KABRA EXTRUSIONTECHNIK LTD Vs. NATIONAL INSURANCE COMPANY LTD

JUDGEMENT

(1.) The petitioner had taken a Fire and Special Perils Policy of Rs. 56.74 crores, Exhibit "A" to the Petition. The premium of Rs. 9,57,771/ was paid and the policy became effective from 1st August, 2004. The arbitration clause, namely, Clause 13, of the Policy reads as under :-

(2.) On 2nd/3rd August 2004, there were heavy rains in and around Daman and there were un-manageable floods. Water from the Daman dam was released to prevent adverse effect on it and due to which large number of areas of Daman were under water to the extent of 18 feet above the ground level. Several factories, buildings, plants were damaged. Amongst others, the factory, building, plant and machineries and goods of the petitioner were also under water which caused tremendous loss to the petitioner. Resultantly, on 3rd August 2004, the petitioner gave an intimation to the respondents and lodged its claim for Rs.20,86,20,974/- under the Policy. The respondents appointed Bhatawadekar and Co., and Mehta and Padamsey Pvt. Ltd. as joint Surveyors. On 5th August 2004, the Surveyors visited the site and prepared their interim report and on 21st September, 2005 submitted their final survey report. Against the claim of the petitioner for the above amount, in the final survey report, the Surveyors recommended Rs. 16,11,59,530/-. It may also be noticed that vide an interim report the Surveyors had recommended payment of Rs. 8 crores as interim payment. After submission of the survey report, the amounts due to the petitioner were not cleared. Thus, vide letter dated 4th November, 2005 the petitioner requested the respondents for settling the claim which was followed by reminders. Some on account payments were made and on 31st January, 2007 the respondents made the final payment, thus making a total payment of Rs. 15,31,28,520/-. On or about 30th January, 2007, the respondents issued a format of declaration which was to be furnished by the petitioner before the payment to it could be released. This format stated that the payment of Rs. 15,31,28,529/-was being offered was accepted by the petitioner in full and final settlement of the claim. This declaration was submitted and the final payment was thereafter released in favour of the petitioner totalling to Rs. 15,32,84,353/-. Vide letter dated 7th February, 2007 the petitioner acknowledged the receipt of the said payment and raised a protest tkat the deduction of the claim in any case to the extent of Rs. 80,43,634/- was unjust and unfair and that amount had been approved by the Surveyors and asked for the reasons for which the claim was denied. Not only this, the petitioner was also called upon to file a declaration which was filed on a stamp paper stating that to be full and final settlement and that it will not raise any claim. With reference to its earlier correspondence, vide its letter dated 26th February, 2007, the petitioner invoked the arbitration agreement and requested that its claim settlement be referred to Arbitration in accordance with-the arbitration clause. Vide letter dated 14th March, 2007, the respondents expressed inability to participate in the arbitration proceedings as, according to them, the matter was fully and finally settled and no arbitration could lie in face of the No Claim Certificate. In fact, even vide their letter dated 16th August, 2007, the respondents also stated that the payment had been accepted unconditionally and as such no claim can be referred to Arbitration. Despite invocation of the arbitration clause by the petitioner, the respondents having failed to act, the petitioner filed the present Petition under section 11(6) of the Arbitration and Conciliation Act, 1996.

(3.) In the reply filed on behalf of the respondent - Insurance Company - the main stand is that in face of the discharge voucher and declaration having been filed in full and final settlement, the petitioner cannot invoke the arbitration clause. It is also averred that the payments were made on account and thereafter the final payment was made as a consequence of the discussions and meetings held between the parties on 8th November, 2006 and 9th November, 2006. Thus, the petitioner is estopped from raising any claim and in fact, according to the respondents, the claim raised is incorrect and is not maintainable. The respondents have relied upon the judgments of the Supreme Court in the case of M/s P. K. Ramaiah and Company vs. Chairman and Managing Director, National Thermal Power Corpn., 1994 Supp3 SCC 126, and in the case of Nathani Steels Ltd. vs. Associated Constructions, 1995 Supp3 SCC 324 in support of their defence.