TaxTMI 
TaxTMI 
2019 (3) TMI 2022
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....nd purchased two Standard Fire and Special Perils Policies dated 29th June, 2013 and 10th October, 2013. On 25th September, 2013 and thereafter on 25th October, 2013, a fire took place in the factory on account of a short circuit as claimed by the Respondent claimant. The Appellant Company on receipt of the information appointed M/s. Protocol Surveyors & Engineers Pvt. Ltd. as surveyors and also appointed their investigator to submit the fact finding report. After the report was submitted by the authorised surveyor, the Appellant Company sent an e-mail to the Respondent with an intimation that it has approved its claim for an amount of Rs. 2,81,44,413/- on account of fire dated 25th October, 2013 towards full and final settlement with complete details of the amount computed. The extract of the e-mail sent by the Appellant Company to the Respondent has been placed on record at Annexure P-2 in Civil Appeal arising out of SLP(C) No. 23956 of 2017 and is reproduced as under: From: [email protected] Sent: Thursday, May 05, 2016 1:23 PM To: Vimal Singh CC: [email protected]; [email protected]; [email protected] Subject: Fire Claim dated 25.10.2013 Si....
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....directly from Bank on your email. 2. Regarding re-instatement premium of Rs. 19100/-, we request you to deduct the same from claim payment. 3. Original Fire Fighting expenses bills are submitted herewith for doing the needful at your end. 4. Regarding Debris Removal Bills in original, we are enclosing herewith separate letter and contents of the same are self-explanatory. This payment is to be released at later date as per our letter. 5. Full and final settlement discharge voucher for Rs. 2,81,44,413/- duly endorsed by the bank is attached for doing the needful at your end. While hoping that you will find above information/documents in line of your requirement, we look forward to have the immediate transfer of payment of our claim to our bank. A line of confirmation in this regard will be highly appreciated. Thanking you Yours faithfully, For Antique Art Exports Pvt. Ltd. Ashok Jain Chairman ANTIQUE ART Exports Pvt. Ltd. (A Govt. of India Recognized Export House) PANIPAT OFFICE: 78 K.M. Stone, G.T. Road, karhans Village, Tehsil Samalkha, Panipat-132103 (INDIA) T:0091-180-3003300 (100 Lines), F: 0091-180-3003311 E: [email protected],:www.antiquea....
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....sists for adjudication and so far as the allegation levelled that the insurer has coerced and put undue force upon the Respondent to sign on dotted lines on a pre-signed standard discharged paper is concerned, there is no prima facie documentary evidence placed on record except the letter dated 27th July, 2016 which was sent for the first time after almost more than 11 weeks of the claim being settled and the application for appointment of Arbitrator is ill founded and deserves to be rejected. 8. The High Court taking note of the rival contentions of the parties and of Sub-section (6A) of Section 11 of the Act which has been introduced by virtue of Amendment Act, 2015 observed that once there is existence of arbitration agreement, acceptance of the payment disbursed by the Appellant company, whether it was under coercion or undue influence, is a matter to be examined by the Arbitrator and accordingly proceeded to appoint the sole arbitrator to adjudicate the dispute between the parties. 9. Shri Vineet Malhotra, learned Counsel for the Appellant submits that once the claim was settled and the claimant received compensation and issued a discharge voucher in full and final settlemen....
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....ance is not in dispute. The question does arise whether the discharge in the present case upon acceptance of the compensation and signing of the discharge letter was voluntary or under coercion or undue influence and the Respondent was justified in invoking Section 11(6) of the Act. It is true that execution of full and final agreement, receipt or a discharge voucher in itself cannot be a bar to arbitration and it has been observed by this Court in National Insurance Co. Limited v. Boghara Polyfab Private Limited 2009(1) SCC 267 at para 44 as under: 44. None of the three cases relied on by the Appellant lay down a proposition that mere execution of a full and final settlement receipt or a Discharge Voucher is a bar to arbitration, even when the validity thereof is challenged by the claimant on the ground of fraud, coercion or undue influence. Nor do they lay down a proposition that even if the discharge of contract is not genuine or legal, the claims cannot be referred to arbitration. In all the three cases, the Court examined the facts and satisfied itself that there was accord and satisfaction or complete discharge of the contract and that there was no evidence to support the a....
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.... such a case, the discharge is under economic duress on account of coercion employed by the employer. Obviously, the discharge voucher cannot be considered to be voluntary or as having resulted in discharge of the contract by accord and satisfaction. It will not be a bar to arbitration. (iv) An insured makes a claim for loss suffered. The claim is neither admitted nor rejected. But the insured is informed during discussions that unless the claimant gives a full and final voucher for a specified amount (far lesser than the amount claimed by the insured), the entire claim will be rejected. Being in financial difficulties, the claimant agrees to the demand and issues an undated discharge voucher in full and final settlement. Only a few days thereafter, the admitted amount mentioned in the voucher is paid. The accord and satisfaction in such a case is not voluntary but under duress, compulsion and coercion. The coercion is subtle, but very much real. The "accord" is not by free consent. The arbitration agreement can thus be invoked to refer the disputes to arbitration. (v) A claimant makes a claim for a huge sum, by way of damages. The Respondent disputes the claim. The claimant wh....
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....e Respondent seeking appointment of Arbitrator of undue influence/coercion being used by the Appellant in signing the papers on dotted lines is reproduced as under: xiii. It is stated that the Respondent occupying a bargaining position as an Insurer coerced and forced the Petitioner to sign on dotted lines on a Pre-signed Standard Discharge Voucher. The Petitioner facing severe financial distress gave in to the pressure tactics of the Respondent and was made to sign a purported Discharge Voucher dated 24.06.2016 for an amount of Rs. 2,20,36,840/- (Rupees Two Crore Twenty Lakhs Thirty Six Thousand, Eight Hundred Forty Only) as against the Claim of Rs. 5,12,49,241/- (Rupees Five Crore Twelve Lakhs Forty Nine Thousand Two Hundred Forty One Only) as a pre-condition for release of money. xvii. It is stated that Petitioner vide its Letter dated 27.07.2016 rescinded the purported Discharge Voucher as illegal and void as it was forced on coerced into signing the same in the face of extreme financial duress. The Petitioner vide the said letter dated 27.07.2016 called upon the Respondent to pay the balance amount of Rs. 2,92,12,401/- (Rupees Two Crore Ninety Two Lakhs Twelve Thousand Fou....
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....gation, 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. 20. The submission of the learned Counsel for the Respondent that after insertion of Sub-section (6A) to Section 11 of Amendment Act, 2015 the jurisdiction of this Court is denuded and the limited mandate of the Court is to examine the factum of existence of an arbitration and relied on the judgment in Duro Felguera S.A. v. Gangavaram Port Limited 2017(9) SCC 729. The exposition in this decision is a general observation about the effect of the amended provisions which came to be examined under reference to six arbitrable agreements (five agreements for works and one corporate guarantee) and each agreement contains a provision for arbitration and there was serious dispute between the parties in reference to constitution of Arbitral Tribunal whether there has to be Arbitral Tribunal pertaining to each agreement. In the facts and circumstances, this Court took note of Sub-section (6A) introduced by Amendment Act, 2015 to Section 11 of the Act and in that context observed that the preliminary disputes are to be exami....