UNITED INDIA INSURANCE CO. LTD. versus ANTIQUE ART EXPORTS PVT. LTD.
[2019] 5 S.C.R. 521, Supreme Court of India, 2019
Outcome: Appeal(s) allowed (Granted)
Segment: Ratio
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UNITED INDIA INSURANCE CO. LTD.
v.
ANTIQUE ART EXPORTS PVT. LTD.
(Civil Appeal No. 3284 of 2019)
 MARCH 28, 2019
[A.M. KHANWILKAR AND AJAY RASTOGI, JJ.]
Arbitration and Conciliation Act, 1996 –  s.11(6) – Appointment
of arbitrator – Fire and Special Perils Insurance Policy taken by
respondent-claimant for his factory – Fire took place in his factory
– Insurance company settled the claim which was accepted by
claimant without any demur or protest – Full and final settlement –
After 11 weeks, claimant invoked arbitration clause contained in
the contract of insurance raising plea that fraud, coercion and undue
influence was exercised by the insurance company and he was forced
to sign on the dotted lines – High Court proceeded to appoint a
sole arbitrator – On appeal, held: Prima facie no dispute subsisted
after the discharge voucher was signed by the claimant without any
demur or protest and after the claim was finally settled with accord
and satisfaction – A letter was sent for the first time after 11 weeks
of the settlement of claim raising protest that the discharge voucher
was signed under undue influence and coercion – No supportive
prima facie evidence was placed on record – In absence thereof, it
must follow that the claim was settled with accord and satisfaction
leaving no arbitral dispute subsisting under the agreement to be
referred to the Arbitrator for adjudication.
Allowing the appeals, the Court
HELD: 1.1 In the instant case, for the two
incidents of fire,
the appellant Company based on the Surveyor’s report sent
e-mails for settlement of the claims for both the fires which was
responded by the respondent through e-mail on the same date
itself providing all the necessary information to the Regional
Office of the Company and also issued the discharge voucher in
full and final settlement with accord and satisfaction.  Thereafter,
on 12th July, 2016, the respondent desired certain information
with details that too was furnished and for the first time on
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27th July, 2016, it took a U-turn and raised a voice of undue
influence/coercion being used by the appellant stating that being
in financial distress left with no option than to proceed to sign on
the dotted lines.  The phrase in itself is not sufficient unless there
is a prima facie evidence to establish the allegation of coercion/
undue influence, which is completely missing in the instant case.
[Para 18]  [533-B-E]
1.2 In the given facts and circumstances, the discharge and
signing the letter of subrogation was not because of any undue
influence or coercion as being claimed by the respondent and
upon execution of the letter of subrogation, the claim was settled
with due accord and satisfaction leaving no arbitral dispute to be
examined by an Arbitrator to be appointed under Section 11(6) of
the Act. [Para 19] [533-E-F]
National Insurance Company Limited v. Boghara
Polyfab Private Limited (2009) 1 SCC 267 : [2008] 13
SCR 638; Union of India and Others v. Master
Construction Co. (2011) 12 SCC 349 : [2011] 5 SCR
853; New India Assurance Company Limited v. Genus
Power Infrastructure Limited (2015) 2 SCC 424 :
[2014] 12 SCR 360 – relied on.
Duro Felguera S.A. v. Gangavaram Port Limited (2017)
9 SCC 729 : [2017] 10 SCR 285 – referred to.
Case Law Reference
[2014] 12 SCR 360
 relied on
Para 9
[2008] 13 SCR 638
relied on
Para 12
[2011] 5  SCR 853
relied on
Para 14
[2017] 10 SCR 285
referred to
Para 20
CIVIL APPELLATE
JURISDICTION:   Civil Appeal No. 3284
of 2019
From the Judgment and Order dated 30.05.2017 of the High Court
of Delhi at New Delhi in  Arbitration Petition No. 105 of 2017
                               With
Civil Appeal No.3285 of 2019.
