Jammu & Kashmir High Court
United India Insurance Co. Ltd. vs Rising Enterprises on 30 March, 1995
Equivalent citations: AIR1996J&K8, AIR 1996 JAMMU AND KASHMIR 8
JUDGMENT A.B. Qadir Parray, J.
1. Mr. Ali has filed this appeal challenging the order passed by learned State Consumer Protection Commission, (hereinafter to be referred to as the Commission) on 2-6-1994, wherein Mr. Ali has drawn the attention of the Commission that in view of conditions of Insurance policy and existing clause of Arbitration, the Commission had not to proceed in the matter unless and until the non-petitioner herein shall not exhaust said remedy as provided in the Insurance Policy.
2. Ld. Commission after hearing arguments of rival parties had passed the impugned order and it is this very order which is impugned in this appeal.
3. The first limb of argument of Mr. Ali is that the Hon'ble appex court had laid much emphasis that wherever there is arbitration clause existing in any Insurance Policy, the aggrieved person should avail the arbitration clause and even under the statute, it has a riding effect that whenever any party to the agreement have to seek redressal of the claims arising out of such Insurance policy or agreement, they have to first avail arbitration clause and in case any of them files the suit, the other person/party has the caveat to ask to court in which the suit has been filed or any proceedings filed to stop the proceedings and to ask the parties to avail the arbitration clause first. He has also referred to me Section 34 of the Arbitration Act which reads:--
"34. Power to stay legal proceedings where there is an arbitration agreement: Where any party to an arbitration agreement or any person claiming under him commences any legal proceedings against any other party to the agreement or any person claiming under him in respect of any matter agreed to be referred, any party to such legal proceedings may, at any time before filing a written statement or taking any other steps in the proceedings, apply to the judicial authority before which the proceedings are pending to stay the proceedings; and if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement and that the applicant was, at the time when the proceedings were commenced, and still remains ready and willing to do all things necessary to the proper conduct of the arbitration, such authority may make an order staying the proceedings."
4. Mr. Ali in the above backdrop submits that the policy which has been entered into between the parties regarding insurance of shop of the respondent situate at Lal Chowk (Qara building), Srinagar and wherein respondent was having the business of electronic goods under the name and style of M/s. Rising Enterprises and is alleged to have gutted on 7-2-1990 due to devastating fire causing total loss to the person of the respondent and as per clause of the policy existing between the parties, a dispute has arisen regarding quantum of compensation/Insurance claim to be given to said claimant. The claim has been found by the Insurance people to the tune of Rs. 5000/- out of Rs. 3.50 lacs which is the sum insured and they joined the dispute that out of total loss caused due to fire they are not being duly compensated of the insurance claimed. Thus Mr. Afi submits that the Arbitration clause is to be invoked in such eventualities.
5. Mr. Manzoor further submits that in view of this statutory bar, the proceedings pending before the Commission are not maintainable.
6. On the other hand, learned counsel for the respondent has argued that the counsel for the Insurance Company (Appellant) had already appeared before the Commission and has participated in the proceedings and whenever Mr. Ali appeared before the Commission, he sought adjournments for filing objections and all this is construed as participation in the proceedings and as such, he is now debarred from making a plea that the matter be referred to the arbitrator in the first instance and thereby learned counsel for the respondents want to project that by such participation, the arbitration clause stands waived off and in support of their submissions, they have referred to AIR 1982 J&K 1, wherein his Lordship Hon'ble Mufti Bahauud-Din Farooqi, acting C.J., as he then was has observed that appearance by a party though without power of attorney as contemplated by Order 3, Rule 1 of the CPC and ask for some time to file written statement, it cannot be said and deemed to be a step-in-aid of the proceedings and on that count relying on judgment of this court reported as AIR 1973 J & K 46, wherein it has been held that where the defendant instead of filing an application asking for the stay of the suit under Section 34 of the Arbitration Act, sought opportunities for filing the written statement, they could not avail of the Arbitration clause of the agreement as they must be deemed to have waived that right.
7. So developing on this concept of law, here in these proceedings also, it seems that Mr. Manzoor standing counsel for the Insurance Company has appeared before the Commission on 15-9-1993 on behalf of the respondents, who are appellants herein and has filed power of attorney on that date and had sought time to file objections. The case came up before the commission on 18-9-1993 and on that date Mr. Manzoor had filed the objections and again sought an opportunity for a few days more to enable him to furnish a copy of these objections to the other side. The case seems to have been adjourned and had come up again before the commission on 25-9-1993 and it was on that date that copy of the objections was given to the other party and the case was listed for arguments for 16-10-1993. It seems that the matter had come up for consideration on 10-5-1994 and then again adjourned and listed on 19-5-1994 when on that date nobody had appeared before the Commission and the case seems to have been adjourned to 2nd of June, 1994, when on that date the impugned order has been passed.
8. From the perusal of the records of the Forum/Commission, it seems that Mr. Manzoor Ali has moved an application on 15-6-1994 asking for staying of proceedings in view of the fact that he has filed an appeal, but the proceedings have not been stayed for obvious reasons that there was no stay and it seems that Mr. Manzoor All had in fact participated in the deliberations of the Commission even on that date when a witness has been recorded and it is Mr. Manzoor who had cross-examined the witness also. So all these things show that there has been active participation of learned counsel for the appellant before the Commission. If this will not be deemed or termed as waiver of the caveat of arbitration, what else can be deemed in the legal parlance? 9. It may not be out of place to mention here that special laws and forums are being created to redress the grievances of the litigant who are now very much crushed under the heavy weight of litigation in the regular courts. The legislature is trying to device ways and means to find laws which are beneficial to the consumers or which can be termed as social legislation to lighten the load of the consumers common man litigant who are being put to harassment by the persons like Insurance Companies and other big business concerns. The welfare State has taken care of such legislation and Consumers' Protection Act is one of the Legislations which is very much in vogue and every effort is being made by all the functionaries to see that the Forum becomes a success and the grievances of the consumers are redressed. Previously there were other social ways also which came to be known as compensation to Motor Vehicles Accident. These cases were also posing a very great problem and then the legislature came with an amendment in the Motor Vehicles Act by creating a forum in the very Act which is known as Tribunal to settle the disputes of the claimants. Even things do not rest there. We have got now Lok Adalats which are taking up these matters expeditiously with the sole purpose and aim to minimise the sufferings of the down-trodden people.
10. A day will not be far off when in recent future we may have Lok Adalats to be held for such claims against Insurance people to settle their claims as has already been done in cases of accidental claims, Hon'ble Apex court in AIR 1994 SC 787 in an appeal against National Commission under consumers' Forum observed:
"The provisions of the Act have to be construed in favour of the Consumer to achieve the purpose of enactment as it is a social benefit oriented legislation. The primary duty of the court while construing the provisions of such an Act is to adopt a constructive approach subject to that it should not do violence to the language of the provisions and is not contrary to attempted objective of the enactment."
11. So in that back-drop, the equities tilt in favour of the respondent who was driven to approach the Forum for obvious reason that he feels aggrieved that out of the total loss allegedly caused to his property due to devastating fire which was insured with the appellants to the tune of Rs. 3.50 lacs nominal amount of Rs. 5000/- is being awarded to him and that is why he has approached the forum, projecting his grievances, as has been observed by the learned Commission in the judgment impugned in this appeal that such things have been objected to by the Insurance people before number of Commissions and even before National Commission, but in all those matters, the consonance of law has been against the appellant and holding the view otherwise.
12. For the foregoing reasons, and in view of the above back-drop, there is no force in the appeal, which is as such, dismissed.
Records be sent back to the Commission.