Calcutta High Court
Humcha Impex Pvt. Ltd vs Universal Sompo General Insurance ... on 17 February, 2014
Author: Sanjib Banerjee
Bench: Sanjib Banerjee
ORDER SHEET
AP No.493 of 2013
GA No.77 of 2014
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
HUMCHA IMPEX PVT. LTD.
-Versus-
UNIVERSAL SOMPO GENERAL INSURANCE COMPANY LIMITED
Appearance:
Mr. V.N. Dwivedi, Adv.
...for the petitioner.
Mr. Hirak Mitra, Sr. Adv.
Mr. Pradyumna Sinha, Adv.
...for the respondent.
BEFORE:
The Hon'ble JUSTICE SANJIB BANERJEE Date : 17th February, 2014.
The Court : Sufficient grounds have been made out as to why the petitioner was not represented on January 6, 2014, when AP No.493 of 2013 was dismissed for default.
The order dated January 6, 2014 is recalled and AP No.493 of 2013 is restored to the file. The restoration application, GA No.77 of 2014, is allowed as above without any order as to costs.
Since the parties had been given previous notice, AP No.493 of 2013 is immediately taken up.2
The petitioner seeks the reference of the perceived disputes covered by the arbitration clause contained in an insurance contract. The insurance company claims complete accord and satisfaction and says that the arbitration clause contained in the agreement stands extinguished.
Following a fire at the petitioner's manufacturing facility in November, 2009, the petitioner lodged a claim. It appears that by a letter dated August 3, 2010, the petitioner scaled down the claim. The petitioner thereafter executed a letter entitled "Consent to acceptance of assessment" which the petitioner appears to have made over to the insurance company on August 24, 2010. According to the petitioner, the letters of August 3, 2010 and August 24, 2010 along with the discharge certificate of August 31, 2010 were issued by the petitioner at the instance of the insurance company and on the petitioner's understanding that if any of the letters were not made over by the petitioner to the insurance company as demanded by the insurance company, no payment would be forthcoming. The petitioner claims that since the incident had taken place in November, 2009 and the petitioner had to wait for a substantial period before the surveyor's report was submitted to the insurance company, the petitioner was at the end of its tether and succumbed to the unreasonable demands of the insurance company to accept a lower sum than what had been claimed. The petitioner insists that if the petitioner had not obtained the substantial payment that was received from the insurance company, its business would have come to a standstill and the issuance of the apparently clean letters 3 and certificates of discharge on its behalf should be viewed against such backdrop.
The petitioner, however, relies on a letter dated August 27, 2010 which, it claims, was delivered to the office of the insurance company on the same day. Such letter of August 27, 2010 protests the calculation of the quantum of loss and alleges coercion by the insurance company, without naming any particular person. The letter bears a rubber stamp of the insurance company with the scribbled initials of the person who had apparently received the letter on behalf of the insurance company on August 27, 2010.
As noticed above, the discharge certificate was issued by the petitioner to the insurance company on August 31, 2010. Within a month thereafter, the payment of about Rs.19.25 crore was made by the insurance company to the petitioner which the petitioner claims to have received by or about September 29, 2010.
There does not appear to have been any protest by the petitioner as to the quantum at which the claim was settled immediately after receipt of the payment or within any reasonable time thereafter. Indeed, a series of letters was issued by the petitioner to the insurance company, copies whereof appear at pages 98 to 106 of the petition, wherein the petitioner merely demanded the surveyor's report for computation of the excise duty that was payable by the petitioner. Each of the letters in the series declared the motive for seeking the surveyor's report to be for the purpose of satisfying the excise authorities. 4
The petitioner invoked the arbitration clause by its letter of July 31, 2012, a copy whereof appears at page 180 of the petition. This letter was issued shortly after receipt of the surveyor's report. It spoke of harassment, undue influence, coercion and duress by the insurance company and sought payment of the balance amount as originally claimed; but it did not refer to the letter of August 27, 2010 by which the petitioner appears to have protested the insurance company's conduct even before the claim was settled and the payment under the settlement was received. In such circumstances, the insurance company's denial of the claim as contained in its letter of September 24, 2009 did not bear a reference to the document of August 27, 2010.
In the affidavit used by the insurance company it has denied the receipt of the questioned letter of August 27, 2010; but the manner in which the casual denial has been made leaves a lot to be desired. The denial of the questioned letter at paragraph 36 of the affidavit-in-opposition implies that the insurance company has still not received the questioned letter of August 27, 2010. Yet, the copy document at page 95 of the petition bears a rubber stamp of the insurance company along with the initials of some person and a date. The insurance company's affidavit altogether glosses over such aspect of the matter.
The petitioner claims that since there is no meaningful or effective denial of the receipt of the letter dated August 27, 2010 by the insurance company, a process of adjudication has to be undertaken, if only to ascertain the veracity of the document and as to whether it was contemporaneously issued or received.5
It does not appear on a wider appreciation of the contemporaneous conduct of the parties, that the exercise as suggested by the petitioner would be required to be undertaken. If the letter of August 27, 2010 is accepted as having been delivered to the insurance company, it would imply that the petitioner had asserted that the letters of August 3 and August 24, 2010 issued on its behalf were at the dictates of the insurance company. In fact, that appears plainly to be so in the one-sided representation contained therein and the known affinity of the insurance companies to go for an over-kill to scotch the possibility of any future dispute upon settling a claim for an amount lower than the amount claimed. However, even if the questioned letter of August 27, 2010 is taken at face value and accepted for argument's sake, it is evident that the discharge certificate of August 31, 2010 was issued subsequent to the issuance of the questioned letter. That would imply either that the letter was not contemporaneously deposited with the addressee or that even if the sentiment as expressed in the letter was genuine and the letter had been issued, the petitioner had no reservations subsequent to execution of the discharge certificate of August 31, 2010. In other words, the petitioner waived the protest as registered in the letter of August 27, 2010 by subsequently issuing a clean discharge certificate on August 31, 2010. In any event, it is unlikely that if the letter had been received by the insurance company contemporaneously it would have released the payment without calling for an unconditional withdrawal of such letter. If the petitioner's case of the unreasonable conduct of the insurance 6 company is believed, it is inconceivable that the insurance company would have released the payment without insisting on the withdrawal of the letter.
The insurance company has relied on the Supreme Court decisions reported at (2009) 1 SCC 267 and (2012) 2 SCC 144 for the measures available to the Chief Justice or his designate upon a defence of accord and satisfaction being raised after the invocation of an arbitration agreement. However, no more detailed analysis of the Supreme Court judgments is necessary in the present context in the light of the view taken herein that whether or not the letter dated August 27, 2010 had been issued or contemporaneously deposited with the insurance company, the protest therein was no longer valid after the execution of the discharge certificate of August 31, 2010 and the failure on the part of the petitioner to protest the insurance company's conduct within reasonable time thereafter. The letter of invocation was only issued nearly two years after receipt of the payment.
In the circumstances, the petitioner's request for referring the disputes to arbitration is declined and the defence of accord and satisfaction accepted. A.P.No.493 of 2013 is dismissed with costs.
Certified website copies of this order, if applied for, be urgently supplied to the parties subject to compliance with all requisite formalities.
(SANJIB BANERJEE, J.) Bp.