State Bank of India vs National Insurance Company Ltd. and Others

A.L. Bahri, J.—State Bank of India, Plaintiff, has filed this appeal against the judgment and decree dated July 29 1989, passed by Additional District Judge, Gurdaspur, whereby appeal filed by the National Insurance, Company, one of the defendants, and cross-objections filed by another defendants Piara Singh were disposed of and judgment and decree of the trial Court decreeing the suit was modified. The trial Court had decreed the suit for a sum of Rs. 1,57,425.36 Paise as claimed in the suit, against all four defendant, borrower Piara Singh, the two guarantors-Avtar Singh and Gurnam Singh and the Insurance Company with whom the truck was insured. The truck was purchased by Piara Singh after raising loan from the plaintiff-Bank. The Additional District Judge, Gurdaspur, dismissed the suit against the Insurance Company and while maintaining the decree against the other three defendants the amount of the decreetal money was reduced to Rs. 1,51,931.40 P. holding that the plaintiff was l not entitled to sundry charges including insurance premium.

The plaintiff-Bank filed the suit for recovery of the amount aforesaid alleging that a loan of Rs. 1,25,000/- was advanced to Piara Singh for purchase of the truck. Avtar Singh and Gurnam Singh stood guarantors. Necessary documents were executed. With the amount of the loan Piara Singh purchased truck No. PEC-1347 which was hypotheticated with the Bank under the terms and conditions Of the loan. The truck was got insured, ft was during pendency of the suit that on February 11, 1985, the truck was destroyed in an accidental fire. Hence the plaintiff amended the plaint impleading the National Insurance Company as the defendant also liable to pay the amount. Piara Singh defendant while contesting the suit dented raising of any loan. The two guarantors also denied having stood guarantors, for the loan. These three defendants, of course, admitted that their signatures were obtained by the Bank officials on some documents. The Insurance Company pleaded that it was not an accidental fire in which the truck was destroyed but the same was intentional, that too on the eve of the expiry of the Insurance policy and thus denied its liability to pay the amount. It was also pleaded that there was no privity of contract between the Insurance Company and the plaintiff Bank. On the pleadings several issues were framed. However, for the purposes of deciding this appeal only issue No. 7-a may be mentioned which is as under :-

(7-a) Whether defendant No. 4 is liable to pay any amount to the plaintiff-Bank. If so, how much ? OPP

The trial Court under the aforesaid issue held that the truck was destroyed in the fire which was accidental as claimed by Gurnam Singh PW who was driver on the truck at the relevant time. The lower appellate Court has reversed this finding relying upon the two reports of the Experts who happened to visit the spot afterwards and had made investigation at the behest of the Insurance Company holding that the alleged occurrence of burning of the truck took place when the insurance policy was going to expire, there was considerable delay on the part of Gurnam Singh to bring Fire Brigade from Pathankot, when Fire Brigades were available at a short distance at Dina Nagar and Gurdaspur near the place of occurrence there was abadi of village Paniar as well, as a Shivala wherein existed a well and, some help could be obtained from these places and water could also be procured from the well of the Shivala to extinguish the fire.

Shri R. K. Chhibber, Advocate, appearing on behalf of the appellant-Bank, has argued that when a finding is based on reports of Experts, which are not based on any evidence. Such a finding would not be considered a finding of fact simplicitor to bar interference therewith u/s 100 of the CPC In support of this contention he relies upon following two decision : Musammat Altafan Vs. Ibrahim, . a decision of the Single Bench and secondly that the aforesaid decision was affirmed by Division Bench in L. P. A. reported as Mohd. Ibrahim Vs. Mt. Altafan and Others, . The Single Bench had observed that the finding based on the opinion of experts is not necessarily a finding based on facts proved or directly demonstrated. The opinion of experts are relevant but not conclusive on the matters to which they relate and where , they materially differ their value and sufficiency may legitimately form the subject of consideration and scrutiny despite the acceptance of any of them by one Court or another. As already stated above, the aforesaid decision '' was affirmed by the Division Bench. That, was a case for divorce under the Mohamedan Law and the question involved related to consummation of marriage. The relevant evidence produced in the present case had been perused, keeping in view the respective arguments addressed with respect to the two reports of the Experts as well as statement of Gurnam Singh PW. As per endorsement of the insurance policy-Exhibit P. 1. State Bank of India is the pledgee with whom the truck was pledged and entitled to recover the insurance amount on account of loss or damage to the truck and that would fully meet the liability of the Insurance Company against the insured owner of the truck. Thus it is held that the Insurance Company is liable to make good loss of the goods of the truck, caused by fire, the State Bank of India is entitled to recover the amount of Insurance policy in this suit from the Insurance Company.

