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2008 DIGILAW 584 (MP)

ORIENTAL INSURANCE COMPANY LTD v. ANJALI GUPTA

2008-04-15

N.K.MODY

body2008
Judgment N.K.Mody, J ( 1. ) BEING aggrieved by the order dated 12/04/2005 passed by ADJ, Barwaha, District-Khargone in case No.66/2003 whereby the application / objections filed by appellant under Section 34 of the Arbitration and Conciliation Act, 1996 (which shall be referred hereinafter as "A and C Act") was dismissed., the present appeal has been filed. ( 2. ) Short facts of the case are that the respondent Ku. Anjali Gupta who is also an advocate purchased shopkeepers insurance policy from the appellant/insurance company on 14/02/2000 in respect of photocopy machine and fixed furniture valuing Rs. 1,75,000/-. Again another policy was obtained by respondent on 30/04/2000 from appellant/insurance company in respect of other stocks of stationery, books, general goods and gift items valuing Rs.1,75,000/-. On 04/05/2000 due to short circuit there was a fire in the shop of respondent at about 11 pm as a result of which respondent sustained loss of property. On 05/05/2000 on the next day a claim was lodged by respondent for Rs.3,70,400/-. One DK Jain was appointed as Surveyor who has submitted the report on 23/06/2000 and assessed the loss of Rs.1,24,500/-. Being dis- satisfied by the amount assessed by Surveyor, a complaint was filed by respondent before District Consumer Forum, Mandleshwar on 15/ 08/2000. The complaint was contested by appellant. Vide order dated 23/03/2001, District Consumer Forum, Mandleswar allowed the complaint of respondent and awarded a sum of Rs.2,72,500/- alongwith interest @ 9% per annum. Being dissatisfied with the amount awarded by District Consumer Forum, Mandleshwar appellant filed an appeal before M.P. State Consumer Grievances Redressal Commission, Bhopal which was allowed in part vide order dated 03/08/2002 and appellant was directed to make the payment of Rs.1,24,500/- as assessed by Surveyor alongwith interest to the respondent and a further direction was given that if the respondent is dis-satisfied with the quantum then respondent may raise the dispute before Arbitrator in terms and conditions of the policy or may institute the civil suit in the Court of competent jurisdiction for redressal of her grievance and for seeking relief. In compliance of this direction, respondent moved an appropriate application under Section 11 (5) of the A and C Act for appointment of Arbitrator before ADJ, Barwaha. Vide order dated 31/03/2004 the application was allowed and one Mr. VS Gavshinde, advocate was appointed as sole arbitrator. In compliance of this direction, respondent moved an appropriate application under Section 11 (5) of the A and C Act for appointment of Arbitrator before ADJ, Barwaha. Vide order dated 31/03/2004 the application was allowed and one Mr. VS Gavshinde, advocate was appointed as sole arbitrator. Being aggrieved by the order of appointment of Arbitrator writ petition was filed by the appellant before this Court which was numbered as 447/2004 and was dismissed on 30/06/2004 as not pressed. Vide award dated 03/11/2004 the sole arbitrator allowed the claim filed by respondent and awarded a sum of Rs. 1,99,000/ alongwith interest @ 13% per annum with effect from 09/10/2002. Being aggrieved by the award, an application was filed by appellant under Section 34 of the A and C Act which was contested by respondent ans was dismissed by the learned Court below vide order dated 12/04/2001 against which the present appeal has been filed. ( 3. ) Learned counsel for appellant submits that after availing the remedy available under the Consumer Protection Act, 1986 and having an order in her favour granting compensation respondent cannot have recourse to proceed for arbitration. For this contention reliance is placed on a decision in the matter of M/s Fair Air Engineers Pvt. Ltd. Vs. N.K. Modi AIR 1997 SC 533 wherein Honble the Apex Court has observed as under :- "The Legislature intended to provide a remedy in addition to the consentient arbitration, which could be enforced under the Arbitration Act on the Civil action in a suit under the provisions of the Code of Civil Procedure, Thereby, Section 34 of the Arbitration Act does not confer an automatic right nor create an automatic embargo on the exercise of the power by the judicial authority under the Act. It is a matter of discretion. Though the District Forum, State Commission and National Commission are judicial authorities, for the purpose of Section 34 of the Arbitration Act, in view of the object of the Act and by operation of Section 3 thereof, it would be appropriate that these forums created under the Act are at liberty to proceed with the matters in accordance with the provisions of the Act rather than relegating the parties to an arbitration proceedings pursuant to a contract entered into between the parties. The reason is that the Act intends to relieve the consumers of the cumbersome arbitration proceedings or civil action unless the forums on their own and on the peculiar facts and circumstances of a particular case, come to the conclusion that the appropriate forum for adjudication of the disputes would be otherwise those given in the Act. The Parliament is aware of the provisions of the Arbitration Act and the Contract Act and the consequential remedy available under Section 9 of the Code of Civil Procedure, i.e., to avail of right of civil action in a competent Court of civil jurisdiction. Nonetheless, the Act provides the additional remedy." ( 4. ) Learned counsel placed reliance on the decision of this Court in the matter of Basant Kumar Vs. The United India Insurance Co. Ltd. 2003 (2) MPHT 5 wherein this Court has observed as under :- " An Arbitrator cannot be allowed to sit over the order of the District Forum and State Commission particularly when the matter has been adjudicated on merits. In my opinion, considering the scheme of the Consumer Protection Act, petitioner cannot now avail the benefit of arbitration proceedings though initially it was open for him to choose the remedy before the Arbitrator. Once the matter has been entertained and decided by the District Forum; award has been passed, it is not open for the petitioner to claim further amount by having recourse to the arbitration clause in the agreement. The