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Judgment
THE key questions which fall the consideration in this case, pertaining to the year 2003, are, what value should be appended with the report of a surveyor? And how much compensation should be awarded to the complainant due to negligent, inactive, passive and lackadaisical manner in keeping the matter pending for the last ten years till date?
ASSAMBROOK Limited, the complainant in this case, purchased Tatamala Factory Tea Estate and the Factory alongwith Machinary situated therein in Calcutta. The said factory was not in operation at that time and continued to be so ever after its purchase by the complainant company. The said factory alongwith its machinery was covered by comprehensive fire insurance policies taken from time to time from OP- United India Insurance Company, last being from 1st May 2000 to 30th April 2001. On 15.04.2001 at about 3.00 P.M. fire broke out at Tatamala Factory. Immediately, the fire station Kalpetta was informed and they extinguished the fire. In this fire the factory was completely gutted and its machinery got damaged. The OP-1 was informed about the same on 16.04.2001. Local Police was also informed vide FIR lodged with the Police Station Vellamunda on 16.04.2001. Other authorities were also apprised of the incident. The OP-1 through its Regional Office at Ernakulam appointed one Captain Krishnan and Co. as surveyor for inspection of the site. The surveyor conducted the survey at the said factory premises on or about 3rd week of April 2001. The Station Officer, Fire Station, Kalpetta and Electrical Inspector gave separate reports on 02.05.2001. The complainant also received the copy of the said report of the Electrical Inspector from the Vellamunda Police Station on or about 16.05.2001.
CAPTAIN Krishnan and Co. Surveyor, vide its letter dated 21.06.2001 requested the Complainant to furnish certain documents pertaining to the aforesaid fire incident. The said letter was replied. The complainant lodged the formal complainant with the Insurance Company for a sum of Rs. 56,85,000/- (i.e. a claim of Rs. 40,00,000/- towards the losses and damages suffered due to destruction of factory building by fire and a further claim of Rs. 16,85,000/- being the loss and damages suffered due to the destruction of machines due to fire). The complainant also sent copy of balance sheet for the year 1999-2000 to the Surveyor. The Kerala Police further confirmed the incident of fire vide its letter dated 06th August 2001. The complaint Company fully cooperated with the OP-1. It is alleged that the Insurance Company is procrastinating the settlement on one pretext or the other. The acts and omissions on the part of the OPs are arbitrary, illegal and contrary to the express terms of contract of Insurance. Ultimately, the present complaint was filed on 14.02.2003 with the following prayers:- "i) This Hon ''ble Commission be pleased to hold and declare that there has been deficiency in service rendered by the Respondents, ii) This Hon ''ble Commission be pleased to direct the Respondents to make payment of Rs. 56.85 lacs (Rupees Fifty Six Lacs Eighty Five Thousand only) to the Complainant Company herein. iii) This Hon ''ble Commission be pleased to order and direct the Respondent No. 1 to furnish to this Hon ''ble Commission, Bank Gurantee forthwith in respect of the prayer (ii) above, iv) This Hon ''ble Commission be pleased to order and direct the Respondents to pay interest at the rate of 18% on the said claim of Rs. 56.85 lacs from the date of incident of fire i.e. 15.4.01 till the date of actual payment of the said amount, v) This Hon ''ble Commission be pleased to order and direct the Respondents to pay a reasonable amount for not settling the claim promptly and consequently loss of money by the complainant on the said amount, vi) Pending the hearing and disposal of this Complaint, this Hon ''ble Commission be pleased to pass interim and ad-interim order in respect of prayer (iii) above. vii) Such other or further order(s) as this Hon ''ble Commission deem fit, just and proper in the facts and circumstances of the case, viii) Cost of petition be awarded in favour of the Complainant Company and against the Respondents. "
