THE ORIENTAL INSURANCE CO. LTD. & ANR.versusDICITEX FURNISHING LTD.

                         [2019] 14 S.C.R. 389                             389


       THE ORIENTAL INSURANCE CO. LTD. & ANR.                             A
                                  v.
                   DICITEX FURNISHING LTD.
                   (Civil Appeal No. 8550 of 2019)
                       NOVEMBER 13, 2019                                  B
       [ARUN MISHRA AND S. RAVINDRA BHAT, JJ.]
       Arbitration and Conciliation Act, 1996 – s.11(6) – Application
under, for appointment of arbitrator – Court’s jurisdiction to examine
the arbitrability of the dispute in the context of no objection
                                                                          C
certificates/discharge vouchers given by the insured to the insurer
in discharge of the claim – Economic duress or coercion, if exists –
In 2011, the respondent-insured obtained Standard Fire and Special
Peril Policy from the appellant to cover the stocks of goods lying in
its three separate godowns– Total sum insured was @ ` 13 crores–
On 25.05.12, fire broke out destroying the stock in the godowns –         D
Appellant appointed surveyor – Respondent lodged claim for ` 14.88
crores – Surveyor recommended payment of ` 12.93 crores to the
respondent– However, the appellant appointed new surveyor –
Appellant released ` 3.50 crores on 04.03.13 – Respondent signed
the discharge voucher – As per new surveyor’s report, the assessment
                                                                          E
worked to ` 7.16 crores which was offered to the respondent in
May 2014, in full and final settlement of the claim – Accepted
reluctantly by the respondent – By letter dtd. 06.06.14, the respondent
withdrew the letter dtd. 31.05.14 submitted along with the discharge
voucher for full and final settlement of the claim –
Respondent informed the appellant that the huge difference between        F
the total amount claimed and the final claim settlement amount needs
to be resolved, failing which the respondent would invoke the
arbitration, as per the terms and conditions of the Policy –
Respondent filed application u/s.11(6) for appointment of arbitrator
– Allowed by Single Judge – On appeal, held: An aggrieved party
                                                                          G
can be the victim of economic coercion which results in its signing a
document which discharges the other party of its obligations –
Several letters spanning over two years stating that the respondent
was facing financial crisis on account of the delay in settling the
claim,were addressed to the appellant – Overall reading of
respondent’s application u/s. 11(6) clearly shows that its grievance      H
                                 389
390            SUPREME COURT REPORTS                       [2019] 14 S.C.R.


A     with respect to the involuntary nature of the discharge voucher was
      articulated– At this stage, the Court is required to ensure that an
      arbitrable dispute exists, has to be prima facie convinced about the
      genuineness/credibility of the plea of coercion – It cannot be too
      particular about the nature of the plea, which necessarily has to be
      made and established in the substantive (arbitration) proceeding –
B
      Reasoning in the impugned judgment cannot be faulted.
            Dismissing the appeal, the Court
            HELD: 1.1 Proposition (iii) of the conclusions recorded in
      Boghara Polyfab visualize duress or coercion on account of
C     withholding of payments due. The court – in more places than
      one, recognized that an aggrieved party can be the victim of
      economic coercion which results in its signing a document which
      discharges the other party of its obligations. [Para 18][410-C-D]
            National Insurance Co. Ltd v Boghara Polyfab Pvt Ltd
D           (2009) 1 SCC 267 : [2008] 13 SCR 638 – relied on.
            New Indian Assurance Co. Ltd v Genus Power
            Infrastructure Ltd. (2015) 2 SCC 424 : [2014] 12 SCR
            360; Union of India (UOI) and Ors. v Master
            Construction Co. (2011) 12 SCC 349 : [2011] 5 SCR
E           853; Velugubanti Hari Babu v. Parvathini Narasimha
            Rao & Anr. (2016) 14 SCC 126 : [2016] 3 SCR 228;
            ONGC Mangalore Petrochemicals Ltd. v ANS
            Constructions Ltd. and Anr. (2018) 3 SCC 373 : [2018]
            2 SCR 598 – referred to.

F           1.2 Though the pleadings in the initial application under
      Section 11(6), Arbitration and Conciliation Act, 1996 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 respondent kept repeatedly stating that
      it was facing financial crisis; it referred to credits obtained for its
G     business and the urgency to pay back the bank. The Surveyor’s
      report, dated 14.08.2014, recommended payment of
      ` 12,93,26,704.98/- to respondent. 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
H
 THE ORIENTAL INSURANCE CO. LTD. & ANR. v. DICITEX                       391
                 FURNISHING LTD.

that the estimate of loss could not be more than ` 7,16,30,148/-.        A
This is what was offered to respondent, by May, 2014.
Respondent’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,
                                                                         B
copies of letters of bankers were produced along with the
application). [Para 19][410-H; 411-A-C]
       1.3 An overall reading of respondent’s application (under
Section 11(6)) clearly shows that its grievance with respect to
the involuntary nature of the discharge voucher was articulated.
Several letters – spanning over two years- stating that it was           C
facing financial crisis on account of the delay in settling the claim,
were addressed to the appellant. 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           D
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; it cannot be
too particular about the nature of the plea, which necessarily has
to be made and established in the substantive (read: arbitration)        E
proceeding. 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        F
its effect as satisfaction) final, thus, precluding the applicant of
its right event to approach a civil court. There are decisions of
this court (Associated Construction v Pawanhans Helicopters Ltd.
(2008) 16 SCC 128 and Boghara Polyfab upheld the concept of
economic duress. Having regard to the facts and circumstances,
this court is of the opinion that the reasoning in the impugned          G
judgment cannot be faulted. [Para 21][412-D-H; 413-H]
      Associated Construction v Pawanhans Helicopters Ltd.
      (2008) 16 SCC 128 – referred to.

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392             SUPREME COURT REPORTS                          [2019] 14 S.C.R.


