United India Insurance CO. LTD vs Hussain Haider

Prem Narain, Presiding Member

This revision petition has been filed by the petitioner United India Insurance Co. Ltd. against the order dated 09.09.2015 of the State Consumer Disputes Redressal Commission, Uttar Pradesh, (in short 'the State Commission') passed in FA No.647 of 2014.

Brief facts of the case are that the respondent/complainant insured his shop of tyre in the name of M/s. Khan Tyre Store at Naveen Mandi, Ahmat Distt. Sultanpur Uttar Pradesh for Rs.12,00,000/- with the petitioner and the petitioner issued shopkeepers Insurance Policy for the period from 25.09.2009 to 24.09.2010. On

05.01.2010 at about 8.00 p.m. the respondent/complainant as usual after closing the shop by locking both the locks of the shutter went to his house. On the next day i.e. on 6.1.2010 at about 7.00 am Pawan Kumar S/o Sakim Ram informed the respondent/complainant on mobile phone that locks of the shop of the respondent/complainant is cut and is lying outside. Respondent/complainant rushed to his shop and saw that the shutter is closed and two locks are lying cut. The respondent/complainant on opening the shutter found that all 96 tires lying in the shop valuing approximately rupees 11.00 lacs are missing. Some unknown thieves after cutting the lock of the shop in the night have stolen all the tyres. The respondent went to the police station on the same day but the Munsi took his application but did not register the F.I.R. On 07.01.2010, the respondent/complainant sent the information to the Superintendent of Police Sultanpur by registered post dated 07.01.2010. On 11.01.2010, the respondent filed a case in the court of Chief Judicial Magistrate Court No.16, Sultanpur for registration and investigation of the case. After registration of the case being crime No.187/2010 under Section 380 IPC the investigation was initiated by the police. The investigation officer due to non traceability of property and the culprit, submitted his final report on 01.06.2010. On 21.01.2010, the respondent/complainant intimated the petitioners about the theft in the shop. The petitioner after receiving the intimation about the theft in the shop of the respondent appointed Sh. Ashok Kumar Agarwal, Chartered Accountant for survey and assessment of the loss. On 17.09.2010, the surveyor submitted his report dated 17.09.2010 and assessed the loss of Rs.5,07,520/-. Since the genuineness of occurrence of the theft was doubtful the petitioner appointed M/s. Salahuddin & Associates, investigator who submitted his investigation report dated 20.2.2011. On 19.04.2011, after receiving the survey report and the investigation report, the petitioner vide by letter dated 19.04.2011 repudiated the claim of the respondent. The respondent filed consumer complaint before the District Forum, Sultanpur being Consumer Complaint No.139 of 2011 claiming compensation of Rs.10,82,900/- along with interest and compensation for mental agony. On 16.11.2012, the District Forum, directed the petitioner to reconsider the case of the respondent and dispose of the same. On 12.12.2012, the petitioner by letter dated 12.12.2012 informed the District Consumer Disputes Redressal Forum, Sultanpur that the petitioner company re-examined their decision of repudiation of the claim and after re-examination the fact again came to light that the incident of theft is not genuine and the claim is not payable. On 16.01.2013, the respondent/complainant filed complaint dated 16.01.2003 before the District Forum, Sultanpur being Consumer Complaint No.20/2013 claiming total amount of compensation of Rs.10.82,900/-along with interest and Rs.1,00,000/- towards mental, physical and economic pain. The petitioner filed written statement stating that the respondent/complainant has given intimation to the petitioner after 14 days which is a clear cut violation of terms and conditions of the policy and further that in the area of 110.44 sq. feet in the shop, keeping 96 nos. of big motor tyres volumetrically was not possible. On 28.02.2014, the District Forum allowed the complaint of the respondent/complainant and directed the petitioner to pay Rs.10,82,900/- along with interest @9% p.a. from the date of filing of the consumer complaint No.139 of 2011 within one month, Rs.10,000/- towards mental agony and Rs.1,000/- as litigation cost. On 25.03.2014, the petitioner being aggrieved by the order of the District Forum dated 28.02.2014 filed an appeal before the State Commission, being First Appeal No.647 of 2014. The State Commission vide its order dated 09.09.2015 dismissed the appeal and confirmed the order of the District Forum.

Hence the present revision petition.

