Mr. Bobade argued that the word “difference” is the
difference in the amount claimed by the petitioner and the amount
offered/accepted by the respondent. The clause cannot be so read.
The word “difference” must be read as “dispute” because the
differences and disputes of a party are referable to arbitration. It is
only because part amount is accepted that it is argued on behalf of
the petitioner that that part of the liability is admitted. There is
nothing to show that the liability has been admitted by the
respondent company to any extent. The admission of liability must
be unconditional. The acceptance of the Insurance Company was
for payment only if it was accepted in full and final settlement.
That would not show admission of liability. That would in fact
show no admission of liability. It would only be a concession. The
concession is to pay a lesser amount than the amount claimed, if
the entire claim is settled fully and finally. It is much like twoparties in a litigation negotiating a settlement. Even if a Civil Suit
is filed for a larger amount the parties may settle the dispute for a
lesser amount. Such is an offer of settlement. Such an offer of
settlement cannot constitute admission of liability. The civil lis
would be settled only if the offered amount is accepted in full andfinal settlement. The acceptance by the respondent of a part of the
claim of the petitioner based upon certain documents, which shall
be referred to presently, is precisely of such nature. It would be an
offer of settlement of the claim. It is, therefore, a concession as
contended by the respondent.
The distinction between concession and a settlement must,
therefore, be noted. Black's Law Dictionary 8th Edition at page
307 defines concession thus:
“The voluntary yielding to a demand for a sake of settlement”
The book of Words and Phrases by Justice R.P. Sethi 2nd
Edition at page 260 explains concession and rebate as “a grant”.
It refers to the common dictionary meaning of the word concession
as:
“The act of yielding or conceding as to a demand or argument,
something conceded; usually implying a demand, claim, or
request, a thing yielded, a grant”.
The offer of the respondent is, therefore, distinctly a
concession and not an admission.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
mnm
ARBITRATION PETITION NO. 424 OF 2014
M/s. Dilip Kumar V
. Lakhi
Vs.
The New India Assurance Co. Ltd.
CORAM : MRS. ROSHAN DALVI, J.
Date of pronouncing the Judgment: 31st July, 2014
1.
The petitioner is an importer and exporter of diamonds and
an insurer of the respondent in respect of certain consignment of
diamonds. The petitioner has been issued an insurance policy by
the respondent insuring the diamonds inter alia against the theft /
robbery / loss for Rs.1.10 Crores. The policy sets out certain
conditions precedent to the liability of the respondent therein.
2.
The petitioner made a claim under the policy of Rs.1.16
Crores upon the theft / robbery / loss of diamonds in a particular
consignment. The respondent carried out a certain survey and
considered certain documents. The respondent offered Rs.52 lakhs
to the petitioner if it was accepted in full and final settlement along
with a deed of indemnity to be signed by the petitioner. Rs. 64
3.
lakhs was not accepted.
The insurance policy contained an arbitration clause. The
petitioner invoked arbitration. The petitioner lodged its claim. The
arbitral tribunal consisting of three Arbitrators considered the case
of the parties. An award by majority of two Arbitrators has been
given. A descenting award by the third Arbitrator has been
separately given. The petitioner has challenged the majority award
in this petition filed under Section 34 of the Arbitration and
Conciliation Act, 1996 (the Act). The essential case of the
petitioner is that the learned Arbitrators have exceeded their
jurisdiction and have dealt with the dispute beyond the scope of
arbitration as per the terms of the policy in interpreting the terms
of the policy and have consequently erred in dismissing the
petitioner's claim.
4.
Mr. Bobade on behalf of the petitioner made out a case of the
access of jurisdiction of the majority Arbitrators under Clause 19 of
the General Conditions of the Policy taken by the petitioner from
the respondent. The relevant part of Clause 19 runs thus:
“If any difference shall arise as to the quantum to be paid
under the policy (liability being otherwise admitted) such
difference shall independently of all other questions be referred
to the decision of an arbitrator, .....
5.
