JUDGMENT

A.K. Kirty, J. - This appeal under Section 39 of the Arbitration Act (hereinafter referred to as the Act) is directed against the order of the court below allowing the application filed by the respondent under Section 20 of the Act.

2. The respondent had taken out two fire policies on 29-11-37 and 11-1 1968. On 14-3-1968 a fire broke out in the shop of the respondent in the evening, in consequence of which the goods contained in the shop were, according to the respondent, completely burnt out. The goods were covered by the two policies noted above. Thereafter, the respondent lodged a claim for Rs. 55,445/- which was repudiated and ultimately, rejected by the appellant company by letter dated 14-5-1969.

3. The two policies were subject to a number of conditions. These conditions constituted the terms of the agreement upon which the policies were taken and issued respectively by the respondent and the appellant. The material part of condition No. 18 runs thus :

"If any difference arises as to the amount of any loss or damage such difference shall independently of all other questions 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, to the decision of two disinterested persons as Arbitrators, of whom one shall be appointed in writing by each of the parties within two calendar months after having been required so to do in writing by the other party in case either party shall refuse or fail to appoint an Arbitrator within two calendar months after receipt of notice in writing requiring an appointment, the other party shall be at liberty to appoint a sole Arbitrator ........................ And it is hereby expressly stipulated and declared that it shall be a condition precedent to any right of action or suit upon this policy that the award by such Arbitrator, Arbitrators ............ of the amount of the loss or damage if disputed shall be first obtained."

4. The respondent by letter dated 21-2-1969 intimated the appellant that since a dispute had arisen between the parties it had nominated Sri Sewa Ram Soori, Advocate, Kanpur as its arbitrator. In its reply dated 25-3-1969 the appellant asserted that no dispute had arisen in terms of the arbitration clause in the Policies and no reference to arbitration could be made. All the same, the appellant subject to the reservations mentioned in its aforesaid letter, intimated the respondent that it had nominated Sri Ganga Ram Talwar, Advocate as its arbitrator. The appellant having finally rejected the claim in toto by letter dated 14-5-1969, the respondent filed an application under Section 20 (1) of the Act, which was registered as Civil Suit No. 224 of 1969. This application was contested by the appellant on several grounds. The court below framed four issues and having decided those issues against the appellant allowed the application.

5. The principal point argued on behalf of the appellant is that the application under Section 20 (1) of the Act was misconceived and not legally maintainable at all; hence the entire proceedings and the impugned order are without jurisdiction. It was urged that the respondent having taken proceedings under Chapter II of the Act, the application under Section 20 was not legally maintainable. The remedy of the respondent, if any, was under Section 8 of the Act. The learned counsel for the appellant sought to support his contentions by referring to "the scheme of the Act" and a number of sections thereof. According to him, Sec. 20 (1) cannot ex facie apply to a case where a party to an arbitration agreement has nominated or appointed his own arbitrator and has called upon the other party to nominate or appoint its own arbitrator. Such act amounts to "proceeding under Chapter II of the Act" and takes the case out of the ambit of Section 20 (1) , because the disputes or differences between the parties become the subject of a pending arbitration. In s