UNITED INDIA INSURANCE CO. LTD.versusANTIQUE ART EXPORTS PVT. LTD.

                         [2019] 5 S.C.R. 521                             521


             UNITED INDIA INSURANCE CO. LTD.                             A
                                  v.
              ANTIQUE ART EXPORTS PVT. LTD.
                   (Civil Appeal No. 3284 of 2019)
                          MARCH 28, 2019                                 B
      [A.M. KHANWILKAR AND AJAY RASTOGI, JJ.]
       Arbitration and Conciliation Act, 1996 – s.11(6) – Appointment
of arbitrator – Fire and Special Perils Insurance Policy taken by
respondent-claimant for his factory – Fire took place in his factory
                                                                         C
– Insurance company settled the claim which was accepted by
claimant without any demur or protest – Full and final settlement –
After 11 weeks, claimant invoked arbitration clause contained in
the contract of insurance raising plea that fraud, coercion and undue
influence was exercised by the insurance company and he was forced
to sign on the dotted lines – High Court proceeded to appoint a          D
sole arbitrator – On appeal, held: Prima facie no dispute subsisted
after the discharge voucher was signed by the claimant without any
demur or protest and after the claim was finally settled with accord
and satisfaction – A letter was sent for the first time after 11 weeks
of the settlement of claim raising protest that the discharge voucher
                                                                         E
was signed under undue influence and coercion – No supportive
prima facie evidence was placed on record – In absence thereof, it
must follow that the claim was settled with accord and satisfaction
leaving no arbitral dispute subsisting under the agreement to be
referred to the Arbitrator for adjudication.
                                                                         F
      Allowing the appeals, the Court
       HELD: 1.1 In the instant case, for the two incidents of fire,
the appellant Company based on the Surveyor’s report sent
e-mails for settlement of the claims for both the fires which was
responded by the respondent through e-mail on the same date
itself providing all the necessary information to the Regional           G
Office of the Company and also issued the discharge voucher in
full and final settlement with accord and satisfaction. Thereafter,
on 12th July, 2016, the respondent desired certain information
with details that too was furnished and for the first time on
                                                                         H
                                 521
522            SUPREME COURT REPORTS                      [2019] 5 S.C.R.


A     27 th July, 2016, it took a U-turn and raised a voice of undue
      influence/coercion being used by the appellant stating that being
      in financial distress left with no option than to proceed to sign on
      the dotted lines. The phrase in itself is not sufficient unless there
      is a prima facie evidence to establish the allegation of coercion/
      undue influence, which is completely missing in the instant case.
B
      [Para 18] [533-B-E]
            1.2 In the given facts and circumstances, the discharge and
      signing the letter of subrogation was not because of any undue
      influence or coercion as being claimed by the respondent and
      upon execution of the letter of subrogation, the claim was settled
C     with due accord and satisfaction leaving no arbitral dispute to be
      examined by an Arbitrator to be appointed under Section 11(6) of
      the Act. [Para 19] [533-E-F]
            National Insurance Company Limited v. Boghara
            Polyfab Private Limited (2009) 1 SCC 267 : [2008] 13
D           SCR 638; Union of India and Others v. Master
            Construction Co. (2011) 12 SCC 349 : [2011] 5 SCR
            853; New India Assurance Company Limited v. Genus
            Power Infrastructure Limited (2015) 2 SCC 424 :
            [2014] 12 SCR 360 – relied on.
E           Duro Felguera S.A. v. Gangavaram Port Limited (2017)
            9 SCC 729 : [2017] 10 SCR 285 – referred to.
                             Case Law Reference
            [2014] 12 SCR 360          relied on             Para 9
F           [2008] 13 SCR 638          relied on             Para 12
            [2011] 5 SCR 853           relied on             Para 14
            [2017] 10 SCR 285          referred to           Para 20
            CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3284
G     of 2019
            From the Judgment and Order dated 30.05.2017 of the High Court
      of Delhi at New Delhi in Arbitration Petition No. 105 of 2017
                                With
            Civil Appeal No.3285 of 2019.
H
    UNITED INDIA INSURANCE CO. LTD.v. ANTIQUE ART                             523
                   EXPORTS PVT. LTD.

