The main legal point established is that disputes arising from an insurance policy, falling within the scope of arbitration as per the policy conditions, should be referred to arbitration as agreed upon by the parties.

ORDER :

1. Heard Shri Ratilal Sakaria, learned counsel appearing for petitioner and Shri Rituraj Meena, learned counsel appearing for the respondent. Perused the records.

2. This petition is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, for appointment of a sole arbitrator.

3. Brief facts which have led to the filing of this petition are as under :

3.1 Petitioner had obtained a fire policy from the respondent by ensuring for a sum of Rs.30 Crores and the subject matter covered under the policy was stock and stock in process as described in the policy for the period 24.04.2018 to 23.04.2019.

3.2 On account of there being an incident of fire that occurred at the petitioner’s factory premises on 18.10.2018 at 05.05 p.m. due to alleged short circuit, it resulted in stock located in the factory premises burnt out and damaged. Loss was reported to the respondent on the same day and respondent insurer deputed the Surveyor who visited the factory premises on 19.10.2019. It is the grievance of petitioner that the Surveyor so appointed by the insurer had not inspected the whole area which was affected by fire and he had hurriedly formed his opinion for assessment of loss. It is also stated that petitioner had sent the relevant documents necessary for assessment of loss. It is further stated that petitioner had given the stock statement indicating the extent of goods damaged in the fire as required by the Surveyor. Petitioner claims that it had initially submitted a claim bill for Rs.70 Lakhs which was subsequently reduced to Rs.35,24,035/- and was paid only Rs.13,39,639/- by the respondent by remitting the said amount to the petitioner’s bank account on 07.10.2019. Petitioner has contended that on 10.10.2019, it informed the respondent insurer of accepting the said amount under protest. Hence, contending that the respondent is liable to pay deficit amount of Rs.21,84,396/-, a legal notice dated 26.03.2020 was issued expressing its intention to resolve the dispute by arbitration as agreed under the policy and suggested the name of the sole arbitrator and called upon the respondent to accord its consent. The respondent by reply notice dated 02.07.2020 denied the averments made in the notice including the name of the proposed sole arbitrator. Hence, this petition.

4. It is the contention of Mr.Ratilal Sakaria, learned counsel appearing for the petitioner that the insurance policy provides for resolution of the dispute between the parties through arbitration and Clause 13 or Condition No.13 forming part of the terms and conditions of the policy would indicate that all disputes and differences arising as to the quantum to be paid under the policy shall be referred to the decision of a sole arbitrator. Hence, it is contended that demand notice was issued, which has been evasively replied by the respondent and as such, he has prayed for appointment of a sole Arbitrator.

5. Per contra, Mr.Rituraj Meena, learned counsel appearing for the respondent has raised two contentions by way of defense to stave off the claim of the petitioner namely (i) that the notice dated 26.03.2020 issued for appointment of arbitrator namely is by a person who has not been duly authorized by the insured; and (ii) the amount has been received without any demur and there being no foundational fact for receiving the amount without protest, petitioner cannot turn around and contend that despite receiving the amount, he would be entitled to prosecute his prayer for appointment of arbitrator or has any claim against the respondent. In support of his submission, he has placed reliance upon the judgment of the Madras High Court in the case of Schmenger GMBH and Company Leder, through its Liason Concern represented by its Liaison Officer Mr.Mukhtar Parvez vs. Saddler Shoes Private Limited, represented by its Managing Director Mr.M. Jamal, reported in 2010 SCC Online Madras 6539.

6. Shri Ratilal Sakaria, learned counsel appearing for the petitioner in reply w