Oriental Insurance V/S Shillong Vaneer Product & Saw Mills - Consumer Court Case

Meghalaya

StateCommission

01/1995

Shillong Vaneer Product & Saw Mills - Complainant(s)

Versus

Oriental Insurance - Opp.Party(s)

Shri. S. Sharma

20 Feb 2010

ORDER

Daily Order

First Appeal No. 01/1995

(Arisen out of order dated in Case No. of District )

1. Shillong Vaneer Product & Saw Mills Shillong

....Appellant

Versus

1. Oriental Insurance Shillong

....Respondent

BEFORE :

HONABLE MR. JUSTICE B. Lamare , PRESIDENT

Ramesh Bawri , MEMBER

PRESENT:	Shri. S. Sharma, Advocate for the Appellant 1
	Mr. S. Dutta, Advocate for the Respondent 1

*JUDGEMENT/ORDER

Heard Mr S.Sharma the learned senior counsel for the complainant, and also heard Mr S.Dutta the learned counsel

for the opposite party.

This case has been delay for many reasons as will be discuss below.

The complainant took an insurance policy from the opposite party No 1, the New India Assurance Co. Ltd for the

sum of Rs 7,00000 (seven lacs) for the period from 31.7.1992 to 30.7.93.The complainant also took another

insurance policy from the opposite party No 3, the oriental insurance co. ltd for the sum of Rs 21,00000(Twenty one

lacs) for the period from 8.10.1992 to 7.10.1992. On 29.12.1992 the fire broke out in the factory premises of the

complainant due to electric short circuit causing extensive loss and damages to the factory as the fire lasted for about

six to seven hours. Both insurance companies appointed their respective surveyor’s to assess the damage and loss of

the complainant, but the assessment made by the surveyor was not accepted by the complainant. The complainant

therefore, has approach this Commission with this complaint petition.

This Commission after hearing both the parties by judgment and order Dt. 1.3.1997 disposed of the complaint

petition. By this order the Commission directed the two insurance companies to release the amount as agreed to by

both of them and the complainant shall also accept the same with the consent of both insurance company. This

Commission appointed two arbitrators, one to represent the insurance companies and the other to represent the

complainant. It was also directed that the arbitrators shall resume their works within two weeks from the date of the

order.

After the appointment of the arbitrators the arbitration proceedings was started and the award was duly made by

the arbitrators. According to this award the sum of Rs10,36.408. (Ten Lacs thirty six Thousand Four hundred Eight)

was to be paid by the Oriental insurance Company and the sum of Rs 4,88.559( Four Lacs Eighty eight thousand

Five hundred Fifty nine) was to be paid by the new India assurance company Ltd.

After passing of the award by the arbitrators the New India assurance company paid the awarded amount to

the complainant and the dispute in so far as the New India Assurance Co. Ltd is concern has been settled and closed.

However, the New India Assurance Co. filed a petition before the District Judge Shillong for setting aside the

award of the arbitrator which was registered as Arbitration Misc Case No 1 (H) 1998. The case was disposed of by

the District Judge by an order Dt. 22.12.1998, rejecting the petition file by the Oriental Insurance Co. Ltd.

Being aggrieved by this order of the learned District Judge the Oriental Insurance Co. prefered an appeal

before the High Court which was registered as F.A No 5 (SH) 2000. The case was pending before the High Court for

many reasons including the non availability of the records of the arbitration proceedings which was allegedly to

have been misplaced either in the court of the District Judge or by this Commission. However the records of the

arbitration proceedings was finally recovered. The High Court after receiving the records of the arbitration

proceedings disposed of the appeals by an order Dt. 25.9.2007.

