ORDER [ENTITY], J.
1. This Revision Petition is directed against the order dated 20-9-1989 passed by the Principal Civil Judge, Dharwad in [CASE NUMBER]. By the said order the learned Civil Judge dismissed the application filed by the instant petitioner under [SECTION] of the [ACT].
2. A few facts necessary for the disposal of this Revision Petition, briefly stated, are as under:
The petitioner was the owner of a truck bearing registration No. MEZ 7399. He had insured the said truck with the respondents. The estimated value of the said truck was stated to be Rs. 2,50,000/-. The duration of the insurance policy was for the period from 24-2-1985 to 24-2-1986.
3. When this was so, the truck in question was involved in a fire accident on 8-5-1985. Thereafter the petitioner put in his claim with the respondents. After protracted negotiation, it appears that the Insurance Company was ready and willing to pay an amount of Rs. 1,69,500/- in full satisfaction of the claim of the petitioner, if the petitioner was agreeable to the same. According to the petitioner, he reluctantly agreed to the said term since he was in dire need of money. Accordingly, he also gave a consent letter dated 10-3-1986. It is pertinent to point out here that it is the version of the instant petitioner that the said letter was given under constraint. In furtherance of the same, a cheque for Rs. 1,69,500/- was given to the petitioner by the respondents on 17-9-1986. It is also borne put from the records that the petitioner had surrendered the salvage on 10-3-1986 and had also given motor total loss voucher on the same day to the respondent.
4. It is the case of the petitioner that the receipt of the amount by him covered by the cheque in a sum of Rs. 1,69,500/- was not in full satisfaction of the amount legitimately due to him and that therefore, he issued a letter to the respondents calling upon them to nominate an Arbitrator to settle the dispute with reference to the amount payable to him in the context of the Arbitration Clause in the Insurance Policy. Respondents, however, repudiated the claim of the petitioner on the ground that the same was satisfied and they did not nominate any Arbitrator. It is under these circumstances that the petitioner approached the lower Court under [SECTION] of the [ACT] praying for the appointment of an Arbitrator in terms of the Arbitration Clause reflected in the insurance policy.
5. The application for arbitration was resisted by the respondents, among other grounds, on the count that the claim was fully satisfied and that the dispute if any had come to an end between the parties on the payment of the amount of Rs. 1,69,500/- in full satisfaction of the claim. The lower Court, on a consideration of the evidence on record both oral and documentary, took the view that the dispute did come to an end with accord and satisfaction reached by the parties. Under these circumstances, the application came to be dismissed. Hence, the instant Revision.
6. I have heard the learned Counsel appearing on either side.
7. The point for consideration is as to whether the order passed by the lower Court is liable to be interfered with.
8. The main thrust of the submission made by Smt. [ENTITY], learned Counsel for the petitioner is that there was a claim by the petitioner and the said claim was refused or refuted by the respondents and that therefore, there was a dispute properly so-called within the meaning of that expression under [SECTION] of the [ACT] and that therefore, the lower Court had no option but to appoint an Arbitrator. In this connection, the learned Counsel has placed reliance on the Decision of the Supreme Court in [PRECEDENT], . The learned Counsel further argued that the effect of acceptance of money in the sum of Rs. 1,69,500/- by the petitioner is a matter which is required to be considered by the Arbitrator and the same cannot be pressed into service to contend that there is no dispute between the parties. In this connection, the learned Counsel has placed reliance on the Decision of the Supreme Court in [PRECEDENT], . Reliance is also placed on the Decision of this Court in [PRECEDENT].
