SHRI GANESH SPINNERS vs United India Insurance Co. Ltd.

THIS Original Petition is in sequel to an Original Petition No. 256/94 which was disposed of as per our order dated 31.8.95 where under the opposite party-Insurance Company who was also the opposite party in that petition was directed to take a decision on the claim put forward by the insured-complainant within a period of two months and liberty was reserved to the complainant to approach this Commission afresh in case the complainant felt aggrieved by the decision so taken by the Insurance Company.

THEREAFTER the Insurance Company informed the complainant that it had finally assessed the compensation payable to the complainant in respect of the incident of fire and the consequential loss suffered by the complainant at Rs. 3,04731 after considering the Surveyors'' report and other material available before it. Being dissatisfied with the said decision taken by the Insurance Company the complainant has come up with this Original Petition seeking to recover a further sum of Rs. 28 lakhs from the Insurance Company as deficit compensation for the loss incurred as a consequence of the fire and also as compensation for the mental agony, harassment etc. on the part of the insurer in finalising the claim and making the payment. Inasmuch as the Insurance Company has taken its decision on the claim after due application of its mind to the facts and circumstances of the case and the said decision cannot be said to have been taken otherwise than in good faith, it is not possible to hold that there was any deficiency in service on the part of the insurer in determining the claim at only on a lower figure than the amount claimed by the complainant. Since the grievance of the complainant is that the amount assessed by the Insurance Company as the compensation due and payable to the complainant is grossly inadequate, the remedy of the complainant, in our opinion, is to take resort to the provision for arbitration contained in Clause 11 of the fire policy. Accordingly, we direct that the complainant may expeditiously address to the insurer for referring the claim for enhancement of the compensation to Arbitrator under Clause 11 of the policy and as such arbitration proceedings shall be comprehensive enough to include the full amount claimed by the complainant under all the heads in the present Complaint Petition. The arbitration proceedings will, of course, be governed by the Arbitration and Conciliation Act, 1996. On receipt of the communication from the complainant nominating his Arbitrator and requesting for making reference under Clause 11 of the policy the insurer shall nominate its Arbitrator and take all further steps in accordance with Clause 11 of the policy. We direct that the Arbitrators shall finalise the award within a period of four months from the date on which they enter on reference. The Original Petition is disposed of which these directions. Original petition disposed of. ______________