IMPORTANT POINT
The main legal principle established is the limited scope of the referral Court's jurisdiction under Section 11(6) of the Act, emphasizing the Court's role in conducting a prima facie examination of the existence of an arbitration agreement and the non-arbitrability of disputes.

JUDGMENT :

SUNITA AGARWAL, J.

1. Invoking Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act, 1996’ for the sake of brevity), the petitioner herein came for appointment of the sole Arbitrator to adjudicate and decide the dispute arising between the parties, as per the Clause No. 13 of the General Terms and Conditions in connection with the insurance policy dated 24.03.2021.

2. The dispute arising out of the co-insurance policy being a Standard Fire and Special Perils Policy (Material Damage), for the insurance of the petitioner’s assets located at the factory premises situated at S. No. 31 near New Cotton Mill, Amraiwadi, Ahmedabad for the period from 31.03.2021 to 30.03.2022, is sought to be referred to the Arbitrator. Reliance is placed on the Clause 13 of the General Terms & Conditions of the insurance policy providing for arbitration as the dispute resolution mechanism.

3. To decide the claim of the petitioner for referring the dispute to the Arbitrator, certain relevant facts of the case, in brief, are to be noted herein-under. A fire accident had occurred on 10.11.2021 during the subsistence of the period of policy at the factory premises of the petitioner and the petitioner laid a claim with the insurance company (respondent) amounting to Rs. 5,10,33,189/-. The premises was inspected by the surveyor and a final report dated 8.8.2022 was submitted assessing the loss/damages to Rs. 2,48,15,934/- based on the terms and conditions of the insurance policy. The petitioner, however, submits that, as against the loss assessed by the surveyor, the respondent had offered only an amount of Rs. 35,88,978/- as full and final settlement as per the discharge voucher dated 6.1.2023. It is contended that the petitioner had accepted the offered amount of Rs. 35,88,978/- under protest on 16.01.2023 by making an endorsement on the discharge voucher. However, an E-mail was sent by the respondent dated 18.01.2023 asking the petitioner to accept the amount of Rs. 35,88,978/- by giving a clean discharge (to the respondent). It is contended that it is not possible for the petitioner to accept the sum of Rs. 35,88,978/- by giving clean discharge to the respondent as there is a serious dispute with respect to quantum of compensation awarded by the respondent. As a result of it, a legal notice dated 30.01.2023 was served upon the respondent, to which an evasive and vexatious reply was given on 10.03.2023. The dispute arising out of the policy as to the quantum of compensation to be paid under the existing policy is, thus, to be resolved by the process of arbitration.

4. The respondent insurance company in reply to the notice dated 30.01.2023 invoking arbitration clause by the petitioner and the affidavit-in-reply filed in the present petition, has taken a categorical stand that the respondent company has not considered the claim for damage of the Vial line machinery, which was purchased having invoice generated on 21st October, 2021 after the inception of the policy with effect from 31.3.2021. It is categorically stated that the machinery, namely Vial line machinery was not included by the present petitioner under the said policy as it was commissioned in the plant of the petitioner after the inception of the policy, i.e. 31.03.2021. The machinery purchased by the petitioner after the inception of the policy date would not be automatically covered. It is further stated that while opting for policy for insurance, the petitioner did not opt for the “ADD-ON coverage” of “Omission on insure Additions, Alteration and Extensions.” There was, thus, no insurance cover available for the new machine, which was purchased after the policy inception date. It is further stated that the amount calculated by the surveyor for the loss of Vial line machinery was not included in the claim disbursement voucher, due to non-coverage of the said machine under the terms of the policy of the insurance. It is denied that the issue i