UNITED INDIA FIRE AND GENERAL INSURACE COMPANY LTD Vs. AMRAVATI DISTRICT CENTRAL CO OPRERATIVE BANK LTD

JUDGEMENT

(1.) This is an appeal against the order passed by the Civil Judge (Sr.Dn.), Amravati, whereby he passed a decree in terms of the award passed by the Arbitrator.

(2.) The facts giving rise to this appeal are as follows - The appellant is an Insurance Company and the respondent is a Co-operative Bank. The respondent-bank entered into a contract of insurance with the appellant . Insurance Company for a period of one year commencing from 1st July, 1976 to 1st July, 1977. The total sum insured was Rs.6,00,000/- (basic cover) in addition to Rs.9,00,000/-. The appellant - insurance company issued a policy in favour of the respondent. The branch at Dhamangaon was also included in the contract. It was agreed that there will be a fixed cash in hand limit of Rs.4,00,000/- maximum and Rs.2,00,000/- minimum. The names of the employees working at Dhamangaon were also communicated to the Company. On 28/2/1977, Special Auditor of the bank carried out an audit of the Dhamangaon Branch. It was found that there was a misappropriation of sum of Rs.3,58,000/-. The matter was reported to the policy. The copy of the report to Police was sent to the appellant-company. The respondent also laid a claim of Rs.3,58,000/-. After protracted correspondence, the appellant Insurance Company agreed to pay Rs.29,000/-, since there was a dispute with regard to the sum recoverable under Insurance. As per the agreement, the matter was referred to Arbitrator Shri P.B.Thakre . a retired Additional District Judge. Shri Thakre passed an award. An application was, therefore, moved to civil court for passing a decree in terms of the award. The award was passed ex parte. However, the appellant resisted the application before the Civil Judge (Sr.Dn.) and contended that the award as passed by the Arbitrator is not correct and proper. It was contended that the Arbitrator has misconducted himself. It was also contended that he had failed to consider the ratio laid down in AIR 1981 Bombay, Pg. 397 (Central Bank of India ..vs.. New India Asurance Co.Ltd.) and has wrongly interpreted the excess clause in the policy. It is the contention of the appellant that it was agreed as per the excess clause that each and every item loss is to be considered separately and the act of the Arbitrator in clubbing together all sums misappropriated was not proper. Inspite of this, the learned Civil Judge (Sr.Dn.) passed a decree in terms of the award. Being aggrieved by that, this appeal has been preferred.

(3.) I have heard Mr.Thakur, Advocate for the appellant and Mr.Ghurde, Advocate for the respondent.