      Vineet Malhotra, Yasir Rauf, Obhirup Ghosh, Vishal Ghori, Mohit         A
Paul, Advs. for the Appellant.
      Dhruv Mehta, Sr. Adv., Rahul Sharma, P. N. Puri, Vivek Sibal,
Advs. for the Respondent.
      The Judgment of the Court was delivered by
                                                                              B
      RASTOGI, J.
      1. Leave granted.
       2. These appeals have been filed by the Insurance Company
assailing the order dated 30th May, 2017 passed by the High Court of
Delhi appointing an Arbitrator in exercise of power under Section 11(6)       C
of the Arbitration and Conciliation Act, 1996(hereinafter being referred
to as “the Act”) to adjudicate the dispute between the parties.
       3. The facts in brief manifest from the record and relevant for the
present purpose are that the respondent claimant was running its factory
situated at 78, Kilo Mile Stone, Karhans Village, Main GT Road,               D
Samalakha, Panipat and purchased two Standard Fire and Special Perils
Policies dated 29th June, 2013 and 10th October, 2013. On 25th September,
2013 and thereafter on 25th October, 2013, a fire took place in the factory
on account of a short circuit as claimed by the respondent claimant. The
appellant Company on receipt of the information appointed M/s. Protocol
                                                                              E
Surveyors & Engineers Pvt. Ltd. as surveyors and also appointed their
investigator to submit the fact finding report. After the report was
submitted by the authorised surveyor, the appellant Company sent an e-
mail to the respondent with an intimation that it has approved its claim
for an amount of Rs. 2,81,44,413/- on account of fire dated 25th October,
2013 towards full and final settlement with complete details of the amount    F
computed. The extract of the e-mail sent by the appellant Company to
the respondent has been placed on record at Annexure P-2 in Civil Appeal
arising out of SLP(C ) No. 23956 of 2017 and is reproduced as under:-
       “From: Jaiprakash1@uiic.co.in
       Sent: Thursday, May 05, 2016 1:23 PM                                   G
       To: Vimal Singh
       CC: sangeetagupta@uiic.co.in; vijaysharma@uiic.co.in;
           nareshchandolia@uiic.co.in
       Subject: Fire Claim dated 25.10.2013
                                                                              H
524            SUPREME COURT REPORTS                         [2019] 5 S.C.R.


A           Sir/Madam,
            This is to inform you that the Competent Authority has approved
            your claim for an amount of Rs. 2,81,44,413/- (building Rs.
            88,18,691 P & M Rs. 7,32,382 FFF Rs. 3,61,049 Finished
            Goods, Rs. 1,95,66,389 Fire Fighting Ex. Rs. 59,000 Cost of Debris
B           Removal Rs. 88,187 Total Rs. 2,96,25,698)
            Less Excess 5% Rs. 14,81,285 = Rs. 2,81,44,413) of loss dated
            25.10.2013 (Claim No. 0407001113C101515001)
            In order to release the payment we require following from your
            end.
C
            1. Confirmation from the concerned bank “Indian Overseas Bank,
            Defence Colony Branch.
            Through mail that in which Account the payment has to be made
            through NEFT.
D           2. Deposit Re-instatement premium of Rs.19100/-
            3. Fire Fighting expenses bills in original
            4. Debris Removal bills in original.
            5. Full and final settlement discharge voucher for Rs. 2,81,44,413/
E           - duly endorsed by the bank also without any Subjectivity.
             Please furnish.
             Jaiprakash
             Divisional Manager
             United India Insurance Company Limited
F            10203, IIIrd Floor, Jamuna House,
             Padam Singh Road
             New Delhi-110005
             Mobile : 9910791508
             Phone : 28755967, 28755419
             jaiprakash@uiic.co.in”
G
             4. On the same date, i.e. 5th May, 2016, the respondent sent a
      reply accepting the computation and provided the desired details with
      final discharge voucher and details of the bank account in which the
      payment was to be credited. The extract of the e-mail and the discharge
      voucher sent by the respondent is reproduced hereunder:-
H
UNITED INDIA INSURANCE CO. LTD.v. ANTIQUE ART                         525
        EXPORTS PVT. LTD. [RASTOGI, J.]

                              “ANTIQUE ART                            A
                              Exports Pvt. Ltd.
               (A Govt. of India Recognized Export House)
   PANIPAT OFFICE: 78 K.M. Stone, G.T. Road, karhans Village,
   Tehsil Samalkha, Panipat-132103(INDIA)                             B
        T:0091-180-3003300 (100 Lines), F: 0091-180-3003311
    E:Info@antiqueartexports.com, :www.antiqueartexports.com

   The Divisional Manager                             05.05.2016
   United India Insurance Co. Ltd.                                    C
   10203, 3rd Floor, Jamuna House
   Padam Singh Road
   Karol Bagh, New Delhi.

