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2008 DIGILAW 92 (ORI)

United Insurance Co. Ltd. v. Harjit Singh Raina

2008-01-30

L.MOHAPATRA

body2008
JUDGMENT L. MOHAPATRA, J. — This appeal under Section 37 of the Arbitration and Conciliation Act, 1996 has been filed against the judgment dated 9.2.2005 passed by the learned District Judge, Sambalpur rejecting the petition filed by the appellants under Section 34 of the said Act to set aside an arbitral award. 2. Case of the claimant-respondent is that he is the registered owner of a truck bearing registration No.OR-15-1119 and the said vehicle was insured with the appellants under Policy No.034200/31/21/1138/1992 and the policy was valid covering a period from 1.3.1992 to 28.2.1993. The said vehicle met with an accident on 11.7.1992 and the fact of such accident was intimated to the appellants on 13.7.1992. Under the direction of the appel¬lants, a surveyor surveyed the vehicle and submitted his report on 13.7.1992 intimating the damages caused to the vehicle and also stated in the report that further damages, if any, can only be ascertained on dismantling the vehicle during final survey. On 19.8.1992 the claimant-respondent submitted his preliminary claim of Rs.1,22,131.95. The appellants not being satisfied with the earlier survey report, deputed two more surveyors to make assess¬ment. The claim of the respondent is that the said two surveyors did not dismantle the vehicle to know the actual damages and without proper survey submitted a report. The claimant having found that proper survey has not been done by the two surveyors deputed by the appellants served a pleader’s notice on 2.11.1992 claiming Rs.3,00,000/- and also requested for appointment of C.P. Singhal as Arbitrator. The appellants did not accede to the request and estimated damages of Rs.41,371, and in order to settle the amount to the claimant, the respondents prepared final settlement of the claimant. Claimant-respondent did not accept the said amount and relying on the survey report submitted by the first surveyor approached different forums without success and ultimately filed M.J.C. No.43 of 2000 before this Court for appointment of an arbitrator. This Court disposed of the above application on 29.6.2001 appointing a retired Judge of this Court as an Arbitrator on consent of the parties. Learned Arbitrator entered into the reference and commencement of the proceeding started on 31.7.2001. This Court disposed of the above application on 29.6.2001 appointing a retired Judge of this Court as an Arbitrator on consent of the parties. Learned Arbitrator entered into the reference and commencement of the proceeding started on 31.7.2001. Learned Arbitrator on completion of the proceeding passed an award directing payment of a sum of Rs.2,30,000/- to the claimant-respondent with interest @ 10% per annum from the date of filing of the application for appointment of Arbitrator till payment within one month, failing which the rate of interest would run at 18% per annum thereafter. Challeng¬ing the said award the appellants filed an application under Section 34 of the Act before the learned District Judge, Sambal¬pur and the said petition having been rejected, this appeal has been filed. 3. As it appears from the application filed under Section 34 of the Act, the appellants had taken various grounds for setting aside the arbitral award and the main ground on which the award was challenged is that the claim is barred by limitation. The very same ground has been taken in this appeal and no other ground has been canvassed before this Court. 4. Shri Dasmohapatra, learned counsel appearing for the appellants contended that the insurance policy commenced on 3.3.1992 and the vehicle met with an accident on 11.7.1992. On 20.7.1992 the claimant-respondent submitted an application for claim of Rs.1,22,131.95 or in the alternative prayed for appoint¬ment of an Arbitrator. The appellants having not acceded to such claim and having deputed surveyors for assessment of the damages, the claimant-respondent submitted another claim application on 2.11.1992 for a sum of rupees three lakhs. On 12.1.1993 the appellants settled the claim for an amount of Rs.41,371/- and this date gave rise to the cause of action for filing an applica¬tion for appointment of an Arbitrator. According to the learned counsel though cause of action arose on 12.1.1993 and the appli¬cation for appointment of Arbitrator should have been filed three years thereafter i.e. by 11.1.1996, the application was filed before this Court only on 18.2.2000 for appointment of an Arbi¬trator