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Judgment
Dr. Sadhna Shanker, Member
These two cross appeals have been filed under section 19 of the Consumer Protection Act, 1986 in challenge to the Order dated 19.02.2016 of the State Commission in complaint no. 69 of 2014, whereby the complaint of the complainant was partly allowed.
We have heard the learned counsel for National Insurance Co. Ltd. (hereinafter referred to as the ‘insurance company’) and the learned counsel for M/s Anurag Traders (hereinafter referred to as the ‘complainant’) as also the learned proxy counsel for Bank of Baroda (hereinafter referred to as the ‘bank’) and perused the record including the State Commission’s impugned Order dated 22.02.2018 and the memorandum of appeal.
The appeal has been filed with reported delay of 48 days.
In the interest of justice, inter alia considering the reasons given in the application for condonation of delay, the short delay in filing the appeal is condoned.
The brief facts of the case are that the complainant, through its proprietor, runs the business of electric goods and for which it obtained the credit facility of Rs. 30,00,000/- from the bank. The complainant had entered into an agreement with the bank for running the business. The bank, on behalf of the complainant, had obtained Shop Keepers Policy from the insurance company, which policy covers furniture, fixture, fittings and stock of business. The premium was paid and the policy was valid for the period from 15.03.2012 to 14.03.2013. The shop situated in the building was insured with various policies. It is alleged that as per the bank’s agreement the claim amount was being paid to the bank. During the subsistence of the insurance policy, on 19.01.2013 a fire took place by the short circuit in the shop of the complainant and all the stock including T.V., Washing Machine, L.C.D. L.E.D. and other electronic items and furniture etc. were destroyed and the complainant suffered a huge loss. Information was given to the fire brigade, Jhansi by the local persons. The complainant informed the insurance company and the concerned police station. The complainant had alleged that his shop was insured for Rs. 33,00,000/- through the bank. The goods of the complainant were damaged by fire. It is alleged that the stock of the complainant was being inspected monthly in the supervision of the bank. The insurance company appointed a surveyor to conduct the survey. The survey was conducted on 10.02.2013, 17.02.2013, 14.03.2013 and 16.04.2013. The first surveyor had assessed the loss of Rs. 31,75,859.02 and after deduction, Rs.28,22,316/- was recommended. The insurance claim of the complainant was not settled by the insurance company. After six months from the date of survey report, the insurance company had appointed a chartered accountant who concluded that the complainant has made a false allegation. Loss of Rs. 2,44,705.07 was assessed by the chartered accountant and the information was given to the complainant through letter dated 12.03.2013 reducing the assessed loss to Rs. 99,448/- in place of Rs. 31,75,859.02.
Being aggrieved, the complainant filed a complaint before the State Commission. The State Commission vide impugned Order dated 19.02.2016 partly allowed the complaint and directed the insurance company to pay Rs. 28,22,316/- with interest @9% per annum to the complainant within two months from the date of Order and Rs. 5000/- towards cost of litigation.
Aggrieved by the said Order of the State Commission, the both the parties filed appeals before this Commission.
First appeal no. 497 of 2016 has been filed by the insurance company for setting aside the Order dated 19.02.2016 of the State Commission
First appeal no. 729 of 2016 has been filed by the complainant for enhancement of compensation.
Learned counsel for the insurance company has argued that the State Commission has grossly erred in holding that the report of the first surveyor, Mr. Yogesh Saxena is correct and granted relief on the same. He further argued that as per the insurance company the reasons for appointing the second surveyor were provided in the written statement and affidavit of evidence as to why the report of the first surveyor was not correct. The reason for appointment of second surveyor is that the first surveyor has given the report without going through the books of account, balance sheet, cash memo, purchaser and sales memo, profit and loss account. In support of the contention of the insurance company to appoint a second surveyor, he relied on the decision rendered in the case of Venkateswara Syndicate vs. Oriental Insurance Co. (2009) 8 SCC 507 wherein the Hon’ble Supreme Court has held that the insurance company is not bound by the assessment of the surveyor and if the insurer is of the view that certain material facts ought to have been taken into consideration by the surveyor, it can certainly depute another surveyor to conduct fresh survey and assessment, which was done in this case. It was also emphasized that the report of the second surveyor, a chartered accountant, is detailed and gave cogent reasons as to why the assessment of loss was reduced.
