AI Structured Summary
Not yet generated for this judgment
Judgment
The appeal has been filed by the appellant New India Assurance Co. Ltd. against the order dated 08.07.2014 of the State Consumer Disputes Redressal Commission, Uttar Pradesh, (in short 'the State Commission') passed in CC No.05 of 2002.
Brief facts of the case are that the complainant/respondent is a company in the name of M/s. Shivalik Tube Pvt. Limited and is duly registered under the Companies Act having its registered office at Velhana Chowk, Village Shandhawali, Meerut Road, Muzzafarnagar. Company's main business was to manufacture M S Pipes. On 27.3.1998, complainant company insured its factory with complete plant and machinery, electric meters, panels, etc. with the opposite party situated at Town Hall Road, Muzzafarnagar. Period of insurance was effective from 27.3.1998 till 26.3.1999. Total sum insured was Rs.33,00,000/-. On the fateful day, 30.7.1998, three guards/watchmen in the factory were beaten in the night, tied and locked in room. At the same time, certain items in the factory were stolen. Thereafter, on the same day, an oral intimation was given to the opposite party following the written information on the next day. Despite repeated reminders and legal notice by the complainant, claim was not settled by the opposite party. Aggrieved with the acts and omissions of the Insurance Company, the complainant filed a consumer complaint before the State Commission. The complaint was resisted by the Insurance Company which pleaded that documents were not submitted by the complainant company in time. As the factory was closed, so the incident of theft was doubtful and therefore, there was no deficiency in service on the part of the Insurance Company.
The State Commission vide its order dated 08.07.2014 passed the following order:-
"The complaint is hereby allowed. The opposite parties are directed to pay a sum of Rs.13,76,377/- to the complainant. Interest @12% shall be payable by the opposite parties to the complainant from the date of the claim lodged on which the first surveyor was appointed by the opposite party, till the date of filing of this complaint. A further interest @09% p.a. shall be payable to the complainant on the aforesaid sum from the date of complaint till the date of realization of the amount. A sum of Rs.15,000/- is further allowed to be paid by the opposite party to the complainant as litigation charges."
Hence the present appeal.
Heard the learned counsel for the parties and perused record. The learned counsel for the appellant stated that the surveyor on 5th July, 2000 has given the following opinion on the admissibility of the claim:-
"9. ADMISSIBILITY OF THE CLAIM: We have some reservations on the bonafides of the above claim. The reasons for this reservation are detailed here below:
a. The insured unit was in poor financial health and has been forced to close down due to heavy operating losses.The insured was on the verge of closing the unit when he purchased this insurance under burglary policy.Whereas the policy wording says that the risk is used for the purpose of manufacturing of M.S.Pipes, the unit went silent immediately after taking this policy of insurance.This material fact has not been disclosed.
b. The miscreants had been at site for about four and a half hours.The nature and extent of dismantling in the machinery parts particularly of the tube welder do not justify this as the involved dismantling would take 8-10 hours and that too by a skilled work man.
c. The statement of the watchmen Mr. Vinay says that the miscreants left the premises after burglary with some material/machine parts in a Riksha Reri.The items involved in this incident ae not feasible to be carried away in a Riksha Reri."
The learned counsel for the complainant emphasized that on this report of surveyor, investigator was appointed by the Insurance Company to find out the correct facts. The investigator also gives the following conclusion:-
"Thus, from the totality of the circumstances, putforth by the insured and his servant, the undersigned is of the considered opinion to the effect that no such theft had ever taken place. It is nothing but a drama staged by the insured to make good his losses which he had incurred/suffered in the past for non-production and closure of the unit. However, there might be some burglars, who had come to steal but on having found nothing, they might have injured the servant for not giving them the proper information about the money etc. It has also been revealed by Investigation that soon after the closure of the unit, the insured had removed the machinery of the premises of his uncle, who is running flour mill at Muzaffarnagar.
