Baba Jalpesh Himghar Private Limited vs The Oriental Insurance Company Limited
2025 Latest Caselaw 3453 Cal/2

Calcutta High Court

Baba Jalpesh Himghar Private Limited vs The Oriental Insurance Company Limited on 16 December, 2025

Author: Shampa Sarkar

Bench: Shampa Sarkar

     ORDER                                                               OCD-16
                       IN THE HIGH COURT AT CALCUTTA
                            COMMERCIAL DIVISION
                               ORIGINAL SIDE

                             AP-COM/936/2025
                   BABA JALPESH HIMGHAR PRIVATE LIMITED
                                    VS
                  THE ORIENTAL INSURANCE COMPANY LIMITED

BEFORE:
The Hon'ble JUSTICE SHAMPA SARKAR
Date: 16th December, 2025.
                                                                       Appearance:-
                                                       Mr. Rohit Banerjee, Advocate
                                              Mr. Saptarshi Bhattacharjee, Advocate
                                                           Mr. Aditya Roy, Advocate
                                                                ... for the petitioner.
                                                Mr. Rajdeep Bhattacharya, Advocate
                                                             ... for the respondent.


1.    Affidavit of service and notice of motion are taken on record.

2.    The petitioner has filed this application for appointment of an arbitral

      tribunal.

3.    The case run by the petitioner is that, on 09.04.2023 and 13.04.2023, it

      had suffered loss when the roof and walls of the chambers of its cold

      storage had collapsed due to natural calamity.      The refrigeration plant,

      cooling units and connected equipment were damaged.          There was also

      loss of the potatoes stored inside the chamber.

4.    The stock of potatoes stored in the chambers were insured under Policy

      No. 311702/11/2023/233, which was valid on the date of the loss.

5.    The petitioner had informed the respondent insurer regarding the loss and

      had lodged a claim of Rs.16,93,58,104/- under the said insurance policy.
                                         2


     Sanjay Dwivedi and Associates was appointed as the surveyor and loss

     assessors by the respondent. It is alleged that, the surveyor had made the

     directors of the petitioner sign various blank forms and vouchers

     including blank letter heads. On January 31, 2025, the petitioner received

     Rs.1,98,86,019/- in its bank account from the respondent. Upon a visit

     to the Kolkata office of the respondent, it was learnt that the amount was

     paid towards settlement of all the dues of the petitioner.

6.   It is alleged that, the surveyor had taken all the original documents from

     the petitioner. By letters dated 28.05.2025 and 12.06.2025, the petitioner

     sought for relevant documents mentioned in the letters from the

     respondent, which it did not produce. The petitioner filed W.P.O. No. 525

     of 2025.By orders dated 24.07.2025, and 03.09.2025, the Hon'ble Court

     had directed the respondent to produce all documents.

7.   The respondent produced a consent letter in the form of a discharge

     voucher dated 22.07.2024,which stated that, Rs.2,13,64,412/- was

     accepted as full and final payment of the loss. The petitioner claims that

     it was a forged document and the petitioner had never entered into any

     final settlement.

8.   Disputes had arisen between the parties and the petitioner invoked

     arbitration by a notice dated 22.08.2025. The respondent responded by a

     reply dated 15.10.2025.
                                        3


9.   Mr. Bhattacharya, the respondent submits that after having received full

     and final payment, the petitioner cannot be entitled to any further

     payment. He raised the question of award and satisfaction.

