M/S Oriental Insurance Co. Ltd vs M/S Ace Footmark Pvt. Ltd.

Claim No,Claim Details,Relief Claimed

Claim No 1,"Claim on account of loss to Plant and

Machinery","Â Rs. 75,95,759/-

Claim No 2,Claim on account of loss to Building,"Â Rs. 2,11,99,350/-

Claim No 3,Claim on account of loss to Stock,"Â Rs. 25,00,000/-

Claim No 4,"Claim on account of interest as per

IRDA Regulations, 2017","Â Rs. 54,70,826/-

Claim No 5,"Claim on account of excess deducted

by the Insurance Company","Â Rs. 24,74,669/-

Claim No 6,"Claim on account of loss to Fire

Fighting Equipment","Â Rs. 7,96,500/-

Claim No 7,"Claim on account of Removal of

Debris","Â Rs. 4,00,371/-

,TOTAL,"Â Rs. 4,04,37,475/-

Claim No.,Particulars,Amount (in ₹)

Claim No. 1,"Plant & Machinery â€" Total claim allowed

(excluding GST)","74,47,189.95/-

Claim No. 2,Building â€" Total Allowed Claim (with GST),"4,40,77,108.94/-

Claim No. 3,Stock â€" Total Allowed Claim,"2,49,35,000/-

Claim No. 4,"Interest â€" Total Allowed Claim as on

28.08.2020 at the rate of 8.25%","51,15,789.05

Claim No. 5,"Policy Excess â€" Total Allowed

Deduction/Adjustment","-60,000/-

Claim No. 6,Fire Fighting â€" Total Allowed Claim,"9,90,296/-

Claim No. 7,Removal of Debris â€" Total Allowed Claim,"2,88,640/-

GST,"Total GST (subject to submission of GST

certificate)","16,24,177.31/-

,"Total Award Amount with interest till

28.08.2020 (date of award)","4,08,94,307.99/-

,"Total Entitlement along with GST with interest

till 28.08.2020 (subject to GST certificate)","4,25,18,485.29/-

would be released to the Claimant and therefore, the Claimant would continue to languish. Therefore, left with no other option, the helpless Claimant",,

had to forcibly accept the assessment under duress and coercion.â€​,,

[underlined for emphasis],,

Thus, CW-1 had affirmed that any delay in receipt of the money would have resulted in a financial collapse of AFPL. It is relevant to note that",,

although CW-1 was cross-examined at length in regard to the assertion that AFPL had submitted a Discharge Voucher involuntarily and under undue,,

influence, he was not cross examined on the aspect that delay in the receipt of funds would have led to AFPLâ€​s “financial annihilationâ€​.",,

The Arbitral Tribunal had also reproduced the response of CW-1 to certain questions posed to him in his cross-examination. The same are,,

reproduced below:,,

“Q. 12: Were you forced for signing any of the discharge vouchers?,,

Ans.: I received a phone call from Ms. Guneet Kaur, CBRO office, that may payment of Rs.2 Crore is being released as an interim relief and for that",,

I have to sign a pre-printed discharge voucher. I objected to this and requested them to get the payment first and to kindly settle my claim since it has,,

been languishing for a year. She told me it is obligatory and a pre-condition to sign the discharge voucher first and then only any payment will be,,

releasedâ€​,,

“Q.15 Is there any document / statement in the Statement of Claim, from the Respondent saying either you take it or leave it?",,

Ans.: it was told to me verbally.â€​,,

The Chief Regional Manager, CBRO of OICL was also cross-examined. The relevant questions and his responses, as noted by the Arbitral",,

Tribunal, are reproduced below:",,

“Q.22: I suggest to you that no payment would have been made to the Claimant unless he had given the discharge voucher which was a,,

precondition as per prevalent practices of the Insurance Company. What do you say?,,

Ans.: Yes. The discharge voucher is a necessary requirement for all the claims whether minor or major.â€​,,

Q.23: Is it correct that the discharge voucher is a standard form printed by the Insurance Company?,,

