United India Insurance Company Limited vs New Macfast Food and Another

K.S. Jhaveri, J.—This appeal is directed against the judgement and order passed by the City Civil Court dated 10.10. 1996 in Civil Misc. Application No. 410 of 1995 whereby the said application was allowed and the award dated 17.5.1995 made by the Arbitrator was set aside and the Appellant was directed to make payment of Rs. 1,10,000/- to the applicant therein along with interest at the rate of 12% per annum.

The Respondent No. 1 was running a fast food restaurant at Dev Bhumi Apartment, near Vijay Cross Roads, Memnager, Ahmedabad. The Respondent No. 1 insured the premises along with furnitures and fixtures with the Appellant company. On 24.10.1990 there was tension prevailing in the city of Ahmedabad in wake of Ayodhya agitation and therefore the restaurant was not opened. On that day a crowd came to the restaurant and looted and set on fire the restaurant. Complaint was lodged with the police and Panchnama was also prepared. Again on 30.10.1990 there was Bharat Bandh and even on that day also the Respondent No. 1''s restaurant was looted.

The Respondent No. 1 therefore lodged a claim and the surveyors had assessed the loss. The surveyors assessed the loss to the extent of Rs. 4,47,578 under policy No. 11/913/90 and Rs. 50000/- under Policy No. 00717/90 and recommended payment of Rs. 4,97,578. However, the Appellant offered only Rs. 3,62,500/- under policy No. 11/913/90 and Rs. 25,000/- under Policy No. 00717/90. Ultimately under protest the Respondent No. 1 accepted the said amount and raised a dispute and arbitration proceedings were initiated where five issues were raised. The arbitrator vide award dated 17.04.1995 held all the issues except issue No. 17 against the Respondent No. 1. The Respondent No. 1 therefore filed the aforesaid application for setting aside the said award and for passing of decree for Rs. 1,10,000/- with running interest at the rate of 24% per annum. The lower court allowed the said application against which the present appeal has been filed.

Learned Advocate for the Appellant submitted that the impugned award is illegal and arbitrary, there is No. evidence on record to support the contention of the Respondent No. 1., and the lower court has erred in holding that the claimant had proved his claim as observed in para 17 of the judgement.

Learned Advocate for the Respondent No. 1 submitted that the lower court has considered all the aspects of the matter and the Appellant has not pointed out anything from record to take a different view of the matter.

From the record it is clear that the dispute referred to the Arbitrator was only with regard to machineries and air conditioners worth Rs. 1,10,000/- . The surveyor had inspected the premises and made assessment. His report is on record. According to him there was loss to the tune of Rs. 4,97,579/- . Para 17 of the order reads as under:

Moreover, the claim of the applicant in respect of the damage and loss caused to the furniture, fixtures and fittings during the riots that took place on 24.10.1990 and 30.10.1990 have been partly allowed by the opponent Insurance Company before the arbitration proceedings were commenced. The dispute referred to the Arbitrator was only with regard to the machineries and air-conditioners worth Rs. 1,10,000/- . Now, the applicant had examined Rasulbhai Valibhai and Mohmadali Jamalbhai in support of its case and had led documentary evidence of police complaint, panchnama, fire report, Surveyor''s report etc. which were admitted by the opponent and hence, duly proved. Now M/s. J.B. Boda Surveyor Pvt. Ltd who was the Surveyor appointed by the opponent Insurance Company had visited the applicant''s shop at number of days to inspect, assess and report upon the loss an damage sustained during the riots. The said Surveyor has made a specific report that the furniture, fixtures and fittings and the machineries were burnt and looted on both the days. The said Surveyor had assessed the loss to the tune of Rs. 4, 97, 579/- caused to the items under the two policies of the applicant. Thus, the applicant had proved its disputed claim before the Arbitrator from the undisputed evidence led before the Arbitrator. The said report also find support from the complaints and panchnama prepared by the police which establish that the shop of the applicant was made point of attack by the mob and was looted and burn on both the days. Now, it was impossible for the applicant to identify any person to prove as to who had in fact looted and burnt from the rioters. The finding of the Arbitrator with regard to issues No. 1 that "the applicant had failed to prove beyond reasonable doubt" therefore, suffers from perversity. In my opinion, such an expression was unwarranted as the proceedings before the Arbitrator were quasi judicial proceedings and not criminal proceedings. The burden was entirely upon the Insurance Company to prove that the applicant had removed the disputed machineries and air conditions on 24.10.1990 when the applicant had duly proved its case. From the observations made in the award itself it is evident that the opponent company has failed to discharge that burden as the concerned officers who had rejected the claim of the applicant were not examined though they were very much in service and the officers who were examined had No. personal knowledge about the incidents and the claim of the Petitioner. The opponent company has not even cared to examine the Investigator whose report was made the base for the rejection of the applicants disputed claim. Under the circumstances, the Arbitrator has not only failed or neglected to discharge his duty by not answering issue No. 3 but has ignored the material evidence led by the applicant and has arrived at the conclusion in favour of the opponent on the basis of No. evidence. It is held in AIR 1987 Del 134 that when the finding of the Arbitrator is based on No. evidence, then certainly court can go into such findings and set aside the award as being perverse. In that view of the matter, I hold that the Arbitrator has committed serious errors on the face of the award, which calls for interference of this Court. For the reasons stated above, the award deserves to be set aside, the same being perverse and based on No. evidence and the disputed claim of the applicant deserves to be allowed with interest.

Thus, it is clear that there was No. dispute about the surveyor''s report. The loss was assessed by the surveyor appointed by the Insurance Company. It also appears that the Insurance Company could have examined the Surveyor, but that was not done. Therefore I do not find any reason for the Insurance Company to challenge the award. The award is based on sound reasoning after elaborate discussion. I am in complete agreement with the reasoning adopted and findings arrived at by the lower Court.

In the premises aforesaid the appeal is dismissed. No. order as to costs.