A                              Case Law Reference
      [2014] 12 SCR 360                  referred to               Para 8
      [2008] 13 SCR 638                  relied on                 Para 8
      [2011] 5 SCR 853                   referred to               Para 8
B     [2016] 3 SCR 228                   referred to               Para 17
      [2018] 2 SCR 598                   referred to               Para 17
      (2008) 16 SCC 128                  referred to               Para 21
            CIVIL APPELLATE JURISDICTION: Civil Appeal No. 8550
C     of 2019.
            From the Judgment and Order dated 13.10.2015 of the High
      Court of Judicature at Bombay in Arbitration Application No. 5 of 2015.
            S. L. Gupta, Kuldep Singh Tomar, Asutosh Sharma, M. S. Mangla,
      Brahm Shankar Kumar, Neeraj Srivastava, Mataprasad Singh,
D     Ms. Ranjana R. Singh, Varinder Kumar Sharma, Advs. for the Appellants.
           Shrish Kumar Misra, Rajesh Mehta, Ms. Deepika Mishra, Bimlesh
      Pandey, Advs. for the Respondent.
            The Judgment of the Court was delivered by
E           S. RAVINDRA BHAT, J.
             1. Leave granted. With the consent of counsel, the appeal was
      heard finally. The Oriental Insurance Co. Ltd (hereafter “the insurer” or
      “the appellant”) appeals the decision of a single judge of the Bombay
      High Court, who allowed the respondent’s application under Section 11(6)
F     of the Arbitration and Conciliation Act, 1996 (hereafter “the Act”) and
      appointed an arbitrator. The insurer’s objection about maintainability of
      the application on the ground that the respondent (hereafter “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.
G
              2. The relevant facts in this appeal are that on 17.09.2011, Dicitex
      obtained a Standard Fire and Special Peril Policy; it was issued by the
      appellant to cover the stocks of goods lying in its three separate godowns
      located at Thane, Maharashtra, by three separate endorsements. The
      total sum insured was @ ` 13 crores. Clause 13 of the terms and conditions
H
 THE ORIENTAL INSURANCE CO. LTD. & ANR. v. DICITEX                             393
      FURNISHING LTD. [S. RAVINDRA BHAT, J.]

of the said policy contained an arbitration clause. On 25.05.2012, a fire      A
broke out at night on the ground floor of the building occupied by RFCL,
which fire spread to the first floor of the building and completely engulfed
all of the appellant’s three godowns which had stored its goods. All the
stocks in all the three godowns were completely destroyed. Dicitex
informed the appellant on 26.05.2012, about the fire and the consequential
                                                                               B
loss. The appellant appointed M/s. C.P. Mehta & Co. as Surveyors and
Assessors to survey the loss suffered by Dicitex and to report on the
claim to be lodged upon the insurer-appellant, by the said company. Dicitex
lodged a total and final claim upon the appellant for a sum of
` 14,88,14,327/- comprising ` 13,52,85,752/- towards cost of the materials
destroyed and ` 1,35,28,575/- as overheads. Dicitex claims also to have        C
submitted comprehensive documentary evidence and detailed work sheets
in support of the claim made to the insurer. On 14.08.2012, after visiting
Dicitex’s factory and the godowns, and after scrutinizing the materials
submitted by it in support of its claim, the Surveyor appointed by the
insurer filed a Final Survey Report recommending that the claim be settled
                                                                               D
for an amount of ` 12,93,26,704.98/- and that after deducting an amount
of 5% towards compulsory deduction for excess, a net amount of
` 12,28,60,369/- be paid over to Dicitex. The latter alleged that a copy of
this survey report was not supplied to it, by the insurer, or the surveyor.
       3. On 20.09.2012, Dicitex addressed a letter to the appellant’s
chairman, informing him of the financial distress that it was facing,          E
requesting for settlement of the claim on priority basis. Dicitex also
informed him about a temporary loan obtained -to the tune of 10 crores-
from Union Bank of India for 3 months at a high rate of interest which
was due for repayment in September 2012 and requested him that it
would be a great financial help if its claim could be settled on priority      F
basis which would mitigate their hardship. Again, on 25.10.2012, Dicitex
informed the insurer that the sale value of the goods destroyed was
above ` 19 crores and that it had not only lost its goods but also its
profits. Dicitex informed that it had already submitted all the documentary
evidence supporting the claim to the Surveyor, M/s. C.P. Mehta & Co.,
yet another letter was addressed to the appellant’s chairman on 31.10.2012     G
placing on record that it had understood from the surveyor M/s. C.P.
Mehta & Co. that the Head Office of the appellant asked for some
more information in connection with the claim. Dicitex stated that
compiling, organizing and sending various documents totalling around
35,000 in number, entailed voluminous work. It was stated that the
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394             SUPREME COURT REPORTS                         [2019] 14 S.C.R.


A     surveyor had already gone through those documents and had picked up
      at random, sample of various concerned records. Dicitex stated that it
      was arranging to compile the documents and agreed to send them to the
      surveyor as soon as possible. In other letters (dated 10.01.2012,
      28.01.2013), again requests were made to the insurer to release the
      amounts. Apparently, the appellant appointed a Chartered Accountant
B     (M/s Naveen Jhand & Associates) to carry out a resurvey of the claim
      made by it (Dicitex). The latter had already furnished 37,700 documents
      physically, which showed the exact quantity of furnishing fabrics in meters.
      Dicitex brought to the notice of the Chairman-cum-Managing Director
      that the new surveyors had asked for large number of documents again
C     and such documents could not be supplied. On 09.02.2013, addressing
      the new surveyor M/s Naveen Jhand, Dicitex submitted 37,700
      documents and submitted further documents to the said new surveyor.
      It submitted that since the previous 9 months, it had been providing
      different documents/information to different people and submitted
      whatever was requested by the new surveyor in broader form and
D     requested them to submit their report at the earliest.
             4. In accordance with the format sent by the insurer and after
      obtaining Dicitex’s signature, a cheque for ` 3.5 crores was handed
      over to it. Dicitex signed the discharge voucher on 04.03.2013, when the
      insurer paid the said sum of ` 3.5 crores to Dicitex as ‘on account
E     payment’ in the matter of its claim. Union Bank of India endorsed the
      said discharge voucher. According to Dicitex, all data that was
      requisitioned by the new surveyor, was provided by it. Several meetings
      took place between the representatives of the new surveyor, the appellant
      and Dicitex. Dicitex, mentioned several letters to the appellant, and the
      surveyor, in 2013 regarding the release of the amounts. Dicitex had also
F     stated that it felt strongly that the new surveyor was just not satisfied
      with whatever was provided by it though all the data it submitted had
      proved its genuine claim and the intention of the new surveyor was to
      somehow reduce the claim. In other letters (such as the one dated
      21.02.2014), Dicitex informed the appellant that the surveyor was refusing
G     to commit to any fixed date within which they would be submitting their
      report and also the appellant’s officials had no answers to its questions
      with regard to when its claim would be settled. Dicitex requested the
      General Manager to set a deadline to settle their claim at the earliest. It
      wrote several letters to the appellant’s officers about the huge financial
      losses suffered by it due to delay in settlement of the claim. Dicitex
H     informed the General Manager to settle the claim within 15 days.
 THE ORIENTAL INSURANCE CO. LTD. & ANR. v. DICITEX                           395
      FURNISHING LTD. [S. RAVINDRA BHAT, J.]

