ARB.P. 459/2015

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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ARB.P. 459/2015

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Date of Decision: 11^th December, 2015

WORLDFA EXPORTS PVT.LTD.

..... Petitioner

Through:

Mr. Sachin Datta, Sr. Advocate

with Mr. Dinesh Sharma and

Ms. Ritika Jhurani, Advocates.

versus

UNITED INDIA INSURANCE CO. LTD.

..... Respondent

Through:

Mr. A.K. De with Mr. Rajesh

Dwivedi, Advocates for R1.

Mr. Dipak K. Nag with Ms.

Aparna Upamnyu, Advocates

for IRDA.

CORAM:

HON'BLE MR. JUSTICE J.R. MIDHA

JUDGMENT

1.

The petitioner is seeking appointment of an arbitrator under

Section 11(6) of the Arbitration and Conciliation Act, 1996.

2.

Factual Matrix

2.1.The petitioner insured its factory at 449-450, HSIIDC, EPIP,

Kundli, Sonepat, Haryana - 131001 with the respondent under

Standard Fire and Special Perils Policy No.222700/11/11/11/

00000916 for the period 28^th February, 2012 to 27^th February, 2013.

2.2.On 25^th October, 2012, a fire broke out in the insured premises

whereupon the petitioner lodged a claim with the respondent. The

respondent appointed M/s Cunningham Lindsey International Pvt.

Ltd. as surveyor to assess the petitioner’s loss on 27^thOctober, 2012.

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In February, 2013, the respondent appointed second surveyor, M/s

Jain Ambavat & Associates.

2.3.On 17^th November, 2014, the surveyor assessed the petitioner’s

loss at Rs.6,04,36,887/- and sought the concurrence of the petitioner

whereupon the petitioner gave its concurrence vide letter dated 17^th

November, 2014 and executed the undated discharge voucher. The

petitioner claims that the respondent forced it to give the concurrence.

According to the petitioner, the respondent refused to release the

assessed amount unless the concurrence was given and the petitioner,

who was suffering because of the inordinate delay of two years, gave

the concurrence under duress and coercion. The petitioner, in the letter

dated 17^th November, 2014, clearly protested that the concurrence was

without prejudice to its rights under the policy. The petitioner also

reserved the right to invoke the arbitration in terms of the policy. The

relevant portion of the letter dated 17^th November, 2014 is reproduced

hereunder:

“2.

Please note that the concurrence is without prejudice to

our/ insurers rights and subject to various terms and

conditions of the policy.”

2.4.On 7^th July, 2015, i.e. eight months after the aforesaid

concurrence, the respondent released a sum of Rs. 5,62,32,959/- to the

petitioner.

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2.5.On 10^th July, 2015, the petitioner protested that the receipt of

Rs. 5,62,32,959/- against their claim of Rs.12,69,51,063/- was under

duress and protest. The petitioner invoked the arbitration clause of the

policy with respect to the balance claim amount. The relevant portion

of the letter dated 10^th July, 2015 is reproduced hereunder:

be treated as full and final settlement acceptable to us.”

2.6.Vide reply dated 03^rd August, 2015, the respondent raised an

objection to the appointment of an arbitrator on the ground that the

payment of Rs. 5,62,32,959/- has been made in full and final

settlement to the petitioner and, therefore, no arbitral disputes survive

in the matter.

3.

Submissions of the petitioner

3.1.The insurance sector in India is regulated by Insurance

Regulatory and Development Authority (IRDA) an autonomous body

constituted under IRDA Act, 1999. IRDA has, from time to time,

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issued various rules and regulations prescribing guidelines to be

followed by insurance companies in settling the claims. The relevant

guidelines contained in IRDA (Protection of Policyholders Interests)

Regulations, 2002 are as under:

“9. Claim procedure in respect of a general insurance policy

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year in which the claim is reviewed by it.