The question covered by issue No. 7-a, as reproduced above, throws the initial burden on the plaintiff to prove that there was accidental fire in the truck. In order to discharge this burden the plaintiff-Bank produced Gurnam Singh driver of the truck as PW 5 who categorically deposed that rice straw was loaded in the truck and there" was accidental fire. He rushed to Pathankot and brought the Fire Brigade and the fire was extinguished. He also stated that on the following day he reported the matter to the police at Police Station Dina Nagar PW 3 Prem Kumar Head Constable from the aforesaid Police Station deposed about the entry of report Exhibit PW 3/1 lodged by Gurnam Singh son of Rur Singh PW 4 H. S. Bawa, Assistant Fire Officer, Pathankot, deposed about the call received on February 12, 1985 at about 1.30 a.m. pertaining to fire of truck No. PBG-1347. The same was attended and a sum of Rs. 210/- was recovered from Gurnam Singh for attending to the call. Necessary entry was made in the register. Prima facie the aforesaid evidence was to be considered sufficient to discharge the onus. The burden of proof thus shifted on to the defendants to rebut the evidence produced by the plaintiff., DW 2 Inderpal Aggarwal went to the spot to conduct survey. His report is Exhibit D. 1. He visited the spot on February 12, 1985 and inspected the truck. According to him the truck was completely burnt but he could, not state as to how the truck caught the fire. Thus, evidence of this witness is not helpful to the defendants in any manner regarding the cause of fire. DW 4 B.S. Pestonji, was deputed by the Insurance Company to submit the survey report. He inspected the truck at Pathankot. Subsequently he also visited the spot. According to his information the truck was burnt and it was not burnt by '' natural causes. It was intentionally burnt. His report is Exhibit DW 3/B, He recommended in his report that investigation be got done from the Expert DW 5 D. C. Sharma, Retired Inspector General of Police, was deputed by the Insurance Company to investigate the case. He secured the presence of Piara Singh and recorded his statement which was produced as Exhibit DW 4/3. The mode of proof was challenged. His report is Exhibit DW 4/4. He also associated Kartar Singh, Sarpanch of village Paniar, according to whom the truck was burnt and he was awakened by the noise of the burst. He went to the spot and from a distance he noticed that there was no person around. The part of the report of this witness is based on hearsay and thus cannot be relied upon. Kartar Singh was the person who could depose to these facts in Court, and the question of reliability of his evidence would have been determined Further-more, Kartar Singh did not visit the spot and from a distance he is alleged to have noticed that at that time there was no one around the truck. The report of Shri Sharma in this respect, as it is, will not prove the Gurnam Singh was not present at the time of the accidental fire. Since Inderpal Aggarwal DW 2 had visited the site immediately after the occurrence, on behalf of the defendants he was the best person to depose as to the goods lying in the truck which were destroyed by the fire. He does not rule out the possibility of the existence of the rice straw in the truck causing fire to the truck as his evidence is silent. The defendants could also produce on this point the report of the Fire Brigade Officer who as per evidence of the plaintiff visited the spot and extinguished the fire That report was obtained by the Insurance Company as is clear from the report of DW 4 Shri B. S. Pestonji, Exhibit DW 3/B. The said report had been kept back and has not been produced in the suit. The evidence of Fire Officer who had visited the spot, if produced, may have rebutted the statement of Gurnam Singh. For non-production of that witness the plaintiff is not to suffer.