       5. On 27th May, 2014, Dicitex received an email from the appellant    A
stating that a discharge voucher for the balance amount of the claim
payable as described was being enclosed. It was requested to execute
the voucher along with the bank’s discharge on the space earmarked on
the left side and send the scanned copy back. By the email dated
28.05.2014, Dicitex replied to the email of 27.05.2014 and referred to
                                                                             B
the discharge voucher sent by the appellant to it for signature. Dicitex
placed on record that its total claim was approximately ` 15 crores and
the surveyor had assessed the same at approximately ` 12.93 crores.
Dicitex stated that the basis for arriving at the figure of ` 7.16 crores
was not explained (by the appellant). It requested the Regional Manager
of the appellant to provide the claim assessment working for their           C
understanding to enable Dicitex to take up the matter with their Board
of Directors for consideration. The appellant, by email dated 29.05.2014,
alleged that M/s. C. P. Mehta & Co. had initially assessed the loss at
` 12,28,60,369/-. However, it had certain issues on the costing; it,
therefore, appointed M/s. Naveen Jhand and Associates to have another
look at the costing aspect and reconfirm/verify the costing for loss         D
assessment purpose. According to the said report submitted by
M/s. Naveen Jhand and Associates, the assessment worked to
` 7,16,30,148/- and accordingly, the competent authority had granted the
claim. The appellant enclosed the working of the claim and requested
Dicitex to go through it and send an unconditional discharge voucher         E
duly signed by it and the bankers. Dicitex, the insured did not do so and
informed the appellant that it had noticed that what was given was just a
statement of calculation, without explanation/basis, that adjustments had
resultant deductions in Dicitex’s claim by more than 50% as assessed
by the surveyor appointed by the appellant. Dicitex stated that since the
appellant had taken 2 years to offer the final settlement of the claim, it   F
(Dicitex) was suffering from a huge financial constraint and had to pay
bank interest and installments, salaries and wages, hence, it was left
with no alternative but to accept the offer of the appellant
reluctantly and was accordingly sending the voucher duly discharged by
Dicitex and their bankers for doing the needful. Dicitex alleged that        G
since the appellant did not relent, and insisted that any further payment
would be made only if the discharge voucher was executed exactly at
the time and in the form and manner as required by it as well as the
letter dated 31.05.2014 was withdrawn. Dicitex stated that as it was in
urgent need of funds to meet its mounting liabilities, it was coerced
into withdrawing its earlier letter of 31.05.2014 and in executing           H
396             SUPREME COURT REPORTS                           [2019] 14 S.C.R.


A     the discharge voucher exactly as dictated by the respondents. By the
      letter dated 06.06.2014, addressed to the Regional Manager, Dicitex
      withdrew the letter dated 31.05.2014 submitted along with the discharge
      voucher for a full and final settlement of their claim. It requested the
      appellant to remit the claim amount immediately. The discharge voucher
      was on the letter head of the appellant, duly endorsed by Dicitex’s
B
      bankers. In the discharge voucher, it was recorded that it accepted a
      sum of ` 3,66,30,148/- in full and final settlement of its claim. It was also
      recorded that Dicitex voluntarily gave discharge receipt in full and final
      settlement of their claim, present or future, arising directly/indirectly in
      respect of the said loss/accident and subrogated all their rights and
C     remedies to appellant in respect of the loss/damages. Further
      correspondence ensued whereby Dicitex informed the appellant that
      since there was a huge difference between the total amount claimed by
      it, and the final claim settlement amount by the appellant, the same was
      required to be discussed and resolved, failing which Dicitex would be
      required to invoke the arbitration, as per clause 13 of the terms and
D     conditions attached to the policy. The appellant, by the letter dated
      17.07.2014 addressed to Dicitex, informed that it was surprised by the
      proposal to invoke arbitration after the clean discharge voucher was
      signed for the sum of ` 7,16,30,148/- in full and final settlement of the
      said loss. The respondents denied that there existed any dispute of
E     quantum in respect of the said claim and contended that the amount due
      to Dicitex arising out of indemnity, arising from the policy was duly verified
      and assessed based on the documents submitted by Dicitex. The appellant
      did not agree to Dicitex’s request for any differential amount or request
      for proceeding for arbitration under the policy. On 24.07.2014, by a letter
      addressed to the appellant, Dicitex denied that the amount received by it
F     was a clean discharge voucher in full and final settlement of their claim
      and reiterated that it suffered a major loss of ` 14,16,94,329/-. The
      surveyor, M/s. C.P. Mehta & Co. had submitted their report assessing
      the loss at ` 12.93 crores. Dicitex also placed on record that as against
      approximately the claim of ` 14.70 crores, the appellant released only `
G     3.50 crores on 04.03.2013 i.e. almost 10 months after the loss had
      occurred, and after a lapse of 27 months, the appellant made “a take it
      or leave it” offer of ` 7.16 crores towards full and final settlement of
      their claim, the discharge was accepted reluctantly by it. Dicitex alleged
      that upon meeting the appellant’s officers, it was instructed to withdraw
      the letter of protest and accept the claim settlement unconditionally which
H     was a proof of coercion.
 THE ORIENTAL INSURANCE CO. LTD. & ANR. v. DICITEX                             397
      FURNISHING LTD. [S. RAVINDRA BHAT, J.]

