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Civil Petition for Special Leave to Appeal No. 308 of 1969, decided on 3rd November 1969.
(On appeal from the judgment and order of the High Court of West Pakistan, Lahore, dated the 27th June 1969, in Civil Revision No. 489 of 1969).
34‑Stay o/' suit‑A indebted to N (a bank) in respect of a loan. on an of factory and stocks to get insured with an Insurance by fire and A preferring claim against claim was referred to arbitration as insurance policy‑Bank meanwhile filing suit for of loan from A‑A's prayer for stay of the S. 34‑Not competent‑Bank not party to contract out of which arbitration arose.
Muhammad Anwar Buttar, Advocate Supreme Court instructed by Iqbal Ahmad Qureshi, Attorney for Petitioners.
Nemo for Respondent.
Date of hearing : 3rd November 1969.
‑This petition arises out of a money suit brought by the respondent‑Bank against the petitioners for recovery of Rs. 2,08,795.05 due from the latter on an over‑draft account of the petitioners with the Bank against pledge of their factory building, goods and stocks which they were obliged to insure with an Insurance Company under the conditions of the loan.
The factory building and the goods of the petitioners which were insured with the Muslim Insurance Company, caught fire and were destroyed. A claim was preferred against the company by the petitioners which was referred to arbitration under the arbitration clause in the insurance policy. The award has since been given but its legality and adequacy is the subject‑matter of litigation in cross‑cases between the insurance company and the petitioners.
In defence of the present suit by the Bank the petitioner moved an application under section 34 of the Arbitration Act for stay of the proceedings in the suit, relying on the arbitration clause in the insurance policy. This has been rejected on the ground that although the Bank may be a beneficiary as the pledgee of the factory and the goods under the insurance policy to receive the amount of the loss as may be paid by the insurance company, it was not a party to the contract of insurance to be obliged tot refer its dispute with the petitioners to arbitration.
It is admitted that the Bank is not liable for the loss which has occurred to the petitioners on account of fire. It is therefore not concerned with the adjudication of the petitioners' claim against the insurance company in arbitration proceedings. No exception can be taken to the order made by the Courts below in dismissing the petitioners' prayer for stay of the proceedings in the suit brought by the respondent against the petitioners under section 34 of the Arbitration Act.
The petition is dismissed.
Leave refused.
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