10. In the decision of SBI General Insurance Co. Ltd. v. Krish Spg.,

     reported in (2024) 12 SCC 1, the Hon'ble Apex Court held as follows:-

             "118. The dispute pertaining to the "accord and satisfaction" of
             claims is not one which attacks or questions the existence of the
             arbitration agreement in any way. As held by us in the preceding
             parts of this judgment, the arbitration agreement, being separate
             and independent from the underlying substantive contract in
             which it is contained, continues to remain in existence even after
             the original contract stands discharged by "accord and
             satisfaction".
             119. The question of "accord and satisfaction", being a mixed
             question of law and fact, comes within the exclusive jurisdiction
             of the Arbitral Tribunal, if not otherwise agreed upon between the
             parties. Thus, the negative effect of competence-competence
             would require that the matter falling within the exclusive domain
             of the Arbitral Tribunal, should not be looked into by the Referral
             Court, even for a prima facie determination, before the Arbitral
             Tribunal first has had the opportunity of looking into it.
             120. By referring disputes to arbitration and appointing an
             arbitrator by exercise of the powers under Section 11, the Referral
             Court upholds and gives effect to the original understanding of
             the contracting parties that the specified disputes shall be
             resolved by arbitration. Mere appointment of the Arbitral Tribunal
             does not in any way mean that the Referral Court is diluting the
             sanctity of "accord and satisfaction" or is allowing the claimant to
             walk back on its contractual undertaking. On the contrary, it
             ensures that the principle of arbitral autonomy is upheld and the
             legislative intent of minimum judicial interference in arbitral
             proceedings is given full effect. Once the Arbitral Tribunal is
             constituted, it is always open for the defendant to raise the issue
             of "accord and satisfaction" before it, and only after such an
             objection is rejected by the Arbitral Tribunal, that the claims
             raised by the claimant can be adjudicated.
             ***

***

124. In a case with similar facts but where an arbitration agreement is not in existence, the claimant would have the

recourse to approach a civil court with its claims. Even in such proceedings before the civil court, it would be open to the defendant to put forward the defence of "accord and satisfaction"

on the basis of the discharge voucher. Similarly, it would be open to the claimant to allege that the voucher had been obtained under fraud, coercion or undue influence. In such a scenario, the civil court would consider the evidence as to whether there was any fraud, undue influence or coercion. If the civil court finds that there was none, then it would reject the claims at the outset. However, if its finds that the allegations of fraud are true, then it would reject the discharge voucher and proceed to adjudicate the claims on merit.

125. Once an arbitration agreement exists between parties, then the option of approaching the civil court becomes unavailable to them. In such a scenario, if the parties seek to raise a dispute, they necessarily have to do so before the Arbitral Tribunal. The Arbitral Tribunal, in turn, can only be constituted as per the procedure agreed upon between the parties. However, if there is a failure of the agreed upon procedure, then the duty of appointing the Arbitral Tribunal falls upon the Referral Court under Section 11 of the 1996 Act. If the Referral Court, at this stage, goes beyond the scope of enquiry as provided under the section and examines the issue of "accord and satisfaction", then it would amount to usurpation of the power which the parties had intended to be exercisable by the Arbitral Tribunal alone and not by the national courts. Such a scenario would impeach arbitral autonomy and would not fit well with the scheme of the 1996 Act."

11. In the decision of M/s. Pampar Ovenfresh Foods Pvt. Ltd. vs United

India Insurance Company Limited & Ors. decided in AP-COM 455 of

2024, this Court held as follows:-

"18.The Board's resolution relied upon by the respondent/insurance company relates to the acceptance of the amount upon perusal of the preliminary report and without consulting the final survey report. Subsequent detection of mistakes in the calculation, gave rise to the dispute between the parties. Moreover, the IRDA's regulations clearly provide that the discharge voucher would not be treated as proof of full and final settlement of the claim and the insured would have the right to pray for higher compensation before the appropriate forum.

19. The contents of such circulars dated September 24, 2015, and June 7, 2016 are quoted below:-

"Ref No: IRDA/NL/CIR/Misc/173/09/2015 Date: 24 September,

To CEOs of all General Insurance Co., Circular Reg: Discharge Voucher in settlement of claim *** The Insurance Companies are using 'discharge voucher' or "settlement intimation voucher" or in some other name, so that the claim is closed and does not remain outstanding in their books. However, of late, the Authority has been receiving complaints from aggrieved policyholders that the said instrument of discharge voucher is being used by the insurers in the judicial fora with the plea that the full and final discharge given by the policyholders extinguish their rights to contest the claim before the Courts.