        6. The position taken by the appellant was that Dicitex was paid       A
` 7,16,30,148/- in a clean discharge and full and final settlement of their
claim and there existed no dispute with regard to the quantum of claim
and refused to appoint any arbitrator. In these circumstances, Dicitex
approached the Bombay High Court under Section 11(6) of the Act, for
appointment of an arbitrator. Dicitex relied on the assessment of
                                                                               B
M/s C.P. Mehta & Co., which had assessed the loss at ` 12.93 crores.
It contended that the appellant released only ` 3.50 crores on 4.03.2013
i.e. almost 10 months after the loss suffered by Dicitex due to fire, and
only after a lapse of 27 months made “a take it or leave it” offer of
` 7.16 crores towards full and final settlement of their claim. Dicitex
stated that it had taken a loan of a substantial amount and had to bear        C
the extra burden of high interest and found itself defaulting on timely
loan repayments. It was further submitted that Dicitex was unable to
pay income tax on time, as a result of which, it had to pay a sum of
` 23.90 lacs in the year 2012-2013 and a sum of ` 11.10 lakhs in the
year 2013-2014 towards interest for the delayed payments of income
                                                                               D
tax. It was also argued, on behalf of Dicitex, that it was subjected to
economic duress and coercion which resulted in the signing of the
discharge voucher, which could not preclude its invocation of the
arbitration agreement.
        7. The appellant resisted the application, contending that Dicitex
had not demonstrated whether the second discharge voucher signed by            E
it was under economical or financial duress under the arbitration
agreement. It was urged that since Dicitex had signed the discharge
voucher and accepted the payment made by the respondents
unconditionally and confirmed that the said payment was received in full
and final settlement of their claim, present or future, arising                F
directly/indirectly in respect of the said loss/accident and subrogated all
their rights and remedies to the appellant in respect of the loss/damages,
there exists no dispute between the parties which can be referred to
arbitration. It was argued that Dicitex having signed the discharge
voucher for ` 7,16,30,148/- in full and final settlement due to alleged loss
suffered by Dicitex, the arbitration application was not maintainable. It      G
was submitted that the appellant had replied to the letter dated 21.06.2014
stating that Dicitex had withdrawn only discharge voucher dated
31.05.2014. The appellant also stated that in the arbitration agreement
itself, Dicitex had to explain the exact correctness of the allegation of
coercion and duress with details and particulars about signing the             H
398             SUPREME COURT REPORTS                           [2019] 14 S.C.R.


A     discharge voucher. It was further contended that though the payment
      was received by Dicitex on 09.06.2014, it raised protest only on
      21.06.2014. Even in the letter dated 21st June 2014, Dicitex referred to
      the discharge voucher dated 31.05.2014 which was not admittedly acted
      upon by the insurer. Dicitex did not resile from the discharge voucher
      dated 31.05.2014, and thus on that ground also, this arbitration application
B
      is not maintainable.
            8. The appellant relied on some decisions of this court (New Indian
      Assurance Co. Ltd v Genus Power Infrastructure Ltd. (2015) 2 SCC
      424. National Insurance Co. Ltd v Boghara Polyfab Pvt Ltd (2009) 1
      SCC 267; Union of India (UOI) and Ors. v Master Construction Co.
C     (2011) 12 SCC 349 etc.
             9. In the impugned judgment, while allowing the application, the
      single judge analysed the decisions of this court, including Boghara
      Polyfab (supra). It was noted that a perusal of the correspondence
      prima facie indicated that the first surveyor appointed by the insurer
D     had recommended the payment of more than ` 12 crores in favour of
      Dicitex. For some reasons, the appellant did not accept the said report
      submitted by their own surveyor and instead appointed M/s Naveen
      Jhand and Associates to re-compute the costings. It was also held that
      Dicitex had furnished more than 37,700 documents to the surveyor for
E     their appraisal for submitting the report. Dicitex had placed on record
      from time to time, documents to show that it had taken loans from the
      banks who were pressurising it for repayment of those loans and interest.
      The account of Dicitex with those banks had drawn the excess amount.
      The final amount was sanctioned by the respondents only after 27 months
      of the fire having taken place, which caused loss to Dicitex. Dicitex had
F     produced about 11 letters addressed by the banks to Dicitex, calling
      upon Dicitex to regularize their bank accounts and showing the excess
      amount drawn by it in various accounts. Dicitex had also placed on
      record, the conduct of the second surveyor, who was, according to it,
      demanding several other documents which were unwarranted and/or
G     already submitted by it. The learned judge noticed that prima facie,
      Dicitex was facing financial distress and economical duress and in view
      of its various urgent business liabilities, it apparently signed the said
      discharge voucher reluctantly. It is not in dispute that the appellant refused
      to accept such discharge voucher signed by Dicitex with letter of protest.
      Therefore, a few days later, a discharge voucher was signed by Dicitex.
H
 THE ORIENTAL INSURANCE CO. LTD. & ANR. v. DICITEX                           399
      FURNISHING LTD. [S. RAVINDRA BHAT, J.]

It was, however, Dicitex’s case that the appellant had insisted upon it to   A
sign a clean discharge voucher and to withdraw the letter of protest
addressed by it, failing which, the insurer would not release the amount,
even that was reflected in the discharge voucher. Dicitex thereafter
withdrew the letter dated 31.05.2014, and signed another discharge
voucher. After signing another discharge voucher, Dicitex placed on
                                                                             B
record their objection that the same was signed due to pressure of the
respondents.
      10. In view of the analysis made, the single judge allowed the
application, observing as follows:
      “57. On perusal of the large number of correspondence                  C
      exchanged between Dicitex and the respondents which were
      not disputed by the respondents, in my prima facie view, it
      indicates that Dicitex was facing the financial constraint and
      economical and financial duress on the part of the respondents
      in not sanctioning and paying the final claim for 27 months
      from the date of fire. Dicitex having faced pressure from their        D
      bankers and suffering from other business liabilities including
      the demand of income tax department, Dicitex was under the
      economical and financial duress and the said discharge
      voucher thus, in my prima facie view, cannot be considered
      as an unconditional discharge voucher thereby Dicitex giving           E
      up their claim in future arising out of the said discharge
      voucher.
      58. In my view, if Dicitex would not have signed such discharge
      voucher acknowledging the payment of the lesser amount than
      what was alleged to be due to Dicitex after 27 months of the           F
      loss suffered, the respondents would not have released even
      the said amount mentioned in the discharge voucher. In my
      view, if according to the respondents, Dicitex was not entitled
      to recover the amount as claimed by Dicitex, but the lesser
      amount, the respondents could have released the amount as
      payable according to the respondents, but could not have               G
      insisted for execution of a discharge voucher as a pre-
      condition before releasing such payment.
      59. Learned counsel for the respondents could not refer to
      any provision in the insurance policy or any other provision
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400     SUPREME COURT REPORTS                       [2019] 14 S.C.R.