Heard the learned counsel for the petitioner, however, none was present on behalf of the respondent for advancing the arguments on the date of final hearing. The learned counsel for the petitioner stated that the surveyor in his report dated 17.09.2010 has assessed the loss to the tune of Rs.5,07,520/-. However, neither the District Forum nor the State Commission has considered this report. It was argued by the learned counsel that the surveyor's report is an important document for settlement of the insurance claim. The District Forum has allowed the claim asked by the complainant without going into the details of the claim. The surveyor in his report has analysed all aspects of the incident and has reached to the conclusion that the complainant has suffered loss of Rs.5,07,520/-. Both the fora below have committed gross error in not considering the report of the surveyor. The investigator appointed by the Insurance Company had clearly observed that the claim of the complainant for 96 tyres is not a genuine claim because 96 tyres cannot be accommodated in the shop of the complainant and on the basis of this, claim was repudiated by the Insurance Company. However, if the claim is to be allowed, it can only be allowed up to the loss assessed by the surveyor. Both the fora below have not given any reason for not considering the report of the surveyor.

I have carefully considered the arguments advanced by the learned counsel for the petitioner and examined the material on record. It is very surprising that both the fora below have not considered the report of the surveyor as there is no observation in this regard. Under the Insurance Act, 1938, the Insurance Company is duty bound to appoint surveyor for settling the insurance claim exceeding Rs.20,000/- and the report of the surveyor forms the basis of the settlement of insurance claim. The report of the surveyor cannot be disregarded or rejected without any cogent reasons as held by the Hon'ble Supreme Court in its judgment ["Sri Venkateswara Syndicate vs. Oriental Insurance Company Limited & Anr", (2009) 8 SCC 507], as follows:-

"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."

When the surveyor appointed by the Insurance Company has given a clear and proper report that the complainant has suffered a loss of Rs.5,07,520/- then it is not clear as to why the investigator was appointed by the Insurance Company. Thus, clearly the claim of the complainant seems to be genuine, however, the claim cannot be allowed for more amount than loss suffered by the complainant as assessed by the surveyor as there is no observation against the surveyor's report in the judgment of the District Forum or in that of the State Commission. I do not see any ground why the report of the surveyor should not be accepted for settling the claim of the insurance.

Coming to the question of delay in filing the present revision petition, it is seen that the delay has been caused in obtaining higher orders and the legal advice after receiving the order of the State Commission. Hon'ble Supreme Court in Manoharan Vs. Sivarajan & Ors, Civil Appeal No.10581 of 2013, decided on 25.11.2013 (SC) has held that:

"9. In the case of State of Bihar & Orss. v. Kameshwar Prasad Singh & Anr., it was held that power to condone the delay in approaching the Court has been conferred upon the Courts to enable them to do substantial justice to parties by disposing the cases on merit. The relevant paragraphs of the case read as under:

"11. Power to condone the delay in approaching the Court has been conferred upon the Courts to enable them to do substantial justice to parties by disposing of matters on merits. This Court in Collector, Land Acquisition, Anantnag v. Mst. Katiji (1987)ILLJ 500 SC held that the expression 'sufficient cause' employed by the legislature in the Limitation Act is adequately elastic to enable the Courts to apply the law in a meaningful manner which subserves the ends of justice-that being the life purpose for the existence of the institution of Courts. It was further observed that a liberal approach is adopted on principle as it is realised that:

Ordinarily a litigant does not stand to benefit by lodging an appeal late.

Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties.

'Every day's delay must be explained' does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner.

When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay.

There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk.

It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so."

Similarly, Hon'ble Supreme Court in the matter of Esha Bhattacharjee vs. Managing Committee of RaghunathpurNafar Academy and Others., (2013) 12 SCC 649, has laid down:-

"From the aforesaid authorities (case laws referred) the principles that can broadly be culled out are:

21.1. (i) There should be a liberal, pragmatic, justice-oriented, non- pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice.

21.2. (ii) The terms "sufficient cause" should be understood in their proper spirit, philosophy and purpose regard being had to the fact that these terms are basically elastic and are to be applied in proper perspective to the obtaining fact- situation.

21.3. (iii) Substantial justice being paramount and pivotal the technical considerations should not be given undue and uncalled for emphasis.

21.4. (iv) No presumption can be attached to deliberate causation of delay but, gross negligence on the part of the counsel or litigant is to be taken note of.

21.5 (v) Lack of bona fides imputable to a party seeking condonation of delay is a significant and relevant fact.

21.6. (vi) It is to be kept in mind that adherence to strict proof should not affect public justice and cause public mischief because the courts are required to be vigilant so that in the ultimate eventuate there is no real failure of justice.

21.7. (vii) The concept of liberal approach has to encapsule the conception of reasonableness and it cannot be allowed a totally unfettered free play.