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Vineet Malhotra, Yasir Rauf, Obhirup Ghosh, Vishal Ghori, Mohit
Paul, Advs. for the Appellant.
Dhruv Mehta, Sr. Adv., Rahul Sharma, P. N. Puri, Vivek Sibal,
Advs. for the Respondent.
The Judgment of the Court was delivered by
RASTOGI, J.
1. Leave granted.
2. These appeals have been filed by the Insurance Company
assailing the order dated 30th May, 2017 passed by the High Court of
Delhi appointing an Arbitrator in exercise of power under Section 11(6)
of the Arbitration and Conciliation Act, 1996(hereinafter being referred
to as “the Act”) to adjudicate the dispute between the parties.
3. The facts in brief manifest from the record and relevant for the
present purpose are that the respondent claimant was running its factory
situated at 78, Kilo Mile Stone, Karhans Village, Main GT Road,
Samalakha, Panipat and purchased two Standard Fire and Special Perils
Policies dated 29th June, 2013 and 10th October, 2013.  On 25th September,
2013 and thereafter on 25th October, 2013, a fire took place in the factory
on account of a short circuit as claimed by the respondent claimant. The
appellant Company on receipt of the information appointed M/s. Protocol
Surveyors & Engineers Pvt. Ltd. as surveyors and also appointed their
investigator to submit the fact finding report.   After the report was
submitted by the authorised surveyor, the appellant Company sent an e-
mail to the respondent with an intimation that it has approved its claim
for an amount of Rs.
2,81,44,413/- on account of fire dated 25th October,
2013 towards full and final settlement with complete details of the amount
computed.  The extract of the e-mail sent by the appellant Company to
the respondent has been placed on record at Annexure P-2 in Civil Appeal
arising out of SLP(C ) No. 23956 of 2017 and is reproduced as under:-
“From: Jaiprakash1@uiic.co.in
Sent: Thursday, May 05, 2016 1:23 PM
To: Vimal Singh
CC: sangeetagupta@uiic.co.in; vijaysharma@uiic.co.in;
    nareshchandolia@uiic.co.in
Subject: Fire Claim dated 25.10.2013
UNITED INDIA INSURANCE CO. LTD.v. ANTIQUE ART
EXPORTS PVT. LTD.
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Sir/Madam,
This is to inform you that the Competent Authority has approved
your claim for an amount of Rs. 2,81,44,413/- (building Rs.
88,18,691  P & M  Rs. 7,32,382  FFF   Rs. 3,61,049 Finished
Goods, Rs. 1,95,66,389 Fire Fighting Ex. Rs. 59,000  Cost of Debris
Removal Rs. 88,187 Total Rs. 2,96,25,698)
Less Excess 5% Rs. 14,81,285 = Rs. 2,81,44,413) of loss dated
25.10.2013 (Claim No. 0407001113C101515001)
In order to release the payment we require following from your
end.
1. Confirmation from the concerned bank “Indian Overseas Bank,
Defence Colony Branch.
Through mail that in which Account the payment has to be made
through NEFT.
2. Deposit Re-instatement premium of Rs.19100/-
3. Fire Fighting expenses bills in original
4. Debris Removal bills in original.
5. Full and final settlement discharge voucher for Rs. 2,81,44,413/
- duly endorsed by the bank also without any Subjectivity.
Please furnish.
Jaiprakash
Divisional Manager
United India Insurance Company Limited
10203, IIIrd Floor, Jamuna House,
Padam Singh Road
New Delhi-110005
Mobile : 9910791508
Phone : 28755967, 28755419
jaiprakash@uiic.co.in”
4. On the same date, i.e. 5th May, 2016, the respondent sent a
reply accepting the computation and provided the desired details with
final discharge voucher and details of the bank account in which the
payment was to be credited.  The extract of the e-mail and the discharge
voucher sent by the respondent is reproduced
hereunder:-

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“ANTIQUE ART
Exports Pvt. Ltd.
