Ramratna Singh, J.

(1) This application is directed against an order of the Small Cause Court Judge of Arrah, rejecting certain objections of the defendants who are petitioners in the case. Petitioner No. 1 is an Insurance Company whose head office is in Bombay and branches in Calcutta and Patna. Petitioners Nos. 2 and 3 are those branches. The opposite party insured his car with the said Insurance Company against loss, damage or accident for the period from the 29th June, 1962 to 28th June 1963. The ear met an accident at Arrah on the 6th November, 1962, and was damaged. It was sent tor repairs to Messrs Lawly Sen and Co., who estimated the cost of repairs at Rs. 325/-. Messrs Lawly Sen and Co., repaired the car and gave the plaintiff a bill for Rs. 296.63 nP. after giving a discount of 10 per cent., to which the Insurance Companies are generally entitled, and the opposite party paid the said amount to the repairing Company under a Cash Memo dated the 15th November 1962. There was some difference between the opposite party and the Insurance Company regarding the amount of the cost of repair. The opposite party, therefore, instituted a Small Cause Court suit at Arrah for recovery of the said amount. The petitioners-defendants appeared in the suit and filed a petition slating that the plaintiff could not proceed with the suit without referring the alleged dispute to arbitration in accordance with the terms of the policy of insurance. After some time, the Company also filed another petition contending that a Small Cause Court was not competent to take cognizance of such a suit. Both the petitioners were rejected by the learned Small Cause Court Judge; hence this application in revision.

(2) In support of the first objection, Mr. Gujadhar who appeared for the petitioners relied on Section 34 of the Arbitration Act, 1940, which reads as follows:

"Where any party to an arbitration agreement or any person claiming under him commences any legal proceedings against any other party to the agreement or any person claiming under him in respect of any matter agreed to be referred, any party to such legal proceedings may, at any time before filing a written statement or taking any other steps in the proceedings, apply to the judicial authority before which the proceedings are pending to stay the proceedings; and if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement and that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, such authority may make an order staying the proceedings".

(3) As has been held in Gaya Electric Supply Co., Ltd. v. State of Bihar, AIR 1953 SC 182 [LQ/SC/1953/14] :

"....... .from the language of the section, it is quite clear that the legal proceeding which is sought to be stayed must be in respect of a matter which the parties have agreed to refer and which comes within the ambit of the arbitration agreement. Where, however, a suit is commenced as to a matter which lies outside the submission, the Court is bound to refuse a stay. In the words of Viscount Simon L.C. in Heyman v. Darwins Ltd., 1942 AC 356 the answer to the question whether a dispute falls within an arbitration clause in a contract must depend on (a) what is the dispute, and (b) what disputes the arbitration clause covers. It the arbitration agreement is broad and comprehensive and embraces any dispute between the parties in respect of the agreement, or in respect of any provision in the agreement, or in respect of anything arising out of it, and one of the parties seeks to avoid the contract, the dispute is referable to arbitration if the avoidance of the contract arises out of the terms of the contract itself. Where, however, the party seeks to avoid the contract for reasons dehors it, the arbitration clause cannot be resorted to as it goes along with other terms of the contract. In other words, a party cannot rely on a term of the contract to repudiate it and still say the arbitration clause should not apply. If he relies upon a contract, he must rely on it for all purposes. Where, however an arbitration clause is not so comprehensive and is not drafted in the broad language which was used in the House of Lords case, namely, "in respect of any agreement, or in respect of something arising out of it, that proposition does not hold good. The arbitration clause is a written submission agreed to by the parties in a contract and like every written submission to arbitration mast be considered according to its language and in the light of the circumstances in which it is made".

Mr. Gujadhar argued that the present dispute comes within the ambit of arbitration agreement contained in the Policy of Insurance. The learned Advocate for the opposite party, however, contended that it was beyond the ambit of arbitration agreement. He further submitted that the petitioners have waived the right to claim reference to arbitration. At the end of the Policy in question, it is noted that it is subject to "clause MV", which is a printed form attached to the Policy.

(4) Clause MV consists ot several sections. Section I deals with loss or damage. Section II deals with liability to third parties. Section III deals with medical expenses. Thereafter, there is a heading "General Exceptions" and then a heading "No claim Bonus". These are the terms in Clause MV. Thereafter, there are eight conditions. The preamble of the conditions read thus:

"This Policy and the Schedule shall be read together and any word or expression to which a specific meaning has been attached in any part ot this Policy or of the Schedule shall bear the same moaning wherever it may appear."

Then are mentioned the eight different conditions of which condition No. 7 is relevant and reads as follows:

"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 the decision of two Arbitrators one to be appointed in writing by each of the 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 the Arbitrators and preside at 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 shall not within twelve calendar months from the date of such disclaimer have been referred to arbitration under the provisions herein contained then the claim shall for all purposes be deemed to have been abandoned and shall not thereafter be recoverable hereunder".