Learned counsel for the complainant has argued that the insurance company did not take permission of its seniors prior to appointing the second surveyor and no valid reason was given for not believing the report of the first surveyor. He has further argued that the Order of the State Commission is well reasoned Order, however, enhancement needed to be considered on account of surveyor’s assessment. In support of its contention, he relied on the decision rendered in the case of New India Assurance Co. Ltd. vs. M/s Luxra Enterprises Pvt. Ltd. & Anr. in Civil Appeal no. 9668 of 2014 wherein it has been held by the Hon’ble Supreme Court that there is no valid reason for an insurance company not to accept the report of the surveyor and to appoint further surveyors unless there is proof that the first surveyor report is arbitrary & excessive.
The question in this case which falls for our consideration is whether the appointment of second surveyor by the insurance company is correct.
It is seen in the written statement filed by the insurance company before the State Commission that the insurance company has mentioned the following reasons for appointment of second surveyor:
“27. That on perusal of the survey report of Sri Yogesh Saxena, it is evident that Mr. Saxena assessed the loss without going through account book, balance sheet, cash memo, purchaser and sales memo, profit and loss account.
That as per relevant rules and records it is duty of surveyor to follow the provisions to go through relevant before assessing the loss, but Mr. Saxena completely fails to proceed accordance with the law.
That it is also relevant to point out here that the surveyor assessed the loss only on the basis of inventory of stock submitted before the bank. Though it is a fact that the inventory to the bank of stock is only submitted for continuing the C.C. limit, they are not based on actual stock in the business and only due to these circumstances Shri G.C. Shukla and company Chartered Accountant was appointed to assess the actual loss of the complainant.”
From a perusal of the survey report of Mr. Yogesh Saxena, it is evident that the first surveyor has recorded the following with respect to the books of account and documents that were submitted for verification:
“Insured firm is maintaining complete books of account i.e. Cash Book, Ledger, Purchase Register, Sales Bill etc.
Insured has also submit Quarterly Sales Tax Return to the Sales Tax Department.
During survey insured has submitted following books and records for our verification. Details of document are as below:
Photocopies of Audited balance sheet for the F.Y. 09-10, 10-11 & 11-12
Provisional Balance Sheet from 01.04.2012 to 19.01.2013.
Photocopies of ITR for the F.Y.09-10, 10-11 & 11-12
Photocopies of Quarterly Sales Tax Return from April 2012 to Dec. 2012.
Photocopies of bank stock statement from April 2012 to Dec 2012.
Photocopy of FIR
Photocopy of Fire Bridge Report.
New paper cutting
Photocopy of Policy
Photocopies of Purchase Bills
Photocopies of Sales Tax assessment order for the F.Y. 07-08 & 08-09
Photocopy of bank account statement from 01.04.12 to 31.12.2012.”
A perusal of the same shows that the surveyor, contrary to the averments of the insurance company, has gone through the copies of audited balance sheet, provisional balance sheet and sales tax return. Apart from this, no arbitrariness or perversity has been pointed out by the insurance company in the first survey report. It is seen that the report of the second surveyor consists of a large number of questions. However, net figure of Rs. 94,682/- as loss assessment as pointed out by the State Commission is based on conjectures and surmises, with no cogent reasoning. Nothing arbitrary or perverse has been pointed out in the finding of the first surveyor.
The settled legal position in the case of appointment of second surveyor is that the same cannot be made unless there are valid and cogent reasons for the same and the report of the first surveyor is arbitrary or excessive in nature.
In view of the above, we are of the view that the reasons given by the insurance company for appointment of second surveyor are not cogent and it has been borne out by the facts that the first surveyor has looked at relevant books of accounts and documents and certified that the insured was maintaining all necessary books of accounts. We are, therefore, of the view that the Order of the State Commission is well reasoned Order, which does not call for any interference by this Commission.
The appeals being devoid of merit are dismissed.