(A Govt. of India Recognized Export House)
PANIPAT OFFICE: 78 K.M. Stone, G.T. Road, karhans Village,
Tehsil Samalkha, Panipat-132103(INDIA)
        T:0091-180-3003300 (100 Lines), F: 0091-180-3003311
E:Info@antiqueartexports.com, :www.antiqueartexports.com
The Divisional Manager
05.05.2016
United India Insurance Co. Ltd.
10203, 3rd Floor, Jamuna House
Padam Singh Road
Karol Bagh, New Delhi.
      Kind Attn: Mr. Jaiprakash
      Subject : Fire Claim dated 25.10.2013
Dear Sir,
    We are in receipt of your email of today’s date, wherein you
have asked to furnish certain documents/information for doing
the needful at your end.  Accordingly, we are submitting herewith
desired information/documents for your necessary action.
1.  We have already requested our bank to confirm account details,
in which payment has to be made through NEFT. Hopefully, you
must have received the same directly from Bank on your email.
2.  Regarding re-instatement premium of Rs.19100/-, we request
you to deduct the same from claim payment.
3.  Original Fire Fighting expenses bills are submitted herewith for
doing the needful at your end.
4.  Regarding Debris Removal Bills in original, we are enclosing
herewith separate letter and contents of the same are self-
explanatory.  This payment is to be released at later date as per
our letter.
UNITED INDIA INSURANCE CO. LTD.v. ANTIQUE ART
EXPORTS PVT. LTD. [RASTOGI, J.]
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5. Full and final settlement discharge voucher for Rs.2,81,44,413/-
duly endorsed by the bank is attached for doing the needful at
your end.
While hoping that you will find above information/ documents in
line of your requirement, we look forward to have the immediate
transfer of payment of our claim to our bank.
A line of confirmation in this regard will be highly appreciated.
Thanking you
Yours faithfully,
For Antique Art Exports Pvt. Ltd.
Ashok Jain
Chairman”
      “ANTIQUE ART
        Exports Pvt. Ltd.
(A Govt. of India Recognized Export House)
PANIPAT OFFICE: 78 K.M. Stone, G.T. Road, karhans Village,
Tehsil  Samalkha, Panipat-132103(INDIA)
       T:0091-180-3003300 (100 Lines), F: 0091-180-3003311
E:Info@antiqueartexports.com, :www.antiqueartexports.com
  05.05.2016
Full and Final Settlement Discharge Voucher
We, Antique Art Exports Pvt. Ltd., 78 KM Stone, Karhans Village,
Tehsil Samalkha, Panipat-132103, Haryana do hereby accept
payment of Rs.2,81,44,413/-(Rupees Two Crore Eighty One Lacs
Fourty Four Thousand and Four Hundred Thirteen only) as full
and final settlement against our fire claim No.:0407001113
C101515001 of loss dated 25.10.2013 without any subjectivity.
       For Antique Art Exports Pvt. Ltd.
    Sd/-
         Ashok Jain
        Chairman”
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5. Civil Appeal arising out of SLP(C ) No. 23963 of 2017 deals
with the fire taken place on 25th September, 2013.  It is not disputed
between the parties that the facts are similar except that the claim was
settled for Rs. 2,20,36,840/-.
6. Indisputedly, both the claims were accepted by the respondent
without any demur or protest, and after full and final settlement and
discharge of claim in reference to both the claims of the incident dated
25th September, 2013 and 25th October, 2013, the respondent later through
e-mail dt. 11th July, 2016 desired certain details and reports with a break
up of computation including copy of the preliminary survey report etc.
and there was no whisper that any coercion or undue influence, etc.
was used by the appellant company.  The e-mail was replied by the
appellant on 20th July, 2016 giving all details as desired by the respondent.
