Oriental Insurance Co.Ltd. vs M/S Tejparas Associates

1. The appellant insurance company had issued fire insurance policy in respect of the plant and machinery of the respondent company. The sum for which it was insured was a sum of Rs.70,00,000/­ (Rupees Seventy Lakhs only). In respect of the policy issued on 01.12.1999, the claim arose on 23.04.2000 when fire accident took place in the premises Digitally signed by MAHABIR SINGH Date: 2019.10.03 of the respondent. In respect of the claim, the appellant 14:23:04 IST Reason:

The said sum was also not acceptable to the respondent but a sum of Rs.25,00,000/­ (Rupees Twenty­Five Lakhs only) was paid to the respondent through Vijaya Bank. The respondent therefore being aggrieved that the claim for insurance reimbursement was not satisfied, had approached the National Consumer Disputes Redressal Commission, New Delhi (“NCDRC” for short) by filing OP No. 146 of 2002. The said complaint came to be dismissed on the ground that the claim involves complicated questions of law and the Civil Court would have jurisdiction to decide the matter. Page 2 of 19

2. The matter was, however, ultimately referred to arbitration by an Arbitral Tribunal consisting of three learned Arbitrators. In the arbitral proceedings, an award dated 28.06.2004 was passed, whereunder two out of three arbitrators awarded the sum of Rs.44,90,000/­ (Rupees Forty­Four Lakh Ninety Thousand only) with interest at 18% per annum also the costs as indicated therein. Since, a sum of Rs.25,00,000/­ had already been paid by the appellant on 20.09.2001, the award constituted the entire sum of Rs. 70,00,000/­ (Rupees Seventy Lakhs only) for which it was insured. The third learned arbitrator, however, dissented from the majority award and held that the sum of Rs. 33,80,925/­ offered by the appellant insurance company was fair and proper. Subsequent thereto the appellant herein filed an application under Section 33 of the Arbitration and Conciliation Act, 1996 (“Act, 1996” for short) seeking for clarification relating to the award dated 28.06.2004 and also with regard to the venue of arbitration as indicated in the award. The said application filed under Section 33 of the Act was dismissed through the order dated 17.12.2004. Pursuant thereto the appellant insurance Page 3 of 19 company, in order to assail the award dated 28.06.2004 and the order dated 17.12.2004 filed the petition under Section 34 of the Act, 1996 on 24.02.2005. Since, the award indicated that the same was passed at Jaipur and the third learned arbitrator in his order had declared the venue of the arbitral tribunal to be at Jaipur, the appellant insurance company filed the petition on 24.02.2005 before the learned District Judge, Jaipur.

3. The respondent on appearing in the said proceedings had objected to the proceedings being held at Jaipur, since according to the respondent the entire cause of action had arisen at Jodhpur. The learned District Judge at Jaipur on considering the rival contentions had through the order dated 12.03.2008 held the petition as not maintainable before that Court but exercised the power under Order 7 Rule 10 and 10 A of the Civil Procedure Code and returned the petition to the appellant insurance company and directed that the parties shall be present before the learned District Judge, Jodhpur, on 02.04.2008 for presentation of the petition therein and proceed with the matter. The Page 4 of 19 appellant insurance company however presented the petition before the learned District Judge, Jodhpur, only on 10.04.2008, instead of the specified date of 02.04.2008. In that circumstance, the respondent herein filed an application under Section 3 of the Limitation Act, before the learned District Judge, Jodhpur, in the re­presented petition under Section 34 of the Act, 1996 which was numbered as arbitration application number 18­A of 2008. Through the said application the respondent had sought rejection of the petition on the ground of the limitation.

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14. In that view, the order dated 15.07.2008 passed on the application filed under Section 14 and Section 3 of the Limitation Act passed by the Additional District and Sessions Judge S.No.3, Jodhpur and the order dated 06.02.2009 passed by the High Court in S.B. (Civil) Misc. Appeal No.1103/2008 are not sustainable. They are accordingly, set aside. Consequently, the proceedings in Arbitration Application No.18­A of 2008 is restored to the file of the Additional District Judge S.No.3, Jodhpur.

15. The parties shall appear before the said Court on 15.10.2019 as the first date for appearance without issue of notice/summons from that Court. The proceedings thereto shall be considered on merits in an expeditious manner. All contentions in that regard are left open.

16. The appeal is, accordingly allowed with no order as to costs. All pending applications shall stand disposed of.