Case Law Details
Oriental Insurance Company Limited Vs Dacite Furnishing Limited (Supreme Court)
For deciding the application under Section 11(6) of Arbitration Act, 1996, the court is required to ensure that an arbitrable dispute exists and has to be prima facie convinced about the genuineness or credibility of the plea and not be too particular about the nature of the plea, which necessarily has to be made and established in the substantive proceeding.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
1. Leave granted. With the consent of counsel, the appeal was heard finally. The Oriental Insurance Co. Ltd (hereafter “the insurer” or “the appellant”) appeals the decision of a single judge of the Bombay High Court, who allowed the respondent’s application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereafter “the Act”) and appointed an arbitrator. The insurer’s objection about maintainability of the application on the ground that the respondent (hereafter “Dicitex”) had signed the discharge voucher and accepted the amount offered, thus, signifying accord and satisfaction, which in turn meant that there was no arbitrable dispute, was rejected.
2. The relevant facts in this appeal are that on 17.09.2011, Dicitex obtained a Standard Fire and Special Peril Policy; it was issued by the appellant to cover the stocks of goods lying in its three separate godowns located at Thane, Maharashtra, by three separate endorsements. The total sum insured was @ ₹ 13 crores. Clause 13 of the terms and conditions of the said policy contained an arbitration clause. On 25.05.2012, a fire broke out at night on the ground floor of the building occupied by RFCL, which fire spread to the first floor of the building and completely engulfed all of the appellant’s three godowns which had stored its goods. All the stocks in all the three godowns were completely destroyed. Dicitex informed the appellant on 26.05.2012, about the fire and the consequential loss. The appellant appointed M/s. C.P. Mehta & Co. as Surveyors and Assessors to survey the loss suffered by Dicitex and to report on the claim to be lodged upon the insurer appellant, by the said company. Dicitex lodged a total and final claim upon the appellant for a sum of ₹ 14,88,14,327/comprising ₹ 13,52,85,752/ towards cost of the materials destroyed and ₹ 1,35,28,575/ as overheads. Dicitex claims also to have submitted comprehensive documentary evidence and detailed work sheets in support of the claim made to the insurer. On 14.08.2012, after visiting Dicitex’s factory and the godowns, and after scrutinizing the materials submitted by it in support of its claim, the Surveyor appointed by the insurer filed a Final Survey Report recommending that the claim be settled for an amount of ₹ 12,93,26,704.98/ and that after deducting an amount of 5% towards compulsory deduction for excess, a net amount of ₹ 12,28,60,369/ be paid over to Dicitex. The latter alleged that a copy of this survey report was not supplied to it, by the insurer, or the surveyor.
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