5. On the other hand, Sri [ENTITY], learned Counsel for thy respondents contended that here is a case where by no stretch of imagination it can be said that there is a 'dispute'. The learned Counsel argued that the question of appointing an Arbitrator would crop up for consideration under [SECTION] of the [ACT] if and if only there is a dispute. It was submitted by the learned Counsel with reference to the documents at Ex.D.2 (no objection certificate), Ex.D.3 (covering letter along with the other documents), Ex.D,4 (letter evidencing the petitioner surrendering the salvage), Ex.D.5 (another covering fetter) and Ex.D.6 (motor total loss voucher), that the contract between the parties came to an end. The learned Counsel in particular, drew the attention of this Court to Ex.D.6 which reads as under:
"Received from the New India Assurance Company Ltd., Hubli a sum of Rs. 1,69,500/- (Rupees one lakh sixty nine thousand five hundred only) which I agree to accept in full satisfaction and discharge of all our claim present or future under [CASE NUMBER] in respect of vehicle bearing Registration No. MEZ. 7399 which was damaged beyond repairs due to fire which occurred on or about the 8th May, 1985.
This settlement being on total loss basis, the right, title and interest in the vehicle hereinafter vests with the New India Assurance Company Ltd."
Placing his finger on the aforesaid documents and in particular to Ex.D.6, the learned Counsel contended that the dispute between the parties ceased to exist. It was further argued that once when the amount was accepted by the petitioner in full satisfaction of the claim, the contract between the parties came to an end and that therefore the Arbitration Clause in the Insurance Policy also became in operative. In fact, the learned Counsel has placed reliance on certain observations of the Supreme Court itself in Damodar Valley Corporation's case in support of his submission.
6. I have given my anxious consideration to the submissions made on either side.
7. [SECTION] of the [ACT] reads as under: "Power of Court to appoint arbitrator or umpire:-
(1) In any of the following cases:-
(a) Where an arbitration agreement provides that the reference shall be to one or more arbitrators to be appointed by consent of the parties, and all the parties do not, after differences have arisen, concur in the appointment or appointments; or
(b) if any appointed arbitrator or umpire neglects or refuses to act, or is incapable of acting, or dies, and the arbitration agreement does not show that it was intended that the vacancy should not be supplied, and the parties or the arbitrators, as the case may be, do not supply the vacancy; or
(c) where the parties or the arbitrators are required to appoint an umpire and do not appoint him;
any party may serve the other parties or the arbitrators, as the case may be, with a written notice to concur in the appointment or appointments or in supplying the vacancy.
(2) If the appointment is not made within fifteen clear days after the service of the said notice, the Court may, on the application of the party who gave the notice and after giving the other parties an opportunity of being heard, appoint an arbitrator or arbitrators or umpire, as the case may be, who shall have like power to act in the reference, and do make an award as if he or they had been appointed by consent of all parties."
A careful perusal of the said Proviso would go to show that [SECTION] of the said Act confers power on the Court to appoint an Arbitrator or Umpire. [SECTION] is attracted only when the following conditions are fulfilled:
"(a) Where there is a valid arbitration agreement;
(b) the agreement contains for appointment of one or more arbitrators;
(c) the appointment of arbitrator is to be made by mutual consent of all the parties to the dispute;
(d) differences have arisen between the parties to the arbitration agreement;
(e) the differences are on the appointment or appointments of arbitrators.