A     of law in support of their claim that the respondents were
      entitled to insist for execution of such discharge voucher
      before releasing any payment in favour of Dicitex with a
      confirmation not to make any claim in future arising out of
      the said claim. The Supreme Court has already deprecated
      the practice followed by the government departments,
B
      statutory corporations and government companies for
      obtaining such undated discharge voucher as the condition
      for releasing lesser amount and has held that the said
      procedure is unfair, irregular and illegal. Though the Chief
      Justice or his designate is empowered to decide the issue as
C     to whether the parties had concluded the contract by
      recording satisfaction of their mutual rights and obligations
      thereby receiving the final payment without objection based
      on the affidavits and the pleadings or can leave the said issue
      to be decided by the arbitral tribunal, in my view, it would be
      appropriate if the issue raised by the respondents that Dicitex
D
      had signed such discharge voucher unconditionally and the
      issue raised by Dicitex that the same was under duress and
      coercion is conclusively decided by the arbitral tribunal and
      if necessary, by leading oral evidence. The learned designate
      of the Chief Justice in case of M/s.Yasho Industries Pvt. Ltd.
E     Vs. The New India Assurance Company Limited in Arbitration
      Petition No.314 of 2014 decided on 24th June 2015 which is
      relied upon by one of the party has taken a similar view.
      Special Leave Petition against the said order is rejected.
      60. In so far as the issue of arbitrability of the claim raised
F     by the respondents on the ground that Dicitex proposed to
      make the claim amount higher than the insured sum is
      concerned, if any claim higher than the insured sum is made
      by Dicitex before the arbitral tribunal, the respondents can
      raise such issue of arbitrability and the same can be decided
      by the arbitral tribunal. The issue of arbitrability of claim on
G     such ground cannot be decided in these proceedings.
      61. Clause 13 of the arbitration agreement of the policy which
      provides that if any dispute or difference shall arise as to the
      quantum to be paid under the policy, such difference shall be
      referred to the decision of a sole arbitrator to be appointed
H
 THE ORIENTAL INSURANCE CO. LTD. & ANR. v. DICITEX                              401
      FURNISHING LTD. [S. RAVINDRA BHAT, J.]

      in writing by the parties or if they cannot agree upon a single           A
      arbitrator within 30 days of any party invoking arbitration,
      the same shall be referred to a panel of three arbitrators.
      Since the respondents have refused to appoint any arbitrator
      out of the names suggested by Dicitex in their letter dated
      14th July 2014 and had not suggested any other name, this
                                                                                B
      application filed under Section 11 (6) of the Arbitration Act
      is maintainable. In my view, the arbitration agreement exists
      between the parties.”
       11. The appellant urges that the impugned judgment is erroneous.
It is pointed out that the effect of the decisions in Boghara Polyfab,
Master Construction and Genus Power Infrastructure (supra) and                  C
having regard to the facts and circumstances of this case, there can be
no question that any arbitrable dispute existed between the parties. Having
accepted the proffered amounts, and having withdrawn the reservation
and protest, Dicitex could not have argued that it was subjected to
coercion or that the appellant forced it to sign the final discharge voucher.   D
Emphasis is placed on Dicitex’s letter dated 06.06.2014, whereby it
withdrew the previous letter dated 31.05.2014, which had contained
reservations about the amount offered in full settlement.
       12. Counsel for Dicitex urges that this court should not interfere
with the impugned judgment. It was urged that the material in the form          E
of the record, particularly the consistent trend of letters, prior to the
letter of 06.06.2014 as well as the correspondence after that, clearly
reveal that Dicitex was undergoing severe financial crisis and that the
prolonged process of settlement claim constrained it to issue the said
letter of 06.06.2014. However, the fact remained that at the relevant
time, it faced a crisis of existence. Its acceptance was under financial        F
compulsion which amounted to economic coercion. Therefore, the learned
single judge very properly analysed all these materials and held that
prima facie, there was no full and final settlement or discharge.
      Analysis & Conclusions
                                                                                G
       13. The 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. It cites the
decisions in Boghara Polyfab, Master Construction and Genus Power
(supra) in this regard.                                                         H
402             SUPREME COURT REPORTS                            [2019] 14 S.C.R.


A            14. The issue of the court’s jurisdiction to examine whether a
      dispute is arbitrable, in the context of no objection certificates or discharge
      vouchers, was examined in Boghara Polyfab for the first time. This
      court in the context of an application under Section 11(6) dealt with the
      issue, holding that if there was accord and satisfaction due to a no dues
      certificate, a reference under Section 11 was not maintainable. It held,
B
      inter alia, that:
             “51. Let us consider what a civil court would have done in a
             case where the defendant puts forth the defence of accord
             and satisfaction on the basis of a full and final discharge
             voucher issued by the plaintiff, and the plaintiff alleges that
C            it was obtained by fraud/coercion/undue influence and
             therefore not valid. It would consider the evidence as to
             whether there was any fraud, coercion or undue influence. If
             it found that there was none, it will accept the voucher as
             being in discharge of the contract and reject the claim without
D            examining the claim on merits. On the other hand, if it found
             that the discharge voucher had been obtained by fraud/undue
             influence/coercion, it will ignore the same, examine whether
             the plaintiff had made out the claim on merits and decide the
             matter accordingly. The position will be the same even when
             there is a provision for arbitration.
E
             52. Some illustrations (not exhaustive) as to when claims are
             arbitrable and when they are not, when discharge of contract
             by accord and satisfaction are disputed, to round up the
             discussion on this subject:

F            (i) A claim is referred to a conciliation or a pre-litigation Lok
             Adalat. The parties negotiate and arrive at a settlement. The
             terms of settlement are drawn up and signed by both the parties
             and attested by the Conciliator or the members of the Lok
             Adalat. After settlement by way of accord and satisfaction,
             there can be no reference to arbitration.
G
             (ii) A claimant makes several claims. The admitted or
             undisputed claims are paid. Thereafter negotiations are held
             for settlement of the disputed claims resulting in an agreement
             in writing settling all the pending claims and disputes. On
             such settlement, the amount agreed is paid and the contractor
H
THE ORIENTAL INSURANCE CO. LTD. & ANR. v. DICITEX                     403
     FURNISHING LTD. [S. RAVINDRA BHAT, J.]