and therefore the application for appointment of an Arbi¬trator was grossly time barred. According to the learned counsel though cause of action arose on 12.1.1993 and the appli¬cation for appointment of Arbitrator should have been filed three years thereafter i.e. by 11.1.1996, the application was filed before this Court only on 18.2.2000 for appointment of an Arbi¬trator and therefore the application for appointment of an Arbi¬trator was grossly time barred. Learned counsel further submitted that since the records clearly indicate that the application filed for appointment of an Arbitrator was beyond the period of limitation, learned Arbitrator should not have passed an award in favour of the claimant-respondent and this being against the law, this Court can entertain the same in an application under Section 37 of the Act. Miss Sabitri Ratho, learned counsel appearing for the claim¬ant-respondent submitted that after the appellants offered a sum of Rs.41,371/- on 12.1.1993, the claimant-respondent approached different forums, such as State Consumer Disputes Redressal Commission and civil Court and if the time consumed in those Courts are taken into consideration and excluded, the application filed for appointment of an Arbitrator was within the period of limitation. Learned counsel further submitted that after receipt of offer on 12.1.1993, the claimant-respondent approached State Consumer Disputes Redressal Commission vide C.D. Case No.200 of 1993 which was disposed of on 3.11.1995 holding that the claimant-respondent is not entitled for any damages or compensa¬tion since there is no negligence or deficiency on the part of the insurance company in the matter of settlement of claim. Thereafter the claimant-respondent filed T.S. No. 101 of 1996 on 8.7.1996 in the Court of the learned Civil Judge (Senior Division), Sambalpur for appointment of an Arbitrator, but the same was returned to present in proper Court on 15.7.1998. Again on 10.8.1998 the claimant-respondent filed T.S. No.2 of 1998 before the learned District Judge, Sambalpur for the very same purpose, but the said suit was also dismissed on 30.4.1999 for want of jurisdiction and therefore the claimant-respondent filed an application before this Court on 18.2.2000 vide M.J.C. No.43 of 2000 for appointment of an Arbitrator. 5. The question that comes for consideration is as to whether the claim was time barred and as to whether the learned Arbitrator having decided this issue in favour of the claimant-respondent, it is permissible for this Court to sit in appeal within the purview of section 34 of the Act. Admittedly, the appellants offered a sum of Rs.41,371/- on 12.1.1993. The question that comes for consideration is as to whether the claim was time barred and as to whether the learned Arbitrator having decided this issue in favour of the claimant-respondent, it is permissible for this Court to sit in appeal within the purview of section 34 of the Act. Admittedly, the appellants offered a sum of Rs.41,371/- on 12.1.1993. The claim petition should have been filed within three years from the said date. Admitted, the claim petition was filed before this Court for appointment of an Arbitrator on 18.12.2000 beyond the period of limitation. There is no dispute that the claimant-respondent approached different forums in between before approaching this Court. In the application filed before this Court under Section 11 of the Act, an order was passed on 29.6.2001 appointing a retired Judge of this Court as the Arbitrator. No objection with regard to limitation was taken as is evident from the said order. The order dated 29.6.2001 passed in M.J.C. No.43 of 2000 is quoted below: “Both parties agree that Justice Bichitrananda Das, retired Judge of this Court, who is presently staying at Sambalpur, may be appointed as Arbitrator in this Case. On consent of the par¬ties Justice B.N. Das, retired Judge of this Court is appointed as Arbitrator to resolve the disputes between the parties. The fees of the Arbitrator shall be fixed by the Arbitrator after hearing both sides. Office is directed to send notice of this appointment to the Arbitrator together with the case papers and other enclosures immediately. Both parties are directed to appear before the Arbitrator on 30.7.2001 at 10.30 A.M. and the Arbitrator shall do well to conclude the proceeding and pass an award by the end of October, 2001. If the opposite party wants to file any objection, it shall do so before the Arbitrator. The M.J.C. is accordingly disposed of. Xxx xxx xxx Sd/-Chief Justice.” However, it appears that objection was raised before