Kolkata — In a dramatic culmination of a nearly decade-long legal battle, the Calcutta High Court has upheld an arbitral award in favor of Reliance Jute Mills (International) Limited, directing Oriental Insurance Company Limited to pay over ₹7.59 crore, plus interest, for losses suffered in a devastating 2014 fire. The judgment, delivered by Justice Aniruddha Roy on May 20, 2025, brings long-awaited relief to the mill, which had been struggling to recover from the financial blow.
On a fateful day in September 2014, a fire tore through the premises of Reliance Jute Mills, gutting finished goods and leaving the company reeling. Though the mill was covered under a valid insurance policy—recently enhanced from ₹22 crore to ₹32 crore—the road to compensation was anything but smooth.
Despite promptly notifying Oriental Insurance and cooperating with multiple surveyors, the mill faced prolonged delays, shifting valuations, and what it described as coercive tactics. The company’s repeated pleas for part payments to stay afloat were met with silence or inadequate offers. Eventually, the mill accepted a partial settlement under duress, but continued to demand the remaining ₹4.43 crore.
Reliance Jute Mills argued that it had been left with no choice but to sign discharge vouchers under financial stress. Letters to the insurer, the IRDA, and even participation in salvage auctions showed a company trying to survive. The mill claimed that the final settlement was not voluntary but forced, and that the insurer’s delays and shifting positions had pushed it to the brink.
In 2016, after exhausting all other options, the mill invoked arbitration. It sought a declaration that the discharge vouchers were invalid due to coercion and misrepresentation, and demanded ₹7.59 crore in unpaid dues, along with interest.
Oriental Insurance countered that the mill had willingly accepted the settlement and signed the discharge voucher without protest. They argued that the principle of “accord and satisfaction” applied—once a claim is settled and accepted, no further demands can be made.
The insurer also pointed to the mill’s continued business relationship with them, including new policies post-fire, as evidence that there was no coercion. They accused the mill of suppressing key communications and claimed that the arbitral tribunal ignored vital evidence.
Justice Roy’s judgment was meticulous and emphatic. Here are the court’s most impactful observations:
The court dismissed Oriental Insurance’s challenge under Section 34 of the Arbitration Act, affirming the arbitral award dated March 2, 2020. The insurer must now release the secured amount—over ₹7.59 crore with accrued interest—within four weeks.
This ruling not only vindicates Reliance Jute Mills but also reinforces the rights of policyholders to challenge unfair settlements, even after signing discharge vouchers.
Case Title: The Oriental Insurance Company Limited vs. The Reliance Jute Mills (International Limited)
Judgment Date: May 20, 2025
Court: Calcutta High Court, Commercial Division
Judge: Hon’ble Justice Aniruddha Roy
Disclaimer: This article is for informational purposes only and does not constitute legal advice. For official details, please refer to the full court judgment.