   also issues a discharge voucher/no claim certificate/full and      A
   final receipt. After the contract is discharged by such accord
   and satisfaction, neither the contract nor any dispute survives
   for consideration. There cannot be any reference of any dispute
   to arbitration thereafter.
   (iii) A contractor executes the work and claims payment of         B
   say Rupees Ten Lakhs as due in terms of the contract. The
   employer admits the claim only for Rupees six lakhs and
   informs the contractor either in writing or orally that unless
   the contractor gives a discharge voucher in the prescribed
   format acknowledging receipt of Rupees Six Lakhs in full and
   final satisfaction of the contract, payment of the admitted        C
   amount will not be released. The contractor who is hard
   pressed for funds and keen to get the admitted amount
   released, signs on the dotted line either in a printed form or
   otherwise, stating that the amount is received in full and final
   settlement. In such a case, the discharge is under economic        D
   duress on account of coercion employed by the employer.
   Obviously, the discharge voucher cannot be considered to be
   voluntary or as having resulted in discharge of the contract
   by accord and satisfaction. It will not be a bar to arbitration.
   (iv) An insured makes a claim for loss suffered. The claim is      E
   neither admitted nor rejected. But the insured is informed
   during discussions that unless the claimant gives a full and
   final voucher for a specified amount (far lesser than the
   amount claimed by the insured), the entire claim will be
   rejected. Being in financial difficulties, the claimant agrees
   to the demand and issues an undated discharge voucher in           F
   full and final settlement. Only a few days thereafter, the
   admitted amount mentioned in the voucher is paid. The accord
   and satisfaction in such a case is not voluntary but under
   duress, compulsion and coercion. The coercion is subtle, but
   very much real. The ‘accord’ is not by free consent. The           G
   arbitration agreement can thus be invoked to refer the disputes
   to arbitration.
   (v) A claimant makes a claim for a huge sum, by way of
   damages. The respondent disputes the claim. The claimant
   who is keen to have a settlement and avoid litigation,             H
404      SUPREME COURT REPORTS                       [2019] 14 S.C.R.


A     voluntarily reduces the claim and requests for settlement. The
      respondent agrees and settles the claim and obtains a full
      and final discharge voucher. Here even if the claimant might
      have agreed for settlement due to financial compulsions and
      commercial pressure or economic duress, the decision was
      his free choice. There was no threat, coercion or compulsion
B
      by the respondent. Therefore, the accord and satisfaction is
      binding and valid and there cannot be any subsequent claim
      or reference to arbitration.
      52. Let us now examine the receipt that has been taken in this
      case. It is undated and is in a pro forma furnished by the
C     appellant containing irrelevant and inappropriate statements.
      It states: “I/we hereby assign to the company, my/our right to
      the affected property stolen which shall, in the event of their
      recovery, be the property of the company”. The claim was not
      in regard to theft of any property nor was the claim being
D     settled in respect of a theft claim. We are referring to this
      aspect only to show how claimants are required to sign on the
      dotted line, and how such vouchers are insisted and taken
      mechanically without application of mind.”
      15. In Master Construction (supra), this Court held that:
E     “20. The Bench in Boghara Polyfab Private Limited in
      paragraphs 42 and 43, with reference to the cases cited before
      it, inter alia, noted that there were two categories of the cited
      cases; (one) where the Court after considering the facts found
      that there was a full and final settlement resulting in accord
F     and satisfaction, and there was no substance in the allegations
      of coercion/undue influence and, consequently, it was held
      that there could be no reference of any dispute to arbitration
      and (two) where the court found some substance in the
      contention of the claimants that `no dues/claim certificates’
      or `full and final settlement discharge vouchers’ were insisted
G     and taken (either in printed format or otherwise) as a condition
      precedent for release of the admitted dues and thereby giving
      rise to an arbitrable dispute.
      21. In Boghara Polyfab Private Limited, the consequences of
      discharge of the contract were also considered. In para 25
H
THE ORIENTAL INSURANCE CO. LTD. & ANR. v. DICITEX                      405
     FURNISHING LTD. [S. RAVINDRA BHAT, J.]

   (page 284), it was explained that when a contract has been          A
   fully performed, then there is a discharge of the contract by
   performance and the contract comes to an end and in regard
   to such a discharged contract, nothing remains and there
   cannot be any dispute and, consequently, there cannot be
   reference to arbitration of any dispute arising from a
                                                                       B
   discharged contract. It was held that the question whether
   the contract has been discharged by performance or not is a
   mixed question of fact and law, and if there is a dispute in
   regard to that question, such question is arbitrable. The Court,
   however, noted an exception to this proposition. The exception
   noticed is that where both the parties to a contract confirm in     C
   writing that the contract has been fully and finally discharged
   by performance of all obligations and there are no
   outstanding claims or disputes, courts will not refer any
   subsequent claim or dispute to arbitration. Yet another
   exception noted therein is with regard to those cases where
                                                                       D
   one of the parties to the contract issues a full and final
   discharge voucher (or no-dues certificate, as the case may
   be) confirming that he has received the payment in full and
   final satisfaction of all claims, and he has no outstanding
   claim. It was observed that issuance of full and final discharge
   voucher or no-dues certificate of that kind amounts to              E
   discharge of the contract by acceptance or performance and
   the party issuing the discharge voucher/certificate cannot
   thereafter make any fresh claim or revive any settled claim
   nor can it seek reference to arbitration in respect of any claim.
   22. In paragraph 26 (pages 284-285), this Court in Boghara          F
   Polyfab Private Limited held that if a party which has executed
   the discharge agreement or discharge voucher, alleges that
   the execution of such document was on account of fraud/
   coercion/undue influence practiced by the other party, and if
   that party establishes the same, then such discharge voucher
   or agreement is rendered void and cannot be acted upon and          G
   consequently, any dispute raised by such party would be
   arbitrable.
   23. In paragraph 24 (page 284) in Boghara Polyfab Private
   Limited, this Court held that a claim for arbitration cannot be
                                                                       H
406            SUPREME COURT REPORTS                      [2019] 14 S.C.R.


