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2020 Supreme(Telangana) 104
IN THE HIGH COURT OF TELANGANA
A. RAJASHEKER REDDY, J.
Nava Bharat Ventures Limited - Appellant
Versus
The Oriental Insurance Company Limited - Respondent
Arbitration Application No.91 of 2015
Decided On : 28-05-2020
Point of Law :
considering the facts and circumstances in the said case, has categorically recorded a finding of fact that the allegations made by the respondent /claimant therein with regard to fraud, coercion, duress or undue influence are bald, and the claimant could not prima facie establish the said allegations. In those circumstances, the Apex court held that bald pleas of fraud, coercion, duress or undue influence, is not enough and the party who sets up such plea, must prima facie establish the said allegations by placing material. In the said judgment also, the Apex Court was considering the request of the claimant made prior to Amendment Act of 2015
Headnote:
Arbitration and Conciliation Act, 1996 - Section 11(5) and (6) - Application is filed to appoint a sole Arbitrator for resolving the dispute between the parties arising out of the Insurance Contract, entered into between the parties dated, and to pass an award in accordance with law - Applicant is a company represented by its authorised signatory and the respondents are the insurers - Oriental Insurance Company -
Finding of the Court:
where the applicant based on correspondence between the parties, could show a prima facie case in support his claim - Having regard to the facts and circumstances, the law laid down by the Apex Court in the judgments 2 and 3 supra, relied on by the learned counsel for the respondents, though unexceptionable, cannot be made applicable to the facts and circumstances of the present case - For the foregoing reasons, the arbitration application is allowed, Former Judge of erstwhile High Court of Andhra Pradesh, is nominated as sole arbitrator to resolve the disputes between the parties and to pass an award in accordance with law -
Result: Applications pending, if any, shall stand closed
ORDER :
1. This application is filed to appoint a sole Arbitrator under Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996 for resolving the dispute between the parties arising out of the Insurance Contract dated 31.03.2010, entered into between the parties dated, and to pass an award in accordance with law.
2. Applicant is a company represented by its authorised signatory and the respondents are the insurers – Oriental Insurance Company.
3. As per the averments made in the affidavit filed in support of the arbitration application, the case of the applicant – company is that it is involved in the manufacturing of bulk Ferro Alloys and its plant is situated at Palvancha, Khammam District.
4. Through one M/s J.B. Boda Insurance Brokers Private Limited, engaged by the respondent – insurers, the applicant has taken an “Industrial All Risks Policy” vide policy No.431800/11/2010/177 dated 31.03.2010, and the period of the policy is from 31.03.2020 midnight to 30.03.2011. The said policy is a comprehensive policy, covering the risks concerning the buildings, machineries, stocks etc., including loss of profit on account of fire (FLOP) and machinery loss of profit (MLOP), and that policy also covers the business interruption on account of damages caused to machinery etc., and for the sum assured under the policy for damage to machinery and for the damages under the interruption to business, the company paid a premium of Rs.1,55,44,355/-.
5. On 1.10.2010, due to fire damage, the generator (62.5 MVA power) and transformer got damaged and due to the same, there was loss both to property and profits. Hence, the applicant raised the claim to a tune of Rs.8,40,76,639/- (Rupees eight crores, forty lakhs, seventy six thousand, six hundred and thirty nine only) vide claim Bill dated 21.03.2012.
6. The respondents – insurer appointed a Surveyor M/s Professional Surveyors and Loss Adjusters (P) Ltd., and the said surveyor submitted report dated 14.08.2012 assessing the loss at Rs.5,76,27,882/-(Rupees five crores, seventy six lakhs, twenty seven thousand, eighty hundred and eighty two only), and limiting the amount deducatable under the policy from the said assessed amount at Rs.50,00,000/- (Fifty lakhs only).
7. The respondents disagreeing with the surveyor’s report, deducted an amount of Rs.2,57,83,723/- (Rupees two crores fifty seven lakhs eighty three thousand seven hundred and twenty three only), and offered to settle the claim for loss of property claims to a tune of Rs.3,18,44,159/- (Rupees three crores eight lakhs forty four thousand, one hundred and fifty nine only).
8. The grievance of the applicant is that the respondents, instead of considering the claim as submitted by the surveyor at Rs. 5,26,27,882/-, which is after deducting of maximum amount of Rs.50,00,000/-, has offered the above stated amount.
9. The applicant submitted a conditional discharge voucher dated 20.03.2013 for the said amount offered by the respondents, with a request to reconsider the claim relating to balance amount of Rs.2,07,83,723/-. The respondent No.1 vide letter dated 26.03.2013, informed the applicant that the authority has approved the claim for Rs.3,18,44,159/- towards full and final settlement and the issue of reconsidering the claim of Rs.2,07,83,723/- was not accepted, and unless a clean discharge voucher is issued, the respondents expressed their inability to release the payment of Rs.3,18,44,159/-.
10. Further the respondent vide letter dated 23.04.2013 informed the applicant that the quantum of settlement by the company is full and final amount and that if the applicant is not agreeable to the same, it can avail the remedy in terms of the conditions of the insurance contract.
11. The further case of the applicant is that in view of dire need of funds and under economic duress, the applicant was forced to issue unconditional discharge voucher dated 24.05.2013, and receive the amount of Rs.3,18,44,159/-.
12. It is stated that on 01.07.2013, the a