Further as pointed out by the Supreme Court in [ENTITY]'s case, a dispute arises where there is a claim and a denial and repudiation of the claim. It is also clear that the existence of a dispute is essential for the appointment of an arbitrator under [SECTION] of the [ACT]. In the instant case, it is an admitted fact that the applicant has received an amount of Rs. 1,69,500/- from the respondents. It is also noticed that there is prima facie evidence to show that he did receive the said amount purporting to be in full satisfaction of his claim. The respondents, therefore, have pleaded accord and satisfaction on the basis of the evidence on record and that therefore, the dispute as such did not continue to exist at all. The question to be considered at this juncture is as to whether the contention raised on behalf of the respondents in this behalf can be accepted. In this connection, the Decision of this Court in [ENTITY]'s case deserves to be noted. In the said case this Court with reference to the Decision of the Supreme Court in Damodar Valley Corporation's case has held, among other things, as under:
"The question next to be considered is, whether the accord and satisfaction by payment of the final bill has put an end to the agreement and the arbitration clause thereunder? There cannot be any controversy on this point too and may, therefore, be easily disposed of. The accord and satisfaction has always been understood as a method of discharge of a contract and may be good defence to an action for breach of a contract, but it will have no effect to put an end to the contract itself. [ENTITY], J., while examining this aspect, observed in [PRECEDENT] :
"The effect of an accord and satisfaction is therefore to secure a release from an obligation arising under a contract. Now it is difficult to conceive of an obligation arising from a contract unless the contract existed. An accord and satisfaction which secures a release from such an obligation is really based on the existence of the contract instead of treating it as non-existent. The contract is not annihilated but the obligations under it cease to be enforceable. Therefore, it is that when an action is brought for the appropriate remedy for non-performance of these obligations that an accord and satisfaction furnishes a good defence. The defence is not that the contract has come to an end but that its breach has been satisfied by accord and satisfaction."
In [PRECEDENT] , the Supreme Court observed:
"Similarly the question whether there has been a settlement of all the claims arising in connection with the contract also postulates the existence of the contract. The principle laid down by [ENTITY], J. in [ENTITY]'s case that accord and satisfaction does not put an end to the arbitration clause was not dissented from by the majority. On the other hand proposition (6) seems to lend weight to the views of [ENTITY], J."
It is, however, open for the respondents to urge before the Arbitrator that in view of the accord and satisfaction reached in the case and the settlement of all the alleged claims, the appellant has no right to raise the dispute and ask for its adjudication. If such a contention is raised, it would be proper for the Arbitrator to decide that question before going into the merits of the disputed claim. A Full Bench decision of this Court in [PRECEDENT]) to which one of us ([ENTITY], J.) was a party, has taken a similar view. It was observed:
"In conceivable cases, even the existence or non-existence of a dispute might itself assume the character of a dispute for adjudication by the arbitrators. The arbitrators are also competent to decide whether that dispute is excluded from the arbitration clause. 'An arbitration agreement may explicitly empower the arbitrator to decide whether or not a particular dispute is within the arbitration agreement.' (See Hudson's Building and Engineering Contracts, Ninth Edition, page 658). But even if there is no such express power unless the dispute is expressly excluded from the arbitration clause "an arbitrator is always entitled to enquiry whether or not he has jurisdiction." (See [ENTITY] on Arbitration, 18th Edition, page 73)."
It is, therefore, open to the Arbitrator to decide the question, if raised, whether there has been a settlement of all the claims arising in connection with the contract having regard to the effect of the accord and satisfaction."
A careful perusal of the aforesaid Decision particularly the portion extracted from out of the Decision of the Supreme Court, would clearly go to show that even there is accord and satisfaction, the same will not put an end to the Arbitration Clause incorporated in the contract between the parties. If there is accord and satisfaction, the same is indeed a ground which can be legitimately pressed into service before the Arbitrator.
8. Having regard to the unequivocal observation of the Supreme Court in Damodar Valley Corporation's case and relied on in the aforesaid Decision, I am of the view that this is not a case where the lower Court could have taken the view that the application is not maintainable at all. Under these circumstances, I am of the view that the order passed by the Court below is liable to be set at naught and the matter deserves to be sent back to the lower Court for disposal of the application according to law in the light of the observations made by this Court that the application filed by the petitioner under [SECTION] of the [ACT] is maintainable.
9. For the reasons stated hereinabove, the Revision Petition is allowed. The order dated 20.9.1989 passed by the Principle Civil Judge, Dharwad dismissing the petition filed under [SECTION] of the [ACT] is set aside. It is held that the application filed by the petitioner is maintainable. The lower Court is directed to pass further orders in the context of the view taken by this Court and dispose of the matter according to law. In the facts and circumstances of the case, I make no order as to costs.