1. The defendant is the appellant. The decree from which this appeal arises is for recovery of Rs. 7,000 with interest from the defendant for the loss sustained by the plaintiff in respect of a car insured with the defendant. The plaintiff was the owner of a car registered as T. G. Q.1 in the Travancore-Cochin State. It was an Austin 18 H. P. car. The car was insured with the defendant against loss or damage and a policy was issued by the defendant to the plaintiff covering all accidents from 1st March 1952 to 28th February 1953. The car met with an accident on the night of 21st December 1952 as a result of which it stood in need of repair. The accident was covered by the terms of the Policy and therefore the defendant was "to repair, reinstate or replace the car or the part thereof and its accessories or pay in cash the amount of the loss or damage not exceeding the actual value of the parts damaged or lost plus a reasonable cost of fitting, such costs not exceeding in any case the estimate of the insurer of the value of the car as specified in the schedule attached to the Policy." The defendant company exercised its option under condition No. 3 of the Policy thereby undertaking to get the car repaired. It was to the workshop of the P. S. N. Motors Ltd., Trichur that the car was removed by the plaintiff's son as authorised by the provisions contained in the Policy. It was alleged that the defendant thereby assumed possession of the car; but the car was not returned after effecting the repairs as required by the Policy as it was burned down in the workshop on 10th July 1953. The plaintiff alleged that the defendant should not have entrusted the car for repairs to a workshop where several inflammable materials like oil and petroleum were stored without ascertaining whether the workshop was insured against fire. The plaintiff alleged that the defendant was negligent in entrusting the car to P. S. N. Motors Ltd., and therefore it was bound to reimburse the plaintiff a sum of Rs. 7,000 being the reasonable value of the car at the time of the accident. As the defendant did not pay the amount on demand the plaintiff instituted the suit for recovery of the same with interest.

2. The contentions of the defendant were that it was not liable for the loss, that the suit was not maintainable as condition No. 7 in the Policy made the award by an arbitrator a condition precedent to a right of suit by the plaintiff, that it did not take charge of the car or entrust it for repairs to P.S.N. Motors, that the insurance Policy was in force only till 28th February 1953, that the responsibility for having entrusted the car to P. S. N. Motors was that of the plaintiff and that P. S. N. Motors was an agent of the plaintiff and not of the defendant, that the removal of the car to P. S. N. Motors Ltd., was not in the discharge of any duty of the plaintiff under the terms of the Policy, that it has not assumed possession of the car and that the plaintiff's cause of action, if at all any, was against the P. S. N. Motors. It also pleaded that the fire that occurred on 10th July 1953 was beyond human control and was an act of God.

3. The lower court framed 8 issues and recorded findings thereon and decreed the suit. Issue No. 4 runs as follows: "Is this suit maintainable in as much the plaintiff has not conformed to the condition No. 7 of the Policy?" On this issue the finding of the lower court was that "if the defendant seeks to have that clause enforced under S.34 of the Arbitration Act the company should have applied for stay of this suit and got the matter referred to arbitration. Defendant has not done any such thing in this matter. I therefore find this issue for the plaintiff that the suit is maintainable."

4. Condition No. 7 reads as follows:

"All differences arising out of this Policy shall be referred to the decision of an Arbitrator to be appointed in writing by the parties in difference or if they cannot agree upon a single arbitrator