                                                                      D
                  Kind Attn: Mr. Jaiprakash
                  Subject : Fire Claim dated 25.10.2013
   Dear Sir,
       We are in receipt of your email of today’s date, wherein you
   have asked to furnish certain documents/information for doing      E
   the needful at your end. Accordingly, we are submitting herewith
   desired information/documents for your necessary action.
1. We have already requested our bank to confirm account details,
   in which payment has to be made through NEFT. Hopefully, you
   must have received the same directly from Bank on your email.      F
2. Regarding re-instatement premium of Rs.19100/-, we request
   you to deduct the same from claim payment.
3. Original Fire Fighting expenses bills are submitted herewith for
   doing the needful at your end.
                                                                      G
4. Regarding Debris Removal Bills in original, we are enclosing
   herewith separate letter and contents of the same are self-
   explanatory. This payment is to be released at later date as per
   our letter.
                                                                      H
526       SUPREME COURT REPORTS                         [2019] 5 S.C.R.


A     5. Full and final settlement discharge voucher for Rs.2,81,44,413/-
         duly endorsed by the bank is attached for doing the needful at
         your end.
       While hoping that you will find above information/ documents in
       line of your requirement, we look forward to have the immediate
B      transfer of payment of our claim to our bank.
       A line of confirmation in this regard will be highly appreciated.
       Thanking you
       Yours faithfully,
C
       For Antique Art Exports Pvt. Ltd.
       Ashok Jain
       Chairman”

D
                             “ANTIQUE ART
                              Exports Pvt. Ltd.
                (A Govt. of India Recognized Export House)
       PANIPAT OFFICE: 78 K.M. Stone, G.T. Road, karhans Village,
       Tehsil Samalkha, Panipat-132103(INDIA)
E          T:0091-180-3003300 (100 Lines), F: 0091-180-3003311
        E:Info@antiqueartexports.com, :www.antiqueartexports.com

                                                             05.05.2016
       Full and Final Settlement Discharge Voucher
F
       We, Antique Art Exports Pvt. Ltd., 78 KM Stone, Karhans Village,
       Tehsil Samalkha, Panipat-132103, Haryana do hereby accept
       payment of Rs.2,81,44,413/-(Rupees Two Crore Eighty One Lacs
       Fourty Four Thousand and Four Hundred Thirteen only) as full
       and final settlement against our fire claim No.:0407001113
G      C101515001 of loss dated 25.10.2013 without any subjectivity.
                             For Antique Art Exports Pvt. Ltd.
                                             Sd/-
                                       Ashok Jain
                                       Chairman”
H
   UNITED INDIA INSURANCE CO. LTD.v. ANTIQUE ART                                527
           EXPORTS PVT. LTD. [RASTOGI, J.]

       5. Civil Appeal arising out of SLP(C ) No. 23963 of 2017 deals           A
with the fire taken place on 25th September, 2013. It is not disputed
between the parties that the facts are similar except that the claim was
settled for Rs. 2,20,36,840/-.
       6. Indisputedly, both the claims were accepted by the respondent
without any demur or protest, and after full and final settlement and           B
discharge of claim in reference to both the claims of the incident dated
25th September, 2013 and 25th October, 2013, the respondent later through
e-mail dt. 11th July, 2016 desired certain details and reports with a break
up of computation including copy of the preliminary survey report etc.
and there was no whisper that any coercion or undue influence, etc.
was used by the appellant company. The e-mail was replied by the                C
appellant on 20th July, 2016 giving all details as desired by the respondent.
Thereafter on 27th July, 2016 for the first time nearly almost after 11
weeks of the receipt of claim and full and final discharge, respondent
claimed that fraud, coercion and undue influence was exercised and he
was forced to sign on the dotted lines without furnishing any prima facie       D
evidence in support thereof. In furtherance, application came to be filed
before the High Court on 11th January, 2017 under Section 11(6) of the
Arbitration and Conciliation Act, 1996(hereinafter being referred to as
“the Act”) inter alia that the insurer coerced and forced the respondent
to sign on dotted lines on a pre-signed discharge voucher and claimed
for appointment of an Arbitrator.                                               E

       7. The appellant Insurance Company in their reply refuted such
allegations and further stated that the respondent had signed a letter of
subrogation in accepting the payment in full and final settlement of its
claim. Discharge Voucher was sent without any demur or protest and
nothing further survives and no arbitral dispute subsists for adjudication      F
and so far as the allegation levelled that the insurer has coerced and put
undue force upon the respondent to sign on dotted lines on a pre-signed
standard discharged paper is concerned, there is no prima facie
documentary evidence placed on record except the letter dated 27 th
July, 2016 which was sent for the first time after almost more than 11          G
weeks of the claim being settled and the application for appointment of
Arbitrator is ill founded and deserves to be rejected.
       8. The High Court taking note of the rival contentions of the parties
and of sub-section (6A) of Section 11 of the Act which has been introduced
                                                                                H
528             SUPREME COURT REPORTS                          [2019] 5 S.C.R.