order passed under Consumer Protection Act is final." ( 5. ) Learned counsel submits that respondent is an advocate and an ex parte award has been obtained against the appellant/insurance company. It is submitted that there was no evidence on record to award compensation of Rs.1,99,000/-. It is submitted that out of this amount, a sum of Rs.1,05,000/-has been awarded towards loss of photocopy machine while as per surveyor report it is evident that the company of which the photocopy machine was belonging is not of Cannon make. It is submitted that while the respondent submitted the estimate of that machine which was not available in market. It is submitted that misusing her position as an advocate the respondent has obtained exorbitantly higher award in ex parte as she was duly compensated by District Consumer Forum itself. It is submitted that while the respondent submitted the estimate of that machine which was not available in market. It is submitted that misusing her position as an advocate the respondent has obtained exorbitantly higher award in ex parte as she was duly compensated by District Consumer Forum itself. It is submitted that before the Arbitrator also the case was listed for compromise and was adjourned for 7 to 8 times. It is further submitted that without giving sufficient opportunity to adduce the evidence by Arbitrator, Arbitrator passed the award on 03/11/2004. It is submitted that learned Court below committed error in dismissing the application filed by the appellant. ( 6. ) Mr. SR Saraf, learned counsel for respondent submits that the objections filed by appellant itself are maintainable. It is submitted that the case law upon which the reliance has been placed by appellant is not at all applicable in the present case, as in the present case, State Consumer Grievances Redressal Commission itself has given a direction to respondent to approach the Court for appointment of Arbitrator. For this contention, learned counsel for respondent placed reliance on a decision in the matter of United India Insurance Co. Ltd Vs. M/s Rukmani Solvex (P) Ltd. 2005 (I) MPWN SN 9 wherein this Court has given a direction to approach the Civil Court for awarding just compensation. According to terms of policy the application for appointment of Arbitrator is maintainable. Learned counsel submits that the objections raised by appellant is not covered under Section 34 of A and C Act. For this contention reliance is placed on a decision in the matter of Hari Om Maheshwari Vs. Vinitkumar Parikh 2005 (2) MPLJ 414 wherein a case where the objections were filed under Section 30 of the Arbitration Act, 1940 the Honble Apex Court has observed that grant or refusal of an adjournment by an arbitrator do not fall within its parameters. It is submitted that in the facts and circumstances of the case, learned Court below has rightly dismissed the application which requires no interference. ( 7. ) So far as the maintainability of application filed by respondent is concerned, the law laid down in the matter of M/s Fair Air Engineers Pvt. Ltd. and Basant Kumar (Supra) has been taken into consideration by this Court in the matter of United India Insurance Co. Ltd. Vs. ( 7. ) So far as the maintainability of application filed by respondent is concerned, the law laid down in the matter of M/s Fair Air Engineers Pvt. Ltd. and Basant Kumar (Supra) has been taken into consideration by this Court in the matter of United India Insurance Co. Ltd. Vs. M/s Rukmani Solvex (P) Ltd. 2005 (1) MPWN SN 9 wherein it has been held that the application is maintainable. In the matter of M/s Fair Air Engineers Pvt. Ltd. and also in the matter of Basant Kumar (Supra) after affording the remedy under Consumer Protection Act the application was filed under the A and C Act while in the present case the permission was given by M.P. State Consumer Grievances Redressal Commission itself. In the aforesaid case Honble Apex Court has also observed that the act intends to relieve the consumers of the combersome arbitration proceedings or civil action unless the forums on their own and on the peculiar facts and circumstances of a particular case, come to the conclusion that the appropriate forum for adjudication of the disputes would be otherwise those given in the Act. In the present case after due appreciation of facts of the case, Commission itself has given the liberty to the respondent to approach for arbitration or to file civil suit. Apart from this, the order of appointment of Arbitrator was challenged by appellant in writ petition No.447/2004 before this Court, subsequently, the writ petition was withdrawn as not pressed, therefore, at this juncture appellant cannot be allowed to raise any objection regarding maintainability of application itself. From perusal of record, it appears that the respondent is an advocate and while awarding the compensation no evidence was recorded by Arbitrator. The case proceeded ex parte against appellant and after holding that no compromise is possible on 01/08/2004, two or three short adjournments were given to appellant and award was passed in favour of respondent. Even if, it is assumed that appellant was negligent in conduction of case before the Arbitrator, then too, the fact remains that the appellant was ex parte. In the facts and circumstances of the case, at the most cost could have been imposed on the appellant. In view of this, appeal filed by appellant stands allowed. Even if, it is assumed that appellant was negligent in conduction of case before the Arbitrator, then too, the fact remains that the appellant was ex parte. In the facts and circumstances of the case, at the most cost could have been imposed on the appellant. In view of this, appeal filed by appellant stands allowed. Impugned award dated 12/04/2005 passed by learned Court below and also the award dated 03/11/2004 passed by sole arbitrator stands set-aside subject to payment of cost of Rs.10,000/- which shall be deposited by the appellant with Bar Association, Barwaha. The sole arbitrator after recording of evidence of both the parties shall re-decide the claim of respondent within a period of six months. Both the parties shall remain present on 15/05/2008. Record of the Court . below be sent back. ( 8. ) With the aforesaid observations, appeal stands disposed of. No order as to costs. Appeal disposed of.