The conditions are also a part of the form called Clause MV: and the Policy subject to Clause MV. Hence, it is manifest that all the terms contained in Clause MV relate to this Policy and all differences in respect of any of the terms would be differences arising out of this policy. I am unable to accept the contention of the learned Advocate for the opposite party that section 1 in the form called Clause MV is not controlled by the conditions. These conditions, in my opinion, control all the terms of CLAUSE MV to which the policy itself is subject. The learned Advocate drew my attention to a term in section 1 according to which the insured "may authorise the repair of the Motor Car necessitated by damage for which the Company may be liable under this Policy provided that the estimated cost of such repair does not exceed Rs. 300/-." He submitted that, inasmuch the repairing cost did not exceed Rs. 300/- in this ease and, as stated in paragraph 4 of the plaint the surveyor of the Insurance Company had come to Arrah and inspected the damaged car on the 8th November, 1962, and advised the plaintiff to send a claim petition and to get the car repaired and send the bill, the insurer was competent to get the car repaired and there could be no question of difference between him and the Insurance Company. But the mere fact that the surveyor of the Company inspected the damage and advised the plaintiff to send the car for repairs dues not amount to acceptance by the surveyor or the Company any amount charged for repairs. Further, in the instant case, the estimated cost of repairs exceeded Rs. 300/-, as it was Rs. 325/-. Of course. Messrs Lawly Sen and Co. gave a discount of ten per cent, at the time of submission of the bill; but the reduced amount of Rs. 296.63 nP. could not be said to be the estimated cost of repair.

(5) It was then argued on behalf of the opposite party that the Insurance Company had waived its right of getting the dispute referred to an arbitration under Section 34 of the Arbitration Act inasmuch as the Company had also filed a petition questioning the jurisdiction of the Small Cause Court. In Anderson Wright Ltd. v. Moran and Co., AIR 1955 SC 53 [LQ/SC/1954/157] it was held that, in order that a stay may be granted under Section 34, it is necessary that the following conditions should be fulfilled; (1) the proceeding must have been commenced by a party to an arbitration agreement against any other party to the agreement; (2) the legal proceeding which is sought to be stayed must be in respect of a matter agreed to be referred; (3) the applicant for stay must be a party to the legal proceeding and he must have taken no step in the proceeding after appearance and that he should satisfy the court not only that he is but also was at the commencement of the proceedings ready and willing to do every thing necessary for the proper conduct of the arbitration; and (4) the Court must be satisfied that there is no sufficient reason why the matter should not be referred to an arbitration in accordance with the arbitration agreement. It appears that the Insurance Company entered appearance in the suit on the 5th April 1963; and on the same date filed a petition raising an objection on the basis of Section 34. In paragraph 8 of that petition, the Company said that at all material times it was, and still was, ready to do everything necessary for the proper conduct of the arbitration that might be held in accordance with the terms and conditions of the insurance. In this petition, it has referred specifically to the arbitration clause contained in condition No. 7 of Clause MV. The Insurance Company had not taken any other step in that proceeding so far. On the 28th July 1963 however, the Insurance Company filed the second petition questioning the jurisdiction of the Smallj Cause Court. The filing of this petition more than: three months after the first petition under Section 34 of the Arbitration Act cannot, in my opinion, deprive the Insurance Company of the advantage that it wants to take of Section 34 of the Arbitration Act. Hence there was no waiver on the part of the Insurance Company. The learned Advocate referred in this connection also to two other decisions, viz, Middle East Trading Co., Bombay v The New National Mills Ltd., Ahmedabad, AIR 1960 Bom 292 [LQ/BomHC/1957/307] and Deluxe Film Distributors Ltd. v. Sukumar Kumar, AIR 1960 Cal 208 but they arc of no assistance except in regard to the principles. In view of the foregoing discussions, I am unable to agree with the learned Small Cause Court Judge that the plaintiff was entitled in the instant case to claim less than Rs. 300/- without any recourse to arbitration; and the petitioners are entitled to stay and it is a fit ease where the Court must stay the proceedings in the suit so long as the difference is not referred to arbitration in accordance with the arbitration agreement contained in condition No. 7 of Clause MV.

(6) Mr. Gujadhar then relied on Section 15 of the Provincial Small Cause Courts Act read with Article 34 of the Second Schedule thereto. These provisions lay down that a Small Cause Court cannot take cognizance of a suit "on a policy of insurance" which apparently means a suit based on the Policy of Insurance. He contended that, inasmuch as, the plaintiff-opposite party can claim the amount incurred in the repairs to his damaged car on account of the accident only on the strength of the Policy, and not independently of it, a Small Cause Court cannot take cognizance of the suit. This contention is well founded. The learned Advocate for the opposite party relied however, on Section 17 of the Provincial Small Cause Courts Act, which lays down that the procedure prescribed in the Code of Civil Procedure shall, save in so far as is otherwise provided by that Code or by this Act, be the procedure followed in a Court of Small Causes in all suits cognizable by it and in all proceedings arising out of such suits. He argued that the objection under Section 34 of the Arbitration Act or the plea regarding want of jurisdiction in the Small Cause Court could not be raised before the Insurance Company filed its written statement. But the Code of Civil Procedure does not lay down that such objections cannot be taken before the defendant files his written statement. He cited the decision in Adam Sajan and Co. v. Asutosh Bandopadhya, AIR 1926 Cal 100 [LQ/CalHC/1924/392] in support of his contention that the present suit was not based on the Policy of insurance. The facts in that case were different and his Lordship rejected the plea based on Article 34 of Schedule II on the ground that the suit before his Lordship was really a suit for damages against the Secretary of State and in the alternative, for failure to ensure safe carriage of the articles by goods train. In view of what has been stated above, the Small Cause Court had no jurisdiction to entertain the present suit.

(7) In the result, the application is allowed, the order of the court below is set aside and the learned Small Cause Court Judge shall return the plaint to the plaintiff-opposite party for presentation before the proper court, without any prejudice to the right of the Insurance Company to raise the question of arbitration in that Court. In the circumstances, there will be no order for costs.