Thereafter on 27th July, 2016 for the first time nearly almost after 11
weeks of the receipt of claim and full and final discharge, respondent
claimed that fraud, coercion and undue influence was exercised and he
was forced to sign on the dotted lines without furnishing any prima facie
evidence in support thereof.  In furtherance, application came to be filed
before the High Court on 11th January, 2017 under Section 11(6) of the
Arbitration and Conciliation Act, 1996(hereinafter being referred to as
“the Act”) inter alia that the insurer coerced and forced the respondent
to sign on dotted
lines on a pre-signed discharge voucher and claimed
for appointment of an Arbitrator.
7. The appellant Insurance Company in their reply refuted such
allegations and further stated that the respondent had signed a letter of
subrogation in accepting the payment in full and final settlement of its
claim.  Discharge Voucher was sent without any demur or protest and
nothing further survives and no arbitral dispute subsists for adjudication
and so far as the allegation levelled that the insurer has coerced and put
undue force upon the respondent to sign on dotted lines on a pre-signed
standard discharged paper is concerned, there is no prima facie
documentary evidence placed on record except the letter dated 27th
July, 2016 which was sent for the first time after almost more than 11
weeks of the claim being settled and the application for appointment of
Arbitrator is ill founded and deserves to be rejected.
8. The High Court taking note of the rival contentions of the parties
and of sub-section (6A) of Section 11 of the Act which has been introduced
UNITED INDIA INSURANCE CO. LTD.v. ANTIQUE ART
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by virtue of Amendment Act, 2015 observed that once there is existence
of arbitration agreement,  acceptance of the payment disbursed by the
appellant company, whether it was under coercion or undue influence, is
a matter to be examined by the Arbitrator and accordingly proceeded to
appoint the sole arbitrator to adjudicate the dispute between the parties.
9. Shri Vineet Malhotra, learned counsel for the appellant submits
that once the claim was settled and the claimant received compensation
and issued a discharge voucher in full and final settlement of its claim,
there was a discharge of the contract by accord and satisfaction.  As a
result, neither any contract nor any claim survived.  It was also contended
that having received the payment under the said discharge voucher
without any demur or protest, it was not open for the respondent after 11
weeks of the receipt of the claim and full and final discharge, to raise a
voice that the discharge was obtained under coercion and undue influence
without furnishing any prima facie evidence in support thereof and placed
reliance of the judgment of this Court in New India Assurance Company
Limited Vs. Genus Power Infrastructure Limited 2015(2) SCC 424
which according to him is almost on the same set of facts and
circumstances.
10. Learned counsel for the appellant further submits that sub-
section (6A) of Section 11 of the Act has been introduced by Amendment
Act, 2015 with
a limited purpose for expediting the arbitral disputes in a
time bound manner provided there is a prima facie arbitral claim/dispute
subsist under the arbitral agreement for adjudication by the Arbitrator.
In the instant case, as there was no arbitral dispute subsisting after the
claim being finally settled with consent of the parties with due accord
and satisfaction, Section 11(6) was not available to be invoked by the
respondent in raising a dispute after more than 11 weeks of the settlement
of the claim to the satisfaction of the parties.
11. Per Contra, Shri Dhruv Mehta, learned senior counsel for the
respondent submitted that he is not disputing as far as the settlement of
the claims are concerned but his objection is that the respondent was not
in a bargaining position and being in financial stress, he had no option but
to accept the claim on the dotted lines settled by the appellant in an
arbitrary manner leaving no choice and mere acceptance in the given
circumstances will not take away the right of the respondent to establish
that it was not voluntary but under undue influence and coercion and
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since there is a clause of arbitration in the agreement, it will be for the
Arbitrator to examine as to whether the acceptance of the claim by the
respondent has been voluntary or under undue influence or coercion and
in the given circumstances, no error has been committed by appointing
the Arbitrator under the impugned judgment.
