VISHNU BHAGWAN AGRAWAL Vs. NATIONAL INSURANCE COMPANY LTD

JUDGEMENT

(1.) This appeal has been directed against the judgment and order dated 22,4.1997 passed by Sri Ram Prakash, the then Civil Judge (Senior Division). Mohanlalganj, Lucknow in regular suit No. 80 of 1999 and Misc. Case No. 114/89, whereby he having allowed the objection filed by the respondent No. 1 against the award dated 3.3.1989 in the case of Shakun Udyog, Sriram Road, Lucknow through its proprietor Vishnu Bhagwan Agrawal v. National Insurance Company and Anr., has set aside the award and remitted the case to the Umpire for making a reconsidered award within a period of four months.

(2.) The factual matrix of this appeal, shorn of unnecessary details, is that the appellants obtained an insurance policy from respondent No. 1, whereby they got their jute stock worth Rs. ten lacs kept in the premises of Haryana Oil Mills situate at Aishbagh Road, Lucknow and mortgaged in favour of Bank of Baroda, Hazratganj, Lucknow. Initially the jute stock was got insured for the period from 13.10.1984 to 13.10.1985. Indisputably on 27.10.1984 the amount of policy was raised from Rs. ten lacs to twenty lacs. The appellants had hypothecated the said jute stock with the Bank of Baroda and in terms of the hypothecation agreement, the entire stock pledged to the Bank had to be insured. It appears that in the meantime, some more stock of jute was purchased by the appellants and they sent a letter on 1.7.1985 to respondent No. 1 to increase the amount of insurance policy to the value of raw jute stocked in their godown, i.e., Rs. 23,13,747 + its 10% and inform them of the premium payable on it. However, before any reply could be received from the respondent No. 1, the appellants wrote another letter to the respondent No. 1 informing it about their shifting of the jute stock from the godown of Haryana Oil Mills, Aishbagh, Lucknow to Surendra Rerolling Mills, Aishbagh, Talkatora Road, Lucknow. A request was also made in this letter for making necessary changes in the policy. It appears that after the stock of jute was shifted to Surendra Rerolling Mills, Aishbagh. Talkatora Road, Lucknow, a fire broke out in the godown on the intervening night on 25/26.9.1985 and the entire stock of jute was destroyed. The appellants lodged a claim with the respondent No. 1 for a sum of Rs. 25,45,121.70 p. (Rs. 23,13,745 being the value of jute destroyed in the fire +10%), but the respondent No. 1 showed its preparedness to settle the claim only at Rs. 12,30,000 being the market value of the stock engulfed fn the fire. As no unanimity could be reached at between the parties on the point of quantum of compensation payable, the matter was referred for arbitration, as per terms of the agreement, to Sri P. B. Agrawal, nominated by the appellants and Sri P.P. Mehrotra, nominated by the respondents. It appears that the two arbitrators did not reach at any consensus on the point of compensation, hence the matter was referred to the umpire Sri S.C. Maheshwari, who gave his award on 3.3.1989 holding the appellants entitled to the amount of Rs. 23,55,132.71 p. with interest at the rate of 10% per annum from 10.3.1986 to the date of award and at the rate of 6% per annum on the principal amount thereafter till the date of payment or the date of decree whichever was earlier. After the service of notice of the award, the appellants approached the Court below which caused the award filed before it and directed notices thereof to be given to the parties. On service of notice of filing of the award, the respondent No. 1 filed its objections to the award which was heard and allowed by the learned court below as stated above, aggrieved from which the appellants have come up in this appeal.

(3.) We have heard the learned counsel for the parties at sufficient length and have gone through the material on record.