Document Fragment View

Matching Fragments

On 11.03.2011 the respondent signed a detailed letter of subrogation which was on a stamp paper, accepting Rs.5,96,08,179/- in full and final settlement of its claim under the policy and the relevant portion of said letter dated 11.03.2011 was to the following effect:

To, New India Assurance Co. Ltd.
Regional Office Nehru Place, Tonk Road, Jaipur Dear Sir, That in consideration of claim amount of Rs.5,96,08,179 (Rupees Five Crores Nintey Six Lakhs Eight Thousand One Hundred Seventy Nine only) (herein after referred as "Claim amount") as full and final settlement amount of our claim No.330203/11/10/01/00100001 arising under policy No.330203/11/09/11/00000018 (herein after referred as "Policy") covering fire loss of my/our factory situated on Plot No.SPL 3, Sitapura, - Industrial area Jaipur (herein after referred as "Factory Premises") due to fire that took place in IOC Terminal on 29-10-2009, we hereby subrogate our rights on behalf of M/S Genus Power Infrastructures Limited Jaipur (herein after referred as "Insured") in favour of New India Assurance Co. Ltd. (herein after referred as "Insurer") as under:-
That we the Insured hereby subrogate all the rights and remedies (to the extent provided by aforesaid contract of Insurance and under the General law and further any other Law enforceable consequence to the above loss) against the RIICO, Indian Oil Corporation, Govt. of Rajasthan, other insurance company or any other agency/authority of Govt. of Rajasthan, semi Govt. etc. whom so ever is liable in respect whereof in favour of the Insurer regarding Fire accident taken place on 29-10-2009 in IOC terminal in Sitapura Industrial Area, Jaipur and claim arises under "Policy" covering fire loss of Insured factory in "Factory Premises" in favour of the "Insurer".
....................................................................... ........................................................................
In witness whereof we get our hands on this Subrogation letter on the 11th day of March 2011.
For Genus Power Infrastructure ltd.
Authorized Signatory Signature
4. After nearly three weeks i.e on 31.03.2011 the respondent issued a notice to the appellant stating that the discharge voucher was signed under extreme duress, coercion and undue influence exercised by the appellant who took undue advantage of the extreme financial difficulties of the respondent. The respondent further sought to appoint its nominee arbitrator. On 21.04.2011 the appellant replied that there was no arbitrable dispute which existed between the parties inasmuch as the respondent had voluntary signed the letter of subrogation and had accepted payment in full and final settlement of its claim. In the meantime on 05.04.2011 the respondent had filed a petition under section 11 of the Arbitration and Conciliation Act, 1996 (The 'Act' for short) before the High Court of Delhi alleging that it had accepted the payment as stated above because of extreme financial difficulty, duress and coercion. On 10.05.2013 the High Court after recording rival submissions of the parties adjourned the matter which was then taken up on 30.05.2013 when the High Court observed;

9. In our considered view, the plea raised by the respondent is bereft of any details and particulars, and cannot be anything but a bald assertion. Given the fact that there was no protest or demur raised around the time or soon after the letter of subrogation was signed, that the notice dated 31.03.2011 itself was nearly after three weeks and that the financial condition of the respondent was not so precarious that it was left with no alternative but to accept the terms as suggested, we are of the firm view that the discharge in the present case and signing of letter of subrogation were not because of exercise of any undue influence. Such discharge and signing of letter of subrogation was voluntary and free from any coercion or undue influence. In the circumstances, we hold that upon execution of the letter of subrogation, there was full and final settlement of the claim. Since our answer to the question, whether there was really accord and satisfaction, is in the affirmative, in our view no arbitrable dispute existed so as to exercise power under section 11 of the Act. The High Court was not therefore justified in exercising power under Section 11 of the Act.