It is clearly understood that no difference or dispute shall
be referable to arbitration as hereinbefore provided, if the
company has disputed or not accepted liability under or in
respect of this policy”
Mr. Bobade argued that the liability of the respondent has
been accepted to the extent of Rs.52 lakhs. That much amount has
to be unconditionally paid by the respondent to the petitioner. The
adjudication in the arbitration must, therefore, be only with regard
to the balance amount not accepted by the respondent. The
learned Arbitrators must, therefore, only consider how much, if
any, of the remainder of the amount of the petitioner's claim can
be granted to the petitioner or not. Mr. Bobade argued that the
learned Arbitrators misdirected themselves in considering the
adjudication of the entire claim of Rs.1.16 Crores made by the
petitioner under various heads and came to the erroneous
conclusion that no part of the claim could be granted to the
petitioner. This is upon the premise that the liability of the
respondent company was not disputed by it and consequently the
arbitration is not for the balance amount.
6.
It is argued on behalf of the Insurance Company/respondent
that once the claim is made the entire claim is to be adjudicated
upon the evidence to be led for the whole claim and the part claim
granted by the Insurance Company was not an admission of the
liability, but a concession given to the petitioner in view of the
petitioner's long standing relations with the respondent to be
accepted only in full and final settlement. If, therefore, the
petitioner did not accept the amount offered by the respondent in
full and final settlement, the respondent would not make that
payment and the entire claim would have to be adjudicated in
arbitration under the aforesaid clause.
By way of an interim award the learned Arbitrators called
7.
upon the respondent to release Rs.52 lakhs with interest at 12% p.a
thereon from January, 2000 until the date of the interim award
being dated 24th November, 2008 after recording that the
respondent/insurer had not admitted its liability to the
claimant/insured. The learned Arbitrators provided adequate
safeguard for the petitioner bringing back the said amount and
reimbursing the same to the respondent along with interest as may
be decided in arbitration subject to the final outcome of the
reference. By way of the adequate safeguards the petitioner was
required to file an affidavit before the tribunal communicating his
acceptance of the amount along with an undertaking to return the
amount if in the final arbitration award it was so directed. The
petitioner also undertook to pay interest as would be awarded
thereon. This acceptance and undertaking by the petitioner would
itself show that the entire claim was open to arbitration.
8.
Nevertheless the above arbitration clause No.19 in the policy
of the petitioner must be considered in view of the main contention
It contemplates a difference (which is a dispute) as would
9.
of the petitioner.
arise as to the payment of the quantum by the respondent to the
petitioner. It would arise if the liability was “otherwise admitted”.
In case of admission of any part of the liability, the difference
(which is a dispute) would be referred to arbitration.
10.
Consequently this clause contemplates that the disputes
between the parties as to the quantum to be paid under the policy
was referable to arbitration. If there was an admission of liability
for any part amount, the remainder of the claim amount which is
not admitted would be referred to arbitration. If there is no
admission of liability the entire claim would be referred to
arbitration.
11.
Mr. Bobade argued that the word “difference” is the
difference in the amount claimed by the petitioner and the amount
offered/accepted by the respondent. The clause cannot be so read.
The word “difference” must be read as “dispute” because the
differences and disputes of a party are referable to arbitration. It is
only because part amount is accepted that it is argued on behalf of
the petitioner that that part of the liability is admitted. There is
nothing to show that the liability has been admitted by the
respondent company to any extent. The admission of liability must
be unconditional. The acceptance of the Insurance Company was
for payment only if it was accepted in full and final settlement.
That would not show admission of liability. That would in fact
show no admission of liability. It would only be a concession. The
concession is to pay a lesser amount than the amount claimed, if
the entire claim is settled fully and finally. It is much like two
parties in a litigation negotiating a settlement. Even if a Civil Suit
is filed for a larger amount the parties may settle the dispute for a
lesser amount. Such is an offer of settlement. Such an offer of
settlement cannot constitute admission of liability. The civil lis
would be settled only if the offered amount is accepted in full and
final settlement. The acceptance by the respondent of a part of the
claim of the petitioner based upon certain documents, which shall
be referred to presently, is precisely of such nature. It would be an
offer of settlement of the claim. It is, therefore, a concession as
contended by the respondent.
12.
The distinction between concession and a settlement must,
therefore, be noted. Black's Law Dictionary 8th Edition at page
307 defines concession thus:
13.
“The voluntary yielding to a demand for a sake of settlement”
The book of Words and Phrases by Justice R.P
. Sethi 2nd
Edition at page 260 explains concession and rebate as “a grant”.