While the authority notes that the insurers need to keep their books of accounts in order, it is also necessary to note that insurers shall not use the instrument of discharge voucher as a means of estoppel against the aggrieved policy holders when such policy holder approaches judicial fora.

Accordingly insurers are hereby advised as under: Where the liability and quantum of claim under a policy is established, the insurers shall not withhold claim amounts. However, it should be clearly understood that execution of such vouchers does not foreclose the rights of policy holder to seek higher compensation before any judicial fora or any other fora established by law.

All insurers are directed to comply with the above instructions."

" CIRCULAR Ref-IRDA/NL/CIR/MISC/113/06/2016 Date:

07.06.2016 All CEOs of General Insurance Cos including Stand-alone Health Insurance Cos and Specialised insurance Cos Re: Discharge Voucher issue This refers to the circular no -IRDA/NL/cir/Misc/173/09/2015 dated 24th September, 2015 on the captioned subject. Since then insurers, on various occasions, have submitted that the above circular is not in the line with the IRDA (protection of policyholders interests) Regulations, 2002 (PPI Regulations) and the Indian Contract Act.

The Authority has reviewed the matter taking into consideration the provisions of the Contract Act, PPI Regulations and Apex

Court Judgements. Taking equal cognisance of the legal rights of the policy holders and insurers, the Authority hereby further directs that-

(i) Wherever there are no disputes by the insured/s or claimant/s to the amount offered by the insurer towards settlement of a claim, the present system of obtaining the discharge voucher may be continued. However, the insurers must ensure that the vouchers collected must be dated and complete in all respects while obtaining the signature/s of the insured/s or claimants.

(ii) If the amount offered is disputed by the insured/s or claimant/s, insurers would take steps to pay the amount assessed without waiting for the voucher discharged by the insured/s or claimant/s.

(iii) Under no circumstances the Discharge vouchers shall be collected under duress, by coercion, by force or compulsion Since there is no uniformity in the format / wordings of the Discharge vouchers in use, Authority would suggest that the insurers may consider adopting a standardised format/wording/s of the Discharge voucher.

Insurers are directed to comply with the above with immediate effect."

20. Therefore, this court is of the view that, this application cannot be rejected even by applying the eye of the needle test. Accord and satisfaction of the claim as alleged by the respondent, is an arbitrable dispute, which fall strictly within the domain of the arbitrator.

21. Reference is made to the decision of SBI General Insurance Co. Ltd. vs Krish Spinning (supra).

*** ***

25.Paragraph 125 is specifically referred to in support of the contention that, if the referral court is able to see the frivolity and dishonesty in the claim of the petitioner, the same can also be detected by the arbitral tribunal, and the tribunal can arrive at an informed reasoned decision, upon appreciation of evidence adduced by the parties.

26. In the case in hand, evidence is required to be led to establish that the decision of the Board of the claimant company displayed accord and satisfaction and that the resolution was not taken as an interim measure, to tide over financial hardship, as contended

by the petitioner. It is available from the records that, several meetings and communications took place.Thus, whether the petitioner lodged the objections at each and every stage, as pleaded in this application, are also to be ascertained from the evidence to be adduced by the parties."

20. InShree Saibaba Plasto Products Pvt. Ltd. v. National Insurance

Company Limited, order dated 13.01.2025 in A.P. No. 119 of 2023; this

court held as follows :-

"Heard the parties.The petitioner relies on a prescribed form of a discharge voucherin the affidavit-in-reply, which provides that execution of the voucher would not foreclose the right of the policy holder to seek higher compensation before any judicial fora or any other fora established by law. Contents of such discharge voucher was communicated by the Insurance Regulatory Development Authority of India,to all CEOs of the General Insurance Company. According to the petitioner, the discharge voucher was executed under pressure. The petitioner relies on a decision of the Hon'ble Apex Court in the matter of SBI General Insurance Co. Ltd.vs. Krish Spinning, reported in 2024 SCC Online SC 1754, in support of the contention that the referral Court is only required to see whether there is an arbitration agreement under clause 13 of the Insurance Policy and whether the petitioner had raised any dispute by invoking the arbitration clause. According to the Apex Court, the issue ofaccord and satisfaction of the claim, should not be adjudicated by the referral court and the same should be left to the learned Arbitrator, for a decision. The referral Court should not go beyond the enquiry as to the existence of the arbitration agreement. The Hon'ble Apex Court in the said decision considered a matter arising out of similar facts and circumstances.