21.8 (viii) There is a distinction between inordinate delay and a delay of short duration or few days, for to the former doctrine of prejudice is attracted whereas to the latter it may not be attracted. That apart, the first one warrants strict approach whereas the second calls for a liberal delineation.

21.9 (ix) The conduct, behaviour and attitude of a party relating to its inaction or negligence are relevant factors to be taken into consideration. It is so as the fundamental principle is that the courts are required to weigh the scale of balance of justice in respect of both parties and the said principle cannot be given a total go by in the name of liberal approach.

21.10 (x) If the explanation offered is concocted or the grounds urged in the application are fanciful, the courts should be vigilant not to expose the other side unnecessarily to face such a litigation.

21.11. (xi) It is to be borne in mind that no one gets away with fraud, misrepresentation or interpolation by taking recourse to the technicalities of law of limitation.

21.12. (xii) The entire gamut of facts are to be carefully scrutinized and the approach should be based on the paradigm of judicial discretion which is founded on objective reasoning and not on individual perception.

21.13. (xiii) The State or a public body or an entity representing a collective cause should be given some acceptable latitude.

To the aforesaid principles we may add some more guidelines taking note of the present day scenario. They are:

22.1. (a) An application for condonation of delay should be drafted with careful concern and not in a half hazard manner harbouring the notion that the courts are required to condone delay on the bedrock of the principle that adjudication of a lis on merits is seminal to justice dispensation system.

22.2. (b) An application for condonation of delay should not be dealt with in a routine manner on the base of individual philosophy which is basically subjective.

22.3. (c) Though no precise formula can be laid down regard being had to the concept of judicial discretion, yet a conscious effort for achieving consistency and collegiality of the adjudicatory system should be made as that is the ultimate institutional motto.

22.4. (d) The increasing tendency to perceive delay as a non- serious matter and, hence, lackadaisical propensity can be exhibited in a non-challant manner requires to be curbed, of course, within legal parameters."

Hon'ble High Court of Gujarat in The Municipal Corporation of.. Vs. Manish Enterprises Ltd., AIR 1993, Guj, 145 has held as follows:-

In my opinion, the Court has to bear in mind the principle of 'substantial justice' and if the expression 'sufficient cause' has to receive liberal construction, in the facts and circumstances of the case, sufficient cause can be said to have been made out by the applicant. For that purpose, in my opinion, it is altogether immaterial whether the advocate could have telephoned the officer concerned; whether the said officer could have immediately rushed to the advocate in the High Court; or whether the appeal could have been filed little earlier. The question is whether there is inaction, negligence or want of bona fides as observed by the Supreme Court. According to me, it cannot be said that any of the above elements is present in the instant case. 'Sufficient Cause' has been made out by the applicant Corporation in approaching this Court in filing the appeal and accordingly delay is required to be condoned.

In my judgment, the legal position cannot be disputed that the provisions of the law of limitation must be applied to all persons equally and uniformly. Government departments and local authorities cannot claim any privilege in that regard and they must be treated on par with private individuals. However, as observed by the Supreme Court, the realities of life also cannot altogether be ignored. Whereas a private individual takes a decision one way or the other almost instantaneously, a democratic government or a bureaucratic department hesitates and halts, discusses and debates, considers and consults, peeps through papers and files, speaks through notes and drafts, moves horizontally and vertically till at last it gravitates towards a conclusion, unmindful and oblivious of urgency and emergency.

Looking to the principles laid down by the Hon'ble Supreme Court arid applying them to the case on hand keeping in mind, the hard realities, I have no hesitation in holding that there is no inaction, want of bona fides or negligence on the part of the applicant Corporation in approaching this Court and delay of 38 days should be condoned in the larger interest of justice."

Relying on the above judgments, I deem it appropriate to allow the application for condonation of delay in filing the present revision petition at a cost of Rs.20,000/- (rupees twenty thousand only) to be paid by the petitioner to the respondent/complainant.

Based on the above discussion, the revision petition No.1021 of 2016 is partly allowed and the order of the District Forum dated 28.02.2014 and order dated 09.09.2015 of the State Commission are modified to the extent that the petitioner Insurance Company shall pay Rs.5,07,520/- (rupees five lakhs seven thousand five hundred twenty only) to the respondent/complainant instead of Rs.10,82,900/-. This amount shall carry an interest of 6% p.a. from the date of filing of the complaint i.e. 16.01.2013 till actual payment. However, the compensation of Rs.10,000/- and litigation cost of Rs.1000/- awarded by the District Forum are maintained.