HIMALAYA CHEMICALS INDUSTRY REGD Vs. ORIENTAL INSURANCE CO LTD
LAWS(J&K)-1993-12-1
HIGH COURT OF JAMMU AND KASHMIR
Decided on December 24,1993

HIMALAYA CHEMICALS INDUSTRY (REGD.) Appellant
VERSUS
ORIENTAL INSURANCE CO. LTD. Respondents




JUDGEMENT

- (1.)The principal question involved in this petition is: whether the dispute raised by the petitioner-firm could be referred to arbitration in the face of repudiation of the liability by the respondent insurance company? And answer to this will turn on the interpretation of arbitration agreement itself which would be adverted to later.
(2.)The petitioner is a partnership concern and is manufacturer of activative carbons etc. It got its factory building and stock-in-trade insured with the respondent-insurance company. Firstly, the cover note was issued by the respondent-company on 30-3-1988. It showed that risk against flood was also covered but the policy issued subsequently "Fire Risk Policy-C" which specifically excluded any loss or damage caused or occasioned by the floods and inundation. The petitioner claims that its factory premises was hit by floods on the intervening night of 24th/25th Sept. 1988 causing extensive damage in the process. A claim was consequently lodged with the respondent-company for a sum of Rupees 5,29,349.96 p. Pursuant thereto the respondent-company asked for a certificate of loss from the Deputy Commissioner, Udhampur. It is not known if this certificate was furnished by the Deputy Commissioner. The company, however, repudiated the claim of the petitioner by communication dated 28-3-1991 on the ground that the insured factory was not covered against "Flood Group Perols". Hence this petition raising dispute and seeking its reference to the arbitrator.
(3.)The respondent-company has challenged the maintainability of this petition on twin grounds: viz (i) that the dispute raised does not arise out of the contract of insurance inasmuch as the policy did not cover any risk against floods; and (ii) that alternatively the alleged dispute raised was not covered by the arbitration clause.


Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.