The relevant paragraphs of the decision of the Hon'ble Apex Court with regard to accord and satisfaction and whether the execution of discharge voucher amounts to discharge andsatisfaction, are quoted below:

"92. The position that emerges from the aforesaid discussion of law on the subject as undertaken by us can be summarised as follows:-

i. There were two conflicting views which occupied the field under the Arbitration Act, 1940. While the decisions in Damodar Valley (supra) and Amar Nath (supra) took the view that the disputes pertaining to "accord and satisfaction"

should be left to the arbitrator to decide, the view taken in P.K. Ramaiah (supra) and Nathani Steels (supra) was that once a "full and final settlement" is entered into between the parties, no arbitrable disputes subsist and therefore reference to arbitration must not be allowed. ii. Under the Act, 1996, the power under Section 11 was characterised as an administrative one as acknowledged in the decision in Konkan Railway (supra) and this continued till the decision of a seven-Judge Bench in SBP & Co. (supra) overruled it and significantly expanded the scope of judicial interference under Sections 8 and 11 respectively of the Act, 1996. The decision in Jayesh Engineering (supra) adopted this approach in the context of "accord and satisfaction"

cases and held that the issue whether the contract had been fully worked out and whether payments had been made in full and final settlement of the claims are issues which should be left for the arbitrator to adjudicate upon. iii. The decision in SBP & Co. (supra) was applied in BogharaPolyfab (supra) and it was held by this Court that the Chief Justice or his designate, in exercise of the powers available to them under Section 11 of the Act, 1996, can either look into the question of "accord and satisfaction" or leave it for the decision of the arbitrator. However, it also specified that in cases where 6 the Chief Justice was satisfied that there was indeed "accord and satisfaction", he could reject the application for appointment of arbitrator. The prima facie standard of scrutiny was also expounded, stating that the party seeking arbitration would have to prima facie establish that there was fraud or coercion involved in the signing of the discharge certificate. The position elaborated in BogharaPolyfab (supra) was adopted in number of a subsequent decisions, wherein it was held that a mere bald plea of fraud or coercion was not sufficient for a party to seek reference to arbitration and prima facie evidence for the same was required to be provided, even at the stage of the Section 11 petition.

iv. The view taken by SBP & Co. (supra) and BogharaPolyfab (supra) was seen by the legislature as causing delays in the disposal of Section 11 petitions, and with a view to overcome the same, Section 11(6-A) was introduced in the Act, 1996 to

limit the scope of enquiry under Section 11 only to the extent of determining the "existence" of an arbitration agreement.

This intention was acknowledged and given effect to by this Court in the decision in DuroFelguera (supra) wherein it was held that the enquiry under Section 11 only entailed an examination whether an arbitration agreement existed between the parties or not and "nothing more or nothing less".

v. Despite the introduction of Section 11(6-A) and the decision in DuroFelguera (supra), there have been diverging views of this Court on whether the scope of referral court under Section 11 of the Act, 1996 includes the power to go into the question of "accord and satisfaction". In Antique Art (supra) it was held that unless some prima facie proof of duress or coercion is adduced by the claimant, there could not be a referral of the disputes to arbitration. This view, however, was overruled in Mayavati Trading (supra) which reiterated the view taken in DuroFelguera (supra) and held that post the 2015 amendment to the Act, 1996, it was no more open to 7 the Court while exercising its power under Section 11 of the Act, 1996 to go into the question of whether "accord and satisfaction" had taken place.