A     by virtue of Amendment Act, 2015 observed that once there is existence
      of arbitration agreement, acceptance of the payment disbursed by the
      appellant company, whether it was under coercion or undue influence, is
      a matter to be examined by the Arbitrator and accordingly proceeded to
      appoint the sole arbitrator to adjudicate the dispute between the parties.
B             9. Shri Vineet Malhotra, learned counsel for the appellant submits
      that once the claim was settled and the claimant received compensation
      and issued a discharge voucher in full and final settlement of its claim,
      there was a discharge of the contract by accord and satisfaction. As a
      result, neither any contract nor any claim survived. It was also contended
      that having received the payment under the said discharge voucher
C     without any demur or protest, it was not open for the respondent after 11
      weeks of the receipt of the claim and full and final discharge, to raise a
      voice that the discharge was obtained under coercion and undue influence
      without furnishing any prima facie evidence in support thereof and placed
      reliance of the judgment of this Court in New India Assurance Company
D     Limited Vs. Genus Power Infrastructure Limited 2015(2) SCC 424
      which according to him is almost on the same set of facts and
      circumstances.
             10. Learned counsel for the appellant further submits that sub-
      section (6A) of Section 11 of the Act has been introduced by Amendment
E     Act, 2015 with a limited purpose for expediting the arbitral disputes in a
      time bound manner provided there is a prima facie arbitral claim/dispute
      subsist under the arbitral agreement for adjudication by the Arbitrator.
      In the instant case, as there was no arbitral dispute subsisting after the
      claim being finally settled with consent of the parties with due accord
      and satisfaction, Section 11(6) was not available to be invoked by the
F     respondent in raising a dispute after more than 11 weeks of the settlement
      of the claim to the satisfaction of the parties.
              11. Per Contra, Shri Dhruv Mehta, learned senior counsel for the
      respondent submitted that he is not disputing as far as the settlement of
      the claims are concerned but his objection is that the respondent was not
G     in a bargaining position and being in financial stress, he had no option but
      to accept the claim on the dotted lines settled by the appellant in an
      arbitrary manner leaving no choice and mere acceptance in the given
      circumstances will not take away the right of the respondent to establish
      that it was not voluntary but under undue influence and coercion and
H
    UNITED INDIA INSURANCE CO. LTD.v. ANTIQUE ART                                529
            EXPORTS PVT. LTD. [RASTOGI, J.]

since there is a clause of arbitration in the agreement, it will be for the      A
Arbitrator to examine as to whether the acceptance of the claim by the
respondent has been voluntary or under undue influence or coercion and
in the given circumstances, no error has been committed by appointing
the Arbitrator under the impugned judgment.
       12. The existence of an arbitration clause in the contract of             B
insurance is not in dispute. The question does arise whether the discharge
in the present case upon acceptance of the compensation and signing of
the discharge letter was voluntary or under coercion or undue influence
and the respondent was justified in invoking Section 11(6) of the Act. It
is true that execution of full and final agreement, receipt or a discharge
voucher in itself cannot be a bar to arbitration and it has been observed        C
by this Court in National Insurance Company Limited Vs. Boghara
Polyfab Private Limited 2009(1) SCC 267 at para 44 as under:-
       “44. None of the three cases relied on by the appellant lay down
       a proposition that mere execution of a full and final settlement
       receipt or a Discharge Voucher is a bar to arbitration, even when         D
       the validity thereof is challenged by the claimant on the ground of
       fraud, coercion or undue influence. Nor do they lay down a
       proposition that even if the discharge of contract is not genuine or
       legal, the claims cannot be referred to arbitration. In all the three
       cases, the Court examined the facts and satisfied itself that there       E
       was accord and satisfaction or complete discharge of the contract
       and that there was no evidence to support the allegation of coercion/
       undue influence.”
       13. It further laid down the illustrations as to when claims are
arbitrable and when they are not. This may be illustrative (not exhaustive)      F
but beneficial for the authorities in taking a decision as to whether in a
given situation where no claim/discharge voucher has been furnished
what will be its legal effect and still there is any arbitral dispute subsists
to be examined by the arbitrator in the given facts and circumstances
and held in para 52 of National Insurance Co. Ltd. Vs. Boghara Polyfab
Private Limited (supra) as follows:-                                             G
       “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 are:
                                                                                 H
530      SUPREME COURT REPORTS                             [2019] 5 S.C.R.