It refers to the common dictionary meaning of the word concession
as:
“The act of yielding or conceding as to a demand or argument,
14.
request, a thing yielded, a grant”.
something conceded; usually implying a demand, claim, or
The offer of the respondent is, therefore, distinctly a
concession and not an admission. The liability of the respondent
is, therefore, not admitted. Clause 19 would, therefore, not apply
for only the difference of the amount. Even if the expression
“difference” would not include “dispute” and would be the
difference between the claim made by the petitioner and the offer
made by the respondent, the arbitration that is contemplated by
the parties is, therefore, of the entire amount.
The remainder of the clause cited above would further make
15.
this interpretation clear.
16.
It is important to notice that in the first part of the clause 19
aforesaid the expression is only “difference”. In the last part of the
clause the expression is “difference or dispute”.
17. The difference would imply the dispute.
18. There would be no difference or dispute referable to
arbitration if the respondent disputed and not accepted the liability
under the policy. This would mean that when any claim is made, if
the respondent disputed or did not accept the liability there would
be no arbitration. If the respondent admitted and accepted liability
in part then alone there would be arbitration for the amount not
accepted or admitted and for which there was a difference or
dispute.
19.
The expression “difference” forms a part of other insurance
policies. In the case of Stebbing Vs. Liverpool & London & Globe
Insurance Company, Ltd. [1917] 2 King's Bench The Law
Reports 433 “all differences arising out of this policy” was to be
referred to arbitration. When a declaration made was seen to be
false, it was held that the truth or untruth of the statements made
by the insurer was a matter referred to the Arbitrator. That is a
similar insurance against loss or damage in connection with
burglary. Loss was alleged. The arbitration clause ran thus :
“ All difference arising out of this policy shall be referred to the
decision of an arbitrator to be appointed in writing by the
parties in difference ....”.
20.
The insured/claimant contended that whether the
assurance contained in the proposal was true or not was not a
difference in arbitration and the Arbitrator had no power to
determine that aspect. It was contended that one of the terms of
the policy was that the truth of the answers forms the basis of the
contract. Reference to the case of Gaw Vs. British Law Fire
Insurance Company was made. In that case it was contended that
when one side affirmed and the other side denied that certain
answer was true, a difference had arisen out of the policy which
It was held that the question whether or not the statement is
could be referred to arbitration.
true was a question arising out of the policy and hence the truth or
untruth of the answer was a matter referred to arbitration.
Consequently the expression “difference” would include all
“disputes” which would arise out of one side claiming any amounts
or declaration and the other side refuting it. It would not be an
arithmetical difference between the claim of the insured and the
part of the claim accepted by the insurer conditionally.
Consequently if any difference (dispute) had arisen, but the
21.
liability was not admitted the entire claim would be referred to
arbitration as a dispute between the parties. Consequently the
entire claim is correctly made.
22.
The learned Arbitrators have entered upon the entire
reference for the entire claim. The claim made by the petitioner in
arbitration is on various counts being for loss, cutting and polishing
diamonds, labour charges, total value of lost goods, profit on the
value totalling to the amount to be recovered. After giving credit
for Rs.50,000/ to be referred from the Angadia a net claim of
Rs.1.16 Crores is made. The claim under arbitration does not show
reference to the unaccepted Rs.64 lakhs under the policy. The
petitioner has claimed in arbitration what the petitioner has
claimed from the Insurance Company under its claim bill annexed
to the statement of claim. The petitioner has made further claim
for interest, loss of business, cost of overheads and cost of
23.
arbitration also.
Upon seeing that the learned Arbitrators have not exceeded
their jurisdiction it must be seen whether the petitioner's entire
claim has been considered alongside the liability of the petitioner
under the policy itself. This Court in a petition under Section 34
cannot go into the details of the evidence led by the parties. Mr.
Bobade has fairly not even called upon the Court to do so.
The learned Arbitrators have raised 8 issues. The essential
24.
proof was in respect of the loss / robbery / theft of the diamonds
worth Rs.1.10 Crores for which the policy was taken. The learned
Arbitrators have also considered whether the petitioner complied
with the policy conditions and proved that they had taken care of
the lost goods upon entrustment in the contract. Upon
consideration of these aspects the learned Arbitrators have framed
issues as to whether the petitioner would be entitled to the reliefs
under separate claims as aforesaid.