vi. The decision in VidyaDrolia (supra) although adopted the view taken in Mayawati Trading (supra) yet it provided that in exceptional cases, where it was manifest that the claims were exfacie time barred and deadwood, the Court could interfere and refuse reference to arbitration. Recently, this view in the context of "accord and satisfaction" was adopted in NTPC v. SPML (supra) wherein the "eye of the needle" test was elaborated. It permits the referral court to reject arbitration in such exceptional cases where the plea of fraud or coercion appears to be ex-facie frivolous and devoid of merit.

93. Thus, the position after the decisions in Mayavati Trading (supra) and VidyaDrolia (supra) is that ordinarily, the Court while acting in exercise of its powers under Section 11 of the Act, 1996, will only look into the existence of the arbitration agreement and would refuse arbitration only as a demurrer when the claims are ex-facie frivolous and non- arbitrable."

21. The Hon'ble Supreme Court in Krish Spinnings (supra) further clarified

that, the scope of enquiry at the stage of appointment of arbitrator was

only with regard to existence of an arbitration clause. Paragraphs 113

and 114 are quoted below:-

"113. Referring to the Statement of Objects and Reasons of the Arbitration and Conciliation (Amendment) Act, 2015, it was observed in In Re: Interplay (supra) that the High Court and the Supreme Court at the stage of appointment of arbitrator shall examine the existence of a prima facie arbitration agreement and not any other issues. The relevant observations are extracted hereinbelow:

"209. The above extract indicates that the Supreme Court or High Court at the stage of the appointment of an arbitrator shall "examine the existence of a prima facie arbitration agreement and not other issues". These other issues not only pertain to the validity of the arbitration agreement, but also include any other issues which are a consequence of unnecessary judicial interference in the arbitration proceedings. Accordingly, the "other issues" also include examination and impounding of an unstamped instrument by the referral court at the Section 8 or Section 11 stage. The process of examination, impounding, and dealing with an unstamped instrument under the Stamp Act is not a time bound process, and therefore does not align with the stated goal of the Arbitration Act to ensure expeditious and time-bound appointment of arbitrators. [...]" (Emphasis supplied)"

114. In view of the observations made by this Court in In Re:

Interplay (supra), it is clear that the scope of enquiry at the stage of appointment of arbitrator is limited to the scrutiny of prima facie existence of the arbitration agreement, and nothing else. For this reason, we find it difficult to hold that the observations made in Vidya Drolia (supra) and adopted in NTPC v. SPML (supra) that the jurisdiction of the referral court when dealing with the issue of "accord and satisfaction" under Section 11 extends to weeding out ex- facie non-arbitrable and frivolous disputes would continue to apply despite the subsequent decision in In Re: Interplay (supra)."

22. Ajay Madhusudan Patel and Ors. v. Jyotrindra S. Patel and Ors.,

reported in (2025) 2 SCC 147, the Hon'ble Apex Court held as follows:-

76.5. In Interplay, In re [Interplay Between Arbitration Agreements under A&C Act, 1996 & Stamp Act, 1899, In re, (2024) 6 SCC 1] the position taken in Vidya Drolia [Vidya Drolia v. Durga Trading Corpn., (2021) 2 SCC 1 : (2021) 1 SCC (Civ) 549] was clarified to state that the scope of examination under Section 11(6) should be

confined to the "existence of the arbitration agreement" under Section 7 of the 1996 Act and the "validity of an arbitration agreement" must be restricted to the requirement of formal validity such as the requirement that the agreement be in writing.