A     (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.
B
      (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 also issues a discharge voucher/
C     no-claim certificate/full and 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 say
D     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
E     contract, payment of the admitted 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
      duress on account of coercion employed by the employer.
F     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
      neither admitted nor rejected. But the insured is informed during
G     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 full and final settlement. Only a
H     few days thereafter, the admitted amount mentioned in the voucher
   UNITED INDIA INSURANCE CO. LTD.v. ANTIQUE ART                              531
           EXPORTS PVT. LTD. [RASTOGI, J.]

      is paid. The accord and satisfaction in such a case is not voluntary    A
      but under duress, compulsion and coercion. The coercion is subtle,
      but very much real. The “accord” is not by free consent. The
      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.         B
      The respondent disputes the claim. The claimant who is keen to
      have a settlement and avoid litigation, 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               C
      duress, the decision was his free choice. There was no threat,
      coercion or compulsion by the respondent. Therefore, the accord
      and satisfaction is binding and valid and there cannot be any
      subsequent claim or reference to arbitration.”
       14. It is true that there cannot be a rule of thumb and each case      D
has to be looked into on its own facts and circumstances, taking note of
the broad principles, it was observed by this Court in Union of India
and Others Vs. Master Construction Co. 2011(12) SCC 349 at para 18
as under:-
      “18. In our opinion, there is no rule of the absolute kind. In a case   E
      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 not the dispute is bona fide and         F
      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 a necessity to refer the dispute for
      arbitration at all.”
                                                                              G
        15. From the proposition which has been laid down by this Court,
what reveals is that a mere plea of fraud, coercion or undue influence in
itself is not enough and the party who alleged is under obligation to prima
facie establish the same by placing satisfactory material on record before
the Chief Justice or his Designate to exercise power under Section 11(6)
                                                                              H
532             SUPREME COURT REPORTS                           [2019] 5 S.C.R.


A     of the Act, which has been considered by this Court in New India
      Assurance Company Ltd. case (supra) as follows:-
            “9. 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 prima facie establish the same by placing material before
B           the Chief Justice/his designate…..”
             16. In the instant case averment was made for the first time after
      11 weeks of the settlement of claim & release of discharge voucher in
      the petition filed by the respondent seeking appointment of Arbitrator of
      undue influence/coercion being used by the appellant in signing the papers
C     on dotted lines is reproduced as under:-
            “xiii. It is stated that the Respondent occupying a bargaining position
            as an Insurer coerced and forced the Petitioner to sign on dotted
            lines on a Pre-signed Standard Discharge Voucher. The petitioner
            facing severe financial distress gave in to the pressure tactics of
D           the Respondent and was made to sign a purported Discharge
            Voucher dated 24.06.2016 for an amount of Rs. 2,20,36,840/-
            (Rupees Two Crore Twenty Lakhs Thirty Six Thousand, Eight
            Hundred Forty Only) as against the Claim of Rs. 5,12,49,241/-
            (Rupees Five Crore Twelve Lakhs Forty Nine Thousand Two
            Hundred Forty One Only) as a pre-condition for release of money.
E
            xvii. It is stated that Petitioner vide its Letter dated 27.07.2016
            rescinded the purported Discharge Voucher as illegal and void as
            it was forced on coerced into signing the same in the face of
            extreme financial duress. The petitioner vide the said letter dated
            27.07.2016 called upon the Respondent to pay the balance amount
F           of Rs. 2,92,12,401/- (Rupees Two Crore Ninety Two Lakhs Twelve
            Thousand Four Hundred and One Only) on account of loss suffered
            by the petitioner as result of fire. The petitioner also claimed an
            interest @ 18% per annum from the date of incident as well as on
            the paid amount till date of payment i.e. up to 06.07.2016.”
G            17. It is true that there cannot be a rule of its kind that mere
      allegation of discharge voucher or no claim certificate being obtained by
      fraud/coercion/undue influence practised by other party in itself is
      sufficient for appointment of the arbitrator unless the claimant who alleges
      that execution of the discharge agreement or no claim certificate was
H
    UNITED INDIA INSURANCE CO. LTD.v. ANTIQUE ART                               533
            EXPORTS PVT. LTD. [RASTOGI, J.]

