' This is an appeal under section 47 of Pakistan Insurance Companies Act, 1938 (hereinafter referred to as the said Act) from the judgment of the Claims Settlement Board, Karachi (hereinafter referred to as the Board) constituted under the said Act. By its judgment dated 30th August, 1979 the Board had decreed the claim of the respondent for Rs, 43,424 with 6 per cent interest against the appellant company as damages.
2. The claim of the respondent before the Board was that her Toyota Car No, 438-697 was insured with the appellant company comprehensively and a policy document was issued on 24th April, 1978. It was alleged that on 10th July, 1978 the respondent's car met with an accident and was damaged. The respondent applied to the appellant on 11th July, 1978 for supply of the prescribed form in order to enable her to prefer a claim for damages. The respondent then preferred her claim for Rs, 43,424. Thereafter lengthy correspondence ensued between the parties and ultimately by its letter, dated 16th September, 1978 the appellant refused to entertain the claim of the respondent on the ground that the risk was not covered by the Insurance Policy.
3. The respondent, therefore, filed application under section 47-C of the Act before the Board. The respondent contested the claim on legal as well as factual grounds upon which following issues were framed:- "(1) Is the application not maintainable?
(2) Is the respondent liable to pay the damages of Rs, 43,424 together with interest till the date of realization as claimed by the applicant?
(3) To what other relief applicant is entitled?"
4. In support of her claim for damages the respondent examined Muhammad Ali the husband of the applicant/respondent and stated the facts about the accident, the damage received by the car and also the quotations required by the appellant in respect of the several parts of the car which had been damaged.
5. After recording the evidence, the learned Board held that the application under section 47-C of the said Act was maintainable, that the respondent had proved damages to the extent of Rs, 43,424 and that she was entitled to a decree with interest stated above.
6. Mr. Riazul Hassan learned counsel for the appellant has laid much emphasis on issue No,1 on the ground that the suit was barred by virtue of condition No,7 of the Insurance Policy which is to the following effect:- "7. 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 to decision of two Arbitrators one to be appointed in writing by each of parties within one calendar month after having been required in writing so to do by either of the parties or in case the Arbitrators do not agree of an Umpire appointed in writing by the Arbitrators before entering upon the reference. The Umpire shall sit with Arbitrators and preside their meeting and the making of an Award shall be a condition precedent to any right of action against the Company. If the Company shall disclaim liability to the Insured for any claim hereunder and such claim not within twelve calendar months from the date of such disclaimer have been referred to arbitration under the provisions herein contained the claim shall for all purposes be deemed to have abandoned and shall not thereafter be recoverable hereunder."
' The learned counsel has alleged that resort to arbitration by the respondent was condition precedent to filing of the suit and that no cause of action shall be deemed to have accrued to the respondent unless he had complied with condition No,7 of the Policy. In support of this plea he has referred to the case of M/s. Prataprai Manmohandas v. M/s. Sheo Narayan Balal and Co. AIR 1956 Bom.
97. This case related to Bye-law 38 of Bombay Bullion Association which provided for arbitration in dispute between the parties as a condition precedent to filing of the suit. It was held by the Court that (i) Bye-law No,38 amount in law to an agreement in writing to refer disputes between persons governed by the bye-law to arbitration within the meaning of S. 2(a), Arbitration Act. Hence the claim in suit must be resolved by the domestic tribunal contemplated by the bye-law and a suit in respect of it was not maintainable.
7. The above decision of the Bombay High Court was also relied upon by Kerala High Court in the case of Vanguard Fire and General Insurance Co. Ltd., Madras v. N. R. Sreenivasa Iyer and others AIR 1963 Ker.
270. The relevant observations of the Court on the question of bar to suits by virtue of section 34 of Arbitration Act are reproduced hereunder:- "(5) The question that arises for consideration is whether the defendant ought to have applied under section 34 of the Arbitration Act for stay of the suit and not having done so whether it was open to it to put forward the contention that the suit was not maintainable. It is now settled by authorities that if the making of an award is a condition precedent for the accrual of a cause of action to the plaintiff, then that condition has to be satisfied before the plaintiff can acquire a cause of action; and if a suit is instituted before that, it is a good defence to the maintainability of the action itself. A distinction has always been made between cases where the arbitration and the award are made conditions precedent to the right of action itself and where they are merely collateral to the main agreement. In the latter case if a suit is instituted in violation of the collateral agreement, the only consequence is that the suit Will be liable to be stayed at the instance of the defendant under section 34 of the Arbitration Act. But where a suit is instituted when the making of an award is a condition precedent to the accrual of a cause of action in favour of the plaintiff before the making of the award, such a suit is also liable to be dismissed if a defence is taken to that effect the reason being that the plaintiff has no cause of action, until the award is made."
8. Mr. Riazul Hassan has also referred to the case of Arthur Andrew Cipriani and others v.
Macddonald Burnett AIR 1933 P C 91. The facts of this case were that A purchased a ticket in a sweepstake. It was subject to the condition that 'in the event of any dispute arising with respect to any matters connected with drawing of the sweepstake or the awarding of prizes the decision of the Stewards of the Trinidad Turf Club thereon shall be accepted as final'. In an action brought by A he claimed a declaration that his ticket was the first prize ticket and that he was the holder of it and an order be made for payment to him of the amount of the first prize accordingly. It was held by the Judicial Committee that the condition on the ticket was a condition precedent, the fulfilment of which was essential before any action for the stakes could be entertained by the Courts. The ratio of the above case is sought to be attracted to the facts of the present case on the plea that, according to condition No, 7 of the Policy resort to arbitration was a condition precedent before filing a suit and as such the suit was not maintainable and that the application under section 47-C for claim should have been dismissed by the Board.
9. This objection was also taken before the Board, but the learned members of the Board rejected the objection on the ground that the appellant had taken steps in the proceedings as envisaged by section 34 of the Arbitration Act, therefore, they have waived their right to get the proceedings stayed or to have the matter referred to the arbitration.
10. Mr. Muhammad Akram Zubairi learned counsel for the respondent has referred to several letters of the appellant to show that by its conduct the appellant had itself waived condition No, 7 relating to arbitration. From the various documents which have been produced as Exh. 8 to Exh. 34 by the respondent, it is proved that by its conduct the Insurance Co. Had waived condition No, 7 and had never asked the respondent to refer the case to arbitration. Reference in this connection may be made to the last notice which is Exh. 33 issued on behalf of the respondent to the appellant Company in which the Company was asked to settle the claim. This notice is dated 18th January, 1979. The notice was served on the Company vide A A.D. Receipt (Exh. 34). Neither any reply was given by the appellant to this notice nor they had indicated their intention to resort to condition No,7 of the Insurance Policy. In view of this conduct of the appellant it shall be deemed that the appellant had waived condition No,7 and were, therefore, estopped from challenging the claim of the respondent on the ground that the respondent should have first resorted to the arbitration clause.
11. I am also in agreement with the views of the Board that as the appellants have filed written statement in reply to the respondent's claim application, hence they have taken steps in the proceedings and as such they shall be deemed to have waived the right to have the matter referred to arbitration.
12. So far as the quantum of the claim is concerned, the respondent has examined her husband Mohammad Ali who has produced the documents Exh. 8 to Exh. 38 which conclusively prove that the car was damaged and that the quantum of damage was to the extent of the amount mentioned in the claim application. No rebuttal evidence was led by the appellant Company. I, therefore, have no reason to interfere with the finding of the Board.
' Consequently the appeal is dismissed with costs. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.