Therefore, substantive objections pertaining to existence and validity on the basis of evidence must be left to the Arbitral Tribunal since it can "rule" on its own jurisdiction. 76.6.Krish Spg. [SBI General Insurance Co. Ltd. v. Krish Spg., (2024) 12 SCC 1 : 2024 SCC OnLine SC 1754] cautioned that the courts delving into the domain of the Arbitral Tribunal at the Section 11 stage run the risk of leaving the claimant remediless if the Section 11 application is rejected. Further, it was stated that a detailed examination by the courts at the Section 11 stage would be counterproductive to the objective of expeditious disposal of Section 11 application and simplification of pleadings at that stage. 76.7.Cox & Kings [Cox & Kings Ltd. v. SAP India (P) Ltd., (2024) 4 SCC 1 : (2024) 2 SCC (Civ) 1 : (2024) 251 Comp Cas 680] specifically dealt with the scope of inquiry under Section 11 when it comes to impleading the non-signatories in the arbitration proceedings. While saying that the referral court would be required to prima facie rule on the existence of the arbitration agreement and whether the non-signatory party is a veritable party to the arbitration agreement, it also said that in view of the complexity in such a determination, the Arbitral Tribunal would be the proper forum. It was further stated that the issue of determining parties to an arbitration agreement goes to the very root of the jurisdictional competence of the Arbitral Tribunal and can be decided under its jurisdiction under Section 16."

23. In the decision ofASF Buildtech Private Limited v. Shapoorji Pallonji

and Company Private Limited reported in (2025) 9 SCC 76, the Hon'ble

Apex Court held as follows:-

"72. The next chapter in the saga of scope and ambit of Section 11 of the 1996 Act came in the form of the seven-Judge Bench decision of this Court in Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re [Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re, (2024) 6 SCC 1] wherein one of us (J.B. Pardiwala, J.) as part of the Bench, undertook a comprehensive analysis of Section(s) 8 and 11, respectively, of the 1996 Act and, inter alia, made poignant

observations about the nature of the power vested in the courts insofar as the aspect of appointment of arbitrator is concerned. It held that the Referral Court, be it the High Court or the Supreme Court under Section 11 of the 1996 Act shall examine only the existence of a prima facie arbitration agreement and not any other issues. The relevant observations read as under: (SCC pp. 96-97 & 104, paras 196-97 & 220) "196. The corollary of the doctrine of competence-competence is that courts may only examine whether an arbitration agreement exists on the basis of the prima facie standard of review. The nature of objections to the jurisdiction of an Arbitral Tribunal on the basis that stamp duty has not been paid or is inadequate is such as cannot be decided on a prima facie basis. Objections of this kind will require a detailed consideration of evidence and submissions and a finding as to the law as well as the facts. Obligating the court to decide issues of stamping at the Section 8 or Section 11 stage will defeat the legislative intent underlying the Arbitration Act.

197. The purpose of vesting courts with certain powers under Sections 8 and 11 of the Arbitration Act is to facilitate and enable arbitration as well as to ensure that parties comply with arbitration agreements. The disputes which have arisen between them remain the domain of the Arbitral Tribunal (subject to the scope of its jurisdiction as defined by the arbitration clause). ...

***

220. The above extract indicates that the Supreme Court or High Court at the stage of the appointment of an arbitrator shall "examine the existence of a prima facie arbitration agreement and not other issues". The other issues not only pertain to the validity of the arbitration agreement, but also include any other issues which are a consequence of unnecessary judicial interference in the arbitration proceedings. Accordingly, the "other issues" also include examination and impounding of an unstamped instrument by the Referral Court at the Section 8 or Section 11 stage. The process of examination, impounding, and dealing with an unstamped instrument under the Stamp Act is not a time-bound process, and therefore does not align with the stated goal of the Arbitration Act to ensure expeditious and time-bound appointment of arbitrators."

