IMPORTANT POINT
A tribunal must follow natural justice principles, allowing parties to present evidence; failure to do so renders an award susceptible to being set aside.

JUDGMENT :

RAJEEV RANJAN PRASAD, J.

Heard Mr. Hrishikesh, learned counsel for the appellant and Mr. Ajay Kumar, learned counsel for the Respondent.

2. This Commercial Appeal has been preferred under Section 37 of the Arbitration and Conciliation Act , 1996 (hereinafter referred to as the ‘Act of 1996’) read with Section 13(1-A) of the Commercial Courts Act , 2015 (hereinafter referred to as the ‘Act of 2015’) for setting aside the judgment dated 23^rd day of July, 2024 passed by learned Additional District Judge-XIV Court, Patna in Miscellaneous (Arbitration) Case No. 173 of 2021 whereby and whereunder the learned Additional District Judge, XIV Court, Patna has refused to interfere with the arbitral award dated 25^th August, 2021 passed by the learned Arbitral Tribunal.

Brief Facts of the Case

3. It is a matter of record that the respondent obtained an insurance policy from the appellant who is in the business of general insurance and provides diverse insurance covers to its customers across India. The insurance policy bearing no. 2260088270 and titled ‘My Business My Choice- Package’ from the appellant assured the respondent against loss and damages due to fire and special perils during the period 1^st day of August, 2018 to 31^st July, 2019.

4. It appears that the Respondent had its factory situated at Bajitpur, P.O.- Sarfuddinpur in the district of Muzaffarpur. The policy in question covered the said factory from the various kind of losses arising out of any accidental fire and special perils.

5. Under the general conditions of the policy, there is an arbitration clause being clause no. 11 whereunder the parties agreed inter alia for settlement and compromise of disputes in connection with the policy and it is not in dispute that in terms of clause 11 of the Insurance Policy, in the present case as the dispute arose over the payment of the insurance claim, the parties chose to refer the matter to the learned Arbitral Tribunal.

6. It is the case of the respondent that at about 03:00 AM on 31^st December, 2018, due to electric short circuit in the factory, a fire broke out which resulted into death and injuries to some of the respondent’s workers. The fire also damaged the respondent’s stock, plant, machinery and building at its factory. In terms of the policy conditions, the respondent reported the incident to the appellant and made a claim on account of loss under various heads including stock, building and shed, plant and machinery, furniture, fixtures and fittings and electrical wiring. The total amount claimed by the respondent came to Rs.3,40,70,091/-. Thereafter, in terms of Section 64UM of the Insurance Act , 1938, the appellant appointed a surveyor, namely, Proclaim Insurance Surveyors and Loss Assessors Private Limited (in short called the ‘Surveyor’). The Surveyor was an approved surveyor of the Insurance Regulatory and Development Authority of India (IRDAI) in terms of the IRDAI (Insurance Surveyors and Loss Assessors) Regulation, 2015.

7. The Surveyor prepared its reports which were communicated to the respondent, the respondent replied to the same with its comments and after numerous correspondences between the parties, the Surveyor submitted a report. It is the case of the appellant that the respondent sought payment of the sum admitted to be payable by the appellant. The Surveyor prepared its final survey report dated 16^th December, 2019 and based on that, the appellant proposed to make payment of Rs.1,61,00,258/- in full and final satisfaction of the respondent’s claim under the policy. It is the case of the appellant that the respondent’s banker