Arbitration and Conciliation Act, 1996 – s.11(6) – Appointment of arbitrator – Fire and Special Perils Insurance Policy taken by respondent-claimant for his factory – Fire took place in his factory – Insurance company settled the claim which was accepted by claimant without any demur or protest – Full and final settlement – After 11 weeks, claimant invoked arbitration clause contained in the contract of insurance raising plea that fraud, coercion and undue influence was exercised by the insurance company and he was forced to sign on the dotted lines – High Court proceeded to appoint a sole arbitrator – On appeal, held: Prima facie no dispute subsisted after the discharge voucher was signed by the claimant without any demur or protest and after the claim was finally settled with accord and satisfaction – A letter was sent for the first time after 11 weeks of the settlement of claim raising protest that the discharge voucher was signed under undue influence and coercion – No supportive prima facie evidence was placed on record – In absence thereof, it must follow that the claim was settled with accord and satisfaction leaving no arbitral dispute subsisting under the agreement to be referred to the Arbitrator for adjudication.
Allowing the appeals, the Court
HELD: 1.1 In the instant case, for the two incidents of fire, the appellant Company based on the Surveyor’s report sent e-mails for settlement of the claims for both the fires which was responded by the respondent through e-mail on the same date itself providing all the necessary information to the Regional Office of the Company and also issued the discharge voucher in full and final settlement with accord and satisfaction. Thereafter, on 12th July, 2016, the respondent desired certain information with details that too was furnished and for the first time on
27 th July, 2016, it took a U-turn and raised a voice of undue influence/coercion being used by the appellant stating that being in financial distress left with no option than to proceed to sign on the dotted lines. The phrase in itself is not sufficient unless there is a prima facie evidence to establish the allegation of coercion/undue influence, which is completely missing in the instant case. [Para 18] [533-B-E]
1.2 In the given facts and circumstances, the discharge and signing the letter of subrogation was not because of any undue influence or coercion as being claimed by the respondent and upon execution of the letter of subrogation, the claim was settled with due accord and satisfaction leaving no arbitral dispute to be examined by an Arbitrator to be appointed under Section 11(6) of the Act. [Para 19] [533-E-F]
National Insurance Company Limited v. Boghara Polyfab Private Limited (2009) 1 SCC 267 : [2008] 13 SCR 638; Union of India and Others v. Master
Construction Co. (2011) 12 SCC 349 : [2011] 5 SCR 853; New India Assurance Company Limited v. Genus Power Infrastructure Limited (2015) 2 SCC 424 : [2014] 12 SCR 360 – relied on.
Duro Felguera S.A. v. Gangavaram Port Limited (2017)
9 SCC 729 : [2017] 10 SCR 285 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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