Gujarat High Court
Flow Ink And Coating Pvt. Ltd vs United India Insurance Company Limited on 4 March, 2022
Author: Aravind Kumar
Bench: Aravind Kumar
C/IAAP/42/2021 ORDER DATED: 04/03/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/PETN. UNDER ARBITRATION ACT NO. 42 of 2021
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FLOW INK AND COATING PVT. LTD.
Versus
UNITED INDIA INSURANCE COMPANY LIMITED
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Appearance:
MR C P CHANIYARA(6836) for the Petitioner(s) No. 1
MR RATILAL V SAKARIA(6613) for the Petitioner(s) No. 1
MS SHABANA N ANSARI(9648) for the Petitioner(s) No. 1
MR RATHIN P RAVAL(5013) for the Respondent(s) No. 1
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CORAM:HONOURABLE THE CHIEF JUSTICE MR. JUSTICE
ARAVIND KUMAR
Date : 04/03/2022
ORAL ORDER
1. Petitioner had obtained Fire Insurance Policies from the respondent for the period 18.09.2017 to 17.09.2018 covering the assets located in Plot Nos.24-25, Changodar Industrial Estate including building, plant and machinery and the stock. During the intervening night of 20.06.2018 and 21.06.2018, a fire is said to have broken at the factory premises covered under the policies and as such a claim came to be lodged by petitioner with respondent, after intimating the incident of fire to the respondent. The Surveyor who conducted the assessment after inspection rendered his opinion and during the course of said inspection, petitioner is Page 1 of 6 Downloaded on : Sat Dec 24 12:11:10 IST 2022 C/IAAP/42/2021 ORDER DATED: 04/03/2022 said to have supplied relevant documents necessary for assessing the loss. Petitioner had made a claim for Rs.6,21,69,000/- after giving set-off to the value of the goods salvaged in the fire accident. As against said claim, respondent released or paid an amount of Rs.1,48,65,296/- on 30.03.2020 which came to be accepted by the petitioner under protest. On ground that it is not in full and final settlement but a part payment, petitioner is said to have reserved its right to recover the balance amount while submitting settlement voucher (undated) vide Annexure-C to the respondent. On account of the amount claimed by the petitioner having not been paid, petitioner got issued a legal notice on 23.06.2020 demanding unpaid balance of Rs.5,87,17,524/- and stated thereunder that in the event of amount not being paid, said claim be treated as dispute and sought for resolution of the same by arbitration as prescribed under Clause 13 of the policy. On account of said demand having not been acceded to by the respondent nor arbitrator being appointed, petitioner is before this Court. Page 2 of 6 Downloaded on : Sat Dec 24 12:11:10 IST 2022
C/IAAP/42/2021 ORDER DATED: 04/03/2022
2. On respondents being notified, they have appeared and filed their affidavit denying the claim made by the petitioner contending inter alia that there is delay in raising the claim in two stages and the claim having been repudiated and/or denied, there is no arbitrable dispute for being referred to an Arbitrator.
3. Having heard the learned advocates appearing for the parties, this Court has noticed that under the contract of insurance entered into between petitioner and respondent, it has been agreed by them that if any dispute or difference arises as to quantum to be paid under the subject policies shall independently of all other questions be referred to the decision of a sole Arbitrator. The Arbitration Agreement entered into between parties reads thus :
"13. If any dispute or difference shall arise as to the quantum to be paid under this policy (liability being otherwise admitted) such difference shall independently of all other questions be referred to the decision of a sole arbitrator to be appointed in writing by the parties to or if they cannot agree upon a single arbitrator within 30 days of any party invoking arbitration, the same shall Page 3 of 6 Downloaded on : Sat Dec 24 12:11:10 IST 2022 C/IAAP/42/2021 ORDER DATED: 04/03/2022 be referred to a panel of three arbitrators, comprising of two arbitrators, one to be appointed by each of the parties to the dispute/difference and the third arbitrator to be appointed by such two arbitrators and arbitration shall be conducted under and in accordance with the provisions of the Arbitration and Conciliation Act, 1996.
It is clearly agreed and understood that no difference or dispute shall be referable to arbitration as hereinbefore provided, if the Company has disputed or not accepted liability under or in respect of this policy.
It is hereby expressly stipulated and declared that it shall be a condition precedent to any right of action or suit upon this policy that the award by such arbitrator/ arbitrators of the amount of the loss or damage shall be first obtained."
4. A plain reading of the aforesaid clause would clearly indicate that dispute or difference arising out of and under the subject policies has been agreed to be resolved through arbitration. It is no doubt true that there is some delay. The delay which even according to the respondent has occurred in two stages namely, from the date of discharge voucher signed by petitioner till legal notice issued seeking for reference of dispute for arbitration i.e. between the period 27.03.2020 to 04.06.2020 and same cannot be held or construed as undue delay. Likewise, Page 4 of 6 Downloaded on : Sat Dec 24 12:11:10 IST 2022 C/IAAP/42/2021 ORDER DATED: 04/03/2022 the gap between the two dates namely from the date of signing of the discharge voucher till the date of filing of the petition i.e. 05.03.2021 being 9 months and 1 day could also not be held as delay which could defeat the right of the petitioner to seek for resolution of dispute by invoking arbitration clause. Had the delay been barred by limitation, the contours of this petition would have changed or the view that would have been taken by this Court probably would have been different. However, on account of claim made by the petitioner being well within the period of limitation, it cannot be gainsaid by the respondent that on account of such delay of 9 months the arbitrability of the dispute had been wiped out or the right of the petitioner to seek for referring the dispute to arbitration is to be nipped at the bud. In that view of the matter, the contention raised by the learned counsel appearing for the respondent deserves to be rejected and accordingly it stands rejected.
5. Hence, the following ORDER
(i) Petition is allowed.
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(ii) Hon'ble Mr.Justice K.S.Jhaveri (Retired), former Judge of this Court, residing at: "Satkaj", 17, Neetibaug Judges' Co.Op.Hos.Soc.Ltd., Opp.High Court of Gujarat, Ghatlodia, Ahmedabad-380061, having Telephone numbers 079-29701376 and 9825049090 and Email ID: [email protected], is hereby appointed as the sole Arbitrator to resolve the disputes between the parties in accordance with the Arbitration Centre (Domestic and International), High Court of Gujarat Rules, 2021. Both Parties would be governed by said Rules.
(iii) It is needless to state that all contentions of both parties are kept open and same can be urged before the learned Arbitrator and this Court has not expressed any opinion on merits.
(iv) Registry to communicate this order to the sole Arbitrator forthwith by Speed Post.
(ARAVIND KUMAR, CJ) GAURAV J THAKER Page 6 of 6 Downloaded on : Sat Dec 24 12:11:10 IST 2022