
not within twelve 
calendar months from the date 
of such 
disclaimer 
have been 
referred to arbitration 
then the claim 
shall have been deemed 
to have been abandoned and shall not be recoverable." 
The car 
was lost, and the 
company 
through its 
Branch 
Manager dis-
claimed liability on· three different dates. 
The insured did not 
take any action in regard to the appointment of an arbitrator un-
til more than twelve months after the last disclaimer by the com-
pany. 
The case of the company was that the insured must be 
deemed to have abandoned his claim by virtue of the contract 
ef insurance policy while the respondent averred that there was 
never any valid disclaimer by the company of its liability as the 
Branch Manager had 
no authority to 
disclaim the liability and 
it could have been disclaimed only by the resolution of the com-
pany. The 
company 
presented 
the present 
application under 
sec. 33 of the Indian Arbitration Act praying for a declaration 
that the reference to arbitration was illegal and the award if made 
by the arbitrator would not bind the company. 
It was contend-
ed on its 
behalf that 
the arbitration 
clause 
had ceased to be 
1952 
Kashinath 
Bhaslr..ar 
Datar 
v. 
Bhaslr,,ar 
VishweshwM' 
Karve. 
1952 
Fe/J. 25, 
1952 
1Ruby General 
Insurance 
Co. Ltd. 
v. 
Pearey Lal 
Kumar 
'llnd Anoth<r. 
502 
SUPREME COURT REPORTS 
[1952) 
operative and the question as to the existence and validity of the 
Arbitration agreement was triable by the court under sec. 33 of 
the Arbitration Act and not by the arbitrator. 
Held, (i) that the point on which the parties were in dispute 
was a difference "arising out 
of the policy", because recourse to 
the contract by which both the parties were bound was necessary 
for the 
purpose 
of determining the matter in dispute between 
them as there was no contention raised in the present case 
by 
either of the parties that there was no contract entered into at 
all or that it was void ab initio, and therefore the arbitrator had 
jurisdiction 
to decide the matter referred to him. A contention 
'that the 
arbitration agreement has ceaseG 
to be 
applicable or 
that it 
no longer subsists 
will not oust the jurisdiction of the 
·arbitrator. 
(ii) No question of determining the effect 
of the arbitration 
:within the n1eaning of sec. 33 arose because there was no dispute 
between the parties as to what it meant. 
A. M. Mair and Co. v. Gordhandas Sagarmul/ [1950] (S.C.R. 
'792), Heyman v. Darwins Ltd. ([1941] 1 ·A.E.R. 337), Mecaura v. 
Northern Assurance Co. ([1925] A.G. 619), Stebbing v. Liverpool, 
London 
and 
Globe Insurance Co. Ltd. ([1917], 2 K. B. 433) 
referred to. 
CIVIL 
APPELLATE 
JuRISDICTION : Civil 
Appeal 
No. 
163 
of 
1951. 
Appeal 
by 
special 
leave 
from 
the Judgment dated the 10th April, 1951, of the High 
Court of Judicature for the State of Punjab at Simla 
(Kapur J.) in Civil Revision No. 286 of 1950 arising 
out of Order dated the 24th March, 1950, of the Court 
of Subordinate Judge, 1st Class, Delhi, in an Applica-
tion under Section 33 of Indian Arbitration Act, X of 
1940. 
Rattan Lal Chawla (K. N. Agarwal, with him) for 
the appellant. 
Som Nath Chopra 
1952. February 25. 
was delivered by 
for the 
The 
respondent. 
Judgment 
of the court 
FAZL Au J .-This is 
an 
appeal 
by special 
leave 
against

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