THE Opposite Party has enumerated the following defenses in its 29 pages written statement. The complainant is not a Consumer because he has availed the service for commercial purpose. The claim is barred by Clause 6(ii) of the Insurance Policy. The complainant has failed to establish its own claim under the Insurance Policy. The complainant did not cooperate with the O.P. within the terms of condition No. 6 (i) (b) of the Insurance Policy. The complainant did not produce necessary particulars, plans, specification books, vouchers invoices duplicate or copies, investigation reports proofs and information in respect to the claim and the origin and cause of loss and the circumstances under which the loss or damage occurred etc. The surveyor could not ascertain the origin and cause of the fire. The investigator was appointed and his report was being awaited. This Commission has no jurisdiction. The complaint be relegated to Civil Court. The Complainant is not entitled to any amount. The surveyor assessed the loss at Rs. 3,42,500/-. There was no maintenance in the factory since 1981. The other allegations have been denied. We have heard the counsel for the parties. Counsel for the complainant made the following submissions. The complainant had purchased this property on 01.02.1991. It was specifically mentioned in the insurance that it was a silent factory. The complainant had furnished copies of the Electric Inspector ''s report dated 02.05.2001 as desired by the surveyor on 21.06.2001. It was submitted that the complainant duly complied with and furnished all the necessary documents vide its letter dated 28.06.2001 and 05.07.2001 which were marked as Exhibit A-6 and Exhibit A-7. On 06.08.2001, the Kerala police stated that the cause of the fire was an electric short-circuit vide Exhibit A-11. That report was forwarded to the surveyor vide letter dated 13.08.2001. The complainant provided all the information relating to the date of commissioning of the factory, latest valuation report, value of the factory and machinery on 28.08.2001 vide Exhibit A-9. The grouse of the complainant is that their claim was never rejected. They did not receive the repudiation letter. The complainant is procrastinating the matter on one pretext or the other. An application was moved before the RTI and the Appellate Court provided a copy of the surveyor ''s report.
THE second submission made by the counsel for the complainant was that the OP-1 has delayed the processing the claim of the complaint. The insurance claim was submitted to OP-1 on 05.07.2001 but still the matter stands unsettled. The OP-1 doubted the veracity of the police report concerning the cause of fire vide its letter dated 24.01.2002. It is alleged that the Surveyor ''s report was never furnished to the complainant within a period of 10 years. The OP-1 could not investigate the cause of the fire. In support of his case the counsel for the complainant has cited an authority reported in the case of Karam Industries v. Oriental Insurance Co. Ltd., IV (2007) CPJ 104 NC, he has also cited another authority reported in the case of Avon Rice Trading Company v. United India Insurance Company, 2002 (3) CPJ 340. The delay on the part of the OP-1 clearly shows deficiency on the part of OP-1. Again no payment whatsoever was made to the complainant till date. Moreover, OP-1 has under-valued the compensation payable under the policy. The complainant is a consumer under the Consumer Protection Act and the Learned counsel cited various authorities. The counsel for the opposite parties did not pick up a conflict with this question. So far as question of delay in processing the claim of the complaint, the learned counsel has placed reliance on the following authorities reported in Vania Silk Mills v. CIT, Ahmedabad, 1991 (4) SCC 22, Jay Shankar Singh v. Insurance Regulatory Development Authority, 163 (2009) DLT 785, the Hon ''ble Delhi High Court, Nani Bai v. Ishaque Khan, 1994 ILJ 296 (MP) and Oriental Insurance Company Ltd. v. Surinder Singh and Ors. 2010 (3) JKJ 586.
IT was also argued that OP-1 has made baseless assertions against the complainant without any evidence. There was no basis for doubting the report sent by the Kerala police. The surveyor ''s report clearly goes to show that it did not consider the final report of the Kerala police. There is no evidence that the surveyor had reviewed his report after going through the report sent by the Kerala police. The surveyor report is ex-facie incorrect. On the other hand, counsel for the OP-1 admitted at bar that there was delay in processing the claim of the complainant. He could not give any reason for the same. He also admitted that OP-1 has not made any payment to the complainant till date.
LASTLY , the counsel for the complainant invited our attention towards the Insurance Regulatory and Development Authority (Protection of Policyholders '' Interests) Regulations, 2002. He contended that these provisions were violated by the OP-1.