25.
The learned Arbitrators have considered the specific
conditions precedent to liability in the policy with regard to book
keeping and entrustment under sub clauses 1 and 3 of the policy.
The learned Arbitrators have further considered the general
conditions in the policy specifically condition Nos. 2,7 & 13 (a, b &
c). Thereupon the learned Arbitrators have considered the salient
features of the terms of the policy more specially the condition with
regard to keeping the daily record when the property is entrusted
to any person and producing such record as documentary evidence
in support of the claim. The learned Arbitrators have seen that the
petitioner has not maintained the record and has not produced the
documentary evidence. The evidence of entrustment by the
petitioner to the relevant Angadia at Bhavnagar where the
demands were sent have been considered and found wanting.
There has been a Surveyor's report as also a police report, which
have been considered by the learned Arbitrators and which cannot
be gone into by this Court.
This Court need not go into the evidence. The award is clear
26.
with regard to the liability as a condition precedent and the main
evidence of entrustment is not shown by the petitioner.
27.
Counsel on behalf of the respondent in fact drew Court's
attention to the Angadias receipt in the compilation of documents
produced by the petitioner. The receipt of the petitioner made out
in the name of Angadia dated 2 nd November, 2001 showing the
acknowledgment of entrustment is strangely only signed by the
petitioner. It bears no signature of the Angadia or the party to
whom the diamonds were entrusted. This would determine the
claim of the petitioner. That has been fully considered.
Consequently the petitioner's claim has been rejected. Since
the respondent was directed to release Rs.52 lakhs to the petitioner
by the interim award the amount of release would have to be
returned which is so directed. The affidavit and giving the
undertaking by the petitioner would bind the petitioner. This
undertaking would be in the return of the amount of Rs.52 lakhs
along with the interest as directed thereon. The entire award is
seen to be in order. It does not require any interference by this
Court.
Consequently the petition is dismissed.
29.
(ROSHAN DALVI, J.)
Print Page
difference in the amount claimed by the petitioner and the amount
offered/accepted by the respondent. The clause cannot be so read.
The word “difference” must be read as “dispute” because the
differences and disputes of a party are referable to arbitration. It is
only because part amount is accepted that it is argued on behalf of
the petitioner that that part of the liability is admitted. There is
nothing to show that the liability has been admitted by the
respondent company to any extent. The admission of liability must
be unconditional. The acceptance of the Insurance Company was
for payment only if it was accepted in full and final settlement.
That would not show admission of liability. That would in fact
show no admission of liability. It would only be a concession. The
concession is to pay a lesser amount than the amount claimed, if
the entire claim is settled fully and finally. It is much like twoparties in a litigation negotiating a settlement. Even if a Civil Suit
is filed for a larger amount the parties may settle the dispute for a
lesser amount. Such is an offer of settlement. Such an offer of
settlement cannot constitute admission of liability. The civil lis
would be settled only if the offered amount is accepted in full andfinal settlement. The acceptance by the respondent of a part of the
claim of the petitioner based upon certain documents, which shall
be referred to presently, is precisely of such nature. It would be an
offer of settlement of the claim. It is, therefore, a concession as
contended by the respondent.
The distinction between concession and a settlement must,
therefore, be noted. Black's Law Dictionary 8th Edition at page
307 defines concession thus:
“The voluntary yielding to a demand for a sake of settlement”
The book of Words and Phrases by Justice R.P. Sethi 2nd
Edition at page 260 explains concession and rebate as “a grant”.
It refers to the common dictionary meaning of the word concession
as:
“The act of yielding or conceding as to a demand or argument,
something conceded; usually implying a demand, claim, or
request, a thing yielded, a grant”.
The offer of the respondent is, therefore, distinctly a
concession and not an admission.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
mnm
ARBITRATION PETITION NO. 424 OF 2014
M/s. Dilip Kumar V
. Lakhi
Vs.
The New India Assurance Co. Ltd.
CORAM : MRS. ROSHAN DALVI, J.
Date of pronouncing the Judgment: 31st July, 2014
1.