While disposing of the appeal the High Court has observed that the arbitrator were appointed as mere fact

findings body of the State Commission and the award made by the arbitrators cannot be termed as an award within

the meaning of the Arbitration Act. After making this observation both the learned counsel of the parties namely Mr

S. Dutta, and Mr S. Sharma agreed that in such eventually the State Commission maybe directed to reopen the CR

case No 1 (M) of 1995 and passed an appropriate award under the provisions of the Consumer Protection Act 1986

and while doing so all the evidence recorded / collected by the arbitrator and the finding of the arbitrators shall be

taken into consideration. The High Court accepted the proposal of both the counsels for the parties and passed an

order in Para 8 of the aforesaid order dt 25.9.2007 as follows

“In views of the afore said discussion and observation, we set aside the impugned order passed by the Learned

District Judge, Shillong. Accordingly we direct the Learned State Commission to restore the disposed of CR Case

No 1 (M) of 1995 and pass appropriate award as it may deem fit , just and proper . We also made it clear that the

Learned State Commission shall not be precluded to invoke its inherent power to record additional evidence, if it is

felt necessary . However, considering the fact that the incident took place in the year 1992, it is hoped that the

Learned State Commission shall make endeavour to hear the matter/argument and disposed of the matter preferably

within the period of two months from the date of receipt of this order. In extra ordinary contingency, the period set

by this court maybe relaxed to a reasonable period”.

On the basis of the above order passed by the High Court, the complaint case was reopened and notice were

issued to both the parties on the basis of which Mr S. Sharma learned senior counsel appeared for the complainant

and Mr S. Dutta the learned counsel appeared for the opposite party the Oriental Insurance Co. Ltd. The counsels for

both the parties submitted that they do not want to file any additional document or produce witnesses in the case, but

both counsel agreed to proceed with the case according to the direction passed on 25.9.2007 by the High Court in

the aforesaid F.A No 5 (SH) 2000 and the case was proceeded accordingly.

Mr S.Dutta the learned counsel for the opposite party Oriental Insurance Co. in his submission firstly, maintained

that the Oriental Insurance Co. did not consent to the appointment of the arbitrator and the arbitrator was appointed

with out their consent which is totally illegal and void. Secondly, Mr Dutta has submitted that since the arbitrator

was appointed with out their consent the entire proceedings is with out any authority and is therefore non valid.

Thirdly, Mr Dutta submitted that the opposite party Oriental Insurance Co. is not liable by the said award of the

arbitrators . In order to appreciate the above points raised by Mr S.Dutta we may now turn to arbitration proceedings

to ascertain weather the arbitrator were appointed without the consent of the opposite party Oriental Insurance

Company or not.

The records of the arbitration proceedings or for that matter we may called it a fact finding committee shows

that when the proceedings was started both the complainant and the opposite parties the Oriental Insurance Company

were present through out the proceedings. The complainant was also examine as a witness and cross examined by the

opposite party. The documents filed by the complainant were also exhibited and proved by the complainant. The

opposite party was duly represented and an ample opportunities was given to the opposite party to adduce their

evidence but the opposite party did not produce any evidence nor file any document. The committee has also heard

the parties on many sittings and finally made the award on 26.9.1997. From the record of the arbitration committee

or the fact finding committee it clearly shows that the opposite party was duly represented by a counsel of their

choice. Therefore, the contention of Mr S. Dutta that the opposite party did not consent to the appointment of the

arbitrator nor took part in the proceedings are not acceptable. Moreover, after full opportunities was given to the

opposite party to place its case before the arbitration committee or fact finding committee the award is binding on

both the parties.

Since the parties were given full opportunities to contest their claims and that the award was made after

examining the complainant and the documents submitted to the committee , we are inclined to accept the same.

Accordingly, it is directed that the opposite party the oriental insurance company, to pay the sum of Rs 10,36.408

(Ten Lac Thirty Six Thousand Four Hundred Eight) to the complainant for the loss incurred by the complainant due

to the fire incident.

It is also directed that the opposite party is also to pay an interest at 12% on the said amount to the complainant

from 20.9.1997 till the date of full payment of the amount.

It is also directed that the payment made as per the order of the High Court which is 50% of the award of the

Arbitration is to be deducted from the amount due to be paid by the opposite party. The payment shall be made

within thirty days from the date of receipt if this order.

With the above observation and directions this petition is disposed of.

Pronounced

Dated the 20 February 2010

[HONABLE MR. JUSTICE B. Lamare]
PRESIDENT

[ Ramesh Bawri]
MEMBER

Meghalaya

StateCommission

01/1995

Shillong Vaneer Product & Saw Mills - Complainant(s)

Versus

Oriental Insurance - Opp.Party(s)

Shri. S. Sharma

20 Feb 2010

ORDER

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