United India Insurance Co. Ltd vs Bansal Wood Products Pvt. Ltd

2025 INSC 39 NON-REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.104 OF 2025 (Arising out of Special Leave Petition (C) No.15799 of 2023)

UNITED INDIA INSURANCE CO. LTD. .…. APPELLANT

VERSUS

BANSAL WOOD PRODUCTS PVT. LTD. ..…RESPONDENT

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

Signature Not Verified respondent-claimant delayed the process of reference to arbitration by Digitally signed by Deepak Guglani

about four years between the period 21st January, 2003 and 01st December, Date: 2025.01.08 17:57:59 IST Reason:

2006 as it was pursuing its consumer complaint before the National

Civil Appeal 104 of 2025 Page 1 of 3 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

Civil Appeal 104 of 2025 Page 2 of 3 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.

.……………….J. [ABHAY S. OKA]

……………….J. [MANMOHAN]

New Delhi;

January 8, 2025.

Civil Appeal 104 of 2025 Page 3 of 3