2019 Supreme(SC) 1093

SUPREME COURT OF INDIA
R. BANUMATHI, A.S. BOPANNA, JJ.
Oriental Insurance Co. Ltd. – Appellant(s)
Versus
M/s Tejparas Associates & Exports Pvt. Ltd. – Respondent(s)
CIVIL APPEAL NO. 6524 OF 2009
Decided On : 03-10-2019

IMPORTANT POINTS
Section 5 of Limitation Act, 1963 is not applicable in case of section 34 of Arbitration Act 1996. However, section 14 is applicable to a case u/s 34.

Headnote:

(a) Limitation Act, 1963 - Section 5 and 14 r/w section 34, Arbitration and Conciliation Act, 1969 - Section 5 of Act, 1963 not applicable in case of section 34, Act 1996 - Instead, section 14 is applicable to a case u/s 34. (Para 10)

(b) Limitation Act, 1963 - Section 3 and 14 r/w section 34, Arbitration and Conciliation Act, 1969 - Application u/s 34 filed before court at Jaipur - Court holding plaint not maintainable for lack of jurisdiction - Returning the plaint directing the appellant-plaintiff to re present the same before court at Jodhpur - Court also fixing date of re presentation as 02.04.2008 - Appellant-plaintiff re presenting the petition on 10.04.2008 - Re presentation of petition of plaint at Jodhpur cannot be considered as fresh petition requiring condonation of delay from date of cause of action - Application u/s 14 could not be dismissed as presentation of plaint at Jaipur was not mala fide - Thus, the re presentation of plaint at Jodhpur involved condonation of only 8 days - Ought to be allowed. (Para 13)

Facts of the case:

The appellant insurance company had issued fire insurance policy in respect of the plant and machinery of the respondent company for Rs.70,00,000/­ (Rupees Seventy Lakhs only). The claim arose when fire accident took place in the premises of the respondent. In respect of the claim, the appellant insurance company offered a sum of Rs.7,98,019/­ (Rupees Seven Lakhs Ninety­Eight Thousand Nineteen only) to the respondent. The respondent having refused to accept the same, a meeting was thereafter convened wherein Vijaya Bank at whose instance the policy was issued was also present. In the said meeting, the appellant insurance company revised the offer to pay the respondent a sum of Rs.33,80,925/­ (Rupees Thirty­Three Lakhs Eighty Thousand Nine Hundred Twenty­Five only). The said sum was also not acceptable to the respondent but a sum of Rs.25,00,000/­ (Rupees Twenty­Five Lakhs only) was paid to the respondent through Vijaya Bank. The respondent therefore being aggrieved that the claim for insurance reimbursement was not satisfied, had approached the National Consumer Disputes Redressal Commission, New Delhi which was dismissed.

The matter was ultimately referred to arbitration by an Arbitral Tribunal consisting of three learned Arbitrators. In the arbitral proceedings, an award was passed, whereunder two out of three arbitrators awarded the sum of Rs.44,90,000/­ (Rupees Forty­Four Lakh Ninety Thousand only) with interest at 18% per annum also the costs as indicated therein. Since, a sum of Rs.25,00,000/­ had already been paid by the appellant on 20.09.2001, the award constituted the entire sum of Rs. 70,00,000/­ (Rupees Seventy Lakhs only) for which it was insured. The third learned arbitrator, however, dissented from the majority award and held that the sum of Rs. 33,80,925/­ offered by the appellant insurance company was fair and proper. Subsequent thereto the appellant herein filed an application under Section 33 of the Arbitration and Conciliation Act, 1996 seeking for clarification relating to the award and also with regard to the venue of arbitration as indicated in the award. The said application was dismissed. Pursuant thereto the appellant insurance company filed the petition under Section 34 of the Act, 1996 before the District Judge, Jaipur which was held not maintainable before that Court but exercised the power under Order 7 Rule 10 and 10 A of the Civil Procedure Code and returned the petition to the appellant insurance company to be presented before the District Judge, Jodhpur. The appellant insurance company however presented the petition only on 10.04.2008, instead of the specified date of 02.04.2008. In that circumstance, the respondent herein filed an application under Section 3 of the Limitation Act, before the District Judge, Jodhpur, in the re­presented petition under Section 34 of the Act, 1996. Through the said application the respondent had sought rejection of the petition on the ground of the limitation which was allowed. Consequently, the petition filed under Section 34 of the Act, 1996 was dismissed. The appellant insurance company therefore filed the appeal before the High Court. The High Court dismissed the appeal.

Finding of the Court:

Application u/s 14 Limitation Act ought to be allowed.

Result: Appeal allowed.