NEW INDIA ASSURANCE COMPANY LTD. versus GENUS POWER INFRASTRUCTURE LTD.

Citation: [2014] 12 S.C.R. 360 · Decided: 04-12-2014 · Supreme Court of India · Bench: ANIL R. DAVE · Disposal: Appeal(s) allowed

Cited by 8 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
(2014] 12 S.C.R. 360 
NEW INDIA ASSURANCE COMPANY LTD. 
v. 
GENUS POWER INFRASTRUCTURE LTD. 
(Civil Appeal No. 10784 of 2014) 
DECEMBER 04, 2014 
[ANIL R. DAVE AND UDAY UMESH LALIT, JJ.] 
Arbitration and Conciliation Act, 1996 -
s. 11 -
Appointment of arbitrator - Insurance claim - Discharge of 
C insurance contract and settlement of insurance claim -
Insured subrogated all its rights in favour of insurer - Petition 
uls. 11 by insured seeking appointment of arbitrator alleging 
that it had accepted the payment because of extreme 
financial difficulty, duress and coercion -
High Court 
D appointing sole arbitrator to adjudicate the dispute between 
the parties - Justification of- Held: Not justified - Discharge 
and signing of letter of subrogation was voluntary and free 
from any coercion or undue influence - Upon execution of 
the letter of subrogation, there was full and final settlement of 
r;: 
the claim -
Thus, no acbitrable dispute existed so as to 
exercise power uls. 11 of the Act. 
Allowing the appeal, the Court 
HELD: The plea raised by the respondentthat the 
F discharge and signing of letter of subrogation was due · 
to fraud, coercion, duress or undue influence is bereft of 
any details and particulars, and cannot be anything but 
a bald assertion. There was no protest or demur raised 
around the time or soon after the letter of subrogation was 
G signed. The financial condition of the respondent was not 
so precarious that it was left with no alternative but to 
accept the terms as suggested. The discharge and 
signing of letter of subrogation was voluntary and free 
from any coercion or undue influence. In the 
H 
360 
NEW INDIAASSURANCE COMPANY LTD. v. GENUS 
361 
POWER INFRASTRUCTURE LTD. 
circumstances, it is held that upon execution of the letter A 
of.subrogation, there was full and final settlement of the 
claim. Thus, no arbitrable dispute existed so as to 
exercise power under section 11 of the Arbitration and 
Conciliation Act, 1996. The High Court was not justified 
in exercising power under Section 11 of the Act. [Para 9] 
B 
[369-C-G] 
. 
National Insurance Co. Ltd. vs. Boghara Polyfab (P) Ltd. 
2008 (13) SCR 638:2009 (1) SCC 267; Union of India vs. 
Master Construction Co. 2011 (5) SCR 853: (2011) 12 SCC 
C 
349 - referred to. 
Case Law Reference: 
2008 (13) SCR 638 
2011 . (5) SCR 853 
Referred to 
Referred to 
.Para 5, 6 
Para 7 
C-IVll APPELLATE JURISDICTION : Civil Appeal No. 
101a4 of 2014. 
D 
Ftom the Judgment & Order dated 30,05.2013 of the High 
Court of Delhi at Delhi n Arbitration Petition No. 212 of 2011. 
E 
Gaurab Banerji, Saurav Agrawal, Madhav Misra, Vyom 
Shah (for Devendra Srigh) for the Appellant. 
Krishnan Venugopal, Abhinav Mukerji, Aman Gupta for the 
Respondent. 
The Judgment of the Court was delivered by 
F 
UDAY U. LALIT, J. 1. Leave granted. This appeal 
challenges the order dated 30.05.2013 passed by the High 
G 
Court of Delhi in Arbitration Petition No.212 of 2011 appointing 
an arbitrator to adjudicate the disputes between the present 
parties. 
. 
2. The respondent has a manufacturing unit for which it 
H 
362 
SUPREME .COURT REPORTS 
[2014] 12 S.C.R. 
A had purchased a Standard Fire and Special Perils Policy 
('policy' for short) from the appellant on 17 .04.2009, which 
policy was for a period of one year and the total sum assured 
was Rs.91 crores and 10 lacs only. ·on 29.10.2009 therewas 
a fire explosion in the adjoining ln°dian Oil Corporation Terminal 
B causing extensive damage to the manufacturing unit of the 
respondent. On being notified, the appellant appointed a 
category "A" Licensed Surveyor and Loss Assessor in 
compliance of Section 64 UM of the Insurance Act, 1938 to 
assess the damage. In the assessment of the respondent and 
c as per the claim lodged by it, the loss caused to its plant and 
machinery, buildings fixtures and furnitures and stocks was to 
the tune of Rs.28. 79 crores. It appears that the Surveyor 
submitted his final report on 27.07.2010 and assessed the loss 
at Rs.6,09,77,406/-. It is contended by the appellant but denied 
0 ·by the respondent· that the final survey report was duly 
communicated to the respondent on 01.11.2010. 
3. On 11.03.2011 the respondent signed a detailed letter 
of subrogation which was on a stamp paper, accepting 
Rs.5,96,08, 179/- in full and final settlement of its claim under 
E the policy and the relevant porti·on of said letter dated 
F 
11.03.2011 was to the following effect: 
To, 
, 

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