The petitioner is an importer and exporter of diamonds and
an insurer of the respondent in respect of certain consignment of
diamonds. The petitioner has been issued an insurance policy by
the respondent insuring the diamonds inter alia against the theft /
robbery / loss for Rs.1.10 Crores. The policy sets out certain
conditions precedent to the liability of the respondent therein.
2.
The petitioner made a claim under the policy of Rs.1.16
Crores upon the theft / robbery / loss of diamonds in a particular
consignment. The respondent carried out a certain survey and
considered certain documents. The respondent offered Rs.52 lakhs
to the petitioner if it was accepted in full and final settlement along
with a deed of indemnity to be signed by the petitioner. Rs. 64
3.
lakhs was not accepted.
The insurance policy contained an arbitration clause. The
petitioner invoked arbitration. The petitioner lodged its claim. The
arbitral tribunal consisting of three Arbitrators considered the case
of the parties. An award by majority of two Arbitrators has been
given. A descenting award by the third Arbitrator has been
separately given. The petitioner has challenged the majority award
in this petition filed under Section 34 of the Arbitration and
Conciliation Act, 1996 (the Act). The essential case of the
petitioner is that the learned Arbitrators have exceeded their
jurisdiction and have dealt with the dispute beyond the scope of
arbitration as per the terms of the policy in interpreting the terms
of the policy and have consequently erred in dismissing the
petitioner's claim.
4.
Mr. Bobade on behalf of the petitioner made out a case of the
access of jurisdiction of the majority Arbitrators under Clause 19 of
the General Conditions of the Policy taken by the petitioner from
the respondent. The relevant part of Clause 19 runs thus:
“If any difference shall arise as to the quantum to be paid
under the policy (liability being otherwise admitted) such
difference shall independently of all other questions be referred
to the decision of an arbitrator, .....
5.
It is clearly understood that no difference or dispute shall
be referable to arbitration as hereinbefore provided, if the
company has disputed or not accepted liability under or in
respect of this policy”
Mr. Bobade argued that the liability of the respondent has
been accepted to the extent of Rs.52 lakhs. That much amount has
to be unconditionally paid by the respondent to the petitioner. The
adjudication in the arbitration must, therefore, be only with regard
to the balance amount not accepted by the respondent. The
learned Arbitrators must, therefore, only consider how much, if
any, of the remainder of the amount of the petitioner's claim can
be granted to the petitioner or not. Mr. Bobade argued that the
learned Arbitrators misdirected themselves in considering the
adjudication of the entire claim of Rs.1.16 Crores made by the
petitioner under various heads and came to the erroneous
conclusion that no part of the claim could be granted to the
petitioner. This is upon the premise that the liability of the
respondent company was not disputed by it and consequently the
arbitration is not for the balance amount.
6.
It is argued on behalf of the Insurance Company/respondent
that once the claim is made the entire claim is to be adjudicated
upon the evidence to be led for the whole claim and the part claim
granted by the Insurance Company was not an admission of the
liability, but a concession given to the petitioner in view of the
petitioner's long standing relations with the respondent to be
accepted only in full and final settlement. If, therefore, the
petitioner did not accept the amount offered by the respondent in
full and final settlement, the respondent would not make that
payment and the entire claim would have to be adjudicated in
arbitration under the aforesaid clause.
By way of an interim award the learned Arbitrators called
7.
upon the respondent to release Rs.52 lakhs with interest at 12% p.a
thereon from January, 2000 until the date of the interim award
being dated 24th November, 2008 after recording that the
respondent/insurer had not admitted its liability to the
claimant/insured. The learned Arbitrators provided adequate
safeguard for the petitioner bringing back the said amount and
reimbursing the same to the respondent along with interest as may
be decided in arbitration subject to the final outcome of the
reference. By way of the adequate safeguards the petitioner was
required to file an affidavit before the tribunal communicating his
acceptance of the amount along with an undertaking to return the
amount if in the final arbitration award it was so directed. The
petitioner also undertook to pay interest as would be awarded
thereon. This acceptance and undertaking by the petitioner would
itself show that the entire claim was open to arbitration.
8.