the Arbitrator with regard to limitation and the learned Arbitrator dealt with the same in paragraph 4 of the award. It appears from the discussions made in the said paragraph of the award that the appellant raised question of limitation and it was submitted before the learned arbitrator that the claim was barred by time considering the period of limitation prescribed in Article 137 of the Limitation Act. It appears from the discussions made in the said paragraph of the award that the appellant raised question of limitation and it was submitted before the learned arbitrator that the claim was barred by time considering the period of limitation prescribed in Article 137 of the Limitation Act. Learned Arbitrator held that when the dispute arose between the parties, the Arbitration and Conciliation Act, 1996 had not come into force and the parties were covered under the Arbitration Act, 1940 which did not prescribe any period of limitation. After commencement of 1996 Act, an application was filed under Section 11 of the Act before the High Court for appointment of an Arbitrator. Learned Arbitrator has further held that right to apply for appointment of an Arbitrator arose on 12.1.1993 and such application could have been filed by 12.1.1996, whereas application in the High Court for appointment of Arbitrator was filed on 18.2.2000. In between, the claimant-respondent had approached different forums for the relief claim and applying Article 14 of the Limitation Act, learned Arbitrator held that the claim was not barred by time. Learned District Judge, who dismissed the petition under Section 34 of the Act, also did not find any unreasonableness in finding of the learned Arbitrator so far as it relates to the question of limitation and accordingly rejected the petition. 6. Learned counsel for the appellant relied upon a deci¬sion of the Apex Court in the case of Hari Shankar Singhania and others v. Gour Hari Singhania and others, reported in AIR 2006 S.C. 2488 in support of his submission that the period of limita¬tion commences from the date of the last communication between the parties. Relying on the said decision it was further contend¬ed that the last communication made by the appellant pertaining to Rs.41,371/- was on 12.1.1993 and therefore the proceeding under he Act should have been initiated within three years there¬after. As discussed in para-5, learned Arbitrator has taken note of the grounds of limitation in its award and applying Section 14 of the Limitation Act held that the petition filed for appoint¬ment of an arbitrator was within the period of limitation. In this connection, a decision of the Apex Court in the case of Shree Ram Mills Ltd. v. Utility Premises (P) Limited, reported in (2007) 4 S.C.C. 599 . In this connection, a decision of the Apex Court in the case of Shree Ram Mills Ltd. v. Utility Premises (P) Limited, reported in (2007) 4 S.C.C. 599 . Interpreting Section 11 of the Arbitration and Con¬ciliation Act, 1996, the Apex Court held that the preliminary matters are to be determined by the Chief Justice or his desig¬nate before appointing an arbitrator under the said provision. The Court further held that it is for the purpose of putting arbitration proceedings in motion by appointing an arbitrator that the finding is given in respect of the existence of the arbitration clause, territorial jurisdiction, live issue and limitation. It was also held that if the Chief Justice does not, in the strict sense, decide the issue whether the claim is a dead one, in that event it is for him to locate such issue and record his satisfaction that such issue exists between the parties. Where the Chief Justice comes to a finding that there exists a live issue, then naturally this finding would include a finding that the respective claims of the parties have not become barred by limitation. If the principles laid down in the said case are applied to the present case, it will appear that the question of limitation having not been raised at all before this Court and the Chief Justice having appointed an arbitrator, presumption is that the claim was a live one and is not a dead issue. In view of the above, I am of the considered opinion that no objection having been raised at the time of appointment of an arbitrator, and the learned Arbitrator having decided the question of limita¬tion in favour of the respondents by applying Section 14 of the Limitation Act, there is hardly any scope of this Court to sit in appeal over the award and take a decision otherwise. 7. The appeal is devoid of merit and accordingly stands dismissed. Appeal dismissed.