12. The existence of an arbitration clause in the contract of
insurance is not in dispute.  The question does arise whether the discharge
in the present case upon acceptance of the compensation and signing of
the discharge letter was voluntary or under coercion or undue influence
and the respondent was justified in invoking Section 11(6) of the Act.  It
is true that execution of full and final agreement, receipt or a discharge
voucher in itself cannot be a bar to arbitration and it has been observed
by this Court in National Insurance Company Limited Vs. Boghara
Polyfab Private Limited 2009(1) SCC 267 at para 44 as under:-
“44. None of the three cases relied on by the appellant lay down
a proposition that mere execution of a full and final settlement
receipt or a Discharge Voucher is a bar to arbitration, even when
the validity thereof is challenged by the claimant on the ground of
fraud, coercion or undue influence.  Nor do they lay down a
proposition that even if the discharge of contract is not genuine or
legal, the claims cannot be referred to arbitration.  In all the three
cases, the Court examined the facts and satisfied
itself that there
was accord and satisfaction or complete discharge of the contract
and that there was no evidence to support the allegation of coercion/
undue influence.”
13. It further laid down the illustrations as to when claims are
arbitrable and when they are not.  This may be illustrative (not exhaustive)
but beneficial for the authorities in taking a decision as to whether in a
given situation where no claim/discharge voucher has been furnished
what will be its legal effect and still there is any arbitral dispute subsists
to be examined by the arbitrator in the given facts and circumstances
and held in para 52 of National Insurance Co. Ltd. Vs. Boghara Polyfab
Private Limited (supra) as follows:-
“52. Some illustrations (not exhaustive) as to when claims are
arbitrable and when they are not, when discharge of contract by
accord and satisfaction are disputed, to round up the discussion
on this subject are:
UNITED INDIA INSURANCE CO. LTD.v. ANTIQUE ART
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(i) A claim is referred to a conciliation or a pre-litigation Lok Adalat.
The parties negotiate and arrive at a settlement. The terms of
settlement are drawn up and signed by both the parties and attested
by the conciliator or the members of the Lok Adalat. After
settlement by way of accord and satisfaction, there can be no
reference to arbitration.
(ii) A claimant makes several claims. The admitted or undisputed
claims are paid. Thereafter negotiations are held for settlement
of the disputed claims resulting in an agreement in writing settling
all the pending claims and disputes. On such settlement, the amount
agreed is paid and the contractor also issues a discharge voucher/
no-claim certificate/full and final receipt. After the contract is
discharged by such accord and satisfaction, neither the contract
nor any dispute survives for consideration. There cannot be any
reference of any dispute to arbitration thereafter.
(iii) A contractor executes the work and claims payment of say
rupees ten lakhs as due in terms of the contract. The employer
admits the claim only for rupees six lakhs and informs the
contractor either in writing or orally that unless the contractor
gives a discharge voucher in the prescribed format acknowledging
receipt of rupees six lakhs in full and final satisfaction of the
contract, payment of the admitted amount will not be released.
The contractor who is hard-pressed for funds and keen to get
the
admitted amount released, signs on the dotted line either in a printed
form or otherwise, stating that the amount is received in full and
final settlement. In such a case, the discharge is under economic
duress on account of coercion employed by the employer.
Obviously, the discharge voucher cannot be considered to be
voluntary or as having resulted in discharge of the contract by
accord and satisfaction. It will not be a bar to arbitration.
(iv) An insured makes a claim for loss suffered. The claim is
neither admitted nor rejected. But the insured is informed during
discussions that unless the claimant gives a full and final voucher
for a specified amount (far lesser than the amount claimed by the
insured), the entire claim will be rejected. Being in financial
difficulties, the claimant agrees to the demand and issues an
undated discharge voucher in full and final settlement. Only a
few days thereafter, the admitted amount mentioned in the voucher
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is paid. The accord and satisfaction in such a case is not voluntary
but under duress, compulsion and coercion. The coercion is subtle,
but very much real. The “accord” is not by free consent. The
arbitration agreement can thus be invoked to refer the disputes to
arbitration.
(v) A claimant makes a claim for a huge sum, by way of damages.