Nevertheless the above arbitration clause No.19 in the policy
of the petitioner must be considered in view of the main contention
It contemplates a difference (which is a dispute) as would
9.
of the petitioner.
arise as to the payment of the quantum by the respondent to the
petitioner. It would arise if the liability was “otherwise admitted”.
In case of admission of any part of the liability, the difference
(which is a dispute) would be referred to arbitration.
10.
Consequently this clause contemplates that the disputes
between the parties as to the quantum to be paid under the policy
was referable to arbitration. If there was an admission of liability
for any part amount, the remainder of the claim amount which is
not admitted would be referred to arbitration. If there is no
admission of liability the entire claim would be referred to
arbitration.
11.
Mr. Bobade argued that the word “difference” is the
difference in the amount claimed by the petitioner and the amount
offered/accepted by the respondent. The clause cannot be so read.
The word “difference” must be read as “dispute” because the
differences and disputes of a party are referable to arbitration. It is
only because part amount is accepted that it is argued on behalf of
the petitioner that that part of the liability is admitted. There is
nothing to show that the liability has been admitted by the
respondent company to any extent. The admission of liability must
be unconditional. The acceptance of the Insurance Company was
for payment only if it was accepted in full and final settlement.
That would not show admission of liability. That would in fact
show no admission of liability. It would only be a concession. The
concession is to pay a lesser amount than the amount claimed, if
the entire claim is settled fully and finally. It is much like two
parties in a litigation negotiating a settlement. Even if a Civil Suit
is filed for a larger amount the parties may settle the dispute for a
lesser amount. Such is an offer of settlement. Such an offer of
settlement cannot constitute admission of liability. The civil lis
would be settled only if the offered amount is accepted in full and
final settlement. The acceptance by the respondent of a part of the
claim of the petitioner based upon certain documents, which shall
be referred to presently, is precisely of such nature. It would be an
offer of settlement of the claim. It is, therefore, a concession as
contended by the respondent.
12.
The distinction between concession and a settlement must,
therefore, be noted. Black's Law Dictionary 8th Edition at page
307 defines concession thus:
13.
“The voluntary yielding to a demand for a sake of settlement”
The book of Words and Phrases by Justice R.P
. Sethi 2nd
Edition at page 260 explains concession and rebate as “a grant”.
It refers to the common dictionary meaning of the word concession
as:
“The act of yielding or conceding as to a demand or argument,
14.
request, a thing yielded, a grant”.
something conceded; usually implying a demand, claim, or
The offer of the respondent is, therefore, distinctly a
concession and not an admission. The liability of the respondent
is, therefore, not admitted. Clause 19 would, therefore, not apply
for only the difference of the amount. Even if the expression
“difference” would not include “dispute” and would be the
difference between the claim made by the petitioner and the offer
made by the respondent, the arbitration that is contemplated by
the parties is, therefore, of the entire amount.
The remainder of the clause cited above would further make
15.
this interpretation clear.
16.
It is important to notice that in the first part of the clause 19
aforesaid the expression is only “difference”. In the last part of the
clause the expression is “difference or dispute”.
17. The difference would imply the dispute.
18. There would be no difference or dispute referable to
arbitration if the respondent disputed and not accepted the liability
under the policy. This would mean that when any claim is made, if
the respondent disputed or did not accept the liability there would
be no arbitration. If the respondent admitted and accepted liability
in part then alone there would be arbitration for the amount not
accepted or admitted and for which there was a difference or
dispute.
19.
The expression “difference” forms a part of other insurance
policies. In the case of Stebbing Vs. Liverpool & London & Globe
Insurance Company, Ltd. [1917] 2 King's Bench The Law
Reports 433 “all differences arising out of this policy” was to be
referred to arbitration. When a declaration made was seen to be
false, it was held that the truth or untruth of the statements made
by the insurer was a matter referred to the Arbitrator. That is a
similar insurance against loss or damage in connection with
burglary. Loss was alleged. The arbitration clause ran thus :
“ All difference arising out of this policy shall be referred to the
decision of an arbitrator to be appointed in writing by the
parties in difference ....”.
20.