The evidence of three Experts, Inder Pal Aggarwal, B. S. Pestonji and D. C. Sharma could be relied upon to the extent that they have observed either the spot or the truck damaged by fire. Inder Pal Aggarwal DW 2 could throw light on the goods'' which were loaded in the truck as he had visited the spot on behalf of the Insurance Company the day following the burning. The evidence of Gurnam Singh is that the fire took place on account of the burning of the rice straw.- The evidence of two other Experts-Pestonji and D C Sharma is not helpful as they did not inspect the truck immediately after it had caught fire. Their reports to some extent are based on circumstances and to some extent on the statements of some witnesses recorded by them. Their reports regarding their observation of the spot or the truck could only be relied upon as direct evidence. Otherwise reports based on hearsay evidence cannot be relied upon. Kartar Singh Sarpanch whose statement was relied upon was not produced as witness in the Court. The statement recorded in -the report by one of the Experts is of no consequence. The plaintiff-Bank had no opportunity to test the veracity of Kartar Singh Sarpanch. There being no cogent evidence produced to rebut the evidence of Gurnam Singh PW, the same was rightly relied upon by the trial Court and ignored on surmises and conjectures by the lower appellate Court. Finding of the lower appellate Court with regard to the cause of fire of the truck is reversed and that of the trial Court is restored holding that it was a case of accidental fire that the damage was caused to the truck and, therefore, the State Bank would be within its rights under the policy of insurance to claim the insurance amount from the Insurance Company.

Certain reasons were stated by the lower appellate Court to disbelieve the statement of Gurnam Singh as the same did not appear, to be normal that he went to Pathankot to bring the Fire Brigade when Fire Brigades were available at a short distance of 3 KMs. Dina Nagar and yet another at a short distance of about 10/15. K.Ms. at Gurdaspur When incident of fire takes place, different people may react differently. Gurnam Singh got a lift in another truck to reach Pathankot and he factually brought Fire Brigade from Pathankot to the spot May be Cleaner of the truck had gone to Dina Nagar and Gurdaspur also to bring Fire Brigade but as per evidence of Fire Brigade Officer, a telephonic call had been received from Jail Road, Gurdaspur, '' with regard to the fire to the truck. It shows that at Gurdaspur the Fire Brigade was not available that is why effort was made to contact Pathankot Fire Brigade for the same. Be that as it may, this fact alone could not be treated as sufficient to disbelieve Gurnam Singh in respect of the manner in which the fire took place in the truck The other circumstance which was taken into consideration was that no help was sought by Gurnam Singh or other persons travelling in the truck from the nearby village and no effort was made to procure water from the well of the Shivala which was, also nearby. These are conjectures which were relied upon by the lower appellate Court. There was no evidence that there were people at the Shivla at the relevant time or that the water could be procured from the well. Further-more, by bringing water in small vessels like buckets by one or two persons would not have been sufficient to extinguish the fire. As already observed above in the report of Shri D.C. Sharma, Kartar Singh Sarpanch of village Paniar and some other persons were attracted at the site of fire but they felt satisfied from witnessing the same from a distance and returned to their village. I fail to understand what sort of help the villagers could have provided it approached by Gurnam Singh when they themselves had returned from a distance after coming to know of an incident.

The plaintiff Bank was also entitled to sundry charges. Some amount was spent by issuing notices to the defendants for non-payment of the loan and some amount was spent as insurance premium for insuring the truck pledged with the Bank. There need not have been a separate contract between the parties to enable the Bank to claim these amounts. These are the results of breach of the contract for not repaying the amount in time that the Bank was required to issue notices. Since the truck was pledged with the Bank as security, the premium paid for its insurance was also recoverable. The lower appellate Court was not justified in declining the relief qua certain items as discussed above while modifying the judgment and decree of the trial Court.

For the reasons recorded above, this appeal is allowed. Parties are left to bear their own costs. The judgment and decree of the lower appellate Court are set aside and that of the trial Court are restored. There will be no order as to costs.