A           rejected merely or solely on the ground that a settlement
            agreement or discharge voucher has been executed by the
            claimant. The Court stated that such dispute will have to be
            decided by the Chief Justice/his designate in the proceedings
            under Section 11 of the 1996 Act or by the Arbitral Tribunal.
B           24. In our opinion, there is no rule of the absolute kind. In a
            case where the claimant contends that a discharge voucher
            or no-claim certificate has been obtained by fraud, coercion,
            duress or undue influence and the other side contests the
            correctness thereof, the Chief Justice/his designate must look
            into this aspect to find out at least, prima facie, whether or
C           not the dispute is bona fide and genuine. Where the dispute
            raised by the claimant with regard to validity of the discharge
            voucher or no-claim certificate or settlement agreement, prima
            facie, appears to be lacking in credibility, there may not be
            necessity to refer the dispute for arbitration at all. It cannot
D           be overlooked that the cost of arbitration is quite huge - most
            of the time, it runs in six and seven figures. It may not be
            proper to burden a party, who contends that the dispute is
            not arbitrable on account of discharge of contract, with huge
            cost of arbitration merely because plea of fraud, coercion,
            duress or undue influence has been taken by the claimant. A
E           bald plea of fraud, coercion, duress or undue influence is
            not enough and the party who sets up such plea must prima
            facie establish the same by placing material before the Chief
            Justice/his designate. If the Chief Justice/his designate finds
            some merit in the allegation of fraud, coercion, duress or undue
F           influence, he may decide the same or leave it to be decided
            by the Arbitral Tribunal. On the other hand, if such plea is
            found to be an after-thought, make-believe or lacking in
            credibility, the matter must be set at rest then and there.”
             16. In Genus Power (supra), the relevant observations of this
G     court are as follows:
            “8. It is therefore clear that a bald plea of fraud, coercion,
            duress or undue influence is not enough and the party who
            sets up a plea, must prime facie establish the same by placing
            material before the Chief Justice/his designate. Viewed thus,
H
THE ORIENTAL INSURANCE CO. LTD. & ANR. v. DICITEX                     407
     FURNISHING LTD. [S. RAVINDRA BHAT, J.]

   the relevant averments in the petition filed by the Respondent     A
   need to be considered, which were to the following effect:
           **************                *************
   (g) That the said surveyor, in connivance with the Respondent
   Company, in order to make the Respondent Company escape
   its full liability of compensating the Petitioner of such huge     B
   loss, acted in a biased manner, adopted coercion undue
   influence and duress methods of assessing the loss and forced
   the Petitioner to sign certain documents including the Claim
   Form. The Respondent Company also denied the just claim
   of the Petitioner by their acts of omission and commission         C
   and by exercising coercion and undue influence and made
   the Petitioner Company sign certain documents, including a
   pre-prepared discharge voucher for the said amount in
   advance, which the Petitioner Company were forced to do so
   in the period of extreme financial difficulty which prevailed
   during the said period. As stated aforesaid, the Petitioner        D
   Company was forced to sign several documents including a
   letter accepting the loss amounting to Rs. 6,09,55,406/- and
   settle the claim of Rs. 5,96,08,179/- as against the actual loss
   amount of Rs. 28,79,08,116/- against the interest of the
   Petitioner company. The said letter and the aforesaid pre-         E
   prepared discharge voucher stated that the Petitioner had
   accepted the claim amount in full and final settlement and
   thus, forced the Petitioner company to unilateral acceptance
   the same. The Petitioner company was forced to sign the said
   document under duress and coercion by the Respondent
   Company. The Respondent Company further threatened the             F
   Petitioner Company to accept the said amount in full and final
   or the Respondent Company will not pay any amount toward
   the fire policy. It was under such compelling circumstances
   that the Petitioner company was forced and under duress was
   made to sign the acceptance letter.                                G
   9. In our considered view, the plea raised by the Respondent
   is bereft of any details and particulars, and cannot be
   anything but a bald assertion. Given the fact that there was
   no protest or demur raised around the time or soon after the
                                                                      H
408           SUPREME COURT REPORTS                       [2019] 14 S.C.R.


A          letter of subrogation was signed, that the notice dated
           31.03.2011 itself was nearly after three weeks and that the
           financial condition of the Respondent was not so precarious
           that it was left with no alternative but to accept the terms as
           suggested, we are of the firm view that the discharge in the
           present case and signing of letter of subrogation were not
B
           because of exercise of any undue influence. Such discharge
           and signing of letter of subrogation was voluntary and free
           from any coercion or undue influence. In the circumstances,
           we hold that upon execution of the letter of subrogation, there
           was full and final settlement of the claim. Since our answer to
C          the question, whether there was really accord and satisfaction,
           is in the affirmative, in our view no arbitrable dispute existed
           so as to exercise power Under Section 11 of the Act. The High
           Court was not therefore justified in exercising power Under
           Section 11 of the Act.”
D            17. In Velugubanti Hari Babu v. Parvathini Narasimha Rao &
      Anr. (2016) 14 SCC 126, the line of judgments in Boghara Polyfab
      (supra) was followed. Later, in ONGC Mangalore Petrochemicals
      Ltd. v ANS Constructions Ltd. and Anr. (2018) 3 SCC 373, the court
      held as follows:
E          “24. From the materials on record, we find that the contractee-
           Company had issued the “No Dues/No Claim Certificate” on
           21.09.2012, it had received the full amount of the final bill
           being Rs. 20.34 crores on 10.10.2012 and after 12 days
           thereafter, i.e., only on 24.10.2012, the contractee-Company
           withdrew letter dated 21.09.2012 issuing “No Dues/No Claim
F          Certificate”. Apart from it, we also find that the Final Bill has
           been mutually signed by both the parties to the Contract
           accepting the quantum of work done, conducting final
           measurements as per the Contract, arriving at final value of
           work, the payments made and the final payment that was
G          required to be made. The contractee-Company accepted the
           final payment in full and final satisfaction of all its claims.
           We are of the considered opinion that in the presents facts
           and circumstances, the raising of the Final Bill and mutual
           agreement of the parties in that regard, all claims, rights and
           obligation of the parties merge with the Final Bill and nothing
H
THE ORIENTAL INSURANCE CO. LTD. & ANR. v. DICITEX                       409
     FURNISHING LTD. [S. RAVINDRA BHAT, J.]

   further remains to be done. Further, the Appellant-Contractor        A
   issued the Completion Certificate dated 19.06.2013 pursuant
   to which the Appellant-Contractor has been discharged of
   all the liabilities. With regard to the issue that the “No-Dues
   Certificate” had been given under duress and coercion, we
   are of the opinion that there is nothing on record to prove
                                                                        B
   that the said Certificate had been given under duress or
   coercion and as the Certificate itself provided a clearance of
   no dues, the contractee could not now turn around and say
   that any further payment was still due on account of the losses
   incurred during the execution of the Contract. The story about
   duress was an afterthought in the background that the losses         C
   incurred during the execution of the Contract were not
   visualised earlier by the contractee. As to financial duress or
   coercion, nothing of this kind is established prima facie. Mere
   allegation that no-claim certificates have been obtained under
   financial duress and coercion, without there being anything
                                                                        D
   more to suggest that, does not lead to an arbitrable dispute.
   The conduct of the contractee clearly shows that “no-claim
   certificate” was given by it voluntarily; the contractee
   accepted the amount voluntarily and the contract was
   discharged voluntarily.
   Conclusion:                                                          E

