IN THE HIGH COURT OF JUDICATURE AT BOMBAY
S.C. GUPTE, J.
United India Insurance Company Ltd. - Petitioner
Versus
Kalyani Avinash Gokhale - Respondent
Arbitration Petition No.695 of 2013
Decided On : 27-11-2018
arbitration petition - challenge to arbitration award - Arbitration and Conciliation Act, 1996, Section 34 - Limitation Act, 1963, Section 5 - want of jurisdiction - nullity of award
Fact of the Case:
The arbitration petition challenges an arbitration award arising from a contract of insurance between the Petitioner and Bank of Maharashtra for group mediclaim insurance. The claim under the policy was rejected, and the dispute was referred to arbitration. The challenge to the award was rejected by the District Court and the Single Judge of the High Court, leading to the present petition.
Finding of the Court:
The Court found that the petition was beyond the statutory period of limitation and could not be entertained. The arguments regarding the lack of jurisdiction of the tribunal and the clarification on the liberty to adopt further proceedings were rejected.
Issues: The main issue was whether the petition was within the statutory period of limitation under Section 34 of the Arbitration and Conciliation Act, 1996.
Ratio Decidendi: The Court held that the petition was clearly beyond time and could not be condoned, as the limitation period could not be extended beyond 30 days provided under the proviso to subsection (3) of Section 34. The arguments regarding jurisdiction and clarification on liberty to adopt further proceedings were also rejected.
Final Decision: The petition was dismissed, and the application for stay of the order was rejected.
1. Heard learned Counsel for the parties.
2. This arbitration petition challenges an arbitration award passed by a sole arbitrator in a reference arising out of a contract of insurance. In pursuance of a contract between the Petitioner and Bank of Maharashtra for group mediclaim insurance providing medical insurance coverage to persons opening or having any type of account with the bank, the Respondent herein took a policy for Rs.5 lakhs covering self, husband and daughter. The policy was renewed for a further period and was subsisting at the relevant point of time. A claim under that policy was submitted by the Respondent for a sum of Rs.5 lakhs towards the expenses of treatment of her husband Avinash Gokhale, who was suffering from cancer. The claim was allowed to the extent of Rs.1.5 lakhs under the original policy but rejected to the extent of Rs.3.5 lakhs under the renewed policy on the ground that the renewal was made on 18 April 2009 after detection of cancer and the claim was, accordingly, not payable. This dispute was referred to arbitration. The learned arbitrator, by his impugned award, directed the Petitioner to release all outstanding claims, which remained unsettled due to restriction of sum insured on account of the alleged preexisting ailment. The learned arbitrator directed the Petitioner not to repudiate or restrict any reimbursement claim. This award was initially challenged by the Petitioner before the District Court at Pune under Section 34 of the Arbitration and Conciliation Act, 1996 (“Act”). The challenge was rejected by the District Court on two grounds. It was firstly held that the District Court had no jurisdiction to entertain the challenge to the award. The Court secondly held that the Petitioner had failed to make out any case for setting aside the impugned award. One of the grounds urged before the District Court in the challenge petition was that the Respondent had no right to appoint an arbitrator. The District Court held that the record of the case indicated that the Respondent had issued letters from time to time for appointment of arbitrator, and since no arbitrator was appointed bilaterally, the Respondent had proceeded to appoint an arbitrator; that notice of appointment of the arbitrator as well as hearing of the matter and of adjournment of the hearing were all duly served by the Respondent on the Petitioner; and that, in spite of such service, the Petitioner had failed to appear before the arbitrator and, in the circumstances, the award came to be passed ex-parte. The District Court held that there was no explanation on the part of the Petitioner as to why it had failed to appear before the arbitrator and that whatever award was passed was passed by following due procedure and there was no case for setting aside the same. This order was challenged by the Petitioner before a learned Single Judge of this Court in an appeal under Section 37 of the Act. The learned Single Judge, by his order dated 7 February 2013, held that the Pune Court had no jurisdiction to entertain any challenge to the impugned award in the present case under Section 34. The learned Judge held that a material part of cause of action in the present matter had arisen in Mumbai and a suit for recovery of any amount under the subject insurance policy (issued to the Respondent at Mumbai) would have to be filed at Mumbai and, thus, a petition under Section 34 of the Act for challenging the award could only be filed before a Court at Mumbai. The learned Judge, accordingly, upheld the order of the learned District Judge to the extent that it held that the Pune Court had no jurisdiction to entertain the petition and dismissed the appeal. This order has since been clarified by the learned Judge upon an application for speaking to the minutes by providing that “the Petitioner herein (Appellant before the Court) was free to adopt appropriate proceedings in appropriate Court”. The Petitioner has, thereupon, approached thi
Consolidated Engineering Enterprises vs. Principal Secretary, Irrigation Department
AI
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.