2025 INSC 39
Supreme
Court of India
(HOBN’BLE
ABHAY S. OKA, J. AND HON’BLE MANMOHAN, JJ.)
UNITED INDIA INSURANCE
CO. LTD
Petitioner
VERSUS
BANSAL WOOD PRODUCTS
PVT. LTD
Respondent
Civil
Appeal No.104 OF 2025 (Arising out of Special Leave Petition (C) No.15799 of
2023)-Decided on 08-01-2025
Arbitration
Arbitration and
Conciliation Act, 1996, Section 34, 37 – Limitation Act, 1963, Section 14 -
Arbitration award – Interest – Submission on behalf of the appellant that the
Arbitral Tribunal and the High Court failed to appreciate that
the respondent-claimant delayed the process of reference to arbitration
by about four years between the period 21st January, 2003 and 01st December,
2006 as it was pursuing its consumer complaint before the
National Consumer Disputes Redressal Commission during this period – Held
that in the peculiar facts and circumstance of the present case, the
ends of justice would be met if the appellant-insurance company is
directed to pay interest as directed by the Arbitral Tribunal @ 12% per annum
with effect from 06th March, 2010 as it was on this date that the Arbitral
Tribunal held the claims to be within time after excluding the time spent by
the respondent-claimant in pursuing its remedy before the National Consumer
Disputes Redressal Commission under Section 14 of the Limitation Act
- Impugned judgment and Arbitral Award
varied/modified only to the aforesaid extent.
(Para
2, 4 and 5)
JUDGMENT
Manmohan, J.:- The present appeal
has been filed challenging the judgment and order dated 02nd February, 2023
passed by the High Court of Delhi in FAO(Comm.) No.76/2022 whereby the High
Court dismissed the appeal filed by the appellant-insurance company.
2.
Learned counsel for the appellant-insurance company submits that the High Court
and the Arbitral Tribunal failed to give any reason as to why the
respondent-claimant was entitled to interest for the various periods of delay
which were attributable to the respondent-claimant. He states that the Arbitral
Tribunal and the High Court failed to appreciate that
the respondent-claimant delayed the process of reference to arbitration
by about four years between the period 21st January, 2003 and 01st December,
2006 as it was pursuing its consumer complaint before the
National Consumer Disputes Redressal Commission during this period. He
further contends that even after reference to arbitration in December, 2006,
the respondent-claimant delayed the arbitration proceedings and it was only on
06th March, 2010 that the Arbitral Tribunal condoned the delay in making
reference to arbitration by excluding the time spent by the respondent-
claimant in pursuing the remedy before the National Consumer Disputes Redressal
Commission.
3.
Per contra, the learned counsel for respondent-claimant states that as the
appellant-insurance company failed to pay the insurance claim, the
respondent-claimant was constrained to seek legal remedy, first by approaching
National Consumer Disputes Redressal Commission and then by invoking the
arbitration agreement between the parties. He contends that the
respondent-claimant approached the Consumer Commission on the basis of legal
advice. He further states that as the appellant-insurance company failed to
perform its contractual obligation, it cannot refuse to pay interest for the
delayed payment. He also submits that though the appellant- insurance company
raised the defence that the claim was barred by limitation, yet the Arbitral
Tribunal decided the issue in favour of the respondent-claimant giving the
benefit of Section 14 of the Limitation Act.
4.
Having heard the learned counsel for the parties, this Court is of the view
that in the peculiar facts and circumstance of the present case, the ends
of
justice would be met if the appellant-insurance company is directed to pay
interest as directed by the Arbitral Tribunal @ 12% per annum with effect from
06th March, 2010 as it was on this date that the Arbitral Tribunal held the
claims to be within time after excluding the time spent by the
respondent-claimant in pursuing its remedy before the National Consumer
Disputes Redressal Commission under Section 14 of the Limitation Act.
5.
Accordingly, the impugned judgment and Arbitral Award is varied/modified only
to the aforesaid extent. The appellant-insurance company is directed to make
the payment of the outstanding balance amount to the respondent-claimant within
four weeks.
6.
With the aforesaid direction, the present appeal along with pending applications,
if any, stands disposed of.
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