SANJAY MADAN Vs. NATIONAL INSURANCE COMPANY

JUDGEMENT

(1.) Claimants Sanjay Madan and Sunil Madan had insured their house and fittings & fixtures in that house with Insurance Company-Objection Petitioner. It was a Policy of reinstatement, which term implies that the entire loss sustained by the insured, i. e. the claimants, was to be made good by the Insurance Company-Objection Petitioner, in the event of any mishap resulting in loss of or damage to the house.

(2.) On the night of 21st February, 1992, when the Insurance Policy was operative, a fire broke out, in which the insured house of the claimants was completely gutted. A claim for Rs. 36,00,000/- was preferred by the claimants. Insurance Company-Objection Petitioner deputed a Surveyor, who assessed the reinstatement claim at Rs. 26,09,668/-. Surveyor submitted his report on 18th August, 1992. Claimants were paid a sum of Rs. 10,00,000/-, on 18th February, 1993, against receipt Ex. PW-4/D and another sum of Rs. 16,09,668/- against receipt Ex. PW-4/C. The receipt is though undated, it is the admitted case of both the parties that the payment was made on 23rd August, 1993. Receipt Ex. PW-4/C records that the money had been received in full and final settlement of the claim, arising out of the fire that took place on 21st February, 1992. However, under the signatures of the claimants, letters "WP" are written, which according to the claimants are abbreviation for words "without prejudice".

(3.) On 5th September, 1993 or say about 12 days after the execution of receipt Ex. PW-4/C, notice Ex. CR/1 was issued by the claimants to the Insurance Company-Objection Petitioner, claiming a sum of Rs. 9,30,332/-, as balance amount of their insurance claim. They stated in the notice that they had received the amount of Rs. 16,09,668/-, without prejudice. When they did not get any favourable response, they resorted to the arbitration clause in the Insurance Policy. Two Arbitrators, one by the claimants and another by the Insurance Company-Objection Petitioner, were appointed. Claimants appointed Shri R. L. Sood, Advocate, as Arbitrator, while Insurance Company-Objection Petitioner appointed Shri Maharaj Bakhash Singh. On the request of the parties, an Umpire was appointed by this Court on 8th March, 1996. The Umpire appointed by this Court was Shri G. D. Verma, the then President of the Bar Association.