obtained on account of fraud/coercion/undue influence practised by the          A
other party is able to produce prima facie evidence to substantiate the
same, the correctness thereof may be open for the Chief Justice/his
Designate to look into this aspect to find out at least prima facie whether
the dispute is bonafide and genuine in taking a decision to invoke Section
11(6) of the Act.
                                                                                B
       18. In the instant case, the facts are not in dispute that for the two
incidents of fire on 25th September, 2013 and 25th October, 2013, the
appellant Company based on the Surveyor’s report sent e-mails on 5th
May, 2016 & 24th June, 2016 for settlement of the claims for both the
fires dated 25th September, 2013 and 25th October, 2013 which was
responded by the respondent through e-mail on the same date itself              C
providing all the necessary information to the Regional Office of the
Company and also issued the discharge voucher in full & final settlement
with accord and satisfaction. Thereafter, on 12 th July, 2016, the
respondent desired certain information with details that too was furnished
and for the first time on 27th July, 2016, it took a U-turn and raised a        D
voice of undue influence/coercion being used by the appellant stating
that being in financial distress left with no option than to proceed to sign
on the dotted lines. As observed, the phrase in itself is not sufficient
unless there is a prima facie evidence to establish the allegation of
coercion/undue influence, which is completely missing in the instant case.
                                                                                E
       19. In the given facts and circumstances, we are satisfied that the
discharge and signing the letter of subrogation was not because of any
undue influence or coercion as being claimed by the respondent and we
find no difficulty to hold that upon execution of the letter of subrogation,
the claim was settled with due accord and satisfaction leaving no arbitral
dispute to be examined by an Arbitrator to be appointed under Section           F
11(6) of the Act.
       20. The submission of the learned counsel for the respondent that
after insertion of sub-section (6A) to Section 11 of Amendment Act,
2015 the jurisdiction of this Court is denuded and the limited mandate of
the Court is to examine the factum of existence of an arbitration and           G
relied on the judgment in Duro Felguera S.A. Vs. Gangavaram Port
Limited2017(9) SCC 729. The exposition in this decision is a general
observation about the effect of the amended provisions which came to
be examined under reference to six arbitrable agreements (five
                                                                                H
534              SUPREME COURT REPORTS                        [2019] 5 S.C.R.


A     agreements for works and one corporate guarantee) and each agreement
      contains a provision for arbitration and there was serious dispute between
      the parties in reference to constitution of Arbitral Tribunal whether there
      has to be Arbitral Tribunal pertaining to each agreement. In the facts
      and circumstances, this Court took note of sub-section (6A) introduced
      by Amendment Act, 2015 to Section 11 of the Act and in that context
B
      observed that the preliminary disputes are to be examined by the arbitrator
      and are not for the Court to be examined within the limited scope available
      for appointment of arbitrator under Section 11(6) of the Act. Suffice it
      to say that appointment of an arbitrator is a judicial power and is not a
      mere administrative function leaving some degree of judicial intervention
C     when it comes to the question to examine the existence of a prima facie
      arbitration agreement, it is always necessary to ensure that the dispute
      resolution process does not become unnecessarily protracted.
             21. In the instant case, prima facie no dispute subsisted after the
      discharge voucher being signed by the respondent without any demur or
D     protest and claim being finally settled with accord and satisfaction and
      after 11 weeks of the settlement of claim a letter was sent on 27th July,
      2016 for the first time raising a voice in the form of protest that the
      discharge voucher was signed under undue influence and coercion with
      no supportive prima facie evidence being placed on record in absence
      thereof, it must follow that the claim had been settled with accord and
E     satisfaction leaving no arbitral dispute subsisting under the agreement to
      be referred to the Arbitrator for adjudication.
            22. In our considered view, the High Court has committed a
      manifest error in passing the impugned order and adopting a mechanical
      process in appointing the Arbitrator without any supportive evidence on
F     record to prima facie substantiate that an arbitral dispute subsisted under
      the agreement which needed to be referred to the arbitrator for
      adjudication.
            23. Consequently, the appeals are allowed and the order passed
      by the High Court is accordingly set aside. No costs.
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             24. Pending application(s), if any, also stand disposed of.


      Devika Gujral                                                Appeals allowed.


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