THE central question is, "can we ignore the report of the surveyor? " The report of the surveyor stands proved on the record. The same was not questioned by the complainant. The complainant did not move any application for his cross examination. The complainant did not put interrogatories pertaining to the surveyor. Only six interrogatories were put to Sushovan Sen. Last interrogatory is relevant which is reproduced. It runs as follows:- "Q.6 Has Mr. Sushovan Sen visited the Tatamala Tea Estate and the Factory situated at P.O. Vellamunda, District Wayanad, Kerala ( "plant and building ") during the periods 1980-1982, 1982-1984, 1984-1986, 1986-1991 and 1991-2002? If the answer is in the affirmative, what were his exact dates of travel to the plant and building? What documents reflect his travel to the plant and building? Reply reads:- " I say I did not visit the Tatamala Tea Estate and the Factory situated at P.O. Vellamunda, District Wayanad, Kerala during the period 1980-1982, 1982-1984, 1984-1986, 1986-1991 and 1991 to 2002. "
It is interesting to note that not a single interrogatory is related to the surveyor. It is clear that the complainant did not pick up a conflict with the report of the surveyor. The main interrogatories should have pertained to the surveyor. There should be some evidence in rebuttal, which may go to show that the report of surveyor is not reliable. It must be borne in mind that it is the complainant and no body else, who is to carry the ball in proving its case. The complainant is to give reasons why the report of the surveyor should be discarded. The surveyor assessed the loss as follows:- LOSS ASSESSMENT Based on the above and without prejudice to the admissibility of the claim we now give below our loss assessment: Degradation in the salvage value Of structural steel items Rs. 1,38,000.00 Estimated loss/degradation to Scrapped Machinery, parts lost/ Damaged due to fire including Loss of withering troughs Rs. 2,04,500.00 ------------------------ Rs. 3,42,500.00 "
AGAIN OP-1 has filed affidavit of Sushovan Sen, Regional Manager. Paras No. 10 and11 are relevant and are reproduced here as under:- "10. I say that the factory worked for few months in the year 1986 and was thereafter closed and remained the silent risk till the date of mishap. No maintenance was carried out in the factory since 1986. 11. I say that as per the survey report, the opposite party came to know that occasionally tea leaves were stored overnight in the withering troughs in the first and second lofts and then taken to the Talapoya factory for processing on the following morning. The third loft is not under use and was kept permanently locked.
WE have also perused the affidavit of Mr. Panmal Sethia. In view of Surveyor ''s report each other evidence pales into insignificance. In United India Insurance Co. Ltd. and Others Versus Roshan Lal Oil Mills Ltd. and Ors. (2000) 10 Supreme Court Cases 19, in para No. 7, it was held:- "7. The appellant had appointed joint surveyors in terms of Section 64-UM (2) of the Insurance Act, 1938. Their report has been placed on the record in which a detailed account of the factors on the basis of which the joint surveyors had come to the conclusion that there was no loss or damage caused on account of fire, was given and it was on this basis that the claim was not found entertainable. This is an important document, which was placed before the Commission but the Commission, curiously, has not considered the report. Since the claim of the respondent was repudiated by the appellant on the basis of the joint survey report, the Commission was not justified in awarding the insurance amount to the respondent without adverting itself to the contents of the joint survey report specially the factors enumerated therein. In our opinion, non-consideration of this important document has resulted in serious miscarriage of justice and vitiates the judgment passed by the Commission. The case has, therefore, to be sent back to the Commission for a fresh hearing. "
IN a recent order passed by a Bench head by Hon ''ble Justice Ashok Bhan in the case of D.N. Badoni Vs. Oriental Insurance Co. Ltd. I (2012) C.P.J. 272 (NC), it was held that Surveyor ''s report has significant evidentiary value unless it is proved otherwise -petitioner has failed to do so in the instant case.
IT must be borne in mind that the delay is a double edged sword which can cut both the sides. This is an undisputable fact that the OP-1 has inordinately delayed the above said settlement. Even after the elapse of 12 or 13 years the complainant has not got any amount. Normally we award 9% interest per annum but under the peculiar circumstances of this case we will award 12% interest and compensation in the sum of Rs. 2,00,000/- to the complainant. Therefore, we hereby order that the OP-1 would pay Rs. 3,42,500/- to the complainant alongwith interest @ 12% from the date of filing of the complaint till its realization. We also award compensation in the sum of Rs. 2,00,000/- in favour of the complainant and against the OP-1. The said amount be paid within a period of 45 days otherwise it will carry interest @ 12% till its realization.