The insured/claimant contended that whether the
assurance contained in the proposal was true or not was not a
difference in arbitration and the Arbitrator had no power to
determine that aspect. It was contended that one of the terms of
the policy was that the truth of the answers forms the basis of the
contract. Reference to the case of Gaw Vs. British Law Fire
Insurance Company was made. In that case it was contended that
when one side affirmed and the other side denied that certain
answer was true, a difference had arisen out of the policy which
It was held that the question whether or not the statement is
could be referred to arbitration.
true was a question arising out of the policy and hence the truth or
untruth of the answer was a matter referred to arbitration.
Consequently the expression “difference” would include all
“disputes” which would arise out of one side claiming any amounts
or declaration and the other side refuting it. It would not be an
arithmetical difference between the claim of the insured and the
part of the claim accepted by the insurer conditionally.
Consequently if any difference (dispute) had arisen, but the
21.
liability was not admitted the entire claim would be referred to
arbitration as a dispute between the parties. Consequently the
entire claim is correctly made.
22.
The learned Arbitrators have entered upon the entire
reference for the entire claim. The claim made by the petitioner in
arbitration is on various counts being for loss, cutting and polishing
diamonds, labour charges, total value of lost goods, profit on the
value totalling to the amount to be recovered. After giving credit
for Rs.50,000/ to be referred from the Angadia a net claim of
Rs.1.16 Crores is made. The claim under arbitration does not show
reference to the unaccepted Rs.64 lakhs under the policy. The
petitioner has claimed in arbitration what the petitioner has
claimed from the Insurance Company under its claim bill annexed
to the statement of claim. The petitioner has made further claim
for interest, loss of business, cost of overheads and cost of
23.
arbitration also.
Upon seeing that the learned Arbitrators have not exceeded
their jurisdiction it must be seen whether the petitioner's entire
claim has been considered alongside the liability of the petitioner
under the policy itself. This Court in a petition under Section 34
cannot go into the details of the evidence led by the parties. Mr.
Bobade has fairly not even called upon the Court to do so.
The learned Arbitrators have raised 8 issues. The essential
24.
proof was in respect of the loss / robbery / theft of the diamonds
worth Rs.1.10 Crores for which the policy was taken. The learned
Arbitrators have also considered whether the petitioner complied
with the policy conditions and proved that they had taken care of
the lost goods upon entrustment in the contract. Upon
consideration of these aspects the learned Arbitrators have framed
issues as to whether the petitioner would be entitled to the reliefs
under separate claims as aforesaid.
25.
The learned Arbitrators have considered the specific
conditions precedent to liability in the policy with regard to book
keeping and entrustment under sub clauses 1 and 3 of the policy.
The learned Arbitrators have further considered the general
conditions in the policy specifically condition Nos. 2,7 & 13 (a, b &
c). Thereupon the learned Arbitrators have considered the salient
features of the terms of the policy more specially the condition with
regard to keeping the daily record when the property is entrusted
to any person and producing such record as documentary evidence
in support of the claim. The learned Arbitrators have seen that the
petitioner has not maintained the record and has not produced the
documentary evidence. The evidence of entrustment by the
petitioner to the relevant Angadia at Bhavnagar where the
demands were sent have been considered and found wanting.
There has been a Surveyor's report as also a police report, which
have been considered by the learned Arbitrators and which cannot
be gone into by this Court.
This Court need not go into the evidence. The award is clear
26.
with regard to the liability as a condition precedent and the main
evidence of entrustment is not shown by the petitioner.
27.
Counsel on behalf of the respondent in fact drew Court's
attention to the Angadias receipt in the compilation of documents
produced by the petitioner. The receipt of the petitioner made out
in the name of Angadia dated 2 nd November, 2001 showing the
acknowledgment of entrustment is strangely only signed by the
petitioner. It bears no signature of the Angadia or the party to
whom the diamonds were entrusted. This would determine the
claim of the petitioner. That has been fully considered.
Consequently the petitioner's claim has been rejected. Since
the respondent was directed to release Rs.52 lakhs to the petitioner
by the interim award the amount of release would have to be
returned which is so directed. The affidavit and giving the
undertaking by the petitioner would bind the petitioner. This
undertaking would be in the return of the amount of Rs.52 lakhs
along with the interest as directed thereon. The entire award is
seen to be in order. It does not require any interference by this
Court.
Consequently the petition is dismissed.
29.
(ROSHAN DALVI, J.)
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