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Judgment
Syed Bashir-Ud-Din, J.—Jamil Ahmad Mirza filed an application on 9-12-1991 seeking permission to sue as an indigent person under
Order 33 of C.P.C. for recovery of Rs. 6,48,300/- towards Insurance claim against New India Assurance Company and M/s. Grindlays Bank.
The application was registered as 163/91 by the Registry.
While the above mentioned application was pending, the petitioner moved another application for treating the aforesaid application (to sue as
indigent person) as an application under Arbitration Act for referring the matter to Arbitrator. The reference to the arbitration is prayed for on the
ground that the petitioner after moving the application for being permitted to sue as indigent person, learnt on information that the respondents have
accepted the petitioner's case for insurance claim in respect of total loss of vehicle JKE-9050 A/C covered by insurance policy No. 31/8079 vide
claim No. 310600/31/ 89/0744. That the competent authority on behalf of respondents have settled the insurance claim on total loss basis for an
amount of Rs. 235879/- as against the claim laid and forwarded by the petitioner for the total loss of the vehicle to the tune of Rs. 6,48,300/-. As
dispute arises between the petitioner (insured) and respondent No. I (Insurer), with regard to the quantum of the claim made and allowed, the
insurance policy provides that such a dispute shall be referable to an Arbitrator. Therefore, the petition for reference of the matter to Arbitrator.
Respondent No. 1 New India Assurance Company has filed objections and opposed the petitioner's prayer of treating the application under
Order 33 of C.P.C. (for permission to sue as indigent person) as an application under Arbitration Act. The application seeking permission to sue
as indigent person is not a suit till the Court accords permission thereto. An independent application has to be filed for reference of the matter to
the Arbitration. However, it is admitted that the insurance claim of the petitioner has been settled by the Competent Authority and the claim of the
petitioner to the tune of Rs. 6,48,300/- is on high side without any basis. The counsel for the parties are in total agreement that if any difference
exists or any dispute arises as to the quantum of claim to be paid under the insurance policy after the liability is admitted, such difference/dispute
shall be referred to the decision of the Arbitrator to be appointed in writing by the parties in difference and if they disagree upon a single arbitrator,
then in accordance with the mechanism provided therefore in terms of Arbitration clause of the insurance policy. The counsel for the panics also
admitted that the claim of insurance put forth by the petitioner has not been accepted in toto by the insurer and instead respondent No. 1 has fixed
the claim liability as Rs. 2,35,879/-. The difference and the dispute regarding the quantum of claim to be paid as policy liability is a matter that is
secured to be referred to an Arbitrator.
As the application for permission to sue as indigent person under Order 33 is pending and the application has not been granted, so it cannot be
said that a suit even by indigent person is pending in the Court. Besides the application of July, 1992 (CMP No. 76/92) for treating the earlier
application (CMP No. 163/91) under Order 33 of CPC as an application for reference of the matter to the Arbitrator is nothing more than a
motion moved by the petitioner for arbitration with intervention of Court when no suit is pending before the Court between the parties on the same
subject.
Section 20 of Arbitration Act provides that any of the parties under Arbitration agreement before institution of the suit, can apply to Court of
competent jurisdiction for filing of the agreement in Court, where the agreement covers the difference referable to Arbitrator, which has arisen
between the parties. The application has to be in writing and is to be registered as suit between the parties, as in this case. No particular form of
the application is provided or set out thereto. The filing of application (CMP No. 76/ 92) demanding the question of difference which has arisen
between the parties regarding quantum of insurance claim, to be referred to arbitration by Court is sufficient to constitute demand as contemplated
by the clause of the policy and is covered fully by the provisions of S. 20 of Arbitration Act. The indigent form application (CMP. No. 163/91) to
sue as forma pauperis which gives sufficient details as to the claim put forth read with application CMP No. 76/92, is sufficient to be construed as
an application in writing for reference of the matter to Arbitration. This position is even fairly conceded to by the counsel for the respondent No. 1.
On consideration of the matter in entirety it is obvious that no cause is shown why the matter be not referred to the Arbitrator after the
agreement is found to have been filed on record the application is accordingly allowed.
In terms of Arbitration clause, the counsel for the parties shall file in writing their unanimous choice for the Arbitrator to be appointed for arbitral
adjudication of the matter. Petition is accordingly allowed.