A. RAJ AGENCIES (P) LTD. vs Oriental Insurance Co. Ltd.

THIS complaint was filed before the Commission on 7th March, 1993 after complainant first filed it before the National Commission as Original Petition No. 347/1993. The National Commission passed an order on 7th February, 1994 the opening sentence whereof reads : "It is manifest on a mere reading of the complaint petition that the valuation of this complaint has been unduly inflated.... We are not able to understand how this claim could be inflated to Rs. 23,00,000/- in the complaint petition. Obviously this was done with a view to enable the complainant to approach this Commission directly. THIS tendency cannot be encouraged.."

and subsequently in the latter part of the order the complaint was directed to be returned to the complainant''s Counsel for suitable amendment and presentation before the appropriate State Commission of the District Forum as the case was.

IN the present complaint the complainant has asked for relief to an extent of Rs. 18,38,444/- on the basis of the computation contained in some Annexures filed alongwith the complaint. The complainant''s case is that it had some insurance policies with the Oriental Insurance Company, which is the first Opposite party in the complaint during the currency whereof a dacoity took place at the business premises of the complainant Company in the night between December 2 and December 3, 1990. In the dacoity goods of substantial value were looted. The matter was reported to the police as well as to the Insurance Company which appointed a Surveyor on 3 December, 1990. The Surveyor made a report on 9th March, 1992 assessing the loss at Rs. 4,03,098/-. This amount was not paid by the Insurance Company inspite of 4 notices sent by the complainant to it through Lawyers. Instead, a second Surveyor was appointed by the Company who made a report on 25 June, 1993 assessing the loss at Rs. 2,62,201/- only. Even this amount was to be paid subject to several conditions mentioned in the letter of the Insurance Company dated 10 November, 1993. The complainant felt that the Insurance Company was acting unfairly for extraneous considerations and refused to accept the amount under the conditions under which it was offered through the letter dated 10.11.1993. The complaint was then made first to the National Commission and thereafter to the State Commission for relief.

The Insurance Company has put in its own version where it has justified its action in offering the aforesaid sum of Rs. 2,62,201/- only and that too subject to the conditions contained in the letter dated 10.11.1993. It has taken the stand that there has been no deficiency in service on its part in settling the claim.

WHAT has been stressed before us by Mr. B.S. Varshney, Advocate, appearing on behalf of the complainant is that there was no justification for the Insurance Company not to have offered the amount of Rs. 4,03,098/- which had been assessed as the loss sustained by the complainant by the first Surveyor and that there was no justification for entrusting the matter to a second Surveyor which appears to have been done only with a view to get its liability reduced to an arbitrary figure. The Insurance Company has filed alongwith the affidavit sworn by one of its employees, copies of both the Survey Reports as Annexures ''L'', and ''M''. It has also filed copies of various letters which were exchanged between the complainant and the Insurance Company and those exchanged between the first Surveyor and the complainant Company. Some reasons have been given by the second Surveyor for not including certain items of the losses which were included by the first Surveyor in his report while recommending payment of a sum of Rs. 4,03,098/-. The second Surveyor has also referred to the evidence on the basis whereof he has computed the loss at Rs. 2,62,201/- and has given justification for exclusion of certain items which were held admissible by the first Surveyor. In ultimate analysis, the dispute between the complainant and the Insurance Company boils down to a dispute about the quantum of the amount which is payable to the complainant Company for the loss sustained by it. Such a dispute, according to condition No. 13 of the terms of the policy is to be determined in arbitration proceedings.

AS far as the question of deficiency in service is concerned, there has been a manifest delay of 15 months between the appointment of the first Surveyor and the submission of the report dated 9.3.92 by him. Alongwith the affidavit filed on its behalf the Insurance Company has appended copies of various letters as Annexures E, F, G, H of different dates between the aforesaid period repeatedly asking the complainant for production of some records which the complainant was not able to do, as per its letters, due to some difficulties mentioned in those letters. We are of opinion, in view of the circumstances appearing from these letters, that there has not been any undue delay in the submission of his report by the first Surveyor. The second Surveyor gave his report on 25 June, 1993. About five months were taken thereafter by the Company in intimating its offer to the complainant. The Company has not been able to place before us any material to the effect as to why it came to make its offer nearly five months after receiving the report of the second Surveyor. We are of opinion that there has been some deficiency on the part of the Insurance Company in this respect in its services to the complainant Company. Mr. Varshney attempted to justify before us the computation made by the first Surveyor in his report dated 9.3.92 and also urged that the amount determined by the first Surveyor was a reasonable one. We are not inclined to go into this aspect of the matter as our view is that the parties should get it settled through arbitration proceedings. We are refraining from making any observation touching the merits of the claim of the complainant Company lest it may prejudice any of the parties in proceedings before the Arbitrators. Instead, we propose to direct the Insurance Company to refer the matter to arbitration within three months from today.

IN conclusion, the complaint succeeds to the extent that the INsurance Company is liable to compensate the complainant Company for its deficiency in service in delaying the making of an offer consequent upon the assessment of the loss by the second Surveyor in his report dated 9.3.92. We hold the INsurance Company liable to pay a sum of Rs. 10,000/- by way of compensation for this deficiency to the complainant.

WE also direct the Insurance Company to make payment of a sum of Rs. 2,62,201/- within this period of three months which shall be accepted by the complainant Company without prejudice to the stand that may be taken by it in the arbitration proceedings about the quantum of the loss for which the Insurance Company may be ultimately held liable in those proceedings, subject, of course, to the minimum amount of Rs. 2,62,201/- which has been offered by it to the complainant Company through its letter dated 10.11.1992. The complainant shall, of course, give a letter of subrogation to the Insurance Company. We also direct the Insurance Company to pay a sum of Rs. 2,500/- by ways of costs of the proceedings before the Commission to the complainant Company during the same period of three months from today.

We may add that we had heard Mr. A.K. Singh, Advocate for the Insurance Company, who has been very fair in his submissions before the Commission.

LET copies of the order be made available to the parties or their learned Counsel within three weeks. Ordered accordingly. Cost awarded.