Ans.: Yes. It is correct. Witness volunteers: However, the Insured while signing the discharge voucher can always qualify the same by putting his",,

comments and the hand written comment will supersede the printed matter.,,

Q.24: As per prevalent practice, is it permissible for the Insurance Company to release any amount to the Insured if any objection is raised to",,

furnishing of discharge voucher by putting hand written comments on the same?,,

Ans.: It is not permissible. However, if the discharge voucher is qualified by the Insured, the matter would have been escalated to the Head Office for",,

their observations and further guidance in the matter.,,

Q.33: I suggest to you that the so-called discharge voucher mentions acceptance of amount by the Claimant even prior to payment having been made,,

by the Respondent Insurance Company to the Claimant. What do you say?,,

Ans.: Yes. It is correct.,,

Q.35: Would it be correct to say that the so-called discharge voucher was printed by the office of the Respondent Company?,,

Ans.: Yes.â€​,,

In view of the above, there is ample evidence on record that AFPL had been compelled to sign on a Discharge Voucher in the given format. This",,

Court finds no infirmity with the aforesaid conclusion.,,

In view of the unambiguous decision of the Arbitral Tribunal that it had accepted the contention advanced on behalf of AFPL, Mr. Basuâ€s",,

contention that the impugned award is unreasoned, is erroneous.",,

The decision in the case of Dyna Technologies Private Limited v. Crompton Greaves Limited (supra) is of little assistance to OICL. In that case,",,

the Supreme Court had observed that even if the court comes to the conclusion that there are certain gaps in the reasoning for the conclusions,,

reached by the Tribunal, courts need to have regard to the documents submitted by the parties and the contentions raised before the Tribunal. This is",,

to ensure that even awards with inadequate reasons are not set aside in a casual manner. The Supreme Court further clarified that only unintelligible,,

awards, where there are no reasons at all, are required to be interfered with on the ground that the same falls foul of Section 31(3) of the A&C Act.",,

The relevant extract of the said decision is set out below:,,

“36. When we consider the requirement of a reasoned order three characteristics of a reasoned order can be fathomed. They are: proper,",,

intelligible and adequate. If the reasoning in the order are improper, they reveal a flaw in the decision making process. If the challenge to an award is",,

based on impropriety or perversity in the reasoning, then it can be challenged strictly on the grounds provided under Section 34 of the Arbitration Act.",,

If the challenge to an award is based on the ground that the same is unintelligible, the same would be equivalent of providing no reasons at all. Coming",,

to the last aspect concerning the challenge on adequacy of reasons, the Court while exercising jurisdiction under Section has to adjudicate the validity",,

of such an award based on the degree of particularity of reasoning required having regard to the nature of issues falling for consideration. The degree,,

of particularity cannot be stated in a precise manner as the same would depend on the complexity of the issue. Even if the Court comes to a,,

conclusion that there were gaps in the reasoning for the conclusions reached by the Tribunal, the Court needs to have regard to the documents",,

submitted by the parties and the contentions raised before the Tribunal so that awards with inadequate reasons are not set aside in casual and cavalier,,

manner. On the other hand, ordinarily unintelligible awards are to be set aside, subject to party autonomy to do away with the reasoned award.",,

Therefore, the courts are required to be careful while distinguishing between inadequacy of reasons in an award and unintelligible awards.â€​",,

In the present case, the reasons that persuaded the Arbitral Tribunal to accept AFPLâ€s claim are apparent, and this Court concurs with the",,

same.,,

Excess / Deductible :

The following minimum deductibles are applicable based on per Location Sum

Insured of the policy.",,

Sum Insured Brand per Location

(including endorsements, If any)",Material Damage,

,,

,,

,"% Of

Claim","Subject to Minimum

Deductible in INR.

Upto 10 Cr,5,"10,000.00

Above 10 Cr and upto 100 Cr,5,"25,000.00

Above 100 Cr and upto 1500 Cr,5,"500,000.00

Above 1500 Cr and upto 2500 Cr,5,"2,500,000.00

Above 2500 Cr,5,"5,000,000.00