UNITED INDIA INSURANCE CO. LTD. versus J.A. INFRASTRUCTURE PVT. LTD.

Citation: [2006] SUPP. 5 S.C.R. 638 · Decided: 30-08-2006 · Supreme Court of India · Bench: AR. LAKSHMANAN · Disposal: Disposed off
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Judgment (excerpt)

A 
B 
c 
UNITED INDIA INSURANCE CO. LTD. 
\'. 
J.A. INFRASTRUCTURE PVT.LTD. 
AUGUST 30, 2006 
[DR. AR. LAKSHMANAN AND TARUN CHATTERJEE, JJ.] 
Arbitration and Conciliation Act, 1996; Ss. 34 and 43/limitalion Act, 
1963; S.14: 
Arbitration Clause in the Insurance Agreement-Dispute between 
Insurer and lns11red-Appointment of Arbitrators by the parties and Presiding 
Officer/Umpire by Arbitrators-Insurer filing Arbitration Petition-Dismissed 
by High Court on ground of jurisdiction-Filing of petition before the District 
Court with application for exclusion of time spent before the wrong for11m 
D in terms of Section 14 of the limitalion Act-Dismissed by trial Co11rt-
Challenge to-Dismissed b)' High Court-On appeal, Held: limitation Act 
could be applied to arbitration as it applies LO the proceedings in the 
Court-1996 Act does not expressly exclude the applicabili1y of Section 14 
of the limitation Act-Time spent in prosecuting the remedy before wrong 
Forum could be excluded in lerms of Section 14 of the Limitation Act-
E Hence, matter remitted back to trial Court to decide the case on merits. 
llespondent-Assured invoked arbitration clause as per Condition No. 7 
of the Insurance Policy and appointed an Arbitrator. The appellant-Insurance 
Company also appointed .another Arbitrator. Both the Arbitrators appointed 
F Presiding Arbitrator. The Majority Award was passed by the Presiding 
Arbitrator and Co-Arbitrator as appointed by the insured awarding a sum of 
Rs. 2, 12,49,336 with future interest in favour of the assured. The Minority 
Award was passed by the other Co-Arbitrator, as appointed by the Insurance 
Company who awarded a sum of Rs. 1,23,08,104/- with interest. Aggrieved by 
both the Awards, the appellant filed an Arbitration Petition, which was 
G dismissed by the Single Judge of the High Court for want of jurisdiction. 
H 
Later, the Insurer filed a fresh petition before the District Court along with 
application under Section 14 of the Limitation Act, which was dismissed by 
the District Court. Aggrieved against the order passed by the District Court, 
the appellant filed a Writ Petition before the High Court which was also 
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UNITED INDIA INSURANCE CO.LTD. r. J.A. INFRASTRUCTURE PVT. LTD. [LAKSHMANAN. J.] 639 
dismissed. Hence the present appeal. 
A 
Disposing of the appeal, the Court 
HELD:t.1. Arbitration and Conciliation Act, 1996 does not expressly 
· exclude the applicability of Section 14 of the Limitation Act and that the 
prohibitory provision has to be construed strictly. Besides, the respondent B 
has not seriously opposed the applicability of Section 14 of the Limitation 
Act which deals with exclusion of time spent in prosecuting the remedy before 
the wrong forum bona fide. Therefore, the order passed by the High Court is 
set aside and the matter is remitted back to the District Court to decide the 
case on merit after affording opportunity to the respondent Pending disposal C 
of the matter by the District Court, the appellant-Insurance Company is 
directed to deposit the amount awarded by the Co-Arbitrator appointed by the 
Insurance Company to the credit of Arbitration Petition on the file of the 
District Court. On such deposit, the District Court shall invest the same in 
a nationalized bank in a short term deposit.1641-G; 642-B-C; E-FI 
State of Goa v. Mis. Western Builders, JT (2006) 6 SC 125, relied on. 
1.2. It is clarified that the objections and other issues raised have not 
been decided on merits. 
D 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3870 of2006. 
E 
From the Judgment and Order dated 21.12.2005 of the High Court of 
Judicature at Bombay, Nagpur Bench, Nagpur in Writ Petition No. 5454/2005. 
A.K. De and Ashok K. Mahajan for the Appellant. 
Rameshwar Prasad Goyal, Jay Savla and Reena Bagga for the F 
Respondent. 
The Judgment of the Court was delivered by 
DR. AR. LAKSHMANAN, J. Leave granted. 
G 
Heard learned counsel appearing on behalf of both sides. 
This appeal is directed against the final judgment and order dt. 21.12.2005 
passed by the High Court of Judicature at Bombay, Nagpur Bench in Wrir 
Petition No.5454 of 2005. The respondent is the insured. The respondent H 
640 
SUPREME COURT REPORTS (2006] SUPP. 5 S.C.R. 
6 
A invoked arbitration as per Condition No. 7 of the Policy. The respondent 
appointed one Shri V .P .Shah as Arbitrator. The appellant-Insurance Company 
appointed Shri A.Sankaran as Arbitrator. Both the Arbitrators appointed
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