ORIENTAL INSURANCE COMPANY Vs. AUTO COMPS INDIA LIMITED

JUDGEMENT

(1.) THIS judgment shall dispose of an objection petition filed by the petitioner/Insurance Company under Section 34 of the Arbitration and Conciliation Act (hereinafter referred to as ˜the Act) for setting aside the arbitral award, dated 5.6.2004, passed by Honble Mr.Justice R.K. Mahajan (Retd.), who was appointed as an Arbitrator in the case. This judgment shall also dispose of another application filed under Section 34 of ˜the Act by the applicant/Auto Comps India Limited for setting aside the above -mentioned arbitral award in so far as it is against the applicant.

(2.) BRIEFLY stated the facts of the case are that Honble Mr.Justice R.K. Mahajan (retired), hereinafter referred to as the Arbitrator, was appointed as an Arbitrator by this Court vide order, dated 16.9.2002, in arbitration case No.25 of 2002, to decide the dispute in between the claimant Company and the respondent/Insurance Company for the damages. The claimant Company had filed the claim before the arbitral Tribunal for an amount of Rs.9,31,61,415/ - payable by the respondent, with interest at the rate of 18% per annum from 10.7.1998 till the payment of the amount. The claimant had also claimed a sum of Rs.30.00 lacs as cost of litigation. The claim preferred by the claimant may be summarized as under:

(3.) THE insurance policies covered the risk of earthquake, flood and allied perils. There was a flood in the drain (Nallah) near the factory of the claimant on 10.7.1998. The respondent Company, in pursuance of the letter written by the claimant, deputed one Shri N.S. Sidhu of M/s Consolidated Surveyors Pvt. Ltd., Chandigarh as spot surveyor. He visited the premises of the claimant Company and after taking stock of the situation, he asked the claimant to submit the list of loss occurred, which was supplied to the surveyor within a period of one week. Meanwhile, M/s A.K. Govil and Associates of Delhi were appointed by the respondents to assess the loss and damage caused to the claimants factory. The factory was visited by the said M/s A.K. Govil and Associates and after carrying out the preliminary inspection and considering the documents, they submitted preliminary report of the damage caused to the factory, plant, machinery, stocks vide their letter, dated 27.7.1998 and approximate damage was assessed at Rs.2.5 crore/Rs.3 crore in the preliminary report and they recommended a sum of Rs.1.00 crore as temporary measure.