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1978 Supreme(Cal) 590
High Court Of Calcutta
M. M. Dutt, Sharma
JAGADHATRI BHANDAR, JAGADHATRI OIL MILLS - Appellant
Versus
COMMERCIAL UNION ASSURANCE CO.LTD. - Respondent
F. A. 217 Of 1973
Decided On : 09/29/1978
AMAL SAHU, AMAR NATH BANERJEE, BHOLANATH SEN, SITI KANTHA LAHIRI
A pure point of law cannot be referred to arbitration unless the parties specifically agree to do so.
Headnote:
INSURANCE - BURGLARY AND HOUSE BREAKING POLICY - CLAIM FOR LOSS OF MONEY - INTERPRETATION OF POLICY CONDITIONS - ARBITRATION CLAUSE - MAINTAINABILITY OF SUIT - PURE POINT OF LAW - TIME LIMIT FOR REFERRING DISPUTE TO ARBITRATION - REPUDIATION OF CONTRACT.
Fact of the Case:
Plaintiff, a partnership firm, insured its shop against burglary and house breaking with the defendant insurance company. On February 6, 1970, four men entered the shop, threatened the partners with revolvers, and took away Rs. 32,871/- from the safe. The plaintiff submitted a claim for Rs. 30,000/-, the limit of indemnity under the policy. The defendant company denied liability, claiming that there was no forcible and violent entry into the premises at the time of the loss. The plaintiff filed a suit for recovery of the insurance money. The trial court dismissed the suit, holding that the claim was not admissible under the policy and that the suit was not maintainable in view of the arbitration clause.
Finding of the Court:
The High Court allowed the plaintiff's appeal and decreed the suit. It held that the plaintiff had proved the occurrence of the incident and the loss of money. The court interpreted the policy conditions and held that the claim was admissible under the policy, as the agreement under the schedule extended the policy coverage to loss of property due to robbery as well. The court also held that the arbitration clause did not bar the maintainability of the suit, as the dispute between the parties related to a pure point of law, which was not covered by the arbitration agreement. The court further held that the defendant company's repudiation of the contract did not vitiate the contract or make it non-existent.
Issues: 1. Whether the plaintiff had proved the occurrence of the incident and the loss of money? 2. Whether the claim was admissible under the policy? 3. Whether the suit was maintainable in view of the arbitration clause?
Ratio Decidendi: 1. The court held that the plaintiff had proved the occurrence of the incident and the loss of money based on the evidence of the plaintiff's witnesses, the police report, and the newspaper report. The court rejected the trial court's findings that the evidence was unreliable and that the plaintiff had not examined all the persons who had assembled after the incident. 2. The court interpreted the policy conditions and held that the claim was admissible under the policy. The court held that the agreement under the schedule extended the policy coverage to loss of property due to robbery as well. The court rejected the defendant's contention that the entry of the miscreants was neither forcible nor violent, and that the conditions under the agreement were not fulfilled. 3. The court held that the arbitration clause did not bar the maintainability of the suit, as the dispute between the parties related to a pure point of law, which was not covered by the arbitration agreement. The court held that the parties did not specifically agree to refer a pure point of law to the arbitrator and that the arbitration clause was in general terms. The court also held that the defendant company's repudiation of the contract did not vitiate the contract or make it non-existent.
Final Decision: The High Court allowed the plaintiff's appeal and decreed the suit. It declared that the contract of insurance covers the loss of money from the safe in the plaintiff's shop on Feb. 6, 1970, and that the plaintiff is entitled to be indemnified by the defendant company on payment of Rs. 30,000/-. Further it is directed that the plaintiff is entitled to recover the said sum of Rs. 30,000/- from the defendant company on account of the aforesaid loss sustained by it. The said sum shall bear simple interest at the rate of 6% per annum from date till realisation.
( 1 ) THIS appeal is at the instance of the plaintiff and it arises out of a suit for recovery of a sum of Re. 30,000/- under an Insurance Policy.
( 2 ) THE case of the plaintiff, a partnership firm, was that the defendant, Commercial Union Assurance Company Limited, entered into a contract of insurance with the plaintiff by issuing a Burglary and House Breaking Policy dated Sept. 17, 1966, indemnifying loss of money to the limit of Rs. 50,000/- in respect of a securely locked countrymada safe in the shop of the plaintiff known as "jagadhatri Bhandar", situate at B. T. Road, Titagarh, in the District of 24 Parganas. The said Insurance Policy was renewed from year to year and the amount of insurance cover was subsequently reduced from Rs. 50,000/- to Rs. 30,000/ -. The plaintiff paid the last renewal premium on Jan. 7, 1970 and the policy was renewed for a period of 12 months from Jan. 7, 1970 till the anniversary of the date in the succeeding year.
( 3 ) THE further case of the plaintiff was that on Feb. 6, 1970, four men, three of whom carrying revolvers, rushed into the plaintiffs said shop, Jagadhatri Bhandar, and compelled one of the partners of the plaintiff firm by violence and/or threat of violence to open the safe, and took away at the point of revolvers Rs. 32,871/- from the safe. The plaintiff submitted to the defendant company a claim for the loss of money for Rs. 30,000/- which was the limit of indemnity for loss under the said contract of insurance, although actual loss was more. The defendant company, thereafter, arranged to inspect the loss by its surveyor at the premises in which the said shop of the plaintiff was situate. Ultimately, the defendant company by its letters dated May 4, 1970 and June 26, 1970 informed the plaintiff that the claim was not admissible under the policy inasmuch as there was no forcible and violent entry into the premises at the time of the loss. The defendant company, accordingly, refused to entertain the claim arising out of the risk covered by the said contract of insurance on the allegation that the policy did not cover such a risk and repudiated the contract of insurance and did not take further steps in the matter to implement the terms of the contract of insurance in spite of repeated requests by the plaintiff. The plaintiff, accordingly, instituted the suit for the recovery of the sum of Rs. 30,000/ -.
( 4 ) THE defendant company entered appearance in the suit and contested the same by filing a written statement. Although the defendant company denied the happening of the incident and the loss of money, as alleged by the plain-tiff, the principal defence of the defendant was based on two technical grounds. The first was that the claim of the plaintiff was not admissible under the policy of insurance and the second was that the suit was not maintainable in view of the Arbitration clause as contained in clause (9) of the Conditions of Policy of Insurance.
( 5 ) THE learned Subordinate Judge, 9th Court, Alipore came to the findings that the plaintiff had failed to prove the alleged incident or that the plaintiff had suffered any loss. Further, it was held that the claim of the plaintiff was not admissible under the Policy of Insurance and that claim was also barred by the Arbitration Clause as contained in clause (9) of the Conditions of the Policy of Insurance. Upon the said findings, the learned Subordinate Judge dismissed the suit. Hence this appeal.
( 6 ) THE first question that is required to be considered is, whether any such incident had taken place and whether the plaintiff had suffered loss of money to the extent of Rs. 30,000/- as alleged. In order to prove the incident and the loss the plaintiff examined P. W. 1 Man-matha Nath Das, the Accountant of the plaintiff's shop. The plaintiff also examined P. W. 2 Shyamsundar Sadhukhan, one of the partners. It transpires from the evidence of these two witnesses that on Feb. 6, 1970 at about 7-15 P. M. or 7-20 P. M