The respondent disputes the claim. The claimant who is keen to
have a settlement and avoid litigation, voluntarily reduces the claim
and requests for settlement. The respondent agrees and settles
the claim and obtains a full and final discharge voucher. Here
even if the claimant might have agreed for settlement due to
financial compulsions and commercial pressure or economic
duress, the decision was his free choice. There was no threat,
coercion or compulsion by the respondent. Therefore, the accord
and satisfaction is binding and valid and there cannot be any
subsequent claim or reference to arbitration.”
14. It is true that there cannot be a rule of thumb and each case
has to be looked into on its own facts and circumstances, taking note of
the broad principles, it was observed by this Court in Union of India
and Others Vs. Master Construction Co. 2011(12) SCC 349 at para 18
as under:-
“18. In our opinion, there is no rule of the absolute kind.  In a case
where the claimant contends that a discharge voucher or no-claim
certificate has been obtained by fraud, coercion, duress or undue
influence and the other side
contests the correctness thereof, the
Chief Justice/his designate must look into this aspect to find out at
least, prima facie, whether or not the dispute is bona fide and
genuine.  Where the dispute raised by the claimant with regard to
validity of the discharge voucher or no-claim certificate or
settlement agreement, prima facie, appears to be lacking in
credibility, there may not be a necessity to refer the dispute for
arbitration at all.”
15. From the proposition which has been laid down by this Court,
what reveals is that a mere plea of fraud, coercion or undue influence in
itself is not enough and the party who alleged is under obligation to prima
facie establish the same by placing satisfactory material on record before
the Chief Justice or his Designate to exercise power under Section 11(6)
UNITED INDIA INSURANCE CO. LTD.v. ANTIQUE ART
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of the Act, which has been considered by this Court in New India
Assurance Company Ltd. case (supra) as follows:-
“9.  It is therefore clear that a bald plea of fraud, coercion, duress
or undue influence is not enough and the party who sets up a plea,
must prima facie establish the same by placing material before
the Chief Justice/his designate…..”
16. In the instant case averment was made for the first time after
11 weeks of the settlement of claim & release of discharge voucher in
the petition filed by the respondent seeking appointment of Arbitrator of
undue influence/coercion being used by the appellant in signing the papers
on dotted lines is reproduced as under:-
“xiii. It is stated that the Respondent occupying a bargaining position
as an Insurer coerced and forced the Petitioner to sign on dotted
lines on a Pre-signed Standard Discharge Voucher.  The petitioner
facing severe financial distress gave in to the pressure tactics of
the Respondent and was made to sign a purported Discharge
Voucher dated 24.06.2016 for an amount of Rs. 2,20,36,840/-
(Rupees Two Crore Twenty Lakhs Thirty Six Thousand, Eight
Hundred Forty Only) as against the Claim of Rs. 5,12,49,241/-
(Rupees Five Crore Twelve Lakhs Forty Nine Thousand Two
Hundred Forty One Only) as a pre-condition for release of money.
xvii. It is stated that Petitioner vide its Letter dated 27.07.2016
rescinded the purported Discharge Voucher as illegal and void
as
it was forced on coerced into signing the same in the face of
extreme financial duress.  The petitioner vide the said letter dated
27.07.2016 called upon the Respondent to pay the balance amount
of Rs. 2,92,12,401/- (Rupees Two Crore Ninety Two Lakhs Twelve
Thousand Four Hundred and One Only) on account of loss suffered
by the petitioner as result of fire.  The petitioner also claimed an
interest @ 18% per annum from the date of incident as well as on
the paid amount till date of payment i.e. up to 06.07.2016.”
17. It is true that there cannot be a rule of its kind that mere
allegation of discharge voucher or no claim certificate being obtained by
fraud/coercion/undue influence practised by other party in itself is
sufficient for appointment of the arbitrator unless the claimant who alleges
that execution of the discharge agreement or no claim certificate was
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obtained on account of fraud/coercion/undue influence practised by the
other party is able to produce prima facie evidence to substantiate the
same, the correctness thereof may be open for the Chief Justice/his
Designate to look into this aspect to find out at least prima facie whether
the dispute is bonafide and genuine in taking a decision to invoke Section
11(6) of the Act.