(emphasis in original and supplied)

24. Hindustan Petroleum Corporation Limited v. BCL Secure Premises

Pvt. Ltd. reported in 2025 SCC OnLine SC 2746, the Hon'ble Apex Court

held as follows:-

"27. As was held in In Re: Interplay Between Arbitration Agreements under Arbitration and Conciliation Act, 1996 & Stamp Act, 1899, since the scope of referral court has to be within the parameter of Section 11 (6-A), the exercise carried thereon is "examination of the existence of an arbitration agreement". While "examination" does not contemplate a laborious or a contested inquiry there is an obligation in the referral court to "inspect and scrutinize" the dealings, if any, between the parties. Para 167 of Interplay (supra) reads as under:--

"167. Section 11(6-A) uses the expression "examination of the existence of an arbitration agreement". The purport of using the word "examination" connotes that the legislature intends that the Referral Court has to inspect or scrutinise the dealings between the parties for the existence of an arbitration agreement. Moreover, the expression "examination" does not connote or imply a laborious or contested inquiry. [P. Ramanatha Aiyar, The Law Lexicon (2nd Edn., 1997) 666.] On the other hand, Section 16 provides that the Arbitral Tribunal can "rule" on its jurisdiction, including the existence and validity of an arbitration agreement. A "ruling" connotes adjudication of disputes after admitting evidence from the parties. Therefore, it is evident that the Referral Court is only required to examine the existence of arbitration agreements, whereas the Arbitral Tribunal ought to rule on its jurisdiction, including the issues pertaining to the existence and validity of an arbitration agreement. A similar view was adopted by this Court in Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd., (2005) 7 SCC 234]"

(Emphasis supplied)

28. This principle was reiterated lucidly in SBI General Insurance Company Limited v. Krish Spinning, wherein this Court (speaking through one of us, J.B. Pardiwala J.) observed as under:--

113. The scope of examination under Section 11(6-A) is confined to the existence of an arbitration agreement on the basis of Section 7. The examination of validity of the arbitration agreement is also limited to the requirement of formal validity such as the requirement that the agreement should be in writing.

114. The use of the term "examination" under Section 11(6-

A) as distinguished from the use of the term "rule" under Section 16 implies that the scope of enquiry under Section 11(6-A) is limited to a prima facie scrutiny of the existence of the arbitration agreement, and does not include a contested or laborious enquiry, which is left for the Arbitral Tribunal to

"rule" under Section 16. The prima facie view on existence of the arbitration agreement taken by the Referral Court does not bind either the Arbitral Tribunal or the Court enforcing the arbitral award.

115. The aforesaid approach serves a twofold purpose -- firstly, it allows the Referral Court to weed out non-existent arbitration agreements, and secondly, it protects the jurisdictional competence of the Arbitral Tribunal to rule on the issue of existence of the arbitration agreement in depth."

(Emphasis supplied)

25. The arbitration clause under the policy is quoted below :-

"4. Arbitration If any dispute or difference arises between You and Us regarding the amount of claim to be paid under this policy (liability having been admitted by Us, such difference shall independently of all other questions, be referred to the decision of a sole arbitrator to be appointed in writing by You and Us or if You and We cannot agree upon a single arbitrator within 30 days of either of Us opting for arbitration, the same shall be referred to a panel of three arbitrators comprising of two arbitrators, one to be appointed by each of Us, to the dispute/ difference and the third arbitrator to be appointed by such two arbitrators and arbitration shall be conducted under and in accordance with the provisions of the Arbitration and Conciliation Act, 1996."

26. Mr. Bhattacharya has raised disputes which touch on the arbitrability and

admissibility of the claim. The issue of accord and satisfaction touches

the question of arbitrability which shall be decided by the arbitrator. All

points are kept open to be agitated before the arbitral tribunal.

27. The petitioner has already suggested a nominee. Mr. Jaidip Sen, learned

advocate, shall act as the petitioner's nominee. Mr. Aniruddha Mitra,

learned senior advocate, shall act as the respondents' nominee. Hon'ble

Justice S. P. Talukdar, Retired Judge of the Hon'ble High Court at

Calcutta, shall act as the learned presiding arbitrator. The arbitral

tribunal will arbitrate upon the disputes between the parties. This

appointment is subject to compliance of Section 12 of the Arbitration and

Conciliation Act, 1996. The learned arbitral tribunal shall fix its

remuneration.

(SHAMPA SARKAR, J.)

S. Kumar