ARB.P.286/2010

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IN THE HIGH COURT OF DELHI AT NEW DELHI

+

ARB.P. 286/2010

PACIFIC GARMENTS PVT. LTD. ..... Petitioner

Through:

Mrs. Shantha Devi Raman,

Advocate.

versus

ORIENTAL INSURANCE CO. LTD. ..... Respondent

Through:

Ms. Manjusha Wadhwa.

Advocate.

%

Date of Decision : November 20, 2012

CORAM:

HON'BLE MS. JUSTICE REVA KHETRAPAL

J U D G M E N T

: REVA KHETRAPAL, J.

1.

The aforesaid petition has been filed by M/s Pacific Garments

Pvt. Ltd. for appointment of an Arbitrator under Section 11of the

Arbitration and Conciliation Act, 1996 (hereinafter referred to as „the

Act‟).

2.

Shorn of details, the facts are that a fire accident occurred on

22.04.2008 in the factory of the petitioner, in which huge stocks of

raw and finished materials were lost, apart from the massive and

enormous damage to the building. A claim was lodged by the

petitioner with the respondent for Rs.4,46,61,615/-. After the lodging

of the said insurance claim and exchange of various letters between

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ARB.P.286/2010

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the parties, the respondent – M/s Oriental Insurance Company Limited

settled the claim for Rs.1,58,35,377/-. The petitioner claims that the

said amount was accepted under protest and the signature of the

petitioner on the discharge voucher was obtained by the respondent on

the dotted lines because the petitioner was in great need of money.

Since the respondent failed to honour their obligations under the

insurance contract and failed to indemnify the genuine losses of the

petitioner, the petitioner served a legal notice dated 28.04.2010

invoking the arbitration clause under the contract being Clause 13

which reads as under:-

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ARB.P.286/2010

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3.

The aforesaid arbitration invocation notice was received and

replied by the respondent vide its reply dated 20^th May, 2010 stating

that there does not exist any dispute between the parties, the claim

amount having been accepted by the petitioner by signing the

discharge voucher. The petitioner rejoined to the said notice vide

letter dated 28.06.2010 stating that there is a genuine dispute which

needs to be agitated before the Arbitrator. The respondent having

refused to appoint the Arbitrator, the petitioner was left with no other

efficacious remedy; hence the present petition.

4.

In the reply filed by the respondent, the respondent submitted

that the present petition is not maintainable since the petitioner has

accepted

the

amount

under

the

Insurance

Policy

No.

271501/11/2008/238, 271501/11/2008/73 and 27150/48/2008/1605 on

31.12.2009 in full and final settlement of its claim through signing the

discharge voucher.

5.

It is further submitted that the petitioner having accepted the

amount after mutual settlement, cannot now allege that the settled

amount obtained by him was under pressure and undue influence by

the insurance company. It is stated that the surveyor submitted his

report on 25.09.2009 observing that the respondent company was

liable for an amount of Rs. 1,58,35,377/- against the claim of

Rs.4,46,61,615/-. The petitioner was duly informed about the basis of

the assessment of loss to the tune of Rs.1,58,35,377/- and in response

to the same, the petitioner had sent an authority letter dated

22.12.2009. The petitioner received the aforesaid amount by signing

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ARB.P.286/2010

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the discharge voucher on 31.12.2009. The aforesaid discharge

voucher was accepted by the petitioner unconditionally in full and

final settlement of all its claims and was endorsed by the

hypothecating bank, that is, United Bank of India – Overseas Branch,

New Delhi with respect to the full and final settlement of the fire

claim. On 18.01.2010, for the first time, the petitioner raised dispute

about the settlement of claim and demanded a copy of the survey

repo