   25. Admittedly, No-Dues Certificate was submitted by the
   contractee-Company on 21.09.2012 and on their request
   Completion Certificate was issued by the Appellant-
   Contractor. The contractee, after a gap of one month, that is,
   on 24.10.2012, withdrew the No Dues Certificate on the               F
   grounds of coercion and duress and the claim for losses
   incurred during execution of the Contract site was made vide
   letter dated 12.01.2013, i.e., after a gap of 3 1/2 (three and a
   half) months whereas the Final Bill was settled on 10.10.2012.
   When the contractee accepted the final payment in full and           G
   final satisfaction of all its claims, there is no point in raising
   the claim for losses incurred during the execution of the
   Contract at a belated stage which creates an iota of doubt as
   to why such claim was not settled at the time of submitting
   Final Bills that too in the absence of exercising duress or
                                                                        H
410             SUPREME COURT REPORTS                          [2019] 14 S.C.R.


A           coercion on the Contractee by the Appellant-Contractor. In
            our considered view, the plea raised by the contractee-
            Company is bereft of any details and particulars, and cannot
            be anything but a bald assertion. In the circumstances, there
            was full and final settlement of the claim and there was really
            accord and satisfaction and in our view no arbitrable dispute
B
            existed so as to exercise power Under Section 11 of the Act.
            The High Court was not, therefore, justified in exercising power
            Under Section 11 of the Act.”
              18. It is clear that in Boghara Polyfab (supra), no rule of universal
      application was indicated. No doubt, subsequent judgments which
C     followed it, were in the context of the facts as were presented to the
      court. Proposition (iii) of the conclusions recorded in Boghara Polyfab
      (supra) visualize duress or coercion on account of withholding of
      payments due. The court – in more places than one, recognized that an
      aggrieved party can be the victim of economic coercion which results in
D     its signing a document which discharges the other party of its obligations.
      Master Construction (supra) placed the matter in perspective, when
      the court enunciated the principle in the following terms:
            “In our opinion, there is no rule of the absolute kind. In a
            case where the claimant contends that a discharge voucher
E           or no-claim certificate has been obtained by fraud, coercion,
            duress or undue influence and the other side contests the
            correctness thereof, the Chief Justice/his designate must look
            into this aspect to find out at least, prima facie, whether or
            not the dispute is bona fide and genuine. Where the dispute
            raised by the claimant with regard to validity of the discharge
F           voucher or no-claim certificate or settlement agreement, prima
            facie, appears to be lacking in credibility, there may not be
            necessity to refer the dispute for arbitration at all.”
             Likewise, in Genus Power (supra), the court cautioned that a
      “bald plea” of coercion, without any supporting material is insufficient
G     for a court to hold that the accord/satisfaction or no dues certificate was
      involuntarily given.
            19. 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
H
 THE ORIENTAL INSURANCE CO. LTD. & ANR. v. DICITEX                              411
      FURNISHING LTD. [S. RAVINDRA BHAT, J.]

the inter se correspondence of the parties – which span over 2 years,           A
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
                                                                                B
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      C
its income tax dues, the pressure from bankers (in support of which,
copies of letters of bankers were produced along with the application).
       20. The averments by Dicitex, regarding the circumstances which
led it to execute the no objection discharge voucher, are reproduced
below:                                                                          D
      “31. The Respondents did not pay anything to the Petitioner
      after the submission of its letter, dated 31 st May, 2014 and
      the submission of its letter, dated 31st May, 2014 and therefore
      several telephonic calls were made on behalf of the Petitioner,
      to the Respondent’s Regional Office at Mumbai in an effort                E
      to persuade the Respondents to increase the settlement amount
      so as to include the differential amount of about Rs. 7 crores.
      The Petitioner also specifically requested the Respondents
      not to, in any event, insist on the execution of the Discharge
      Voucher strictly as prescribed as a condition precedent for
      the payment of any part of the balance amount of claim.                   F

      32. Since, on the one hand, the Respondents did not show
      any inclination to relent on any count and instead continued
      to insist continued to insist that any further payment would
      be made to the Petitioner if and only if the Discharge Voucher
      was executed exactly at the time and in the form and manner               G
      as required by the Respondents as well as the letter dated 31st
      May, 2014 withdrawn and, on the other hand, the Petitioner
      was in urgent need of funds to meet its mounting liabilities
      the Petitioner was forced to withdraw its earlier letter dated
      31 st May, 2014 and coerced into executing the Discharge                  H
412             SUPREME COURT REPORTS                             [2019] 14 S.C.R.


A            Voucher exactly as dictated by the Respondents. Accordingly,
             the Petitioner wrote a letter dated 6 th June, 2014 to the
             Respondent No. 2 stating therein that it was withdrawing its
             letter dated 31 st May, 2-14 and also enclosing the duly
             executed discharge Voucher. The Petitioner also requested
             that the claim amount be paid over to it, immediately.”
B
             The averments in the application, later are that the appellant paid
      the amount. Dicitex, nevertheless later, by three letters questioned the
      basis of reduction of the amount of claim. It later alleged that it wrote a
      letter “dated 14th July, 2014 to the respondents stating therein, inter
      alia, that since they were forced to accept the offered amount and
C     that since there was a dispute on the quantum of claim settlement
      paid to the Petitioner, the Petitioner was invoking arbitration
      proceedings under Clause 13 of the said Policy to recover the
      differential amount.”
              21. An overall reading of Dicitex’s application (under Section 11(6))
D     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 years- stating 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
E     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
F     coercion; it cannot be too particular about the nature of the plea, which
      necessarily has to be made and established in the substantive (read:
      arbitration) proceeding. 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,
G     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. There are
      decisions of this court (Associated Construction v Pawanhans
      Helicopters Ltd. (2008) 16 SCC 128 and Boghara Polyfab (supra)
      upheld the concept of economic duress. Having regard to the facts and
H
 THE ORIENTAL INSURANCE CO. LTD. & ANR. v. DICITEX                          413
      FURNISHING LTD. [S. RAVINDRA BHAT, J.]

circumstances, this court is of the opinion that the reasoning in the       A
impugned judgment cannot be faulted.
     22. In view of the foregoing discussion, the appeal is held to be
unmerited; it is dismissed, without order as to costs.

                                                                            B
Divya Pandey                                            Appeal dismissed.




                                                                            C




                                                                            D




                                                                            E




                                                                            F




                                                                            G




                                                                            H