18. In the instant case, the facts are not in dispute that for the two
incidents of fire on 25th September, 2013 and 25th October, 2013, the
appellant Company based on the Surveyor’s report sent e-mails on 5th
May, 2016 & 24th June, 2016 for settlement of the claims for both the
fires dated 25th September, 2013 and 25th October, 2013 which was
responded by the respondent through e-mail on the same date itself
providing all the necessary information to the Regional Office of the
Company and also issued the discharge voucher in full & final settlement
with accord and satisfaction.  Thereafter, on 12th July, 2016, the
respondent desired certain information with details that too was furnished
and for the first time on 27th July, 2016, it took a U-turn and raised a
voice of undue influence/coercion being used by the appellant stating
that being in financial distress left with no option than to proceed to sign
on the dotted lines.  As observed, the phrase in itself is not sufficient
unless there is a prima facie evidence to establish the allegation of
coercion/undue influence, which is
completely missing in the instant case.
19. In the given facts and circumstances, we are satisfied that the
discharge and signing the letter of subrogation was not because of any
undue influence or coercion as being claimed by the respondent and we
find no difficulty to hold that upon execution of the letter of subrogation,
the claim was settled with due accord and satisfaction leaving no arbitral
dispute to be examined by an Arbitrator to be appointed under Section
11(6) of the Act.
20. The submission of the learned counsel for the respondent that
after insertion of sub-section (6A) to Section 11 of Amendment Act,
2015 the jurisdiction of this Court is denuded and the limited mandate of
the Court is to examine the factum of existence of an arbitration and
relied on the judgment in Duro Felguera S.A. Vs. Gangavaram Port
Limited2017(9) SCC 729.  The exposition in this decision is a general
observation about the effect of the amended provisions which came to
be examined under reference to six arbitrable agreements (five
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agreements for works and one corporate guarantee) and each agreement
contains a provision for arbitration and there was serious dispute between
the parties in reference to constitution of Arbitral Tribunal whether there
has to be Arbitral Tribunal pertaining to each agreement.  In the facts
and circumstances, this Court took note of sub-section (6A) introduced
by Amendment Act, 2015 to Section 11 of the Act and in that context
observed that the preliminary disputes are to be examined by the arbitrator
and are not for the Court to be examined within the limited scope available
for appointment of arbitrator under Section 11(6) of the Act.  Suffice it
to say that appointment of an arbitrator is a judicial power and is not a
mere administrative function leaving some degree of judicial intervention
when it comes to the question to examine the existence of a prima facie
arbitration agreement, it is always necessary to ensure that the dispute
resolution process does not become unnecessarily protracted.
21. In the instant case, prima facie no dispute subsisted after the
discharge voucher being signed by the respondent without any demur or
protest and claim being finally settled with accord and satisfaction and
after 11 weeks of the settlement of claim a letter was sent on 27th July,
2016 for the first time raising a voice in the form of protest that the
discharge voucher was signed under undue influence and coercion with
no
supportive prima facie evidence being placed on record in absence
thereof, it must follow that the claim had been settled with accord and
satisfaction leaving no arbitral dispute subsisting under the agreement to
be referred to the Arbitrator for adjudication.
22. In our considered view, the High Court has committed a
manifest error in passing the impugned order and adopting a mechanical
process in appointing the Arbitrator without any supportive evidence on
record to prima facie substantiate that an arbitral dispute subsisted under
the agreement which needed to be referred to the arbitrator for
adjudication.
23. Consequently, the appeals are allowed and the order passed
by the High Court is accordingly set aside.  No costs.
24. Pending application(s), if any, also stand disposed of.
Devika Gujral
                                Appeals allowed.