So far so good as far as observation and assessment of the matter in issue is concerned, the rest is left for your appreciation in respect of the matter in issue in the light of the matter that Shri Naven Kumar, son of Shri Nirnjan Swaroop, one of the Managing Director of the Company, was an agent of the Insurance Company, viz. The New India Assurance Co. Muzaffarnagar, who might have arranged for the insurance of the alleged machinery with the ulterior motive, since, after suffering losses and having such a huge debt of about a crore, the insured had gone in for further insurance after closure of the company finally on 31.03.1998."
The State Commission has not accepted the report of the investigator on the ground that the Insurance Company did not have the right to appoint second surveyor and if a second surveyor was to be appointed, permission of Insurance Regulatory and Development Authority (IRDA) was required under Section 64 UM of the Insurnace Act, 1938 which has not been obtained in the present case. The report of the surveyor has also not been accepted by the State Commission on the ground that the surveyor's report is not supported by the affidavit of this surveyor. Thus, the State Commission has not given any heed to the reports of the surveyor as well as of the investigator.
The learned counsel for the appellant stated that the surveyors are appointed under the provisions of the Insurance Act, 1938 and their report forms the basis for settling the Insurance claim. The report cannot be rejected without any cogent reasons. In the present case, the surveyor has clearly stated that the incident of theft and burglary is doubtful, however, the surveyor has assessed the loss of Rs.4,63,497/- only. The story of the complainant cannot be believed as practically, it is not possible to open such a heavy machinery within 4 hours and to take the same on rickshaw from the gate of the factory.
The learned counsel for the appellant further stated that the surveyor as well as the investigator both have doubted the incident and particularly have raised certain points which create suspicion in respect of the incident. It has been observed by the surveyor and the investigator that it was not possible to open all the machinery in just 4 hours and the same would have taken at least 8 to 10 hours to dismantle. Further, the investigator has observed that the machinery was so heavy that it could not have been taken on a rickshaw. It was further stated by the learned counsel for the appellant that the surveyor has assessed the loss to the tune of Rs.4,63,497/- only, whereas, the State Commission has allowed roughly the total claim of the complainant for Rs.13,76,377/- of which there is no justification. The State Commission has observed that the surveyor has wrongly applied depreciation, therefore, the total claim has been allowed. Surveyor is a licensed surveyor and he is supposed to know the principles of working out the loss in such cases. The factory was closed due to financial crisis and the machinery was old therefore in these circumstances, depreciation is to be applied for assessing the correct loss.
On the other hand, learned counsel for the respondent/complainant stated that after verifying the material, the policy was issued by the Insurance Company. A proper FIR was filed in the matter and after four months of the FIR, the untraced report was filed by the police and competent court has accepted the same on 08.8.1998. The surveyor has not filed any affidavit in respect of his report, therefore, the State Commission has not agreed with the report of the surveyor. The State Commission has not allowed the depreciation as applied by the surveyor. The Insurance Company appointed another surveyor in the name of investigator and the State Commission has not accepted the report of the investigator because no permission was taken by the Insurance Company under Section 64UM of the Insurance Act, 1938 from Insurance Regulatory and Development Authority (IRDA). Learned counsel for the respondent/complainant mentioned that the State Commission has clearly observed the following:-
"We have further found that the report of the investigator is not authentic report nor it has been proved by filing affidavit of the said investigator Ashok Varma and it is not admissible in view of the law laid down by Hon'ble NCDRC in the case of NIC Vs. Mohd. Ishaq reported in I (2012) CPJ 538 (NC) wherein it is held that fora below rightly rejected report of surveyor on ground that it was not supported by affidavit of the author. In our view it seems to have been concocted and got prepared by the opposite party merely to repudiate the claim otherwise what was the necessity to appoint the investigator while there was a report of the surveyor pertaining to the loss occurred and assessing the loss to some extent in favour of the complainant? The procedure in this regard for appointment of second surveyor/investigator has not been followed and the rules and regulations of Insurance Law in this regard have been violated."
Learned counsel further argued that Insurance Company has not filed any proof that there was no theft. Even the police in its final report has not given a finding that there was no theft. So the incident of theft cannot be doubted. The guards were beaten, tied and locked in a room. The Investigator's view that the burglars did enter the premises but when they did not find any machinery there, they beat up the guards in order to get more information from the guards, is only an imagination of the investigator and cannot be considered a reality in the light of the final report submitted by the police. The police, during their investigation, has not expressed any such doubts as have been expressed by the surveyor and the investigator.
