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2019 (11) TMI 662 - SC - Indian LawsRejection of Arbitration application - Section 11(6) of the Arbitration and Conciliation Act, 1996 - The insurer’s objection about maintainability of the application on the ground that the respondent (Dicitex) had signed the discharge voucher and accepted the amount offered, thus, signifying accord and satisfaction, which in turn meant that there was no arbitrable dispute, was rejected - main theme of the appellant’s argument in this case is that Dicitex could not have invoked the arbitration clause, since it had fully and finally accepted the amount offered (i.e..) and withdrawn its protests and reservations, by the letter dated 06.06.2014. HELD THAT:- A close look at the facts in the present case would show that though the pleadings in the initial application under Section 11(6) are weak, nevertheless, the materials on the record, in the form of copies of the inter se correspondence of the parties – which span over 2 years, clearly show that Dicitex kept repeatedly stating that it was facing financial crisis; it referred to credits obtained for its business and the urgency to pay back the bank. It is a matter of record that the Surveyor’s report, dated 14.08.2014, recommended payment of ₹ 12,93,26,704.98/to Dicitex. Equally, it is a matter of record that the appellant referred the matter to a chartered accountant’s firm, to verify certain inventory and sales figures. It went by the report of the latter, who stated that the estimate of loss could not be more than ₹ 7,16,30,148/. This is what was offered to Dicitex, by May, 2014. Dicitex’s application under Section 11(6) is replete with references to the number of letters written to the appellant, seeking release of amounts; it also averred to inability to pay its income tax dues, the pressure from bankers (in support of which, copies of letters of bankers were produced along with the application). An overall reading of Dicitex’s application (under Section 11(6)) clearly shows that its grievance with respect to the involuntary nature of the discharge voucher was articulated. It cannot be disputed, that several letters – spanning over two yearsstating that it was facing financial crisis on account of the delay in settling the claim, were addressed to the appellant. This court is conscious of the fact that an application under Section 11(6) is in the form of a pleading which merely seeks an order of the court, for appointment of an arbitrator. It cannot be conclusive of the pleas or contentions that the claimant or the concerned party can take, in the arbitral proceedings. At this stage, therefore, the court which is required to ensure that an arbitrable dispute exists, has to be prima facie convinced about the genuineness or credibility of the plea of coercion - If the court were to take a contrary approach and minutely examine the plea and judge its credibility or reasonableness, there would be a danger of its denying a forum to the applicant altogether, because rejection of the application would render the finding (about the finality of the discharge and its effect as satisfaction) final, thus, precluding the applicant of its right event to approach a civil court. This court is of the opinion that the reasoning in the impugned judgment cannot be faulted - Appeal dismissed.
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