SANJAY KISHAN KAUL, J.

1. The travails of an individual litigant are writ large in this case where the very purpose of the insured (i.e., M/s. Mercury Rubber Mills, a partnership firm) to take out insurance policies from the insurer(s) (i.e., M/s. Oriental Insurance Company Limited and M/s. National Insurance Company Limited) for covering machinery breakdown and loss of profits on that account from time to time has been defeated.

2. The extract from the Insurance Manual filed by the insurer in respect of such insurance policies shows the objective: with rapid industrialization, the machinery utilized was becoming more complicated with the result that repairs entail delays and complications bringing the entire work to a standstill even when small, but vital parts of machine fail. It was, thus, essential for the industrialists to ensure against such contingency. However, another insurance policy to cover the consequential losses that may be suffered by the individual using the machinery following the breakdown was also necessary and, thus, such kind of policies came into being.

3. The facts of the present case are that the insured is engaged in the manufacture of power transmission and conveyor belts for various industrial and other uses from rubber and other components having a factory at Rasoi in District Sonepat, Haryana. The insured had been obtaining insurance policies inter alia for covering machinery breakdowns and loss of profits on that account from time to time. Accordingly, as per the insurance policy taken out by the insured, the insurer agreed to pay all the loss of profits which the insured might suffer due to breakdown of its machinery installed in its factory as described in the Schedule to the policy.

4. The insured lodged claims on 25.03.1982 qua the policies in question and a Surveyor was appointed. We may notice that the insured had obtained insurance policy regarding machinery breakdown from the National Insurance Company Limited, while the LOP policy was taken out from the insurer in the present case. Both the companies appointed a Surveyor and the claim with regard to machinery breakdown was settled to the satisfaction of the insured. However, the dispute arose in respect of the claims qua the insurer in the present case under the LOP policy, as against the breakdown of three different machineries the claims paid by the insurer were much less. The details of these claims are as under:

5. The insurer paid only the claims payable as per it and in view of the arbitration clause existing inter se the parties, the insured filed Suit No. 2279A/1985 on the Original Side of this Court.

6. The insurer, however, resisted reference of disputes to arbitration relying on the inter se communications to claim that there was full and final settlement of the claims and there was no dispute(s) referable to arbitration. The learned Single Judge in terms of an Order dated 09.04.1987 found that whether or not the insured had accepted payments in full and final settlement of claims and had given a valid discharge to the insurer was a question of fact to be decided in the arbitration proceedings and could not be decided by the Court and, thus, allowed the petition and referred the following dispute to arbitration:

Claim No. Amount Claimed (in Rs.) Claim paid by insurer Machinery Particulars No. of outage days Survey Reports

00001 6,70,795/- 53,507/- Mixing Mill No. 3 233 25.03.82 34-43

00005 2,77,067/- 53,507/- Mixing Mill No. 2 98 22.03.82 83-104

00017 93,328/- 51,467/- Mixing Mill No. 5 35 27.03.82 56-73

“Whether the cheques for the abovesaid amounts were received by the petitioner from the respondent in full and final settlement of its abovenoted three claims? If not, what amount is due to the petitioner from the respondent under the abovesaid claims?

7. The insurer preferred an appeal before the Division Bench, which was registered as FAO (OS) No. 61/1987. This appeal remained pending till it was d