I have carefully considered the arguments advanced by the learned counsel for both the parties and have examined the material on record. It is seen from the record both the surveyor and the investigator have raised doubt over the alleged theft, however, the surveyor has assessed the loss to the tune of Rs.4,63,497/-. The surveyor report of the surveyor is an important document and cannot be brushed aside without any cogent reason. Hon'ble Supreme Court in its judgment ["Sri Venkateswara Syndicate vs. Oriental Insurance Company Limited & Anr", (2009) 8 SCC 507], has observed that:
"31. The assessment of loss, claim settlement and relevance of survey report depends on various factors. Whenever a loss is reported by insured, a loss adjuster, popularly known as loss surveyor, is deputed who assesses the loss and issues report known as surveyor report which forms the basis for consideration or otherwise of the claim. Surveyors are appointed under the statutory provisions and they are the link between the insurer and the insured when the question of settlement of loss or damage arises. The report of the surveyor could become the basis for settlement of a claim by the insurer in respect of the loss suffered by the insured.
There is no disputing the fact that the surveyor/surveyors are appointed by the insurance company under the provisions of the Insurance Act and their reports are to be given due importance and one should have sufficient grounds not to agree with the assessment made by them. We also add, that, under this Section the insurance company cannot go on appointing surveyors one after another so as to get a tailor-made report to the satisfaction of the officer concerned of the insurance company; if for any reason, the report of the surveyors is not acceptable, the insurer has to give valid reason for not accepting the report."
It is seen that the State Commission has given only reason for not accepting the report of the surveyor that the surveyor has not proved his report by filing his affidavit. The report of the surveyor cannot be rejected on this technical ground alone unless there are other reasons for not accepting the same. I agree with the assertion of the learned counsel for the appellant Insurance Company that the application of depreciation is a recognized principle of assessment and old machinery has to be assessed after applying depreciation. The decision of the State Commission for not applying the depreciation cannot be sustained.
Although the investigator and the surveyor both have expressed their doubts on the actual theft, but because the same is not affirmed by the police investigation, the total claim may not be repudiated. However, as seen above, the State Commission has not accepted the report of the surveyor without any proper reason, therefore, the order of the State Commission requires modification on the basis of the report of the surveyor.
It is seen from the impugned order of the State Commission that the State Commission has allowed interest @12% p.a. on the amount of Rs.13,76,377/- from the date of appointment of the first surveyor till filing of the complaint. Honorable Supreme Court in the matter of Chengalrayan Cooperative Sugar Mills Vs. Oriental Insurance Co. Ltd. & Anr., (2000) 10 SCC 213 has held the following:-
"6. We however, feel that the interest ought to have been awarded from the date on which the claim was filed before the National Commission. Consequently, while maintaining the order of the National Commission for payment of Rs.11,69,994 to the appellant as the value of the gunny bags, we direct that this amount shall be paid within two months from today and that too, with interest at the rate of 18 per cent per annum from the date of filing of the claim before the National Commission till the date of actual payment."
From the above, it is clear that interest is awarded from the date of filing of the complaint and not from the date of incident. Moreover interest @12%p.a. and 9% p.a. seem to be on a higher side. It is seen that there is no contract to pay interest on the amount of claim in the policy contract between the parties. Looking at the interest scenario prevailing from 2003 till now interest @8% p.a. shall be reasonable and just.
On the basis of the above discussion, the first appeal No.577 of 2014 is partly accepted and the order dated 8.7.2014 is modified to the extent that the appellant Insurance Company shall be liable to pay an amount of Rs.4,63,497/- as assessed by the surveyor to the complainant instead of Rs.13,76,377/- as awarded by the State Commission. This amount will be paid along with interest @8% p.a. from 01.1.2003 till the date of actual payment to the complainant. The order in respect of the litigation charges of Rs.15,000/- as awarded by the State Commission is maintained. This order be complied by the appellant Insurance Company within a period of 45 days from the date of receipt/service of this order.