VISHNU BHAGWAN AGRAWAL & ANR. versus NATIONAL INSURANCE CO. LTD.

Citation: [2017] 10 S.C.R. 278 · Decided: 26-10-2017 · Supreme Court of India · Bench: R.F. NARIMAN · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
[2017] 10 S.C.R. 278 
VISHNU BHAGWAN AGRAWAL & ANR. 
v. 
NATIONAL INSURANCE CO. LTD. 
(Civil Appeal No. 4661 of2007) 
OCTOBER 26, 2017 
[R. F. NARIMAN AND SANJAY KISHAN KAUL, JJ.] 
Arbitration - Appellant kept jute stock, which was insured -
Appellant subsequently purchased more stock of jute and asked 
C for increase in the value of the insurance policy - This, according 
to insurance company was not accepted - Raw jute involved in a 
fire incident - Dispute whether the insured stock should be valued 
as on the date of the fire or on the date of purchase - Appellant 
produced evidence in the form of purchase receipts of the value of 
stock of jute which amounted to Rs. 7031- per quintal - However, 
D this was not accepted in the survey done at the behest of the 
insurance company, the surveyors valued stock @ Rs.4041- per 
quintal by adopting the spot rate fixed in the market - Appellant 
invoked arbitration proceedings - /11 view of divergence of opinion 
between the arbitrators, the matter was referred to an Umpire -
E 
Umpire concluded that the insurance compa11y had accepted a11d 
agreed to the insured'.~ letter and property covered under policy in 
question stood increased in value and simply because an 
endorsement letter was not issued before the date of incidellt, it 
would not mean that insurance company can go back from its 
commitment - Courts below found the award passed by the Umpire 
F 
perverse - Insurance company contended that Umpire misconducted 
himself and that when insurance policy is written, it can be amended 
only in writing and not by the conduct of the parties - Held: The 
Umpire took a possible view in the facts of the case after having 
analysed the evidence before him - Though the insurance policy 
G was to be amended in the manner known to the law and that too in 
writing between the parties, yet estoppel by conduct was a ground 
the Umpire was well within his legal ken to hold - Further, in absence 
of anything to rebut the evidence produced on behalf of the 
appellant that the purchase price of the jute would reflect the market 
value as on the date of the fire, equally the umpire was well within 
H 
his legal bounds in arriving at conclusion, on facts, that the sum of 
278 
VISHNU BHAGWAN AGRAWAL & ANR. v. NATIONAL 
279 
INSURANCE CO. LTD. 
Rs. 7031- per quintal would reflect the market value of the jute stock A 
as on the date of fire - Insofar, as grounds for challenge are 
concerned, no legal error apparent on the face of the Umpire's 
award or misconduct in the sense of legal misconduct - Thus, the 
award by Umpire resuscitated. 
Allowing the appeal, the Court 
B 
HELD: 1. The Umpire took a possible view on the facts of 
the case having analysed the evidence before him and having 
arrived at the conclusion that the insurance policy was raised, 
given the conduct of the Insurance Company, not only in not 
replying to the letter dated 01.07.1985 (which showed that the 
C 
appellant purchased more stock of jute and asked for an increase 
in the value of the insurance policy) but also in adjusting the sum 
of additional premium. It is clear that though the insurance policy 
may have to be amended in the manner known to the law and that 
too in writing between the parties, yet estoppel by conduct is a 
ground the Umpire was well within his legal ken to hold. Further, D 
in the absence of anything to rebut the evidence produced on 
behalf of the appellant that the purchase price of the jute would 
reflect the market value as on the date of the fire, equally the 
umpire was well within his legal bounds in arriving at a conclusion, 
on facts, that the sum of Rs.703.23/- per quintal would reflect the 
E 
market value of the jute stock as on the date of the fire. [Para 8] 
[283-E-G] 
2. An arbitration award is not to be lightly interfered with. 
So far as the grounds for challenge are concerned, no legal error 
apparent on the face of the award or misconduct in the sense of F 
legal misconduct, i.e. that material evidence that is vital has been 
ignored, is made out on the facts of the present case. The 
arbitrator's findings can be said to be a possible one on the facts 
of the case. None of the findings are impeachable and therefore, 
the impugned judgment deserves to be set aside. The Umpire's 
award is thus resuscitated and payments that have to be made G 
under the Award shall be made by the Insurance Company. [Para 
10] [284-C-F] 
Polymat India (P) Ltd. & Am: v. National Insura

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